5-minute read

Does Anyone Know How to Calculate Productivity?

Recently, a colleague asked me how to calculate productivity. I inquired around to my more experienced practitioners and for the most part, no one was able to answer the question in a way that would help a new Dermatology Nurse Practitioner (NP) in an upcoming interview who is being asked to calculate it. This is primarily because it’s difficult to measure without experience, so the next best thing is to use market research as a rough comparison. I have to thank one of my connections on LinkedIn who provided the article, “Calculating your worth: Understanding Productivity and Value”, written by Todd Pickard, MMSc, PA-C, as it provided the information, I needed to write this post.

What is Productivity & Why it’s Significant

In healthcare, productivity is the “amount of clinical services provided, the professional billing activity of the providers, and the intensity of the work” (Pickard, 2014, p. 128). If you’re reading this article, you’re likely aware that healthcare consumes the largest portion of the United States gross domestic product (GDP), more than any other high-income country. There has been a rising trend in the number of Americans traveling outside of the country for surgeries and medications because the cost of healthcare products and services is so much more expensive in the United States. Legislators wonder, why consumers pay more and healthcare providers earn more, yet we have the poorest health outcomes compared to other high-income countries.

Reimbursement has been steadily decreasing, forcing practice owners and healthcare entities to make very difficult decisions, including not accepting insurance and maximizing the output of physicians (MD), nurse practitioners (NP) and physician associates (PA). Payers and employers want a simple way to measure performance.

Measuring Productivity

Essentially, we want to know the output of each provider. Simply counting the number of patients seen in a day excludes:

-Severity of illness

-Complexity of resources

-Cost of treatment options

-Gross billing vs percentage of collections

-Cost of meeting compliance

-Risk and liability factors

Relative Value Units (RVU)

Relative Value Units or RVU was created to develop a single numerical marker to measure how much and how hard provider’s work. RVU data is based on time, required skill level, clinical judgement, and the liability risk of the services provided (Pickard, 2014). In practice, RVUs can be measured using Current Procedural Terminology (CPT) codes which are assigned to medical, surgical, and diagnostic services. This creates a standardized metric that can be widely used by payers, consumers, and data analysts to comparatively evaluate providers’ performance in terms of volume and acuity.

While helpful, the RVU is not perfect. It can hide the amount of time dedicated to patient care when the service is all encompassing as is the case with surgery (RVU of 0) where care begins during the preoperative phase and ends in the postoperative phase.

Both the Current Procedural Terminology code and Relative Value Units can also hide the productivity and contributions of Advance Practice Providers (APP or Dermatology Nurse Practitioners and Physician Associates) who bill “incident to” or as shared visits. In this instance, the APP bills under the physician for a higher reimbursement rate in exchange for not being “seen” when data is analyzed to calculate our contributions to quality care or improvement in health outcomes. We’re all trained, if it’s not documented, it didn’t happen. I don’t think I need to elaborate on how the lack of data only makes it more difficult to be recognized or properly compensated.

Revenue Generating Talent: Making the Case

In the simplest of terms, productivity is a reflection of the clinical services provided and who’s providing those services. It may be the best metric you have to show that as a Dermatology Nurse Practitioner you are a revenue generating asset. Keep in mind, this can only be done if you bill under your National Provider Identifier (NPI), as opposed to “incident to”. Depending on who you work for and who’s in charge of assigning patients to each provider, you may not have any control over your productivity.

Even if you don’t have control over your patient assignments or bill under your NPI, you can emphasize value metrics that reflect your patient volume, work effort, and revenue. You and your practice can measure how valuable you are to the company by:

- Evaluating patient satisfaction surveys and Google Reviews

- Measuring adherence to practice guidelines

- Comparing provider outcomes for morbidity and mortality

Pro-tip: You can speak with your coder and office manager to find out how you can optimize documentation to reflect the complexity of care you deliver and the acuity of patients.

Quality of Life

In many cases, physicians will produce more RVUs than NPs and PAs. However, having APPs on staff allows the practice as a whole to generate more volume and revenue. As the Dermatology Nurse Practitioner, it’s up to you to identify or ask to see how many more patients the physician was able to treat because you helped coordinate care, reduce wait times for appointments, or handle services only licensed providers can manage. If this is not currently being measured, see if it can be calculated on a monthly or quarterly basis moving forward. I love that Pickard (2014) brought up how having NPs on staff can improve staff quality of life, a metric far too often forgotten. Having more competent, licensed providers increases the number of tasks that can be accomplished, divides the stress of the complexity of care, and allows the entire staff to have a life outside of the clinical setting; another point for increasing retention.

Transparency Increases Retention

Productivity can be used for peer evaluations, to support the request for additional staff and staff support, and when determining the companies’ compensation and bonus structures. This is likely an important topic to discuss with potential employers as well as with current employers during your next performance review. If you own your own practice, this should be a topic you’re very transparent and comfortable talking about with your employees. Transparency as an employer can set you apart in a market that is highly competitive and full of attractive offers from industry peers. Keep in mind, employees are talking amongst one another and to their colleagues all the time both in real life and via social media. There is an increasing trend in people disclosing their salary and bonus structures.  

It goes without saying, productivity is a sensitive and complex topic, but one that can be easily understood with open dialogue and transparency. If you would like to contribute to this conversation, please contact me so we can all continue to learn together.

Whether you desire to own a practice or not, if you really want to understand these concepts, you must learn as much about the business side of dermatology as you did/do for your clinical education and training.

Reference

Pickard, T. (2014). Calculating your worth: Understanding productivity and value. Journal of the Advanced Practitioner in Oncology, 5(2), 128-133. https://doi.org/10.6004/jadpro.2014.5.26

Author information: At the time of publishing, Todd Pickard, MMSc, PA-C was affiliated with the University of Texas MD Anderson Cancer Center, Houston, Texas. Email: tpickard@mdanderson.org

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Kimberly Madison, DNP, AGPCNP-BC

Kimberly Madison is a new dermatology nurse practitioner with a passion for writing, entrepreneurship, financial literacy, and mentorship. I created this blog to share my journey as I become a dermatology nurse practitioner and entrepreneur. Most importantly, I’m looking forward to helping nurse practitioners and aspiring students to better understand the business of dermatology and their role in improving access to care, providing culturally competent care, and advancing education.