Post #2: Metrics 101 – The Basics of Managing Your Metrics
Holy cow, Colleagues! Were the practices of Summit ever ready for some discussion and work on metrics or what? You’ve been lighting up the Help Desk with great comments, questions, observations, realizations, etc., and I’m more than a little excited about the stir we’re creating on this.
As you know, November was the month for us to be underway with the Summit Beyond MetCHECK Program. MetCHECK is the name of our combined efforts to measure, compare and ultimately better manage production in our practices by zeroing-in (at home and as a group) on four key practice “vital signs” (metrics).
This has been quite the undertaking to be sure, as I mentioned in my email last week. But I’m pleased to say, we’re underway. We have our first points on the four graphs that we’re keeping/monitoring together, and next month, we’ll be able to draw a line and connect a couple dots. Exciting stuff!
Again, I want to thank the Summit partners that participated in turning in their results for October and encourage all of us to jump on board. The more partners that participate, the more accurate and reliable our answers will be to two simple questions:
What are the four vital sign results within my practice?
What do the results show Summit-wide?
That said, let’s establish a few understandings and expectations about MetCHECK:
We have a great start on this. We are, of course, not to our desired level of Summit-wide participation, but I’m confident we will be. A number of partners emailed after receiving my results email that they had not gotten their metrics in for November (several indicating they are short-handed because of the virus). However, all of these colleagues vowed to have their November metrics in by the December 15 deadline, which is great.
That established, I’m confident our four metrics averages for October are not yet accurate depictions of the true averages of the Summit practices. This will change as more and more colleagues get on board and report their metrics.
We’ll address some of the more common questions of the last few days in this blog post, but remember, you’re always welcome to email or call the Help Desk with questions (Tbowen@mythrivecoaches.com or 402-794-4064).
Each month, I’ll be averaging and posting last month’s group outcomes. The deadline for getting your metrics in is the 15th of each month – so by December 15, you’ll want to have reported your November numbers. I promise the form is easy to use, and it should only take a minute to enter your numbers. Here’s the link again:
https://www.mythrivecoaches.com/practice-metrics
Rome wasn’t built, or remodeled, in a day. Our efforts managing practice outcomes together are a work in progress to be sure. And we’re progressing. By the first of the year, my hope is we’re on a roll with this, helping us understand and impact outcomes at home and as a group. I get excited when I think of the conversations this will spur in the months and years to come within and between the Summit practices (for doctors and staff).
Let’s remember when keeping/tracking metrics, it’s NOT about exactly how you choose to keep/calculate a given metric, or whether you do it differently than another practice (except for the four we’re tracking together – I’ll clarify exactly how we’re calculating those below). What’s important is that you calculate your metrics the same way every month. What we’re interested in is the trend, and we can always read and respond to the trend as long as we’re watching the same thing every week/month.
The situations and goings-on in a practice at any given time can have major impact on our results during that time. For example, staff or a doctor being out with Covid (we’ve certainly seen some of that). Or someone being on vacation. Or turnover on the staff. Or a season of the year (like back to school). Or a third party program changing (been a little of that going on, too). But if we stay with it, these things have a way of all coming out in the wash. Sometimes events will dictate we change the way we keep a given metric, but usually not.
Don’t let your team get lost in the outcome of the metric. The outcome is just our case history. The key is not the history, the key is our diagnosis (the direction of the graph and the trend it indicates) and our treatment plan accordingly (the set of initiatives you and your team designate and implement to continue a favorable or discontinue an unfavorable trend).
More often than not, colleagues that think they’re managing metrics aren’t doing it at all. They may be keeping metrics (doing the case history), but often are not addressing/impacting the outcomes as a team. Frankly, doing the former without the latter is a waste of time. What good is the history without the treatment plan? If your efforts are just about producing pretty graphs and charts, and not about the team being accountable to the outcomes and impacting them together, pretty as those charts are, I recommend you spend that time doing something else.
Averages, whether national or within Summit, are interesting, but they are not the thing against which I recommend you evaluate your own results and strive accordingly. I’m glad for us to know the Summit averages on these metrics, and these can be helpful in revealing opportunity or verifying efforts we’ve made. That said, I’m vastly more interested in the way your metrics compare to your own objectives than how they compare to any average. Knowing a metric outcome is only as valuable as knowing how it compares to what you’re striving to achieve. Averages are about someone else. Your objective is about you.
OK, these things established, let’s cover some basics of managing the metrics. I think a great way for us to do so is to share some questions and answers on our four metrics over the last few days.
1. What Exactly is Receipts? How Should I Calculate This?
Receipts is revenue actually collected by the practice during the time period under consideration (in our tracking together, monthly). This can also be called collections or collected revenue. This is the metric for watching the overall growth trend of our practices individually and Summit-wide. Because practices have such a wide variance in number of doctors, number of doctor days, number of locations, number of lanes, hours worked, etc., it’s difficult to establish an average, or benchmark, for this metric, or have a meaningful range. It’s just not apples to apples. But again, what we want to watch here, in our individual practices and as a group, is the trend. And, of course, we want to direct the team’s focus, energy and strategy accordingly.
2. What Exactly is Revenue-Per-Patient or Revenue-Per-Exam & How Do I Calculate This?
Revenue-Per-Patient can be figured a number of ways to show a number of things.
That said, all versions of the RPP metric measure our productivity per unit of time.
And make no mistake, we’re in the time business. I like to say the purpose in this metric is to measure, understand and manage NOT how busy we are, but how we are busy. Two very different things!
What we are and will be tracking here together is revenue generated per comprehensive exam performed. So, we’re simply dividing receipts (collected revenue) for the period by comprehensive exams performed in that period. Again, different practices compute this metric differently, but a key for our GROUP purposes is that ALL Summit practices keep and report this metric the same way every month. And remember, our interest is the direction of the graph, more than an actual number. What we want to do here is manage our results, not just know a number. As I mentioned before, I believe the latter a waste of time without the former.
I see considerable differences in this metric by region of the country, urban vs rural practices, patient demographics, specialties, etc. I also see surprising differences in what various sources report here as an average, or benchmark. Generally speaking, averages reported for this metric are between $300 and $350. Based on data Summit Partners submitted for October 2020, the Summit average was $363 (not too shabby, Colleagues, but we can move this one!), with a range for reporting Summit practices from $210 to $501. (Major question to ponder – what does that wide range tell us about this particular metric??)
3. What Exactly is Production Scheduled? How Do I Calculate This?
Production Scheduled (also referred to as production booked or production capacity) is simply a measure of how “booked up” we are in a given time period. The metric is reported as a percentage, so for the month of November, for example, perhaps we were 70 percent booked, or even 105 percent booked.
For me, this is the metric that comes to mind when I hear colleagues talk about being “busy.” A practice booked at 105 percent is certainly busy, but we watch other metrics to make sure it’s the right kind of busy! (Another question to ponder - ever notice some days more lightly booked end-up with surprisingly high production, perhaps like some weeks during COVID scheduling, and some days we’re slammed end-up with surprisingly low production? What does that tell us about how busy we are, VS how we are busy?)
For purposes of being as indicative as possible for all Summit Partners, we’ve tweaked what we’re calling this one. From here forward, let’s refer to this metric as production scheduled.
With all of us keeping this metric, and thus the need to keep it similarly, the question to be answered, of course, is which time slots do I include? Although I can make an argument for all time slots (ALL time is money in our business, not just SOME time!), let’s use comprehensive exams. So, we divide the number of comprehensive exam slots filled or booked (and for which the patient actually showed-up – if not, don’t count it!) by the number of comprehensive exams available in the same time period.
Although this metric is not widely benchmarked or published, in my experience, this is the one metric that SETS THE TONE FOR EVERY OTHER PRODUCTION METRIC in the practice. Although all four of these metrics are important indicators, this is a trend we will watch particularly carefully together, especially during the “Virus Era.”
Based on data Summit Partners submitted for October 2020, the Summit average was 85 percent (relatively strong booking for the Virus Era), with a range for reporting Summit practices of 40 percent to 105 percent.
4. What Exactly is Capture Rate? How Should I Calculate This?
Capture Rate is simply a measure of the extent to which we’re filling the prescriptions we write. This metric is reported as a percentage (percent of Rx’s written that are filled in-house). Capture rate is particularly useful for assessing how we’re holding-up to the competition as things evolve in the marketplace, and one I like to watch closely for indication of needed team focus, discussion and strategy accordingly. This metric has tended to creep steadily down in North America the past several years due to competitive pressures, but we aim to reverse that trend!
Again, I see surprising differences in what varying sources report here as an average, or benchmark, and considerable differences by region of the country, urban vs. rural practices, patient demographics, specialties, etc. Generally, I see this metric run between 35 and 65 percent (lower in Canada, interestingly). Based on data Summit Partners submitted for October 2020, the Summit average was 42 percent, with a range for reporting Summit practices from 27 percent and 67 percent. So we’re doing reasonably well here partners, but with the product and service advantages we have as Summit practices, this is a metric I believe we can work together to improve.
5. So is that Good? ... How am I Doing?
Here, of course, is where we think about the question of averages. How is my practice performing in this metric relative to average? And where are we Summit-wide relative to average? I’ll offer a couple of different answers here, one of which may surprise you.
1) Who cares what “average” is? In my experience, average really has little to do with your practice (or our group), or what you/we want to accomplish. I’m much more interested in for what we’re striving than I am in average.
2) Whether it’s “good” or “how I’m doing,” depends on what you (we) have defined as your (our) objective. Plain and simple. If it’s well below that objective, then nope, not so good. If it’s well above, yup, we’re killing it (and perhaps it’s time to change your objective?).
It’s Not A Contest!
Although I love that comparison can fire-up our competitive tendencies, and can be a good and helpful thing, remember that the PURPOSE of team tracking of metrics is not about who’s winning the contest. It’s about the team diagnosing the condition of the practice (and group) and forming/implementing a treatment plan that improves our outcomes. That’s it.
Don’t Over-Analyze
Over-Analysis causes Paralysis. You’ve probably heard me say this more than you care to recount. But I’ll say it yet again:
Remember, it’s not about the number. Don’t get lost in the number. It’s about where the number is directing you and your team. Our purpose is not production. Production is just a measure of the relative extent to which we’re achieving our purpose. I see teams get way too caught up in metrics, when we’re more productive when we’re laser-focused on purpose and mission.
That said, Let’s simply keep in mind what I call The 4 M’s of Managing Your Metrics:
Measure It (history and diagnosis)
Maneuver Your Team Accordingly (treatment)
Monitor the Results of That (treatment/follow-up)
Manage Your Outcome (treatment/follow-up)
The Tale of Two Practices
You’ve heard me reference a number of times in our conversations of late what I call The Tale of Two Practices. It fascinates me how two practices a block apart can have such vast differences in the outcomes of their metrics – these four we’re keeping together, and others you may focus on in your practice. Same marketplace, same competition, same third- parties, same internet, same economy, same world, same twenty-four hours in a day. And yet, such vast differences in outcomes. This is the reason I tend not to give too much credence to the benchmarks or averages. What interests me, and where I really want to challenge you and your team, and all of us as Summit Partners as we approach 2021, is this: What do I (we) want to accomplish, are we accomplishing it, and what will we do?
This the multi-million-dollar question.
Quick Reminder – Don’t forget to report your four practice metrics for November (by December 15) at https://www.mythrivecoaches.com/practice-metrics. Let’s do this together, partners!