5 Important Healthcare Financial Metrics to Monitor

healthcare financial metrics

There are many financial factors to keep track of throughout each revenue cycle in the healthcare industry. Financial KPIs, or key performance indicators, are helpful metrics that can enable you to closely and accurately monitor the financial health of your practice. This article will cover some of the most vital healthcare financial metrics for professionals to keep track of to maintain a solid grasp of your economic outlook.

Additionally, if you’re feeling overwhelmed with the financial side of your practice and want to get back to focusing on providing quality healthcare to your patients, PracticeForces can help. We offer medical billing and coding franchise solutions that improve the financial health of any medical practice. Once you finish this article, explore the rest of our website to learn more about our services.



The first item on this list is relatively obvious but still worth mentioning—revenue. Revenue is the total amount of money your practice brings in during a revenue cycle, and monitoring it is crucial to financial success. 


Operating Margin

Another integral healthcare KPI for providers to monitor is operating margin. This figure measures your practice’s profit margin, which breaks down to the money you charge for patient care minus the amount it costs you to provide that care. Keeping this margin as high as possible without sacrificing the quality of care is an essential step toward success for medical practices.


Days Cash on Hand

A measurement of how much liquidity your practice typically maintains, days cash on hand refers to the amount of money your practice keeps in reserve. While it might seem like more is always better, optimizing this financial KPI requires a delicate balance. Lenders see too much cash as an inefficient use of resources, so investing a portion of these funds may be wise if the reserves are high.


Gross Collections Ratio

Proper billing is an essential part of medical practice operation, and the gross collections ratio measures how effective your billing department is. This healthcare financial metric gives you an accurate picture of the percentage of bills your employees are successfully collecting, helping you minimize lost funds and identify problem areas. 


Claim Denial Rate

Running a healthcare practice means dealing with insurance constantly, so the claim denial rate is a crucial KPI to monitor. This figure measures the percentage of claims that insurance companies reject, helping you optimize your process and increase returns. 


Get Help Today

If you want to improve your scores in multiple healthcare KPIs today, working with an experienced medical billing and support company like PracticeForces is an excellent first step. Our team at PracticeForces is happy to discuss your specific situation and provide tips on improving your practice’s performance in multiple metrics. 

If you’re overwhelmed with the financial management of your practice, PracticeForces can simplify the process and help you focus on what matters. You can reach our helpful staff members by phone or explore the website to learn more about healthcare RCM. Take control of your finances and optimize your practice’s healthcare financial metrics with PracticeForces by calling (727) 499-0351.

Parul Garg, CEO and co-founder of PracticeForces, has significantly contributed to the growth of over 1,000 U.S. medical practices through her expertise in medical billing and coding since the company’s inception in 2003. With a background in Computer Science and an MBA in Human Resources, her leadership and AAPC-certified coding skills have been pivotal in managing the company’s operations effectively.

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