Founder Letter: Essential Objective: Mastering Business Metrics

As physical therapists, we know the importance of objective measurements. Not only do they affirm that your plan of care for a particular patient is, in fact, working, but also they reveal areas in which adjustments to the treatment plan may be necessary. Clinically, you wouldn't—and couldn't—develop or progress through a patient’s therapy program without completing any objective measures. Well, that same principle applies to your business. That’s right: your business. Often, PTs refuse to think of their practices as true businesses. In fact, they’re living, breathing, constantly changing—and they should be treated as such. Now, more than ever, it’s important that you monitor the health and wellbeing of your clinic—just as you would with your patients. How? The key, my fellow business owners, is metrics.

That word alone can cause eye-rolling, brow-furrowing, and head-scratching. Throw in actually understanding—let alone calculating and monitoring—business metrics, and you might feel downright befuddled. But this is just the mysterious aura of metrics. When you actually get your mind wrapped around the concept, it’s no more difficult than high school algebra. That’s why we’re devoting this month’s blog and webinar to metrics. We’re demystifying and teaching you—in plain English (no business jargon here)—how to monitor the health of your private practice. To start, here’s a post explaining what metrics actually are.

The truth is, there are numbers that correlate to every part of your clinic’s daily, weekly, monthly, and annual business cycle—numbers that can tell you how you’re doing and where you should focus your plans for improvement. And they go beyond the stereotypical business side of things. There’s data to track throughout every area of your practice—from the front and back offices to inside the treatment room—and all of it affects (or should affect) how your practice grows and evolves. For instance, if you have a website or do any online advertising, you can create a Google analytics profile to monitor such stats as number of visitors, clicks, views, and contact form submissions as well as the sources of your web traffic. That way, you can see which marketing efforts are giving you the most bang for your buck. Another example has to do with MPPR—a topic that really warrants its own blog post. But the short version is that you can’t competently manage MPPR if you’re not tracking three crucial metrics: clinic cost per visit, net revenue per visit, and payer mix. Following and understanding these calculations will help you think critically and react intelligently to the revenue losses your clinic may incur due to MPPR.

And then there’s the patient experience—something you might not think of as metric-measurable. But really, a patient’s satisfaction with your services begins the moment you—or someone at your front desk—pick up the phone. How many prospective patients actually book appointments with you? That’s phone call conversion rate, and it tells you a lot about the way patients perceive your clinic based on their interaction with the person on the other end of the line. Then, once a patient walks through your doors, how long does it take for your front office staff to greet him or her? How long does it take to check in? How much time passes before that patient is in with the therapist? Wait times play a huge role in overall patient satisfaction, which is why these metrics are so critical. According to an article in the Atlanta Journal-Constitution’s HealthFlock blog, “Wait time (time spent in both the waiting room and exam room before seen by a doctor) in particular is frequently cited as the single most important factor in determining patient satisfaction. In fact, a national survey found that 40% of the variance in patient satisfaction can be explained by the amount of time a patient waits to see their doctor.”

And satisfaction is key if you hope for your patients to refer your practice to their family and friends—yet another bit of data you can track: number of patient-initiated referrals.

Of course, understanding the ins and outs of metrics, including the ones I’ve highlighted above, is only half the battle. To reap the full benefits of these super-handy business tools, you’ve got to track them. That means paying attention to them (read: actually measuring them) on a regular basis. You have to study the data—and draw conclusions from it—to actually enact change. Once you learn which metrics you should track, establish systems to do just that. Then, genuinely track them. Monitoring your numbers consistently allows to you recognize trends and see areas where there’s potential for efficiency gains, which in turn allows you to get ahead of your business trajectories and be proactive when it comes to clinic decisions—rather than reactive.

This month, I’m challenging you to stop putting off managing your metrics. Identify an area of improvement that you want to attack in your clinic, and dive into the metrics that could help you track your progress. After a few weeks of tracking, trends should be visible. Analyze them; then, make changes and see how the metrics change. Numbers are objective; they don’t lie. If you ignore them, you’re only hurting your practice—and your patients. After all, you’re in the business of helping people, but you can help more people by spending more time on—not just in—your business.