A couple weeks ago, multi-talented PT entrepreneur Ben Fung, DPT (You Twitter fans know him as @DrBenFung), saw one of our @TherapyPartners tweets about patient outcomes and FOTO. Ben tweeted back that “PT practice is more than outcomes – it’s a business”.
Ben is ABSOLUTELY right! Physical Therapy IS a business and MUST BE RUN like a business. While @TherapyPartners tweets and blogs a lot about outcomes, leadership, team member engagement, and some of the soft aspects of a therapy practice, no therapy practice owner, manager, or team member can neglect the financial needs of the business – productivity and profit margin. Yes . . . physical therapy practices must be effectively led and managed like any business, and for short and long term stability, a number of factors must be considered.
Let’s use a time-honored methodology as a basis for our discussion . . . The Balanced Scorecard.
Although their work is over 20 years old, Robert Kaplan and David Norton wrote a classic article in HBR way back in 1992 entitled The Balanced Scorecard: Measures That Drive Performance. Their model has been used in its actual and modified forms by many businesses since then. The authors advocate giving Leader-Managers a “fast but comprehensive view of the business” from 4 Key Perspectives that are critical in nearly every business:
Customer Internal Business Innovation/Learning Financial
- Customer Perspective – The things that build trusted customer relationships. Convenience, Quality, Service, Caring, Cost. Hmmm . . . sounds like Value.
- Internal Business Perspective – Critical processes and activities that team members must perform that will meet customer needs AND wants. What must you excel at doing?
- Innovation / Learning Perspective – In a changing, more demanding market place . . . creating learning opportunities for employee growth and development.
- Financial Perspective – Bottom line performance, i.e. profitability.
While Kaplan & Norton’s model was designed more for product-delivery companies, it certainly can be modified and applied in principle for the management of a service-based therapy practice.
Here is a link to their HBR article:
Dust off the 90’s formatting and give it a read and some thought.
We have developed a Kaplan/Norton-like ‘Balanced’ approach to practice management at Therapy Partners and across our member practices. We have adopted a real focus on delivering and measuring “Triple AimPLUS” Value.
We feel there are 7 Keys to Balanced Performance Success related to the TripleAimPLUS:
- Clinical Care Improvement – Function and Value Delivery
- High Performance Teamwork
- Followership & Leadership Development
- Team Member Engagement (or ‘Employee’ Engagement)
- Customer Relationships/Patient Experience
- Productivity Management
- Expense Management
We place high level importance on a set of key metrics related to a Balanced set of Perspectives, and we use several measurement tools to provide key information to practice owners, clinic managers, and team members –
- FOTO Quarterly Outcomes Scorecards for practices, clinics, and individuals
- The PTManager application
We have developed a software application called The PTManager to provide the practice owners and clinic managers with a
- Balanced and
- Easy to Read and Interpret
- Assessments and
- Action Plans
to use in managing their clinics and practices. We are using the first version of this application and are in the process of developing the second version.
Here is an overview of the BALANCED metrics we look at now, and in some cases are developing for application real soon . . .
Clinical Care Improvement / Measurable Quality: Value and Functional Improvement – FOTO Scorecard – Quarterly
- Utilization Outcomes (Value) – FOTO Utilization Outcomes essentially measure Functional Change per Visit. We call TPI’s goal in this metric the “85/45/15 Goal” which means we expect > 85% of patients to achieve Higher than Expected + Expected Utilization Outcomes; > 45% of patients to achieve Higher than Expected Utilization Outcomes; and < 15% of patients to achieve Lower than Expected Utilization Outcomes. FOTO Utilization benchmarks are used in a value-based contract with a health plan, so they are not only quantification of a therapist’s skill development, these outcomes are critical for our payments. We expect more value-based payments in the near future.
- Functional Outcomes. TPI clinics have a goal to achieve FOTO Functional Score Change of > the 75th Percentile nationally.
Teamwork / Engaged Team Members: High Performance Team Assessment– PTManager: Performance Management – Annually; Quarterly if problems exist
- High Performance Team (HPT). Jody Ruppert, OSI Physical Therapy’s CEO, developed a HPT Assessment based on 7 criteria – Shared Purpose, Involvement, Commitment, Trust, Communication, Process Efficiencies, and Continuous Improvement. Each team member completes the assessment of their team, which is scored against established benchmarks, and shows how the team is doing in each of the 7 criteria.
Leadership Development: Followership and Leadership Assessments – PTManager: Performance Management – Annually; Monthly or Quarterly if problems exist
- Followership. Each team member must be able to follow before they can lead. In fact, each team member must follow and lead at different times each day. Our Followership model is based on work by Gordon Curphy and Mark Roellig.
Clinic Managers assess each team member in the PTManager based on 10 Contribution and 10 Enthusiasm Factors, review a graphic representation of team members, record an assessment of the team and each member, and create an action plan for greater engagement.
Self Starters are Respectful of Leaders, Enthused, Proactive Contributors, Confident. Do-ers are Respectful, Enthused, but more Passive Contributors because they Lack Confidence. Criticizers are Active Thinkers with Strong Feelings, usually Self- Confident, but they Do NOT Respect the Leaders’ vision, strategy, and/or behavior. They are Unenthused, have Different View of how things should be done, and try to Create Converts to their way of thinking. They bring the team down. Disengaged Employees have checked out. They Do NOT Contribute; they are Unenthused.
Managers must learn to support team members; ensure they embrace the practice’s vision, mission, and strategy; help them gain self-confidence; and engage with their team . . . in other words, leader-managers must develop team members to become strong Self Starters. Managers must also eliminate the team of Criticizers and Disengaged Employees by either helping them positively transform to Self Starters, or by helping them leave.
- Leadership. We believe in developing leaders from ‘top to bottom’. Big L Leaders who provide direction and drive positive change; Leader-Managers who support the direction, align teams, plan, and hold people accountable; Small L Leaders who support the direction, are team players, and are role models who achieve expected results. We have created a Leadership Assessment based on Dr. Mark McCloskey’s 4R Model of Leadership – Relationships, Roles, Responsibilities, and Results of a Leader. Leadership development must be supported and managed across the practice. Here is a 10’ video of Dr. McCloskey talking about his 4R Model of Leadership:
Team Member Engagement Assessment– PTManager: Performance Management – Annually; Monthly or Quarterly if problems exist
- Employee Engagement. This is more than just a new buzz-phrase. It truly relates to and contributes to all of the concepts above – outcomes, teamwork, followership, leadership. We are in the process of creating an assessment tool based on Gallup’s 12 Point Employee Engagement Assessment. Like becoming a Self Starter Follower, Team Member Engagement depends on the individual’s drive to be engaged and leadership’s support and management of the Employee Engagement process. Even if you do not measure this, all transformational practice leaders support a process to enhance employee engagement.
So what IS
bitly links here
Customer Relationships/The Patient Experience – PTManager: Performance Management – Quarterly
- The Customer Life Cycle. So it’s time to get past ‘Patient Satisfaction’ surveys. It’s time for creating customers for life. At TPI – this is UNDER CONSTRUCTION, but we made the big step in June by bringing in Jerry Durham (@Jerry_DurhamPT) to present his Customer Life Cycle solution to the ‘Exceptional Patient Experience’ piece of The Triple AimPlus – http://bit.ly/NEWatTPIjune. Now we have to work with Jerry to create a Customer Relationship measurement tool in PTManager.
Productivity Metrics and Analysis – PTManager: Monthly Productivity – Monthly
Getting down to the Nitty Gritty. Financial management. Practices around the country measure productivity in different ways, but here is a brief look at the metrics TPI practices assess and manage on a monthly basis via the PTManager app. BMS is TPI’s billing partner, and all TPI practic es use BMS’s RevFlow system. Key data from RevFlow reports is automatically imported each month into the PTManager. The only thing the managers do is input each provider’s FTE status. PTManager creates a monthly productivity report which is accessed by managers. Simple and fast.
- New Patients / Therapist FTE / Mo
- Visits / Provider FTE / Mo
- Visits / New Patient
- Timed Units / Visit
- Charges / Provider FTE / Mo
- Charges / Visit
- Revenue / Provider FTE / Mo
- Revenue / Visit
- Revenue / New Patient
PTManager generates a productivity scorecard per practice, per clinic, and per therapist along with various graphic displays of the metrics. Managers use this data along with more detailed RevFlow reports and financial statements every month.
Below is a sample of a PTManager Monthly Productivity Report from a TPI practice (some data has been covered) – actual metrics and benchmarks.
Expense Analysis – PTManager: Annual Expense Analysis – Annually at Year-End
We are in the process of fine-tuning an annual expense analysis in the PTManager. This expense analysis goes beyond your P&L. This application analyzes costs related to specific activities and responsibilities. It calculates the major cost factors that go into performing each responsibility and reports the total cost and the percentage of your revenue that you spend on each responsibility. This application allows owners and managers to assess how efficiently they are using their people, space, and financial resources for the activities necessary for their clinics. This expense analysis helps the owners better manage their entire practice, more confidently decide if they have to make operational changes, and more accurately determine whether they should keep activities in house or outsource them.
We hope to have the PTManager available in its full application by the 3rd quarter this year.
Effective Practice Management is a broad based process with many factors affecting overall success. We have a lot of work to do to get our system fully refined in order to most efficiently and effectively help our practice owners and clinic managers achieve the best results. But we are confident that this well-balanced approach will help our independent practice members achieve long term strength and stability.
If you would like more information about the PTManager, contact me at Jhoyme@therapypartners.com or 651-341-3330.Leave a reply →