On Saturday afternoon, medical-practice consultant Dixon Davis presented “Vital Signs: 10 Key Performance Indicators That Reveal the Health of Your Practice.”

Mr. Davis, president of DKD Advisory, a consulting firm based in Salt Lake City, emphasized the importance of using key performance indicators (KPIs) to identify trends, opportunities, and inefficiencies in medical practices. By analyzing productivity and efficiency metrics, he said, practices can make informed decisions to optimize operations, improve financial performance, and enhance overall effectiveness.

“Our decisions are based on what we see and understand,” Mr. Davis stated. Using KPIs to measure the health of a medical practice during a set time period provides hard data that inform those decisions, helping to guide its board of directors in important decisions.

Mr. Davis discussed using the following KPIs:

Productivity KPIs: These identify the productivity of individual providers or the clinic as a whole by measuring volume of production output or number of units sold.

Total Revenue KPIs: These include collections per full-time equivalent (FTE) ophthalmologist; total clinical collections per encounter for all ophthalmologists; encounters per ophthalmologist, per location; new patient ratio (new patient encounters for all ophthalmologists divided by total patient encounters for all ophthalmologists).

Revenue KPIs might also include the rate of premium IOL conversions; cataract yield rate; and growth rate.

Efficiency KPIs: These measure the ability of a clinic to generate revenue given its  investment in staff, supplies, services, and assets. They include overhead expense ratio; staff payroll ratio; FTE staff per FTE provider ratio; revenue per staff ratio; occupancy expense ratio; and enquiry to consultation rate and consultation-to-surgery rate. A better efficiency ratio indicates that a practice is more effective in turning its resources into revenue. OM