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What the Heck Is EPH?

A Comprehensive Guide to the
Newest KPI for Independent Practices

Introduction

Most physician practices are overspending in their revenue cycle, losing upwards of $100,000 per year, because they do not know how to measure EPH. If you lead a high-volume practice, want to reduce cost in your revenue cycle, and don’t know what the heck EPH is, this eBook is for you!
A few years ago, we began to hear the same question over and over again from our clients: How can we measure individual productivity in our revenue cycle? This was a great question without a great answer. Practice leaders for top-performing physician groups were frustrated that they were drowning in data and technology, but had no KPI to measure revenue cycle productivity. The fundamental problem was this: Practices were overstaffed even though all the benchmarks said they were not.
We made it our mission to answer the question: How can we measure Rev Cycle Productivity?
Through an exhaustive 3.5 year research process, we poured through our 16 million encounter data warehouse, worked with over 100 unique practices and put our team on airplanes to interview clients about Rev Cycle Productive.
We learned three things:
  • Even top-performing groups in traditional rev cycle metrics, like charge lag, denial rate and AR days, struggled to quantify rev cycle productivity.
  • Through a new KPI called Encounters per Hour (EPH), rev cycle productivity could be measured and benchmarked to a national average (21 EPH).
  • EPH could be improved and Rev Cycle Employees could be transformed into White Glove Ninjas, who at a minimum are 5x more productive than the national average.
This eBook is written for practice leaders who want their Rev Cycle Team to not just be productive, but super productive. You do not have to be a Rev Cycle expert; in fact, it’s probably better if you aren’t. If you are looking for ways to stop surviving and start thriving as a busy independent practice, this is for you.
Over the next 5 sections we will share:
This short read will be well worth the time invested because we are the experts in helping high-volume practices achieve elite EPH. We've worked with 100+ practices to help measure, improve and achieve elite EPH for their White Glove Ninjas. Plus, the journey to get there will be fun! Let’s jump in.

Why Measure EPH?

Before we explain in detail what this metric is, we must first dive into the origin of the problem.
For the past 30 years, there has been a steady rise in administrative costs in healthcare. A study in the Annals of Internal Medicine¹ reveals that administrative costs account for 34% of healthcare expenditures in the U.S. today. Research based on data from the Bureau of Labor Statistics², the National Center for Health Statistics and the United States Census Bureau shows that the majority of these administrative costs are growth in non-clinical employees in healthcare.
While administrative costs continue to climb, reimbursement rates have remained flat. Cost increases are projected to continue into the future. That, combined with flat reimbursement rates, threatens practices’ ability to remain independent. Measuring productivity and unlocking productivity gains helps push back against the trend of rising administrative costs.
Government regulatory complexity, payer requirements and Meaningful Use made the business of medicine more complicated. Revenue Cycle teams do the difficult work of standing between a rock and hard place. On the one hand, we must protect our clinical productivity. They are the only ones who generate revenue for the practice, and they did not go to medical school to be coders. On the other hand, all of the payer requirements must be satisfied if we want to be paid completely and correctly the first time.
There are only 3 options to handle these requirements:
  • Expect clinical teams to code everything perfectly
  • Continue to hire revenue cycle employees to deal with complexity
  • Find a way to radically improve rev cycle productivity
Until now, most practices chose Option 2 — continue to hire employees to deal with complexity. This made sense because Option 1 is a non-starter, and there was not a known way to radically improve productivity. This is where we arrive at EPH. Now, we have a way to measure and improve productivity to fight back against rising administrative costs. It’s a little-known KPI we call Encounters per Hour, or EPH for short.

EPH = Encounters per Hour per Coder

How to Measure EPH?

Trying to measure Rev Cycle productivity before EPH was incredibly difficult because most traditional KPI’s measured results. The few existing productivity metrics were based on outdated workflows or were more suitable for inpatient coding processes.
The Meaningful Use program accelerated EHR adoption and usage during the 2010’s, and now most practices use either EHR templates, Computer Assisted Coding (CAC) or some combination of the two. Of course, there are some practices that continue to use paper superbills or charge tickets, but for the most part, mid revenue cycle work shifted from charge entry to encounter correcting and perfecting.
The process looks like this: First, the doctor captures encounter information in the EHR template, CAC, or whatever combination they use. Next, Rev Cycle employees pick up the work after the encounter is created in the EHR or CAC and make all of the necessary corrections and perfections to ensure that claims are paid completely and correctly the first time. It’s their job to make sure claims are perfectly coded to the standard of each payor. Finally, these employees send the claims to the Practice Management system to be sent out to the payors.
Since there was not an existing KPI to measure the productivity of this function, we developed Encounters per Hour. EPH measures how many encounters a rev cycle employee can review, correct and perfect in an hour.
Most existing technology is not designed to measure EPH, so we came up with an easy formula practice leaders can use to calculate their EPH. To calculate an accurate baseline EPH, simpy divide daily encounter volume by the number of rev cycle FTEs who review, correct and perfect encounters created out of your EHR or CAC engine.

# of Rev Cycle FTEs

Daily Encounter Volume

Based on our own 16 million encounter data warehouse and two outside studies³, the national average is 21 EPH. This breaks down to just under 3 minutes per encounter, which makes sense. Some encounters are quickly reviewed, while others will take much longer than 3 minutes. On average, the clinical team gets everything coded perfectly 46% of the time.

How to Improve EPH?

Many practices struggle to improve EPH for very good reasons.
Pressure from complex government regulations, payor requirements, and technology changes has led many practice leaders to continually add more revenue cycle employees. These Revenue Cycle teams do a great job of managing all of these competing requirements and ensuring the practice is paid correctly and completely the first time. This is an important job. However, these teams work so hard and spend so much time working on all of the necessary details of the Revenue Cycle that they do not have time to work on improving EPH. Improving EPH actually requires a different skillset than being a great Revenue Cycle employee.
The best way to improve EPH is to:
  • Establish a baseline EPH
  • Set a target EPH
  • Follow a repeatable process to make incremental progress towards the target EPH

Top Challenges to Improving EPH

The number one reason that most independent physician practices have average EPH (despite being excellent at traditional revenue cycle metrics) is that they do not measure EPH. It is impossible to manage or improve on a KPI that you do not measure. Establishing a baseline EPH is the first step in the journey. If you do not already know your baseline EPH, White Plume provides a free tool to help you get started.
The second most common challenge practices face in achieving elite EPH is they do not have the team and resources necessary for success. Unfortunately, most independent practices do not already have a Data Scientist, Business Analyst, Behavioral Coach and Software Subject Matter Expert on their Revenue Cycle team. The competition for these resources is fierce and as a result are very expensive.
Weight loss is a good analogy to improving EPH. A good plan to eat well and exercise is a great start, and adding a personal trainer is even better. However, unless you are willing to make changes, you will never get the results you want. Crossing off these top two challenges is a big accomplishment, but there is still work ahead for groups who want to reach elite EPH.
Here are the top objections to change we encounter when working towards Target EPH:
  • Status Quo Workflow — “We have to do it this way, because we’ve always done it this way!”
  • False Choice Mindset — “If we are more productive, we will be less accurate.”
  • Knowledge Silos — “Local coding knowledge is in employees rather than systematized.”
  • No Leadership Visibility — “It's impossible to see the impact, and we have no way to get our hands around it.”
On your journey to Elite EPH, you may not run into all of these challenges, but you will certainly hit some of them. Other high-volume practices just like yours have encountered (and conquered) these challenges successfully, and you can too! The results are worth it.

Difference Between
Average & Elite EPH

Executives at physician practices are under tremendous pressure to deliver results in a difficult financial environment.
Based on our research, 83% of practice leaders expect to hire Rev Cycle Employees over the next 12 months, either through turnover or net new employees.
89% of these same leaders report getting pressure from physician leadership or their Board of Directors to accomplish more revenue cycle work with less resources.

We define Elite EPH as 105 and above. We like to call Revenue Cycle employees who achieve this EPH White Glove Ninjas. These White Glove Ninjas are a minimum of 500% more productive than the National Average EPH. The implication is that 1 White Glove Ninja can handle over 400 encounters in less than 4 hours. To handle the same encounter volume, the average practice would take 2.5 Rev Cycle Employees and an entire workday.

89% of practice leaders report getting pressured to accomplish more revenue cycle work with less resources.
Moving from 21 EPH to 105 EPH can turn your team of Rev Cycle Employees into White Glove Ninjas. A 20 provider practice at 21 EPH spends over $150,000 more per year on their Rev Cycle than a group with 105+ EPH. The opportunities this can provide are endless. You can add physicians without adding revenue cycle staff, grow the practice at scale or reallocate FTEs to more profitable areas of the business.
One of the biggest surprises we learned from studying Elite EPH is that White Glove Ninjas over 105 EPH also did a better job of preventing Revenue Leakage. This discovery was so surprising because common sense tells you that people who are working faster seem less likely to catch small missed revenue opportunities. But the data says they catch an additional $1.99 per encounter when compared to their peers performing at 21 EPH. That adds up quickly!

Conclusion

Nobody was measuring EPH 5 years ago, but 5 years from now it will be a standard KPI for all Rev Cycle Teams.
The top 1% of performers are 5x more productive than the national average of 21 EPH. Elite EPH performance of 105+ EPH is possible for most practices who are willing to think outside the box to challenge the status quo.
An experienced team who has worked on an EPH Improvement Project is invaluable and can produce results within 6 months.

Action Steps:

  • Calculate Your EPH Baseline
  • Understand the Impact on Your Practice
  • Set a Target EPH and a Plan to get there

  • Have Questions? We have Answers

About White Plume and White Glove Practice

We work with large practices who want to measure and improve EPH. For practices who are a good fit, we can guarantee a minimum EPH improvement within the first 6 months.

Schedule a White Glove Appointment

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  • Call us at 877.633.7226 x134