by Mark Sanna DC, ACRB Level II, FICC
CEO & President, Breakthrough Coaching
Picture a locomotive train speeding along the tracks. At the controls sits the conductor guiding the course by monitoring the crew, equipment, and signals determining the direction. At the rear of the train trails along the caboose. Unable to chart its own course, it must be towed along obeying the commands of the conductor. When it comes to managing your practice, are you the conductor or are you riding along in the caboose?
Lagging or Leading?
Most business savvy chiropractors manage their practice using a traditional set of statistics. These typically include the number of new patients, office visits, missed appointments, services rendered and collections over a specific period of time—a month, quarter or year. This management approach focuses on outcomes. How many appointments were seen? How many services were delivered? How many dollars were generated? These measures are called “lagging” indicators. Like the caboose on a train, they trail behind a series of actions that result in the arrival at a final location. Lagging indicators are named so because they lag behind the activities that result in their outcome. Relying on lagging indicators means you have to wait till the end of the month, quarter or year before you can take corrective action to improve your results.
A more current approach to practice management focuses on the action steps that result in the final outcomes desired, rather than solely focusing on the outcomes themselves. These action steps are called “leading” indicators. By measuring and monitoring the actions that can generate the results you desire, like the train conductor, you have the opportunity to modify those actions in such a way as to improve the likelihood of arriving at your desired destination.
Real Time Course Correction
Let me give you a non-healthcare example that is helpful in understanding leading indicators. For many of us a weight loss is a personal goal. A lagging indicator that is easy to measure is your weight. Step on a scale and you have your result. But what actions must you take in order to reach your goal? There are two leading indicators for weight loss: calories consumed and calories burned. These two indicators are a bit more challenging to measure, but are in your immediate control to influence.
By defining the actions that drive the ultimate outcome, you can positively change those actions, and improvement will follow. When you hold your team accountable and measure their action on a daily basis, you can be confident about what your lagging indicator will report at the end of the month. Here is the real kicker – it is much easier to course correct real-time behavior than it is to change those ultimate outcomes you agonize over.
Efficiency
When chiropractors discuss efficiency, we are most often discussing energy expenditure during movement. The less energy expended during the execution of a sport skill or job task, the more efficient the movement is considered. When management consultants refer to efficiency, they mean the measurable ability to avoid wasting materials, energy, effort, time and money. Increased efficiency means increased profitability. Efficiency means being able to course-correct with a minimal waste of energy, time and expense. In order to accomplish this, you must quickly and efficiently know which corrective measures to take before a crisis erupts.
Increased documentation, reporting and regulatory requirements have made it more and more difficult for chiropractors to focus on managing the efficiency of their practice while simultaneously delivering quality care to their patients. This results in stress, decreased productivity, and ultimately, burnout. It puts practice team members and managers in constant firefighting mode.
Lagging indicators provide you with a rear-view mirror view that does little to improve performance and efficiency. On the other hand, leading indicators give you a predictive factor that you can use to influence the activities of your practice team before a dip in new patients, office visits, services or collections occurs. They shift your focus from results after the fact, to processing improvement in the moment.
Identify Leading Indicators
How do you start tracking your leading indicators? One way is to take a closer look at your daily processes. The key is to define the actions that result in the outcomes you desire, measure them daily, problem solve, and adjust if the actions are not being adhered to. Work with your practice team members or a coach to determine which actions, when done on a consistent basis, drive the outcomes you desire.
For example, if the lagging indicator of missed appointments is too high, texting patients to confirm that they will attend their appointment on time will decrease the number of missed appointments. Measuring the number of reminder texts sent provides you with a leading indicator. More texts results in decreased missed appointments.
Another example of a leading indicator is the number of proactive collection calls made on delinquent accounts. The more calls made the better your collections. The effectiveness at which your practice team carries out these actions improves the ultimate results. With this information, you can refine your practice procedures in ways that result in continuous improvement.
Continuous Daily Improvement
Identifying your leading indicators creates daily touch-points that allow you to be aware of any issues before problems occur. But don’t stop there. Coach your practice team members to review their results on a daily basis. If the results indicate a breakdown in your systems and procedures, your team will have the opportunity to track the root cause of the problem and determine the best course of action for making improvements.
Get out of the caboose and become the conductor of your practice. Identify and measure the actions that drive the outcomes you desire and then efficiently improve them. Measurement and course correction on a daily basis is the key to your success. Do this and the metrics and measurements your practice and profitability rise and fall on will follow.
Leading vs. Lagging Indicators
- Leading: Number of Contacts Made with Potential New Patients/Lagging: New Patients
- Leading: Number of Outstanding Receivables Followed-up On/Lagging: Collections
- Leading: Number of Patient Payment Plans Set/Lagging: Collections
- Leading: Number of Reminder Texts Made/Lagging: Missed Appointments
- Leading: Number of Re-examinations Performed/Lagging: Patient Visit Average
- Leading: Number of Visits Recommended at Report of Findings/Lagging: Patient Visit Average
- Leading: CPT Code Analysis/Lagging: Services Rendered
- Leading: Number of Office Visits Pre-scheduled/Lagging: Office Visits
Dr. Mark Sanna is a member of the Chiropractic Summit and a board member of the Foundation for Chiropractic Progress. He is the president and CEO of Breakthrough Coaching (www.mybreakthrough.com 1-800-723-8423).
Why is the Discount Challenge prize amount $11,181? Because that is the average “per-occurrence” fine for Medicare inducements. That’s not $11,181 per patient, that’s not per provider, that’s PER VISIT. Stinks, doesn’t it? To us, the prize amount is worth the investment if we can help our profession better understand proper discounting.