Percent of Patient Schedule Occupied

Purpose:
Identifies opportunity to maximize slot utilization and improve practice productivity

Value:
Measures available capacity in a patient schedule

Calculation:
N: Number of patient hours occupied
D: Number of patient hours available

Point-of-Service (POS) Collection Rate

Purpose:
Provides opportunity to increase collections, decrease collection costs, and accelerate cash flow

Value:
Identifies opportunity for increased POS collections

Calculation:
N: Total POS collections
D: Total patient cash collected – all self-pay 

Total Charge Lag Days

Purpose:
Measures charge capture workflow efficiency and identifies delays in cash

Value:
Accelerates cash flow

Calculation:
N: Σ days from revenue recognition date (posting date) less date of service date (by CPT code)
D: Σ CPT codes billed 

Professional Services Denial Percentage

Purpose:
Tracks payer denials and impact on cash flow and trends payment opportunity and process improvement

Value:
Drives root cause accountability in the revenue cycle processes

Calculation:
N: Σ CPT (units of service) codes denied
D: Σ CPT codes billed 

Aged A/R by Payer Group as a Percentage of Outstanding Total A/R

Purpose:
Trending indicator of receivable aging and collectibility by payer group

Value:
Indicates payment delays or revenue cycle’s ability to liquidate A/R by payer group

Calculation:
N: Billed payer group by aging (0-30, >30, >60, >90, >120 days)
D: Outstanding A/R by payer group 

Aged A/R as a Percentage of Outstanding A/R

Purpose:
Trending indicator of receivable aging and collectibility

Value:
Indicates payment delays or revenue cycle’s ability to liquidate A/R

Calculation:
N: 0-30, >30, >60, >90, >120 days
D: Total outstanding A/R 

Primary Physician Practice Operating Margin Ratio

Purpose:
Measures the financial performance of a primary physician entity on an accrual basis

Value:
Determines the state of financial health and sustainability of current practice operations

Calculation:
N: Net income from primary practice operations
D: Primary practice operating revenue

Specialty Physician Practice Operating Margin Ratio

Purpose:
Measures the financial performance of a specialty physician entity on an accrual basis

Value:
Determines the state of financial health and sustainability of current practice operations

Calculation:
N: Net income from specialty operations
D: Specialty operating revenue 

Net Income/Loss Per Primary FTE Physician

Purpose:
Measures the average profit or loss of Primary FTE physician on an accrual basis

Value:
Determines the financial health on a physician FTE level; can be used for tracking and trending the profitability of the entity based on a physician level; supports the need for strategy development to minimize losses

Calculation:
N: Net income from operations
D: Number of FTE physicians 

Net Income/Loss Per Specialty FTE Physician 

Purpose:
Measures the average profit or loss of specialty FTE physician on an accrual basis

Value:
Determines the financial health on a physician FTE level; can be used for tracking and trending the profitability of the entity based on a physician level; supports the need for strategy development to minimize losses

Calculation:
N: Net income from operations
D: Number of FTE physicians 

Total Primary Physician Compensation as a Percentage of Net Revenue

Purpose:
Demonstrates an ability to afford primary physician compensation in relation to the revenue of the physician enterprise

Value
Predicts reasonableness of primary physician compensation relative to revenue (direct contribution of a physician)

Calculation:
N: Total primary physician compensation
D: Total net primary patient service revenue

Total Specialty Physician Compensation as a Percentage of Net Revenue

Purpose:
Demonstrates an ability to afford specialty physician compensation in relation to the revenue of the physician enterprise>

Value:
Predicts reasonableness of specialty physician compensation relative to revenue (direct contribution of a physician)

Calculation:
N: Total specialty physician compensation
D: Total net specialty patient service revenue 

Practice Net Days in A/R

Purpose:
Calculates the average number of days it takes to collect payment on services rendered; measures revenue cycle effectiveness and efficiency

Value:
Used as a potential proxy for DCOH (“Cash Inventory”); determines the effectiveness of patient care collections and can be used for budgeting and cash flow projections

Calculation:
N: Net patient service A/R
D: Average daily net patient service revenue 

Practice Cash Collection Percentage

Purpose:
Measures revenue cycle efficiency, supports the valuation of current accounts receivable, and predicts income

Value:
Provides an opportunity to increase cash flow and forecasts accuracy of expected revenues

Calculation:
N: Actual patient service cash collections
D: Net patient service revenue