Thursday, June 26, 2008

Balanced Scorecard for Clinics

At long last I’ve finally finished our F2007 clinic annual report. I’ve previously posted on the basics of what a small clinic can analyze at year end. I think a clinic’s scorecard needs to contain actionable information and be of a size that a manager/doctor can complete it in a day or two. What do I include in my own report?

Core Metrics
My core metrics are split by each clinic and include the number of referrals, total provider days, gross revenue and average daily revenue (gross/provider days). I compare each metric to the previous year. Included in the core metrics is a recommendation on the number of days to work by each specialty and in each office in the coming year. In general each 10% increase in patient referrals requires 5% more days. I don't act on a change in a referral pattern in an office unless it's off by more than 10% in 2 consecutive quarters

We are a referral based practice so I analyze how many (by quarter), to which office (4 sites) and from which referring practitioner. We also divide each by specialty type. I’ve found that 20% variation is normal in referring practitioners. For each specialty, variation as little as 5% variation per quarter is more common. For generalists, I would recommend total patient encounters or total active patients (patients seen in the last 2 years) as a core metric.

Wait Time
The number of minutes waited in the office calculated from the time of the appointment until check-out and the number of days waited for different appointment types.

Our office uses block booking. I calculated the mean/stdev of the time from appointment creation to actual appointment (we ensure each block of patients is a normal distribution). This measure is accurate retrospectively. For a prospective calculation, we also measure time to an opening for a block on two consecutive days.

Total cost to run the clinic (including depreciation and bad debt but excluding capital and taxes) as a percent of revenue. Variation of less than 5% is normal over an entire practice but individual groups can vary widely. For variable expenses I also analyze the budget as costs per provider days.

Catchment Area
We determine where patients are coming from calculated as a rate per 10,000 population. In primary catchment areas less than 10% variation is normal and in secondary catchment areas 20-30%.

Voluntary Employee Turnover
Our goal is less than 5% turnover per year. Each lost employee is calculated as a fraction of an FTE based on days worked in the previous year. Total employee bank is calculated as total days worked divided as a fraction of FTE’s. We consider 4.5 days per week one FTE. Last year our turnover was <1%.

No Show Rate
Our goal is less than 5%

Most of the data has been automated over the last 5 years so I can expand the analysis each year. It usually takes me about 8 hours to get the preliminary data together and another 8 hours to analyze and complete the report. For a mid-sized clinic it’s time well spent.

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