Metrics That Matter: Key Performance Indicators (KPIs) Your Practice Should Be Tracking

As PECAA’s Finance & Strategy Advisor, the question members ask me most often is, “Which KPIs should I track for my practice?” To understand which metrics are the most important, we first need to understand why they’re needed.

Key Performance Indicators (KPIs) are metrics used to measure your practice’s short- and long-term performance. Strategic tracking of these measures can help you identify areas where your practice is excelling and areas for opportunity — there’s no better time to establish KPIs than at the start of a new year (though any time works). 

If you’re thinking that your practice is doing just fine, visualize yourself driving a car with both hands on the wheel — even on the straightest of highways, you’re constantly making minor adjustments to stay on the road, but if you take your hands off the wheel for second, you’ll notice that the car gradually begins to swerve. Monitoring KPIs is like driving with your hands on the wheel — you’re flagging minor performance dips before they turn into larger financial problems. 

Essential KPIs To Track

• Revenue Per Patient: The Holy Grail of metrics, as every other metric contributes to improving the total revenue per patient. If you increase other metrics first, your revenue per patient will go up — increase this while also growing your patient base, and your overall practice revenue will grow. 
  Formula: Total revenue ÷ number of patients
   
• Frame Capture Rate: An accurate picture of how well your practice sells frames is critical to achieving a high-performing and profitable optical. National average capture rates in recent years have hovered around 47%.* If your practice is below this, PECAA’s Optical Business Advisors can help you assess your doctor handoff, frame assortment and frame selling strategies.
  Formula: Number of frames sold ÷ number of refractions completed 
   
• Revenue Per Contact Lens Fit: This KPI reveals the average revenue your practice generates from each contact lens fit. The national average for revenue per sale of contact lenses is around $428* — if your practice is below this average, it’s a sign to review your contact lens capture rate — including the ability to sell annual supplies, usage of premium daily lenses and follow-up strategy for patients trying out new lenses.
  Formula: Total revenue from contact lens product sales and lens fitting fees ÷ number of contact lens fits

Depending on the focus of your practice, additional metrics are also important to track — KPIs can measure the efficacy of individual business initiatives like marketing, specialty services, patient co-management and other areas. 

How Often To Review Your Metrics

It’s not necessary to assess every metric daily, or even weekly — monthly is a good place to start. In addition to helping you identify KPIs that provide the greatest opportunity for improvement, I am available to meet quarterly or semi-annually to review metrics with you. Together, we can make informed decisions and set and adjust short- and long-term goals for your practice. 

If you need help reviewing metrics, setting goals for your practice or simple formulas to calculate KPIs, I am here to help! Together with my fellow PECAA Member Business Advisors, we are available to work with PECAA Max members at no additional cost! If you are not a PECAA member, contact us to learn how PECAA can help your practice thrive. 

_{*Data from Glimpse, by ABB Analyze}