View from the Board: Numbers don’t lie

I fell in love with veterinary medicine for the problem solving and the science.  I never thought I would spend so much of my time thinking about key performance indicators (KPIs), much less how those numbers could shape my team’s workflow, my stress level and the overall experience my patients and clients have at my hospital.

The longer I’ve owned and operated a practice, the clearer it’s become that monitoring KPIs isn’t “business fluff,” it’s one of the most practical tools we can use to have better patient care, stabilize the team and the keep the hospital healthy enough to grow. Especially now.

Over the past year and a half, many have experienced two realities. Costs continue to rise and clients are tightening their budgets. In some hospitals, patient visits are down slightly compared to prior years.  When that happens, it’s easy to assume the solution is just to “work harder” and “increase marketing.”  Sometimes, those are the best answers, but without KPIs they are just guesses and guessing can be expensive.

I learned pretty quickly that while gut instinct has value, it’s not a reliable instrument in driving decisions for a hospital. Numbers don’t panic, they don’t exaggerate and they don’t forget. They can be misunderstood or ignored, but they don’t lie.

When you are facing reduced patient visits and more price sensitive clients, your margin for error shrinks. That is when KPIs become even more valuable because they can help you monitor what effect any changes have made on the practice.

One of the biggest benefits I have found about monitoring KPIs is that it can make my practice more stable. A stable practice supports a stable team and a stable team provides better care.

Holding myself accountable to a budget built around KPIs had the most direct impact on my ability to increase payroll responsibly. When the hospital is more profitable, payroll can be a healthier percentage of gross revenue. That can translate to happier staff, reduced turnover and a workplace I am proud to lead.

As expenses climbed, the easiest lever for me to control was inventory (cost of goods). If visits are down slightly, having cash tied up in products on the shelf hurts more than ever. Monitoring my inventory KPIs helps me keep my money working for the practice and not collecting dust on the shelf.

For me, it seemed simple, every hospital should have someone that “geeks out” on the numbers, whether that is the owner, the practice manager or a trusted advisor. You don’t want to turn the entirety of the hospital into a spreadsheet, but you do want to make sure that decisions are grounded in reality and to monitor the effect changes make.

In a time when clients are watching their spending and visit volume may be down slightly, you can’t afford to fly blind and only go with the gut instinct. Numbers don’t lie, but they can only help you if you look at them. Once you do, then benefits show up everywhere with stronger finances, a better supported team, smarter investments and a practice that can keep delivering excellent medicine since that is what our patients and clients deserve no matter what the market does.

Scott Driever, DVM, is immediate past president of AAHA. He is owner and veterinarian at Animal Hospital Highway 6 in Sugar Land, Texas.

Photo credit: © American Animal Hospital Association

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