You probably didn’t start a career in the rehab therapy industry to battle with competitors or play business war games—and if you chose to work in a pre-existing practice, you really didn’t have to worry about any of that. But once you open your own clinic, overcoming competition is the name of the game—and there’s a whole new set of rules to follow if you want to run a successful practice. On that note, there’s one important business tactic all practice managers should know like the back of their hand: benchmarking.
The PTs in your clinic operate as players on a team, but what good is a team without any goals? Benchmarks are just that: measurable performance goals that compare performance within a business and/or the marketplace. But, you can’t just pick a numeric goal willy-nilly; benchmarks should result from existing data that accounts for averages across multiple data sets (e.g., consider how many units a provider bills not only per patient visit, but also per hour). Benchmarking should also consider the needs and physical limitations of your business and employees.
As I alluded to above, benchmarking can happen both internally and externally:
- Internal benchmarking: “An analysis of the inner workings of your company that allows you to set goals based on past performance and track progress over time.”
- External benchmarking: “An analysis of how your business compares to others in your industry, to gain a clearer idea of where you fall short (if anywhere) and what you can do better.”
Internal Benchmarking Example
Let’s put aside the business-speak for a minute and dive into a quick example (adapted from this source). Let’s say you want to create a benchmark for how many patients your PTs see each day. You dig through some records and discover that, on average, your PTs see 13 patients a day. Though it may sound like a good number for a benchmark, it’s not necessarily the best one. After all, that number doesn’t consider any data other than a general average for patients seen, which means it paints an incomplete picture of the value of each visit.
After digging further, let’s say you discover that the PTs who see 10 patients a day actually provide more services per day than their “busier” coworkers—thus billing more CPT codes. Those PTs are actually bringing more money into the clinic than the PTs who see 15 patients in a day. (Not to mention, they’re less likely to suffer from burnout.)
At the end of the day, a more reasonable benchmark for this particular example is actually 10 patients a day—provided that each therapist is billing an average of 3.5 service units per visit. (Number of billed units per visit is another area that probably warrants some attention and data-digging; it’s possible that the therapists who billed fewer units were undercoding their services due to a misinterpretation of the 8-Minute Rule—or perhaps spending too much time on documentation.)
Once you’ve settled on these benchmarks, meet with every PT and explain the practice’s new goals. You now have the data to back up your decisions, and you’re well on your way to improving your revenue stream and your business as a whole.
External Benchmarking Example
Let’s keep playing off that previous example and say you’re really trying to perfect the number of patients your PTs see each day. You’ve successfully enforced the 10-patients-a-day goal, and you’ve noticed a marked improvement in your revenue stream and your PTs’ morale. But, you have a tickle in the back of your mind, and you can’t help but wonder how you’re doing in comparison to your competitors.
So, you start researching, and after some diligent digging (never underestimate the power of Google-fu), you discover that your primary local competitor’s PTs see, on average, 11 patients a day. All of a sudden, you realize that your previous benchmark isn’t quite competitive enough, and that you might want to increase your benchmark to 11 patients in order to match your competitors.
That said, you still want your PTs to have enough time to conduct all relevant procedures during each patient’s visit—to both keep your patients happy and maintain your recently improved revenue stream. After crunching some numbers and talking with your PTs, you determine that the sweet spot is an average of 10.6 patients per day. This accounts for daily fluctuations in appointment and patient type.
Internal and external benchmarking work hand-in-hand when it comes to measuring your practice’s performance. It’s just as important to regularly assess your employees as it is to compare yourself to your competitors. And while all that research may seem like a lot of work, playing benchmarking private eye is significantly less daunting when you have the power of WebPT Analytics—but more on that later.
Benchmarking is crucial when you’re trying to create a lean, mean, fighting machine of a business. It can help pinpoint the strengths and weaknesses of the individuals within your practice as well as the strengths and weaknesses of your business as a whole.
Just don’t forget that the key to successful benchmarking is creating a plan of action. It’s one thing to set a goal after you’ve pored over and analyzed your practice’s metrics; it’s another to help ease your employees toward that new goal.
Potential Benchmarking Categories
The categories you choose to benchmark largely depend on the operations of your individual business. After all, something that’s relevant to you won’t necessarily be relevant to a different-sized practice a town over. Plan to spend some quality time with your business’s data so you can determine your business objectives, analyze your historical performance, and decide which areas need some benchmarking action. That said, here are some categories you may want to consider:
- Patients seen per day
- Billed units per provider work hour
- Payments per billed unit
- Billed units per visit
- Referral conversion rate
- Initial evaluation rate
- Overall number of visits
- Visits per discharge
- Cancel/no-show rate
Benchmarking in WebPT
We get it—researching industry trends, analyzing practice data, and then creating benchmarks can be totally overwhelming and incredibly time-consuming. Sure, it’s important—but that doesn’t make it any less difficult to execute. So, if you’re looking to get all the benefits of benchmarking in the rehab therapy industry with none of the hassle, look no further than WebPT Analytics.
Our Analytics solution compiles, sorts, and charts your practice’s data in six categories, called key performance indicators (KPIs). Those KPIs can help you monitor your business’s health using metrics like referral conversion rate, visits per discharge, and units per visit. WebPT Analytics also collects and displays KPI data at different organizational levels, making internal benchmarking a breeze for individual clinics or the organization as a whole.
Analytics also allows users to benchmark externally at both the local and national level. The local benchmarking feature compares your clinic’s individual KPI data against clinics that are geographically close to your practice. The national comparison works a little bit differently; it stacks your performance against all like-sized organizations nationwide. The national KPI data is also organized by percentile (i.e., if you’re in the 75th percentile, then you performed better than 75% of all others).
Goal-setting in WebPT Analytics is a snap, too. Users can set static goals that don’t vary, or create customized monthly goals. Those goals will appear on the relevant KPI charts until you decide to change them.
Beginning to benchmark may sound like a mountainous task, but ultimately, it’s just incredibly well-researched goal-setting: it’s doable and pragmatic. After all, you can’t fix a clock if you don’t know why it ticks.