Measuring The Utilisation Rate in a Healthcare Business
What is the Utilisation Rate?
The utilisation rate is really a measure of how full the diaries are for each of your practitioners.
- If it is too high, you likely need to add more resources.
- Too low and it means that you’re not bringing in enough work, or least that you have capacity to grow.
It’s an important measure for appointment bookers to keep track of, because it may uncover any issues inefficient scheduling.
Business owners also need to keep track of this to help decide when to hire and when there needs to be more effort put into lead generation if a particular practitioner needs to fill their diary.
How to Calculate Utilisation Rate
Total time booked in for appointments over the period
divided by
Total time available for appointments over the period
The Utilisation rate looks at how much of this available time is used in productive work, expressed as a percentage.
Available or Billable Time
If you employ a practitioner on a contract of 40 hours per week, they won’t necessarily be available for 40 hours of appointments.
To calculate the available time, you need to subtract a certain amount for activities such as
- training
- breaks
- meetings
- administration, and
- strategic planning
For example, if available time added up to about 30 hours per week, and the practitioner was booked in for 24 hours of appointment time in the week, their utilisation would be 24 divided by 30, or 80%.
It’s best to approach non-billable time as an investment, and it will also help both you as an owner as well as your employed practitioners to avoid burnout.
Time to Recruit?
In my practice we run at about 80% utilisation rate and I know that any higher than that and our practitioners risk burn out. And on the flip side – any lower than that – and it could be time to recruit again.
Measuring the utilisation rate is great metric that will help you with budgeting, planning recruitment, know which services are more popular.
What the Utilisation Rate Tells You
For a simple metric, the utilisation rate gives you a good insight into a Practice’s profitability and productivity. Things such as:
- A consistently high utilisation rate means that your resources are overworked.
- A low utilisation rate means that you need to bring in more work.
- Tracking utilisation for each employee-type (Graduate, Senior Practitioner etc.) helps plan hiring.
- Tracking utilisation rate by skill shows the demand for different services.
- A utilisation rate above 100% can imply a lot of out-of-scope work and poor planning.
- Tying utilisation rate to profits can show you the most profiting services for your agency.
