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Examine the Profitability of Your Practice
A Special Thank
with Healthcare KPIs
You to the April

You may believe your medical
2018 Host of the practice is profitable, but how do you that can have the greatest impact on profitability. If your
practice has multiple locations or physicians, collect and
really know? Even if you know how measure this data at the lowest possible levels: per provider,
South Florida much money you’re making, you office location or specialty.
likely don’t know how much you’re Healthcare KPIs can be broken into five main categories:
Healthcare leaving on the table. 1. High-level profitability KPIs - gross margin, operating
Most providers spend the majority margin, net margin, etc.
2. Revenue cycle KPIs – reimbursement rate, denial rate,
Networking Group of their time focusing on the clinical resubmission rate, approval rate per denials, date of service
side of the practice. However, paying
attention to the business side is criti- to date of submission, etc.
cal to ensuring a healthy, profitable 3. Cost KPIs – total overhead expenses as percentage of
practice. revenue, total vendor fees as a percentage of revenue,
To fully understand your practice’s salaries to net patient revenue per provider, etc.
operations and financial condition, BY KEVIN N. FINE, MHA 4. Liquidity KPIs – A/R distribution, cash conversion,
you’ll need to go beyond top-line key current ratio, average daily collections, etc.
FLORIDA performance indicators (KPIs) to measure and examine metrics 5. Productivity KPIs – charges by provider, receipts by
on a more granular level. provider, ratio of claims collected to fees incurred, etc.
MEDICAL Imagine having the information you need to answer ques- Metrics in the first category can give you a big-picture view
CENTER tions such as: of your business. As you move into the other areas, you can
• “How much profit is our new ultrasound machine generat- start to see a more comprehensive view of practice performance
ing?” and profitability.
For information about • “If we lose a payer relationship, how much would that There’s no question that healthcare is one of the most dynam-
affect our practice?” ic and challenging industries. To survive and thrive, it’s impor-
our next meeting of • “Which of our office locations is least profitable?” tant to be nimble and build a sustainable, scalable practice. The
SFHNG, Looking more closely at your business metrics can arm you good news is you already have plenty of data that can help you
with the information to make strategic decisions and enable do that – you just have to know where and how to look.
please email you to identify inefficiencies in areas such as revenue cycle
charles@ management, which can significantly impact your bottom line. Kevin N. Fine, MHA, is a director of healthcare advisory services
While there are endless metrics you can track, you should in the Miami office of Kaufman Rossin, one of the top accounting
southfloridahospitalnews.com start by deciding on a reasonable number of specific measures firms in the U.S. He can be reached at kfine@kaufmanrossin.com.

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6 May 2018 southfloridahospitalnews.com South Florida Hospital News