Dashboards and KPIs: the fundamentals of becoming a data-driven HME
In today’s increasingly competitive environment, successful HMEs must rely on data to make quick and well-informed decisions about their business operations. The value of dashboards and key performance indicators (KPIs) in making smart decisions cannot be understated. A dashboard provides an easily digestible representation of how a business is performing at a given time, using KPIs to identify successes or potential gaps that need to be addressed.
HMEs should use a business management solution that includes dashboard capabilities to help make tracking KPIs an easy task, but not all software is created equal. For many HMEs, there are questions around what to look for in a dashboard, what KPIs to track and how often to track them. There may not be one-size-fits-all answers to these questions, but there are standards that any HME could benefit from.
Top attributes in dashboard functionality
Dashboards and scorecards – The ideal business management solution offers both an executive dashboard and a business scorecard. An executive dashboard provides trending data over an extended period of time, over a few months or an entire year. A business scorecard, on the other hand, provides a snapshot of where the business stands at that moment in time.
Visibility on the go – Look for a software solution that allows the dashboard or scorecard to be viewed on the go. As people more frequently work remotely or travel, quick visibility into business information from mobile devices is key to keeping the business running and performing optimally.
Easy to use – A system that is easy to use is more likely to be utilized by management. Dashboard configuration should require little to no maintenance, with a one-time data configuration. The data should be laid out in an easily interpreted format.
Benchmarking – A solution that offers industry benchmarking data is helpful for HMEs to track how they measure up against their peers, and offers an opportunity to adjust goals and KPIs based on industry averages.
Essential KPIs for your HME
KPIs represent a set of measures that focus on aspects of organizational performance that are the most critical for the current and future success of the business. The specific KPIs an HME should track will vary, but generally speaking, the following KPIs are critical:
Days Sales Outstanding (DSO) – the average amount of time it takes to collect revenue.
Sales Revenue – the total amount of money the business is taking in.
Held AR – measures how much of a company’s accounts receivables is comprised of invoices on hold.
Percentage of Denials – indicates what percentage of claims or invoices have been denied for payment.
Revenue per Employee – shows a company’s billing volume as a ratio of dollars per full time equivalent (FTE).
Asset Utilization – measures how often the company’s serialized items are being used, or rented.
Unconfirmed Sales Orders – measures the money not yet in AR and can’t be billed until you get documentation.
However, to thrive, providers must dig deeper to understand the specific components that make up each of these high-level metrics. For example, there are many steps that transpire before an order is added to the unconfirmed sales order list. These steps could include:
- Time elapsed from when the referral is received to the benefits being verified.
- Time from benefit verification to order entry.
- Time to request and receive correct documentation from referral sources.
By breaking the process into discrete steps and inspecting the elapsed time for each one, providers will uncover problem areas that are negatively impacting their bottom line.
The business management platform should enable providers to define the optimal workflow and measure the actual time spent on each step. Ideally, these results should be made available on dashboards so that staff members can quickly prioritize their work so they are more efficient. Using these results, providers will have the visibility necessary to make sound business decisions and identify where workflow bottlenecks exist, enabling them to resolve operational inefficiencies.
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