Return on Investment (ROI) is a term we generally associate with business and industry and, although based on the same premise, healthcare ROI is a little more complicated because the “value” of an investment is not always numerical or monetary as it is in business. ROI is generally calculated by taking the current value of an investment less the total cost of the investment, divided by the cost of the initial investment. If part of the current value of an investment is improved quality of healthcare provided, how would one quantify the value numerically or financially?
Focusing on KPIs and metric specific to the healthcare business will provide you with the information you need to help you measure the ROI and better strategize how to get higher ROIs in the medical environment. Healthcare KPIs fall into these categories:
- Revenue Metrics
- Communication Metrics
- Contact Center Metrics
- Operational KPIs
Revenue metrics are obviously the most quantifiable KPIs because they analyze expenditure and revenue. Revenue metrics include:
Number of new appointments: Measuring the number of enquiries that translate into appointments, which appointment times are preferred, and which specialties receive the least enquiries will help you ensure your sales people are doing their jobs and enable you to adjust marketing to generate more bookings for departments that are underperforming.
Patient lifespan: The longer a person is a patient of your healthcare business, the more revenue potential there is which is why tracking lifecycle metrics of your patients will lower your customer acquisition costs. Focusing on pediatrics, for example, will help you acquire patients at the beginning of their lifespan.
Patient lifetime value (LTV): Statistics show that 80% of revenue in a hospital is generated from 20% of existing customers. Calculating the LTV, the total future income likely to be generated by a patient in their lifetime, will help improve patient retention and lower acquisition costs, as well as inform your marketing strategy.
Gross profit per appointment: The gross profit per appointment is the amount of money generated from an appointment excluding any direct costs. Calculating this KPI will help identify more profitable specialties, improvements that can be made to customer engagement strategies, and how the marketing budget should be allocated.
Patient recall time: This is a metric that measures the length of a patient’s stay or the number of visits by a patient and is critical revenue forecasts. A high patient recall time indicates excellent customer satisfaction which means that the patient will return when needed or advised. This helps predict staffing requirements and guide marketing strategies. For example, offering an efficient follow-up service or online scheduling of appointments will increase patient recall time.
Patient churn rate: This is the percentage of patients who don’t complete a treatment plan. A high churn rate indicates low customer satisfaction and a drop in potential revenue. Monitoring this KPI will show you which areas have high churn rates so that you can focus on improving the patient experience in those areas which will, in turn, improve your bottom line.
Communication metrics of both digital and in-person communications will help improve overall patient care as well as help plan your marketing budget. Communication metrics include:
Number of Touchpoints: Touchpoints, or patient interactions, measure the number of interactions between patients and your healthcare business. These can be physical interactions, call centre interactions, or online AI interactions. The fewer touchpoints there are between the patient’s initial enquiry and their appointment, the better. Measuring this KPI will help you streamline your operations and improve the overall experience of the patient.
Patient satisfaction: Monitoring patient satisfaction is vital to the overall ROI of a healthcare business because happy patients are what healthcare is all about. A patient that is satisfied will come back as well as refer new potential customers. Phone surveys, feedback forms, digital analytics, and focus groups can all be used to monitor patient satisfaction and enable any necessary improvements to be made.
Bot to Live Chat Handover: Monitoring the number of times a chatbot has to hand over a query to a human agent because it is unable to assist will help you identify ways in which you can improve the accuracy of your chatbot which in turn improves the customer experience and saves on staffing costs. Investing in AI-powered chatbots can reduce this ratio dramatically.
Contact Center Metrics
Measurement of call center KPIs will reveal the level of patient service and opportunities to improve patient satisfaction. Contact Center metrics include:
Number of issues: Patient requests should be checked in order to monitor the volume of assistance required and how efficient it is. If there are a lot of patients waiting for assistance costs can be minimized and the quality of patient care improved by implementing AI chatbots or a FAQ section on your website or app.
First contact resolution (FCR): The FCR metric evaluates the efficiency of the healthcare business and patient satisfaction by quantifying the number of patients whose issues are resolved during their first contact with your organization.
Average hold time: According to research done by Arise, people will hold no longer than 2 minutes and many think any holding time is unacceptable. It also shows that the likelihood of people calling back is low. Monitoring your average hold time is a good KPI for evaluating customer satisfaction.
Average call time: Monitoring the amount of time the agent is on a call with a customer will help with operational efficiency and staffing decisions as well as indicate patient satisfaction levels.
Agent utilization rate: The Agent utilization rate is the average time per call of an agent in relation to the total numbers of hours they have worked. This will help evaluate the performance of the agent and identify opportunities to utilize or improve chatbot assistance which will streamline workflow efficiency.
Healthcare operational KPIs will give you a good idea of the standard of care your healthcare business is providing its patients. Operational KPIs include:
Patient wait time: This is the amount of time a patient spends waiting in an emergency room or for an appointment before receiving any consultation. Longer waiting times reduce customer satisfaction drastically and are the cause of 20% of patients switching healthcare providers.
Staff-to-patient ratio: The more staff there is, the quicker patients are attended to, and the better the quality of healthcare they receive is. The staff-to-patient ratio KPI in conjunction with the waiting time KPI can offer invaluable insights for improving operational systems.
Patient follow-up rate: The patient follow-up rate is a KPI that monitors patients’ health once they have completed their therapy. High follow-up rates improve patient satisfaction and reduce readmissions.
There are many other KPIs that healthcare businesses can use to measure the efficacy and profitability of their investment and but these are the ones that are important to look at if your want to get a higher ROI. Better still, if you use the HFMA’s industry-standard KPIs, the MAP Keys, you will be able to compare your performance and ROI to those of other healthcare businesses and practitioners which will give even greater insight on how to measure and improve your overall ROI.