Healthcare finance KPIs (key performance indicators) are numerical values that enable medical institution and department administrators to measure their financial and operational performance in relation to their set objectives. When used appropriately, these KPIs can help determine what is and isn’t working within the practice. Certain KPIs need to be mandatory for regulatory reporting on a regular basis which will help identify any potential issues before they become too serious.
Every organization in the healthcare sector will have distinct KPIs that arise from numerous data sources and fluctuate depending on the particular functioning model of the organization. Though, these KPIs stated below are all considered to be fundamental KPIs in healthcare:
- Number of patients served: It is possible to evaluate the efficacy of a certain place within your network by looking at the number of people that it attends to.
- Gross collections ratio: This KPI is the total payments your hospital has received, divided by charges, excluding write-offs. Again, this can help you determine how serious of a payment-collection issue your hospital may have, and this can affect resource allotment.
- Discount Given: This KPI will give more freedom for assessing discounts given by who but at the same time track them carefully to identify the revenue leakage over discounts.
- Average revenue per bed: This key performance indicator will indicate if it is necessary to expand the number of beds or to discover other techniques in order to raise income without raising the number of beds.
- Average revenue per treatment: You can assess the economic achievement of a certain procedure by assessing the revenue it generates. This is a great way to recognize which treatments are more lucrative and which ones are not.
- Operating profit margin: The operating profit margin reveals if an enterprise is making a profit or incurring a loss. This is an essential factor to evaluate the financial status of a business or the entire organization.
- Average realization per patient (ARPP): A crucial metric for evaluating income which is based on the Patient billing info and Admission records of the individual.
- conversion into service bills: This measurement is calculated based on the conversion of prescriptions into treatments, which is obtained from online prescriptions in the doctor’s module and charged services in the Hospital Information Management System (HIMS).
- Revenue per clinician: It is possible to assess the amount of money that a particular clinician is contributing to the organization, which can be used to identify which staff are performing well financially. This information can then be used to inform decisions about remuneration and growth.
- Productivity: This key performance indicator is associated with certain measurements of achievement, such as the mean number of patients attended to or admissions every day. It can be further separated by personnel or establishment, allowing you to identify which staff or hospitals are doing well and which are not. This can be applied to decisions about employing staff and using resources.
- Days in accounts receivable: The amount of days that a particular invoice or bill has been due is reflected in the accounts receivable. If the length of time in accounts receivable increases, it could demonstrate bigger issues with the billing process and signify that operations must be enhanced to enhance the overall cash flow.
- Compensation: It is essential to keep track of your employees’ salaries in different locations and roles. This will provide you with a deep knowledge of your general payment patterns and guarantee that salaries do not fluctuate excessively within your system.
- Claim denial rate: The frequency of rejections on your insurance claims is indicated by this metric. This should be consistent with the industry standards. If not, it might be necessary to alter the invoicing system.
- Bad debts: You should calculate the amount of debt that you are unable to collect in order to figure out the amount of care you are providing without any payment. This data can assist you in deciding if you should change the way your practice is operating in the future.
- Number of clinicians: It can be beneficial to ascertain the number of clinicians present in a given place and to compare it to the total count of patients. This can be a good indicator of the amount of staff employed in the area.
- Days cash in hand: This key performance indicator can be considered a rough estimation of the level of liquidity a healthcare business maintains. Monitoring this metric can provide an understanding of the financial trajectory of a company and allow an insight into their capacity to put aside funds for unexpected costs.
- Profit and loss by location: This reveals which places are thriving and which ones are not. This can allow decisions to be taken with regards to where to offer additional resources, such as marketing or personnel support. When it comes to more serious cases, it could signify areas that need to be shut down.
- Profit and loss by budget: Allocating funds to particular sections of the budget, for example, outpatient or same-day surgery.
- Total expense: Monitoring this information reveals where cost-cutting measures should be implemented, helping higher-level executives make decisions on where to put forth the most effort to reduce expenditures.
- Labour expense: Keeping track of this key performance indicator can help your organization gauge the total costs related to personnel, such as salaries and benefits, and determine if any alterations are needed.
Even if you have all the healthcare performance indicators, it won’t be of help to you if you don’t accurately collect the data and arrange it in a useful way. Implementing the right HIMS software with the appropriate KPIs integrated in it can guarantee that your KPIs are precise, purposeful, and orderly. If you are seeking the most suitable system for monitoring your healthcare financial KPIs, you can’t find a better option than Manorama Infosolutions Lifeline Suite – this solution will address all your needs. Book a demo today.
