How to Meet Practice KPIs and Keep Your Independent Practice Thriving
Independent physician practices are an important element of the U.S. healthcare system. They provide a source of timely preventative care, helping to manage both patients’ acute and chronic conditions. They strive to help patients avoid hospitalizations.
At the same time, independently practicing physicians can enjoy greater autonomy than those practicing in hospitals or corporate healthcare systems. They tend to achieve greater patient engagement and greater patient satisfaction—and tend to have higher levels of physician satisfaction as well. Physicians remaining in independent practice often have opportunities to form deeper relationships with the patients in their communities. This allows them to provide a more personalized approach to healthcare than the standardized approach offered by many healthcare systems.
Independent physician practices face many challenges as well. Dealing with the stresses created by the COVID-19 pandemic, added to the already existing administrative and regulatory burdens of a system that often favors larger organizations, has driven many physicians to leave independent practice. A recent survey from The Physician’s Foundation reports that 43% of independent practices reduced staff and 8% closed permanently during the pandemic.
In the 2 years prior to January 2021, there was a 12% increase in the number of hospital- or corporate-employed physicians. Joining a corporate or hospital organization may seem like it would provide the economies of scale needed to make it easier to deal with many of the challenges independent physicians face—but that isn’t always the case. Studies show that combining practices is not always associated with reduced costs; increasing patient volumes doesn’t always improve quality of care, either. Instead, it’s associated with a loss of physician autonomy and decreased levels of physician happiness.
These factors create a strong argument for maintaining independent medical practices—but to thrive as highly functioning medical practices that provide excellence in healthcare, independent practices need to take steps to manage their practice health just as they work to manage their patients’ health. And just as data is essential for managing patients’ health, it’s essential for evaluating and managing the health of independent medical practices.
But in an age of data overload, how do you decide which data to track and measure to help your independent practice thrive? The solution lies in the management concept of Key Performance Indicators (KPIs): Critical metrics that can be used to predict current and future success and can provide the framework to let you take an evidence-based approach to decision-making.
Keep reading to learn more about KPIs: What they are and how to choose the right ones to help your independent practice grow and thrive—and remain independent.
Key Performance Indicators (KPIs)
Analytics are essential for an independent practice’s survival, and KPIs are essential for creating analytics that can help you better understand your practice’s financial and operational health. Analytics using KPIs can help your practice to maximize the use of limited supplies and resources. But what are KPIs?
- Provide your practice with a focus for strategic improvement
- Create an analytical basis for decision-making
- Help you to focus attention on what matters most, your patients
KPIs are an essential management tool, so choosing the correct metrics for your KPIs is critical. You want to choose metrics that are easily accessible, so they can be accessed when needed to help make decisions, and metrics that are derived from up-to-date, comprehensive data sources. Without access to current, accurate data, independent practices must guess on how best to deploy their resources.
Practice revenue cycle
One area in which to consider collecting data for KPIs is your practice revenue cycle. The practice revenue cycle tracks revenue from patients beginning with their initial appointment and ending when the provider receives payment in full for the services provided. To optimize this revenue cycle and maximize practice revenue, you need to identify the high-level KPIs that measure and predict overall performance and the secondary KPIs that drill down to more specific areas in the cycle.
The revenue cycle consists of 7 basic steps.
- Preregistration: Collecting information from the patient prior to their arrival, such as demographics, insurance, and eligibility information
- Registration: Continues the preregistration process by ensuring that all patient information is 100% accurate; that financial forms have been signed; that referrals or authorizations are in place, if needed; that insurance benefits are assigned, etc.
- Charge Capture: Medical services are rendered into billable charges to prepare for submission to the insurance carrier
- Claim Submission: Claims for any billable fees are submitted to insurance companies; this step may include “claim scrubbing,” a process in which claims are double-checked to ensure accuracy prior to submission
- Remittance Processing: Remittances are returned from the insurance carrier, with the explanation of benefits to show what has been paid and for what services
- Insurance Follow-up: During this step, the practice examines what has and has not been paid by the insurance company and determines the next steps for unpaid items
- Patient Collections: Practice determines the balance owed by patients, collects co-payments and deductibles, and sends out routine patient financial statements
Value-Based Care quality metrics
Another critical area to consider when selecting KPIs for your practice is the data for Value-Based Care (VBC) quality metrics.
In VBC, reimbursement is often dependent on measuring and reporting specific quality measures. The Agency for Healthcare Research and Quality (AHRQ) denotes 6 domains of healthcare quality required for VBC:
Effectiveness and efficiency focus on ensuring that patients receive proper care as well as the resources needed to receive necessary follow-up care (and thus decrease hospital readmissions). Since many external factors can affect readmissions and patient health, regardless of the provider’s quality of care, these quality domains are difficult to measure directly. As a result, measuring these quality domains often translates into metrics such as number of hospital readmissions, Emergency Department utilization rate, number of adverse events, or improvements in preventative care.
Timeliness is reflected in prompt patient care, which can both positively affect patients’ experience and improve the quality of care they receive. Factors such as long wait times for appointments or difficulty making appointments can hinder patient care and negatively impact patient experience.
Safety can be measured in areas such as the rate of secondary infections, which may lead to preventable hospitalizations.
Patient-centeredness, or patient focus, measures a) whether patients feel like their providers listen to them, and b) if they feel their providers care about their health and well-being. It can also be demonstrated by increased patient compliance and more effective coordination of care.
Equitability is another difficult-to-measure quality domain, one that encourages providers to care for patients from all population segments and demographics.
Value-based programs depend on transparency into the most accurate benchmarks based on health condition risk stratification. Metrics such as patient experience scores, access to care metrics, and social determinants of health (SDOH, for evaluating equitability of care access) could provide valuable KPIs to help improve compliance with VBC contract requirements.
Becoming financially proactive
Once you’ve identified KPIs to help you make evidence-based decisions to improve your practice health, it’s critical to ensure that this data is easily accessible, and accessible in the right context. This enables you to use it to drill down and discover the answers you need when you need them.
Developing the right KPIs for your practice will help you to become financially proactive. It will help you to provide context for your core financial outcomes and help you to better understand what could be causing variances in your practice’s financial performance. Data and analytics can help independent practices focus on the most important measurables, including both financial and quality metrics.
With the right tools in place, your practice can stay financially and operationally healthy while remaining independent. Contact us to learn more about how we can help your practice to thrive.