Similar to any other business, running a successful physical therapy clinic requires you to track specific weekly, monthly, and annually to determine what is working and what needs to be changed. We don’t know about you, but we certainly weren’t taught much about business in our therapy program, and we certainly didn’t learn about which reports and metrics needed to be tracked, should we decide to open our own practice.
To make it easier for you, we have gathered a list of metrics and reports that should be reviewed, at various times, to determine how well your clinic is doing. Tracking metrics and running the appropriate reports not only allows you to see what is working for your clinic, but it also provides you with an opportunity to identify areas for growth and develop strategic plans to optimize weaker areas of your clinic.
If you are a private practice owner, the following are reports that you should be for your clinic:
- Cancellation percentage: The number of patients who cancel their appointments each week. The number of cancellations each week should be an actual percentage, not just a guess. Most clinics shoot for a cancellation rate of 10% or less, but fluctuation is likely dependent on the month. By knowing the clinic’s cancellation percentage, you are able to determine whether or not your patient reminder methods are working. Oftentimes, private practices will calculate the opposite of this percentage which is known as the arrival rate.
- Average billed units per visit: The average number of units being billed for each patient per visit. This is an extremely important and highly fluctuating variable, depending on patient population and insurance type. This metric provides you with the necessary information to make sure each therapist is not underbilling, which is very common. It also allows you to ensure that your therapists are not overbilling which often leads to an increased number of denied claims by insurance companies.
- Referrals: The number of new patients who contact your practice. Referrals is an essential metric to track and generate new business, especially if you have or are just starting a physical therapy practice. Tracking referrals will provide insight as to which marketing methods are working and which ones need to be re-assessed.
- Total new patients: The number of new patients who come into the clinic for evaluations. This allows you to see how effective your marketing and referral technique strategy is and if necessary, make any appropriate changes. Tracking the number of new patients over time also allows you to see fluctuations in specific months and be able to plan for those in the future. For instance, January tends to be a slower month for most private practice owners as it is the first month of the year so patients’ deductibles have not been met yet, typically resulting in less patients seeking out therapy services.
- Net revenue per month: The amount of money a private practice actually collects. A very common mistake clinic owners make is keeping track of the amount the clinic bills for; however, what a clinic bills for and what a clinic receives are two very different numbers. By calculating how much the clinic collects, you are able to have a more accurate representation of how much revenue the clinic is bringing in per month and adjust accordingly, if needed, for continued clinic growth.
- Revenue per therapist: The amount of revenue each therapist is bringing into the clinic on a monthly basis. This metric allows clinic owners to see how productive their therapists are being throughout the month and whether they are effectively managing their time and billing.
- Billing metrics:
- Days in Receivable Outstanding (DRO): This measures the average amount of time required to collect charges from the financially responsible party. This is an important metric to keep track of because it allows you to evaluate how quickly you are being paid, either by the insurance company or the patient. Ideally you want your DRO at less than 35 days and if anything is in your 50+ days bucket, then that needs to be more closely looked at as it is cause for concern.
- Profit/Loss: This report identifies the clinic’s overall net profit or loss and is a report that should be run weekly, monthly and annually. The clinic’s net profit/loss can be calculated by taking the clinic’s weekly, monthly, or annual net revenue and subtracting all of the necessary expenses, based on the respective report being run. This report is critical to understanding the health of your clinic and provides you with crucial information, such as the number of patients you must see, and the amount of money you must be making each month or year to turn a profit.
**NOTE: All of these reports can be run on a weekly, monthly and annual basis, depending on how closely you want to keep track of these specific metrics. At the absolute minimum, each of the above reports should be run on a monthly basis to keep track of your clinic’s progress.
Keeping track of all of the necessary reports that should be run when owning and managing a private practice clinic is confusing and quite frankly, exhausting. Not only that, but manually creating these reports is extremely time consuming and can result in human error and wanting to pull your hair out. To avoid all of that unnecessary stress and potential error, consider investing in an EMR system, such as HelloNote. HelloNote is an all inclusive EMR documentation software for physical therapy clinics that not only includes documentation capabilities, but also assists with billing and all of your reporting needs. By keeping track of the above metrics, you are well on your way to owning and running a successful private practice!