7 Essential Metrics for Home Health Care Businesses to Achieve Optimal Growth

Welcome to our blog post on the Top Seven Home Health Care KPI Metrics. As a serial entrepreneur with experience in the healthcare industry, I understand the importance of tracking KPIs to ensure the success of any business. In this post, we will explore the significant KPIs that every home health care business should track and calculate for optimal performance and growth.

In an industry that is rapidly growing, the Number of active subscribers is one of the most vital KPIs to track. This metric determines the number of patients that a home health care business is currently serving. According to recent statistics, the industry has seen a 66% increase in demand for home health care services over the last five years, making it essential for businesses to monitor this KPI closely to stay ahead of the competition.

• The Average revenue per subscriber is another crucial KPI to track. This metric measures how much revenue each customer generates for your business. Given the steady growth of the home health care industry, this KPI has become particularly important, with businesses looking to maximize their profits.

• Another noteworthy KPI is the Customer satisfaction rate. Higher customer satisfaction means more loyal customers, better word-of-mouth referrals, and ultimately more revenue. In a survey conducted by the Home Health Care News, 94% of respondents said they were either very satisfied or satisfied with the home health care services they received. Achieving high satisfaction rates should be a top priority for any home health care business.

There you have it, a glimpse into the important KPIs you should be tracking as a home health care business. Keep reading for more details on these metrics and how to track and calculate them effectively.

Number of Active Subscribers

As a home health care provider, one important performance metric to track is the number of active subscribers. This KPI measures the number of individuals who have an active subscription to your service and are currently receiving care from your organization.

Definition

The number of active subscribers for home health care providers represents the total number of clients who are actively receiving services from your organization. It reflects how well you are retaining your clients and the quality of care they are receiving.

Use Case

The number of active subscribers KPI is essential for home health care providers to assess the growth and success of their business. By tracking this metric, providers can examine trends over time, set growth targets, and develop retention strategies to improve customer satisfaction and loyalty.

How to Calculate KPI

To calculate the number of active subscribers, divide the total number of active subscribers at the end of the period by the total number of subscribers at the start of the period. Multiply the result by 100 to get the percentage increase or decrease in active subscribers.

Calculation Example

Suppose you had 200 active subscribers at the beginning of the month and 250 active subscribers at the end of the month. The calculation for the number of active subscribers would be:

This would imply a 25% increase in active subscribers during the period.

KPI Advantages

• The number of active subscribers provides insight into customer satisfaction and loyalty.
• It allows providers to monitor growth trends and adjust their business strategies accordingly.
• It helps providers identify areas that may require improvement to better retain existing clients.

KPI Disadvantages

• In cases where home health care providers have low subscriber figures, increases in active subscribers can be misleading when evaluating performance or calculating growth rates.
• It does not provide insight into the quality of care patients are receiving.
• It does not account for patients who may be temporarily unavailable for care due to hospitalizations or other reasons.

KPI Industry Benchmarks

The number of active subscribers can vary according to the organization's size, location, and the type of services offered. However, on average, home health care providers in the United States have an active subscriber rate between 75-85% of total subscribers.

Average revenue per subscriber

As a pro serial entrepreneur who has started and run many businesses, I can assure you that tracking key performance indicators (KPIs) is crucial to business success. The metric of average revenue per subscriber (ARPU) is especially valuable in the home health care industry. In this chapter, I will explain how to define, use, and calculate the ARPU metric, as well as its advantages and disadvantages, and industry benchmarks.

Definition

ARPU is the average amount of revenue earned per subscriber in a given time period. In the context of home health care, a subscriber is typically a patient receiving some form of care services. ARPU is calculated by dividing total revenue by the number of subscribers during the time period in question. This metric provides insight into the overall revenue generated by each subscriber and can help identify potential revenue growth opportunities.

Use Case

ARPU is useful in determining the effectiveness of pricing strategies, marketing efforts, and overall revenue generation. It can also help identify areas of potential revenue growth by analyzing revenue generated from different types of subscribers or services. For example, if the ARPU for patients receiving in-home care is significantly higher than the ARPU for patients receiving remote care, a business may want to focus on expanding in-home care services to increase overall revenue.

How to Calculate KPI

To calculate ARPU, use the following formula:

Calculation Example

Let's say a home health care business generated $100,000 in revenue during the first quarter of the year and had 500 subscribers during that same period. To calculate ARPU, you would divide $100,000 by 500, resulting in an ARPU of $200 per subscriber.

KPI Advantages

• Provides insight into overall revenue generated per subscriber
• Helps identify potential revenue growth opportunities
• Allows for analysis of revenue generated from different types of subscribers or services

KPI Disadvantages

• May not provide a complete picture of revenue generated by a business
• Does not take into account factors such as costs or profitability
• May be influenced by external factors outside of a business's control

KPI Industry Benchmarks

The ARPU benchmarks in the home health care industry can vary widely depending on the type of services provided. However, according to a survey by Home Care Pulse, the average ARPU for home care providers in the United States was $3,946 per month as of 2019.

Average length of subscription

In the home health care industry, average length of subscription is a crucial KPI to track. It measures the amount of time patients remain subscribed to a particular provider. This metric indicates the stability of patient numbers and revenue streams, making it a reliable measure of long-term performance.

Definition

The average length of subscription KPI calculates the average number of days a patient stays subscribed to home health care services before ending their treatment.

Use Case

Tracking this KPI helps home health care providers understand the number of patients staying with their business for long periods and the rates of patient attrition. By understanding this KPI, home health care providers can evaluate their performance in retaining patients and identifying areas for improvement.

How To Calculate KPI

Calculation Example

Suppose a home health care provider has 100 patients over a year, and each patient subscribes for an average of 30 days. The average length of subscription KPI calculation is:

KPI Advantages

• Helps identify trends in patient behavior over time
• Provides an objective measure of patient retention and revenue stability
• Facilitates informed decision-making for business growth and expansion

KPI Disadvantages

• May not capture all the nuances of patient subscriptions, such as specific health conditions
• Does not take into account any changes in the intensity of care provided during each subscription period

KPI Industry Benchmarks for 'Average Length of Subscription'

According to industry benchmarks, excellent performance for the average length of subscription KPI in the home health care industry is approximately 60-90 days

Number of Medical Equipment Sales

If you operate a home healthcare service, tracking your performance is crucial for ensuring your business success. One of the most important KPIs you need to track is the number of medical equipment sales. This KPI provides insight into your business's sales performance and market share in terms of medical equipment.

Definition

Number of medical equipment sales refers to the total number of medical equipment units sold during a specific period of time. Medical equipment includes various tools and devices used in the treatment and care of patients.

Use Case

This KPI is especially important for home healthcare providers who operate in retail sales. By tracking the number of medical equipment sales, service providers can identify trends, forecast future sales, and make informed decisions about marketing and advertising efforts. Additionally, comparing this KPI with other KPIs, such as the number of patients or revenue, can help you evaluate your business's overall performance.

How To Calculate KPI

To calculate the number of medical equipment sales, use the following formula:

Calculation Example

Let's say your home health care business sells medical equipment and you want to determine the number of medical equipment units sold during the first quarter of the year. During this time period, you sold:

• 20 hospital beds
• 30 wheelchairs
• 10 oxygen concentrators

Using the formula above, your calculation would look like this:

KPI Advantages

• The number of medical equipment sales is a direct indicator of your business's sales performance, making it an essential KPI for evaluating your business's growth.
• Tracking this KPI allows you to identify trends, forecast future sales, and make informed decisions about marketing and advertising efforts.
• By comparing this KPI with other KPIs, such as the number of patients or revenue, you can evaluate your business's overall performance.

KPI Disadvantages

• Tracking only the number of medical equipment sales may not provide a complete picture of your business's financial performance, especially if the sales of medical equipment are not significant parts of your business's revenue.
• Market changes or the entry of competitors can significantly affect the number of medical equipment sales, making this metric volatile.
• While the number of medical equipment sales is essential, other metrics, such as the cost of acquiring those sales or the profitability of those sales, are also necessary to evaluate your business's financial health.

KPI Industry Benchmarks

According to industry benchmarks, home healthcare providers average about 150-200 pieces of medical equipment sales per month, depending on the region and service offerings.

Insurance Reimbursement Rate

For home health agencies, the insurance reimbursement rate is one of the most important KPI metrics to track and calculate. It measures the percentage of insurance claims that a healthcare provider submits to insurers, which results in payment for their services rendered.

Definition

The insurance reimbursement rate is the percentage of an agency’s submitted claims that are paid timely and in full by insurance companies.

Use Case

Home health care agencies need to be aware of their insurance reimbursement rate to ensure their financial stability. This metric helps to identify any potential issues with insurance claims and reimbursement processes. With this knowledge, agencies can take the appropriate measures to address any problems and improve their reimbursement rate.

How to Calculate KPI

To calculate the insurance reimbursement rate, take the total amount of claims paid by insurance companies in full and on time and divide it by the total amount of claims submitted. Multiply the result by 100 to get the percentage.

Calculation Example

Suppose a home health agency submits 100 insurance claims during a particular period. Of these, 70 claims are paid in full and on time by insurance companies. The insurance reimbursement rate of the agency for that specific period would be:

KPI Advantages

• The insurance reimbursement rate helps to measure the effectiveness of a home health agency's billing and claims process.
• It highlights the agency's financial stability.
• It provides valuable information for decision-making processes.

KPI Disadvantages

• The insurance reimbursement rate is affected by external factors, such as changes in insurance policies and reimbursement regulations.
• It does not provide information on the quality of care provided by the agency.

KPI Industry Benchmarks

According to industry benchmark data, the average insurance reimbursement rate for home health care agencies is around 80%.

Customer satisfaction rate

As a home healthcare provider, one of the essential KPIs to track is the customer satisfaction rate. Understanding how happy your patients and their families are with the care provided is crucial. Here's a detailed explanation of the customer satisfaction rate KPI:

Definition

Customer satisfaction rate refers to the percentage of patients or their families who report being satisfied with the quality of care they received from a home health care provider.

Use Case

Tracking the customer satisfaction rate KPI is essential because it provides insight into how well your home healthcare business is meeting the needs and expectations of your patients and their families. By understanding areas where you are excelling and areas that require improvement, you can make informed decisions and necessary changes to improve overall patient satisfaction.

How to Calculate KPI

To calculate the customer satisfaction rate KPI, divide the number of satisfied patients by the total number of patients surveyed, then multiply the result by 100 to get a percentage.

Calculation Example

Suppose you surveyed 100 patients, and 80 patients reported satisfaction with the care provided. The customer satisfaction rate would be:

KPI Advantages

• Provides insight into how well your home healthcare business is meeting the needs of your patients and their families
• Helps to identify areas for improvement and make necessary changes
• Can facilitate the retention of patients and attract new clients

KPI Disadvantages

• Relies heavily on surveys, which may not always accurately reflect the patient's satisfaction level
• May not provide a complete picture of the business's overall health and success
• Difficult to compare across organizations, as surveys can be conducted in different ways

KPI Industry Benchmarks

According to the Medicare Home Health Agency Consumer Assessment of Healthcare Providers and Systems Survey, the average customer satisfaction rate for home healthcare providers is around 80%.

Number of telemedicine appointments.

Definition: The number of telemedicine appointments is a KPI metric that tracks the total number of remote clinical consultations offered by a healthcare provider over a specific period.

Use Case: The number of telemedicine appointments highlights the demand for remote healthcare. It portrays the number of patients that require healthcare services and the capacity of healthcare providers to accommodate such needs. This metric is essential for healthcare providers seeking to expand their telemedicine operations, evaluate the success of their telemedicine programs, and identify areas for improvement.

How to Calculate KPI:

Calculation Example:

KPI Advantages:

• Accurate measurement of the success of telemedicine programs
• Provides insights into patient populations and their healthcare requirements
• Allows for capacity planning and resource allocation

KPI Disadvantages:

• May not be applicable in areas with inadequate internet connectivity
• Does not account for the quality of patient care provided
• Can reflect potential redundancies or inefficiencies in-person appointments.

KPI Industry Benchmarks: The industry average for the number of telemedicine appointments is approximately 70%. However, telemedicine providers should aim to exceed this average as it indicates a high demand for services.