Remember back in physical therapy school how difficult it was to evaluate your first patient? Which symptoms mattered? Which were unrelated? Over time, you developed a system to evaluate, develop treatment plans, and treat your patients effectively. Similar to processes applied in patient care, getting the outcomes you want from your business requires a data-driven, systematic approach: Applied Business Intelligence. Here's how it works:

Measure. Start with defining and gathering the business metrics—key performance indicators (KPI)—for your business. KPI help organizations achieve goals through the definition and measurement of progress.

Analyze. Once you have measured the KPI, it is important to drill down from the result and investigate the underlying factors that drive the KPI.

Act. Once you understand what is changing and why, you can take specific action.

Systematize. Your business is like any living system—it's always changing. That's why it's important to have a system that makes it easy to constantly measure and manage your business.

REPORTS VERSUS APPLIED BUSINESS INTELLIGENCE

Most rehabilitation clinic-management software systems create a multitude of reports. Getting KPI back out of the system is often a difficult process. You are left to sift through pages of data to decipher what information is important and then what to do about it. If you were to manually analyze a report, you would be looking for things that were out of the ordinary; the exceptions. Since exceptions are where the important information is found, it is important to have a system that can alert you to the exceptions. It is equally important that you have a system that enables you to drill down from the exception to the information that created the result. This approach allows you to quickly identify potential problems and correlate the true cause to the business impact.

APPLYING BUSINESS INTELLIGENCE: 10 PRINCIPLES

These principles were gleaned from our interactions with hundreds of therapists in clinics of every size and stage of growth. While this list is by no means exhaustive, we hope it will inspire you to develop your own principles, establish KPI, and implement a system for regularly monitoring and improving the core processes that drive your business outcomes.

Principle 1) Turn referrals into patients.
KPI: Number of referrals with no first visit.
Action: Outreach to newly referred patients.
Some practices rely on the patient to schedule their appointment. Physicians get frustrated when their patients do not get treated. Having a clinic-management software system that keeps track of referrals without appointments makes it easy for the front-desk staff to take a minute and make a phone call.

Principle 2) Make sure every visit is an authorized visit.
KPI: Number of pending appointments with expired authorizations or referrals.
Action: List all upcoming visits that need renewed referrals or insurance authorizations.
You should always know that a patient's referral or authorization is expired when you are scheduling the patient, and you should always know that this week's patients have a valid authorization and referral. You need a system that generates the list for you.

Principle 3) Stay on top of documentation.
KPI: Number of undocumented visits.
Action: An undocumented visit is a problem waiting to happen.
Not having the documentation completed creates an audit risk and forces everyone to scramble when the payor or the physician needs documentation on the patient.

Principle 4) Collect early.
KPI: Amount of average patient balance.
Action: Give patients an updated statement at the time of visit.
The best time to collect is when the patient is in the office. To do this, you need to be able to tell the front-desk staff what to collect from the patient, including a way to print an up-to-date statement.

Principle 5) Get paid for what you do.
KPI: Number of potential underbilled visits.
Action: Compare visit time to billed procedure time.
By accurately tracking the visit time, and comparing it to the total procedure time, you create a cross-check that catches potentially missed procedures while ensuring maximum productivity.

Principle 6) Know your therapists.
KPI: Therapist productivity—total visits, procedures per visit, dollars per visit.
Action: Investigate differences and changes in therapist productivity.
If a therapist's billing rate falls, you need to know why. Are referrals dropping? Were they doing more evaluations? If you're going to manage your therapists, you have to have the data you need to find true productivity problems and address them early.

Principle 7) Know your referral sources.
KPI: Referral-source productivity—total patients, value of referrals.
Action: Track your best referral sources, and follow up at the first sign of a problem.
When you know your best referral sources, you can develop a proactive plan to make sure they are getting what they need. You may even find you have a referral source that is sending you a lot of referrals, but these referrals may not be profitable. Having this information enables you to focus your resources where they have the greatest impact.

Principle 8) Stay on top of your patients.
KPI: Number of inactive patients with active referrals.
Action: Create an outreach plan for inactive patients.
You need a system that makes it easy to create a list of patients that need to be called to schedule appointments. At the very least, you can tell the physician you tried to get them scheduled.

Principle 9) Manage your expectations.
KPI: Amount of expected versus actual payment.
Action: Identify denials, coding problems, and contract issues.
When your expected versus actual payment differs significantly, you need to do something. Knowing what to expect will help you to manage your business better; knowing what you get will help you to manage your payor relationships and your business better.

Principle 10) Cash is king.
KPI: Accounts receivable aging average.
Action: Stay on top of aging receivables.
You need a system that alerts you to past-due accounts as well as habitually past-due payors. You need a system that lets you keep track of conversations and commitments, and reminds you to follow up.

Jerry Henderson, PT, has been a PT for more than 25 years. An original founder of Clinicient, he currently owns and operates PhysioCare at Woodinville, a physical therapy practice located in Woodinville, Wash. For more information, contact .