Key performance indicators are those that are identified as important to achieving a specific business goal or desired business outcomes and which are measured as an indication of performance against these standards (outcomes). In short, KPIs are a collection of factors and measures that identify performance for a specific organization. They reflect the relative quality and effectiveness of a business; the extent to which the business is delivered on its mission; whether the business is meeting objectives and customer preferences; whether the business is achieving business goals in accordance with a strategy; and whether the business is developing and delivering services or products that are consistent with its vision.
Key performance indicators (KPIs) are the most important quality of healthcare measures used to measure, monitor, and improve the quality of health care delivery.
There are many types of Key Performance Indicators used in Pharmacy. Some are used more for financial purposes such as finances (expenditure) and quality of healthcare, while others can be used as a measure of efficiency or even process improvement. In any regard, it is important to have a full understanding of these indicators so that you can properly utilize them and results are meaningful.
Examples of KPIs for Various Types of Businesses
There are different metrics for different businesses. It all depends on what type of business it is and what they are trying to achieve (goals). However, there are some general KPIs that apply to most businesses, including pharmacies:
– Number of customers and how long they stay (retention)
– Sales (revenue)
– Number of new customers acquired (acquisition)
– Productivity rate (time spent versus time produced)
As a general rule, you should always measure your progress using Key Performance Indicators (KPIs). It’s the best way to see how you are doing and what improvements need to be made.
There are KPIs that are specific to different types of businesses. For example, a retail business needs to measure things like customer satisfaction and conversion rates. A restaurant needs more specific KPIs such as customer wait time and food quality.
A KPI is any measure used to identify, develop, or evaluate performance against that of an organization, its products or services, its customers, or its other key performance indicators.
In this article we will cover the basic information about key performance indicators (KPIs) and understand their importance to achieve desired goals in a pharmacy setting.
What is the purpose of using Key Performance Indicators (KPIs)?
Patient care and pharmacy practice are closely related and both have important roles. It is essential for an efficient and effective service that patients are treated at the right time, with the right medication at the right dose. Improvements in patient care, quality of pharmacy services, and delivery time with all its implications explain that the specified KPIs identified are useful and value-added to access the overall performance of the pharmacy department.
How to Identify your KPIs?
There are three main steps from definition of KPIs to measurement (assessment), these include:
- Define your KPIs
- Document and Communicate
- Monitor and Evaluate
- Search for common KPIs used in healthcare.
- Establish KPIs that have direct impact on productivity and efficiency of the pharmacy.
- Select KPIs you consider useful to achieve your goals.
- Benchmark KPIs – there is no single best KPI [use another health services unit or a famous pharmacy in your town].
- Collect data – this is the foundation of your key performance indicator program.
- Summarize results – highlight wins, weaknesses and opportunities.
- Use performance indicators (outcome) to communicate with management.
Example of KPIs for an outdoor pharmacy service
There are different types of KPIs commonly utilized to measure improvement in an outdoor pharmacy. These KPIs are based on the goals that must be achieved and may include clinical and non-clinical indicators. A few of the non-clinical indicators are listed below:
Prescriptions per customer per month
Medication reorders or refills
Before starting the process for identifying, measuring, and analyzing KPIs, you need to answer two main questions:
1. What KPIs are available to measure the performance of your pharmacy?
(Identify and categorize KPIs)
2. In what area can you measure the performance of your pharmacy?
(Select the storage area, dispensing station, or any other relevant)
The Essential Principles of using KPIs – Focus on the outcome
Key performance indicators (KPIs) are considered to be the gold standard of performance measurement. In a broader sense, KPIs can be categorized according to the essential principles and as a measurement of the patient-centered outcome—the value of the pharmacist’s product and service to patients—the process of the pharmacy business, and the organization.
Steps in establishing KPIs for an outdoor pharmacy
The following categories can help in selection of Key Performance Indicators –
(Tip: Select the category you consider relevant to your use case, and necessary to achieve your goals)
- Financial (e.g., select KPIs with a goal to reduce cost of essential medicines)
- Quality (e.g., select KPIs with a goal to improve quality of dispensed drugs, consider steps in procurement, packaging, storage, etc.)
- Process improvement (e.g., select KPIs with a goal to minimize dispensing error).
- Efficiency in your pharmacy practice (e.g., select KPIs with a goal to reduce patient wait time).
For KPIs related plan, it is important you achieve your desired outcome. The desired outcome is ultimately translated into customer satisfaction. Therefore, in this step, you will collect your desired outcome as a list. For example:
1. KPIs for patient-centered outcomes.
2. KPIs for the pharmacy business process improvement.
3. KPIs for the organization success and growth.
Based on the list that you gathered (step 1) you will develop the following questions
(note: list questions are for example only and not in perfect order)
1. Why should you keep track of the key performance indicators?
2. Why should your pharmacy be measured using a KPI tool?
3. How does a KPIs tool work for you?
4. Why should you try to understand the logic behind a KPI tool before trying to use it?
5. How can pharmacists use KPIs effectively?
6. Why is the measurement of customer outcomes so important?
Planning for KPIs and running the process
The first step in identifying the KPIs is to learn which indicators are required for the pharmacy to improve quality, services, safety and patient satisfaction (outcome). Human performance in terms of service delivery time and cost factors are necessarily considered to identify KPIs that are meaningful.
Starting with the following plan may help:
- Clarify goals and your desired outcome, e.g., increasing efficiency of the outdoor pharmacy services, reducing patient wait time..
- Identify KPIs that have direct impact on pharmacy services.
- Identify individuals responsible for specific function, e.g., inventory manager, dispensing staff, record keeper.
- Analyze the importance of your KPIs and
- Identify the indicators that would work best for you (now and in the future)
Establishing KPIs to assess medication risks
Creating and implementing processes to assess medication risks can be used from the first time the pharmacist prescribes a new drug to when the pharmacist is routinely assessing medications. At each of these stages, the pharmacist should look at each possible indicator for each drug prescription being administered on a daily basis to determine if the patient might be at risk for an adverse medication event. The process steps described above can be used as a guide.
There are many types of Key Performance Indicators used in pharmacy and to achieve your specific goals. Some are used more for financial purposes such as financial assessment of healthcare services, while others can be used as a measure of efficiency or even process improvement. In any regard, it is important to have a full understanding of these indicators so that you can properly utilize them.
This article describes the types of key performance indicators (KPIs), how those KPIs are derived and communicated, their interpretation, measurement and importance, the sources of data and methods for collecting and analyzing data on those KPIs. Most importantly, we should know who is responsible for determining whether to perform KPIs, when they are performed, where they are performed, to whom they are communicated and the use of results of KPIs to plan and improve pharmacy practices.
Disclaimer: The views and opinions expressed on PharmaRead are those of the authors and do not necessarily reflect the official policy or position of any agency or organization. PharmaRead articles are provided for information only with focus on global health, pharmacy practice, and healthcare systems in Low- and Middle-income Countries (LMICs). Readers should seek expert opinion for use, implementation or application of this knowledge based on their individual circumstances.