Not Knowing These Metrics Can Kill Your Financial Success
By: Pam Reyonolds, R.N. Do you know how many patients your clinic sees from 10 a.m. to 11 a.m. on Tuesdays? Do you know which hour of which day of the week you see the most patients? Do you know what percentage of your revenue is spent on nursing staff each day? If your answer to these questions is yes, have you trended them over time, analyzed the numbers, and used the information to make your clinic more profitable? When we opened our first Medical Practice seven years ago, we didn’t know these numbers would be important. We didn’t realize there would be big fluctuations in patient volumes at various times of the day. And it wasn’t until recently that we realized you can hire staff to work split shifts, so we didn’t have extra staff at the clinic during our slowest hours. As our business has grown, we’ve learned the importance of vacuuming up the nickels and dimes, especially when it comes to our biggest expense – staffing. Creating the Staffing Metric for Our Medical Practice As COO at our Medical Practice one of my biggest jobs is analyzing various metrics I receive daily from department supervisors. Some of the reports I look at answer questions including: 1. How many patients were seen the previous day at each location? 2. How much cash was brought at each location? 3. How much payroll we spent in each department? 4. What percentage of that day’s revenue was spent on payroll? When I first began to receive those reports, the numbers were not nearly as helpful as they are today. The first month my daily report showed me we were spending 4.36% of our daily revenue on the nursing staff. The information was about as useful as asking me, “Is spending $3000 to buy a camel too expensive?” Why? I had no way to compare it to anything. I began to trend the number daily, and over time, I discovered how to use the numbers to run a tighter ship. I had a guideline that showed when staff was just sitting around doing nothing. I also knew quickly if we’d failed to staff enough people to support the patient volume on a particular day. Now, if our staffing metric number for the nursing staff ever climbs over 5%, our nursing director is getting a phone call to explain what happened. Creating the Right Staffing Metric for Your Medical Practice What numbers to trend will vary by your business model. Our Medical Practice is focused on providing a great patient experience. We know if we are going to thin expenses, payroll is not our best option. We also know anything more than 5% for our nursing staff means something is wrong with staffing. You, however, may run a model where your payroll percentage may run lower than ours. Maybe you don’t have nurses. Or perhaps you pay higher salaries, so your percentage may be higher than ours. What I’m trying to say is 5% isn’t the magic number for all clinics, and it’s not the magic number for all departments. You have to trend and find the number that is right for you. We trend these same numbers and percentages for the front desk staff and for our providers. The payroll of the nursing staff being out of sync for what is actually required is one thing, but if you trend the numbers and start realizing you have too many providers sitting around between patients, it is a problem that could cause serious financial woes for your business. Other Metrics to Watch Another thing to trend is the average number of patients per hour per day of week. These numbers help you determine not only where to focus your staffing, but also where you may need to have team members work on call or hire for split shifts. I know in our largest clinic, on Mondays from 2:00 to 3:00 p.m. we check in 16.25 patients/hour. On Fridays from 2:00 to 3:00 p.m. we check in 8.25 patients/hour. Knowing this allows us to staff more people to work on Mondays and less people to work on Fridays. At one of our other clinics, on Mondays between 2:00 to 3:00 p.m. we check in 4.75 patients/hour and on Fridays at the same time we check in 4.25 patients/hour. At that clinic, we need to staff the same number of people on both days. We have realized if we do not watch these numbers daily, we are tossing money out the window. Worse yet, we may drop the ball on customer service because we don’t have enough people scheduled to work. These are just a few examples of how trending metrics can make a huge difference in the way you run your business. There are an endless amount of reports you can watch every day to ensure you’re staffing levels are on par to keep you financially successful.
