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KPIs or key performance indicators are a quantifiable measure a company uses to determine how well it’s meeting its operational and strategic goals. Different businesses have different KPIs depending on their individual performance criteria or priorities. That said, the indicators usually follow the same set of characteristics.
There are four defining characteristics of KPIs:
To be effective, a key performance indicator must be based on legitimate data and must provide context that echoes your practice’s objectives. If you are interested in understanding how your no-show rate is impacting your revenue flow you can create a KPI to measure that impact. Conversely, you wouldn’t track staff attendance rates if that is not a pressing issue for your practice.
Key performance indicators can be created to track just about any aspect of your practice’s operations. Common KPIs include:
The key is focusing on what matters most to your practice. It also requires a commitment by you and your team to track the metrics, report on progress, and act on the data – otherwise it is a fool’s errand.
When choosing key performance indicators, your practice should start by considering the most important goals and objectives for your business. Is it revenue? Patient volume? Satisfaction rates? Operational efficiency? Once you have your list identified make sure to ask – can these be turned into measurable KPIs? Next, identify whether the KPIs will help in assessing the company’s progress against its stated strategies. Finally, you need to make sure that the KPIs selected are clear enough so that everyone in the practice can understand them.
Your practice doesn’t need a specific number of KPIs. In general, the number usually ranges from four to ten for most businesses. Whatever number you decide upon, just make sure the KPIs are crucial to business’ success. Remember, if everything is important, then nothing is important; so be selective.
Incorporating KPIs into your practice strategy doesn’t have to be intimidating. Start small and build your KPIs as you become more comfortable with the process. We recommend starting with financial KPIs as your EHR and PM systems include financial reports that can help you quickly track and measure your performance.