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The Top KPIs Addiction Treatment Centers Aren’t Monitoring

Reading Time: 6 Minutes

Like other businesses, addiction treatment centers need to track and analyze their performance regularly. Timely tracking ensures that the treatment center operates well and settles the expenses according to the revenue generated.  

Even if you run a nonprofit addiction center, you still need to monitor the performance over time to ensure that you are not operating in losses. And to effectively track your performance, you need to utilize the Key Performance Indicators (KPIs) for addiction treatment centers.  

Here’s everything you should know about KPIs in addiction treatment centers and the substance abuse industry.

Why KPIs for Addiction Treatment Centers are Vital

Most substance abuse centers struggle with low revenues and delayed payments because they don’t use the right KPIs to monitor their growth. KPIs are vital measurements indicators used to track the performance of a business, employees, and patient/client treatment. The KPIs can either be expressed in percentages or ratios. 

In the substance abuse industry, KPIs help organizations know the outcome of their efforts. The performance metrics also empower the employees to make the right decisions in patient education efforts and patient outcomes. 

Most importantly, KPIs help financial and administrative decision makers to plan on their finances, develop the right marketing tactics, and make the right long-term decisions for the behavioral health organizaiton. 

Top KPIs That Addiction Treatment Centers Should Monitor

Here are the main types of KPIs your substance treatment center can use to understand your organization’s performance over time.

1. Financial KPIs

How does your organization manage its finances? In addition to having an expert finance and billing team, you need to regularly evaluate various financial aspects to ensure your organization is financially stable. Here is the main finance KPIs that you may measure in your addiction treatment center:

Profit

This might seem obvious, but you need to know if your organization is making a profit or not. You should use the profit to analyze how successful your organization is. Net profit= total revenues- total expenses

A/R over Time (Current and Historical A/R)

Average revenue is the total amount of revenue earned against the users/units. Here’s is a brief guide on how to calculate the average revenue (skip if you’ve this basic down): 

Step 1: collect your data for the month and add the data points. 

Your data could look like this: 

  • Patient 1: $1000 
  • Patient 2: $2000 
  • Patient 3: $1500  
  • Patient 4: $1000 

Total data points would be ($1000+$2000+$1500+$1000) =$5500. 

Step 2: divide the total revenue with the number of data points: 

5500/4= $1375 per patient 

The average revenue per patient in the addiction treatment center would be $1375. You can calculate the average revenue every month to know what to expect from each patient and rectify any adverse changes. 

Average Treatment Charge

You can also find out the average charge of or treating each patient. Here’s an example:

  • Cost of treating patient 1: $1000 
  • Cost of treating patient 2: $2000 
  • Cost of treating patient 3: $1500 
  • Cost of treating patient 4: $1000

 ($1000+$2000+$1500+$1000) =$5500  

The average treatment charge =$5500/4 patients= $1375 

This metric can help you know the treatment expenses over time and reduce them without affecting the quality of services offered. 

Expenses vs. Budget

You should compare the actual expenses that you incur in the addiction center vs. your projected budget. This comparison can help you know if you stick to the budget and the adjustments you can make in the future to operate within your budget. 

2. Payroll KPIs

Your payroll costs could significantly impact your total business finances, especially if you have many employees. Below are helpful payroll suggestions that you can use to measure your payroll metrics: 

  • The costs of payroll- analyze the cost and time that your accounting team spends on the payroll processing process. You can also track to know how a specific payroll step takes. 
  • Effectiveness and productivity– Do you make any payments outside the payroll? Do you make any payroll mistakes? How long do you take to fix them? You can note the effectiveness and productivity errors to know the possible costs/losses they bring forth. 
  • Overtime– overtime can have a prolonged impact on workers and cost you more than the average wages. You can monitor your overtime metrics to know how overtime affects your productivity. 
  • Training costs– it can be costly to train your new staff. Monitor the prices to make sure that they don’t affect your finances.
  • Employee leave– monitoring your employees’ leave can help you know how the leaves affect the productivity of the treatment center. 

 3. Operational KPIs

Here are the main metrics that you may use to know the effectiveness of your operations, and their impact on the business: 

  • Patient-wait time- how long do patients wait during administration and what’s the impact on the operations? 
  • The staff to patient ratio -always find the ratio between the patients at different times to know which ratio gives you the highest productivity. 
  • Overall patient satisfaction- regularly collect your patients feedback to know the level of satisfaction so that you can learn the changes to make 
  • Patient follow-up –does your organization offer patient follow-up? If yes, what’s the impact of the follow-up on the patients and your business? 

4. Data KPIs  

You can track and analyze your data and reporting once you have started or identified the above performance metrics. Here are the top data pipelines that you can follow: 

  • Treatment- how much cost do you incur to treat a specific patient, and does the treatment help you get the desired patient outcomes? 
  • Readmission rates- do some patients come back after discharge? This is not unusual in addiction treatment and reporting readmission rates is important. 
  • Patient safety-safety should be a significant concern in your institution. Do you have safety issues that might be affecting your operations? 

The above data pipelines can help you know the best practices to drop and focus on balancing the financial status of your business and customer satisfaction. 

Key Takeaway

What we just covered are a few of the many KPIs you can use to monitor the performance of your treatment center. Proper monitoring can grow your business and increase patient satisfaction ratings and outcomes. Not sure where to get started to update your reporting and financial planning?

Logik’s Software Can Help

laptop on table with Logik

We create billing and accounts receivable software for enterprise-level behavioral health providers. We aim to help you see the correlation between lost revenues and performance metrics monitoring. With the help of our software, you can easily track your accounts for better planning. Contact our team for more information about our software, and how we can help you with your addiction treatment center KPIs. 

Logik

Optimizing billing and forecasting are key to helping patients get the care they need, growing as an organization, and worrying less about your bottom line. To learn more about Logik’s billing and forecasting solutions schedule a demo.

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