Planning for Success

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Identifying top metrics to monitor in your strategic plan

By Robbie Leonard, PT, DPT

The purpose of strategic planning is to set priorities and action plans that move you closer to your vision.

While that concept is simple enough, a critical question that must be answered is which initiatives should be prioritized to build a healthier, stronger, and more valuable organization. An annual scorecard may help you to objectively measure performance in critical areas of the business which, in turn, will allow you to quickly identify priorities, establish targets, and objectively measure the return on investment for strategic initiatives. It is true that “what gets measured gets done.”

The article outlines key metrics to assess annually during strategic planning. While key metrics will differ for every practice, this article focuses on staff engagement, staff performance, quality care and patient engagement, professional promotion/marketing, and revenue cycle management.


As a clinic owner, your ability to care for patients is limited to the quality of staff you recruit, develop, and retain. Without fully engaged staff, no organization will succeed for very long at providing quality care. The following are four examples that are commonly used to measure staff engagement and sample targets for each.

  1. Annual Retention of Clinical Staff: Retention of staff is critical for long term success. Consider tracking annual retention of staff as a measure of your ability to retain your most valuable asset. Retention can simply be measured by identifying voluntary retention and total number of clinical staff. A company that starts with 10 therapists and loses two has an 80% retention rate. This metric is also very helpful for forecasting hiring needs. If a company losses two staff due to turnover each year, a more proactive recruiting plan can be developed over time.
  2. Annual Retention of Support Staff: Tracking retention of support staff separately provides insight into which employee pool may require additional work and attention in the upcoming year.
  3. Staff engagement survey: Using a consistent staff engagement survey is a good leading indicator of engagement and can also assist with improving retention if used correctly. Review top-ranked surveys to ensure that you are asking the right questions. The Gallup Q12 survey is an example of an engagement survey that provides valuable insight into staff engagement.
  4. New Hire Conversion Rate: Measuring the percent of job offers that are accepted provide great insight into how appealing your organization, team, and compensation plan are to prospective employees.


Happy but under-performing staff can be a recipe for trouble. Assessing staff performance and providing clarity around expectations is just as critical as staff engagement. Therapists are in high demand and a well-run organization should optimize the amount of care they provide to the community. This requires having a target for the amount of care provided by each therapist. Your company goals, payer mix and corresponding payer policy, staff experience, and clinical model will all contribute to setting appropriate goals for these metrics:

  1. Procedures Per Visit (UPV): units of care provided per visit
  2. Visits Per Clinical Hour: number of patients seen per week, day, or clinical hour
  3. Procedures Provided Per Clinical Hour: while you can calculate this via #1 and #2, this is a good measure to assess how much care is being provided per hour
  4. Revenue per Professional FTE: as mentioned previously, targets should be appropriate given payer mix and payer guidelines
  5. Labor as a Percentage of Total Revenue: since labor costs account for more than 50% of revenue in most clinics, it is important to track this metric over time to make sure you are achieving clinic efficiency targets


While the following metrics should also be on a weekly clinic scorecard, it is helpful to also look at these annually to identify any that present an opportunity for improvement. If any of the metrics here are below national averages or company targets, they may require a deeper dive into identifying root problems and creating a comprehensive plan for change management.

  1. Visits per new patient (VPN): Patients that value the care they are receiving tend to complete their plan of care. Those that are not getting adequate value do not. In addition to patient engagement, lower VPN numbers may indicate inconsistency in how well a plan of care is explained and how well patients are scheduled out to complete that plan of care. Targets will vary depending on payer contracts. A target of 12 VPN is common in many markets.
  2. Arrival rate: This is both a measure of patient engagement and a metric that assesses the clinic’s processes for achieving commitment to care and patient appointments. A cancellation rate greater than 10% (arrival rate below 90%) is a clear opportunity to improve.
  3. Net Promotor Score® (NPS): NPS provides insight into the value patients are receiving from your practice. Keep in mind that physical therapy NPS tends to be significantly higher than other industries. This is likely due to the nature of care provided and the high amount of personal attention provided by therapists.
  4. Clinical Outcomes: While an outcomes program may be more difficult to implement and assess, having a system to collect and track consistent outcome data provides excellent information on the quality of care provided. Most EMRs offer integration of an outcome measurement system to make this process less cumbersome.


The goal of marketing is to communicate the offerings you provide that have value for prospective customers. Therapy is generally underutilized by many patients who could benefit from our services. It is our professional responsibility to promote the benefits of therapy within the communities we serve. Below are a key metrics that will help assess the effectiveness of your promotion efforts:

  1. New patient (NP) growth over prior year: While each clinic will have unique expectations, keep in mind that physical therapy is a growing industry and clinics with growth rates below 2-3% annually could lose market share while also limiting growth.
  2. New patient conversion rate: This metric tracks how many referrals convert into actual patients over time. It can be measured by simply dividing annual NP volumes by annual referrals.
  3. Marketing cost as a percentage of revenue (compared to NP growth rate): A clinic spending 4% to 5% of their revenue on marketing should expect a higher growth rate than one spending 1% on marketing. Comparing marketing spending to NP growth can be helpful to ensure marketing is an investment, not an expense without results.
  4. Growth of referrals from key channels: Assessing growth by key referral channels provides significant insight into which market efforts are working and which are missing the target. Consider surveying patients annually or quarterly to track how they are finding you. Consider measuring three to five key areas such as:
    • a. Past Patient Referrals: these could be repeat patients or word of mouth referrals.
    • b. Physician/Provider Referrals
    • c. Digital Marketing: This includes digital marketing efforts, SEO, and Pay Per Click
    • d. Community Events


Having and achieving revenue cycle management goals are just as critical as achieving operational goals. The following are five key metrics that should be tracked at least annually to assess performance:

  1. Collections as a percentage of allowed charges: Too few clinics track this critical metric. To calculate allowable charges, subtract contractual adjustments from total charges. A common error in this calculation is including adjustments that aren’t contractual. Divide collections by allowable charges to get a percentage. A collections rate below 95% is an opportunity for improvement.
  2. Front office collections: Tracking average collections per visit over time can provide insight as to how well your team is doing with point of service collections. Patient responsibility continues to increase, so a robust over the counter collections process is key to maximizing revenue.
  3. DSO (Daily Sales Outstanding): DSO is simply the amount of time it takes on average to collect charges. Use at least a four-month total to calculate average charges per day. Then divide your total AR (ending AR at the end of the four-month period) by your average charges per day to get an average DSO. In most markets, a DSO over 40 days is an opportunity for improvement.
  4. Billing cost as a % of Revenue: While #1-3 are quality metrics, this is an efficiency metric. If you total billing cost is over 7%, you may have an opportunity to lower your cost. Below 6% is outstanding so long as your team is achieving performance targets.


By measuring these Key Performance Indicators (KPIs), you will quickly be able to identify objective strengths and weaknesses. You will also be able to calculate the financial gap between current performance and future goals. Using this as a first step in strategic planning will allow you to calculate the ROI for each initiative and prioritize initiatives that will have the most significant impact on the value of the organization. Keep in mind that you will likely need to narrow your priorities to one key initiatives for each company division. In the future you can expand the list to include criteria to assess development of leadership, culture, compliance, and expanding your impact. As you add additional strategic initiatives, each should have an objective metric like the examples in Table 1.

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1McChesney C, Covey S, Huling J. The 4 Disciplines of Execution: Achieving Your Wildly Important Goals. Bangor, PA: Free Press; 2012.

Robbie Leonard

Robbie Leonard, PT, DPT, is a PPS member and former practice owner. She is the co-founder of 8150 Advisors and can be reached at

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