Key Performance Indicators for Hospice Agencies

What Are the Most Important KPIs for a Hospice Agency?

 

Top hospice leaders know the importance of tracking key performance indicators (KPIs). By tracking specific metrics, hospice agencies can identify areas for improvement to ensure they are meeting the needs of patients, families, and other stakeholders. KPIs assist with goal setting, monitoring, and data-driven decision making—enhancing the overall quality and efficiency of care and service delivery. KPIs play a crucial role in continuous process improvement efforts.

KPIs can be categorized into quality, financial, and operational metrics. These groupings typically align with the executive roles responsible for driving KPI improvement. What are some of the top KPIs hospice leaders should review regularly, and what insights do they provide?

 

Quality KPIs

 

Hospice Quality Reporting Program (HQRP) measures, such as the Hospice Item Set (HIS) and the publicly available Consumer Assessment of Healthcare Providers and Systems (HCAHPS) survey results include key quality measures such as pain management and overall satisfaction. Quality measures can be used to drill down on gaps in care, and trends can be used to determine whether specific improvement initiatives are being effective. The public availability of competitor data allows for benchmarking.

Other quality KPIs include:

• Timely admission. The days from hospice referral or eligibility assessment to the initiation of hospice services can indicate the efficiency of the admissions team. In addition to tracking the average time to admission, it is also helpful to look at specific instances where the time was greater than a hospice’s target for admitting patients. These instances can be useful for identifying root causes.

 

• Visits in the last week of life. The frequency of visits during a patient’s final days is an indicator of quality, compassionate care. Hospices can use this metric to assess the effectiveness of their care plans and resource allocation to ensure peaceful, dignified transitions for patients and families.

 

Financial KPIs

 

• Revenue Per Patient Day: This KPI helps hospices assess their revenue generation capabilities and identify opportunities to optimize reimbursement. Revenue per patient day may be impacted by coding and documentation practices, payer mix, average length of stay, and other factors.

 

• Cost Per Patient Day: This metric helps hospice agencies evaluate their cost structure and identify areas for cost reduction or improved efficiency. Cost per patient day can be further stratified and trended by labor, pharmacy, and other expense line items per day.

 

• Revenue per Admission: The average revenue per admission gives insight into the financial impact and the profitability of particular patient populations, for example diagnosis groups, which can inform strategic planning.

 

Revenue Cycle Metrics are an important subcategory of hospice financial KPIs. Key metrics to monitor include:

 

• Days In Accounts Receivable: “Days in AR” shows the average number of days it takes for a hospice to collect payment on accounts receivable. The AR balance is divided by an average daily revenue amount to estimate how many days of revenue sit in receivables. Lower numbers are better, indicating efficiency in converting outstanding balances to cash. Timeliness of billing, or issues holding up sequential claims are some of the things that can inflate days in AR.

 

• Collections Percentage: The collection percentage shows cash collected for a period, expressed as a percentage of the total expected net revenue for the same period. This is a lagging metric since payers reimburse hospices weeks or months after the provision of services. Denials and upstream issues with admissions paperwork are just some of the factors that can impact collections percentages.

 

Operational KPIs

 

Operational KPIs may be impacted by multiple teams, including marketing and admissions teams, clinical managers, human resources professionals, and others.

 

• Average Length of Stay (ALOS): ALOS trends contain a lot of important information. For example, late admissions to hospice in the last days of life drive ALOS down and signal a need for education for referring providers. Diagnosis mix also impacts length of stay. Because patients with exceptionally long stays can skew the average, median length of stay trends should also be monitored.

 

• Productivity percentage: Productivity percentages express the level of output to input, or the relationship between actual staff labor hours versus budgeted staffing model hours, taking into account census and the level of care provided. Since staffing models are intended to determine the most appropriate and efficient number and mix of healthcare professionals needed to meet the demands of patient care, comparing the ratio of actual hours versus target gives insight into the team’s productivity. Low productivity numbers correlate with unfavorable expense variances, while productivity numbers that are too high could signal understaffing and quality risks.

 

• Referrals and conversion rates: Referrals and conversion rates measure the success of marketing efforts and the admissions team. With these KPIs, leaders can drill down not only on growing hospice referrals but also on overall volume trends by referral source, as well as identify and address reasons that referrals may not convert to admissions.

 

• Staff turnover or retention rates: For most hospices, labor represents the largest expense on the income statement. Providers face unprecedented staffing challenges as the population ages and experienced clinical staff retire. High staff turnover rates can interfere with consistent delivery of high-quality care, as well as drive up the cost of recruitment and training. Monitoring turnover or retention metrics can inform employee engagement and retention strategies. Turnover is calculated by dividing the number of employees who left the organization during a time period by the average number of total employees for the same time period. Retention can be calculated by taking the number of same employees at end of a period divided by the number of those same employees at the beginning of the period.

 

Best practices

 

Best practices for using KPIs include selecting the right metrics, setting clear targets, and regularly monitoring and analyzing data. The metrics a hospice chooses should align with its strategic goals and provide meaningful insights into performance. The timing, availability, and ease of extracting data is a crucial factor, because the value of using KPIs comes from the actions taken in response to the information they provide. Hospice software plays a critical part in an agency’s ability to get the data needed for KPIs.

In summary, the best hospice agency leaders stay on top of their KPIs and are ready to make adjustments to their tactics and workflows in order to meet their strategic goals and continually improve performance and service delivery.

Author’s Note: Views, information, and guidance in this resource are intended for information only. We are not rendering legal, financial, accounting, medical, or other professional advice. Alora disclaims any liability to any third party and cannot make any guarantee related to the content.

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