The Most Important Metrics Your Med Spa Should Track in 2024

Business, meeting, financial advisor, CFO, tracking business data

By: Kendall Reed

Understanding your data is essential to making smart business decisions. If you haven’t been tracking your practice’s monthly data, consider this a New Year’s resolution: start now. While measuring and analyzing your Key Performance Indicators (KPIs) alone won’t guarantee success, it will guide you toward smarter decisions as you aim to grow your Medical Spa in 2024. 

This article will focus on four key performance indicators essential for your Medical Spa: 

  • Total Production
  • Capacity Percentage
  • Revenue per Working Hour
  • Revenue per Appointment 

Metric #1: Total Production (by Practice & by Provider)

As a Med Spa Owner or Practice Manager, understanding Total Production is vital for gauging your practice’s success and the contribution of each provider. Among the four KPIs we’re discussing, this one is likely the easiest to monitor and pull.

How to Track

Your Electronic Medical Records (EMR) software is an invaluable tool for this. Most EMR systems can track both the practice’s and individual providers’ production levels. If your current EMR doesn’t offer this feature, consider investing in software that does. 

Why It Matters

    • Identifying Top Performers – Tracking provider production highlights your ‘superstars’ – those who are excelling and can be incentivized to maintain high performance. It also identifies those with room for improvement. Remember, comparisons between providers aren’t always apples to apples; factors like the type of services offered or product sales expertise can influence production levels.
    • Understanding Trends and Seasonality  – Monitoring production helps you recognize patterns and prepare for fluctuations in business. This insight is crucial for planning and ensuring steadiness throughout different seasons or months, which might bring varying levels of income.
    • Revenue Tracking – Beyond just production, this KPI assists in understanding the actual revenue generated. While simple on the surface, it’s a nuanced measure. It’s beneficial to compare your total production with top-line revenue. The figures may not align perfectly due to factors like credit card payment timings, but they should be close. A significant discrepancy between your EMR’s payment numbers and your accounting software’s figures warrants attention. A minor difference of a few thousand dollars is generally acceptable.

In conclusion, Total Production is not just about numbers; it’s a strategic lens to view your practice’s health and make informed decisions for growth and improvement.

Metric #2: Capacity %

Once you’ve gathered your production KPIs, the next step is to analyze Capacity %. This metric is calculated by dividing the time a provider spends with patients by their idle time at the office. At Maven, we focus on an hourly analysis. Simply put, Capacity % equals the number of hours spent with patients divided by the number of non-patient hours (Hours Worked/Hours Available).

How to Track

To determine a provider’s HOURS AVAILABLE, subtract any blocked time from the TOTAL HOURS they’re at the office. Blocked time could include lunch breaks or meetings with the practice manager, as these periods aren’t available for patient care.

Why It Matters 

Tracking CAPACITY % is crucial as it reveals how ‘busy’ a provider is. Maven’s Capacity Benchmark is ideally somewhere around 75-80%. Consistently exceeding this range might indicate providers are overburdened, warranting a discussion about workload. Conversely, falling below this threshold suggests a need to increase patient caseload. This could be due to a lack of patients or scheduling inefficiencies.

By optimizing your providers’ schedules and improving operational efficiencies, you can enhance your providers’ CAPACITY %, ultimately boosting your practice’s TOTAL PRODUCTION and REVENUE.

Metric #3: Production per Working Hour

With our total production and capacity % metrics in hand, we’re now ready to explore some insightful calculations that will benefit your practice on both a holistic and individual provider level.

How to Track

Calculating REVENUE PER WORKING HOUR is a straightforward process. Start with the TOTAL PRODUCTION figure we previously discussed and divide it by the HOURS WORKED, as determined in the CAPACITY % section. This simple calculation reveals how much a provider generates for every hour they spend with patients.

Why It’s Important

This metric will naturally vary across different practices and even among providers within the same practice. By examining REVENUE PER WORKING HOUR, you can identify which providers are making the most efficient use of their time. Understanding what sets these high-performing providers apart is key. Is there a secret in their patient interaction process, or do they employ specific techniques that maximize productivity? If you notice a provider excelling in this area, delve into their methods. The goal is to learn from their approach and see if these practices can be replicated across your team to boost overall efficiency.

In essence, Revenue per Working Hour isn’t just about crunching numbers; it’s a window into the operational effectiveness of your providers. By closely analyzing this metric, you can uncover valuable insights that can lead to more strategic decisions and, ultimately, a more prosperous practice.

Metric #4: Production per Appointment 

Last but certainly not least, let’s dive into REVENUE PER APPOINTMENT. You might be wondering how it differs from REVENUE PER WORKING HOUR. The key lies in the varying lengths of appointments – they can range from a brief 15 minutes to a more extended session of 1.5+ hours.

How to Track

REVENUE PER APPOINTMENT is determined by dividing TOTAL PRODUCTION by the # OF APPOINTMENTS a provider completes during a given period. It’s worth noting that this figure is typically lower than PRODUCTION PER WORKING HOUR, as most appointments tend to take less than one hour. 

Why It Matters

Just like PRODUCTION PER WORKING HOUR, it is crucial to understand REVENUE PER APPOINTMENT as this indicates how much is generated per client visit. On a practice level, this metric shines a light on which services or appointments are most lucrative, and can even help you determine how much to invest in your marketing efforts. With this insight, you can strategize to offer more of these high-value services, aiming to maximize your top-line revenue.

While REVENUE PER WORKING HOUR is more focused on optimizing scheduling and operational efficiencies, REVENUE PER APPOINTMENT plays a pivotal role in shaping marketing strategies, and service offerings, and enhancing customer engagement. This metric essentially guides you in identifying the most financially rewarding services and helps tailor your business strategies to boost profitability.

Conclusion

If there’s one takeaway from this article it’s this, KPIs are an extremely important part of understanding any business. They aren’t worth a whole lot if they aren’t being considered or analyzed before making business decisions. If you’re not a DIY person and want to better learn more about tracking your KPIs, click this link to schedule a meeting with one of our financial experts so we can help.