Leveraging Key Performance Indicators to Track and Achieve Your Organization’s Financial Goals
By the time you get to work each day, your brain has already logged numerous sets of metrics. You’re so accustomed to tracking them, you may not even realize you’re doing it. Out of context, the following set of numbers can seem meaningless, and probably require some explanation, even though they are routine:
1. 10, 45 and 30. The number of minutes allotted for one snooze button cycle, your morning workout, and then showering, dressing and getting out the door.
2. 310 and 0. (Wait, change that to 120 and 0.) How many calories you consume via your doughnut-and-coffee breakfast. (Make that whole grain cereal and coffee.)
3. 45, 48 and 3. The posted speed limit, your actual speed, and the minutes saved on your commute by hitting all the green lights.
Ideally, healthcare organization leaders would be able to mentally tick through revenue cycle key performance indicators (KPIs) the same way they’d rattle off their morning routines. In reality, however, revenue cycle numbers can be complicated, especially with numerous other business priorities.
Even so, carving out a segment of time for the most critical KPIs can have a big pay-off: it can provide trending data, enable you to benchmark performance, and help you quickly identify and resolve billing problems. Days in A/R is especially important, as it provides crucial information about your organization’s claims management and billing performance as well your payers’. As a reminder, to calculate days in A/R: take your total current receivables (net of credits) and divide it by your practice’s average daily charge amount.
Tracking revenue cycle metrics may always feel more like the workout portion of your morning routine rather than the doughnut-and-coffee part. But in the long run, it can make the difference between operating in the black or red, finally being able to set your group’s expansion plans in motion or making much-needed upgrades to the organization.
For a refresher course on how to calculate four revenue cycle KPIs and determine how to measure success, download the Waystar resource guide, Key Metrics in Revenue Cycle Management.