Quality means different things to different people. For example, quality for a patient may be defined by the patient’s experience, considering factors like the time spent waiting in an exam room or their doctor’s bedside manner. But when primary care providers think of quality, they may consider how many patients attended their scheduled appointments or received necessary vaccinations.

Healthcare KPIs (key performance indicators) bridge the gap between these definitions by providing a measured reference for quality. Specifically, a healthcare KPI or metric is a performance measurement that monitors a healthcare organization’s overall processes and offers insight into patient satisfaction rates.

Why do healthcare KPIs matter?

KPIs show measurable evidence of organizational growth and performance over time. These metrics indicate your organization’s overall efficiency, giving you actionable insight into how you can improve.

Specifically, healthcare KPIs:

  • Demonstrate the ability to provide high-quality care. Quality metrics indicate a facility’s caliber of care by giving insight into factors such as the rate of accurate and timely diagnoses or treatment effectiveness rates.
  • Monitor overall patient satisfaction. KPIs can provide a helpful baseline for healthcare professionals to monitor their service quality and understand their care’s impact. By measuring patient satisfaction, providers are equipped to make impactful quality improvements. Sometimes, the technologies providers use, such as population health management tools, use information on patient satisfaction to provide suggestions for such improvements.
  • Measure community impact. Broader metrics like readmission rates and staff-to-patient ratio can help hospitals grasp their community influence, allowing them to measure their performance in the overall community.
  • Identify areas of operational improvement. A bird’s-eye view of a facility’s operational performance gives providers insight into potential areas of improvement. From there, providers and donors can work together to bridge gaps and overcome barriers.
  • Build a medical marketing strategy. KPIs act as hard evidence for your organization’s value. You can use these KPIs to inform your marketing messages on your website and other marketing materials.
  • Maintain high donor and patient acquisition and retention rates. These increased rates can directly correlate with your facility’s ability to provide quality care through increased staff hiring, purchasing new equipment, and improving your overall physical space.

These are only a few of the ways healthcare KPIs can be put to work, and now that you know their value, you might be wondering — how do you measure these metrics and what do they look like?

For a detailed analysis of relevant data to measure performance, organize your data into three separate categories: financial, operational, and clinical. Let’s dive into the details of each.

Financial KPIs

The financial KPI category includes all data related to your organization’s financial performance, from operating expenses to various revenue streams to ROI. And, with the rising cost of care, these metrics are more important than ever.

Here are some common financial KPIs you can use to monitor your financial health and inform decision-making:

  • Treatment costs: Indicates the cost incurred by your facility to provide treatment to a patient. It can be used to spot and address any exaggerated expense abnormalities.
  • Patient drug cost per stay: Shows the cost of medication per patient visit and can illuminate additional budget pressures faced from blocked access to relevant medication.
  • Payer costs: Determines which insurance types cover the most costs among patients using key data on healthcare utilization and risk adjustment analysis. From there, you can find out which payers align with different medical stays.
  • Claims denial rate: Measures how often an insurance provider declines health cost payment for a defined selection of reasons. Investigate this data further to find out if you can decrease denial rates by providing additional information in your claims.
  • Operating margin: Indicates the amount of cash generated by a facility’s normal, day-to-day operations.
  • Net profit margin: Evaluates how much money your facility makes after all expenses are subtracted from the total revenue.

Financial KPIs give insight into how money flows within your organization. They offer a meaningful baseline perspective for determining and addressing any cost abnormalities within your organization’s predefined financial structure.

Operational KPIs

Operational KPIs provide a perspective into a healthcare facility’s operational efficiency — specifically, the organization’s ability to manage both staff and patients. Employee retention and improved patient outcomes contribute to more efficient operations overall, supporting your organization’s long-term growth.

Measure operational KPIs such as:

  • Patient room turnover rate: Evaluates how quickly a facility can successfully turn over its finite number of rooms while maintaining quality care.
  • Patient wait time: Monitors the average length of time a patient waits in a facility’s waiting room. This is a key efficiency metric linked to patient satisfaction.
  • Emergency department throughput: Measures the time it takes between a patient’s arrival in the ER and their meeting with a physician.
  • Staff-to-patient ratio: Indicates whether your facility is under or overstaffed and provides insight into your overall staff management effectiveness.
  • Patient safety rate: Shows a range of measured patient safety metrics, from hospital-acquired infections to post-operational complications.
  • Appointment cancellation rate: Determines the number of missed or canceled appointments by patients which can result in wasted resources.

Operational KPIs measure your organization’s ability to balance efficiency with quality. For instance, an abnormally low patient wait time and a high treatment error rate (covered in the next section) may indicate that staff members need to take more time to assess patient symptoms.

Keeping an eye on these metrics can also help you organize fundraising efforts to help you fund efficiency improvements. For example, a hospital may increase its funding for operational essentials through a grateful patient program, which Graham-Pelton defines as, “all the steps and resources that a healthcare institution uses in order to consistently secure grateful patient donations as an ongoing initiative.”

Clinical KPIs

While increased patient and referral pools can indicate that a facility is performing well clinically, measuring clinical KPIs lends deeper insight into the overall quality of an organization’s care.

Examples of important clinical KPIs include:

  • Readmission rate: Monitors the number of patients who return to the hospital within a predefined period after being released.
  • Average length of stay: Measures the average time spent by a patient in a facility. Various categories of operations will naturally yield different lengths of stay.
  • Treatment error rate: Calculates the number of mistakes made by clinical staff when providing treatment. This could look like misprescribing medication or providing an incorrect dosage amount.
  • Patient satisfaction: Monitors a patient’s overall experience based on patient survey responses. Your facility could use this metric to identify areas of improvement in how your providers interact with patients along with the care they provide.

When combined with operational and financial metrics, better clinical KPIs generally suggest more positive patient outcomes. However, you also need to take into account factors across your organization that may be impacting the quality of care. For example, you not only need to know whether patients adhere to your preventive recommendations but also whether your website is engaging for patients and prompts them to follow such recommendations.

According to Arcadia, healthcare analytics tools show your organization exactly where you can improve through personalized reports that explore financial, operational, and clinical KPIs. Partnering with a provider that automatically tracks and analyzes these metrics can help your facility reach maximum efficiency while providing quality care.