Making Sense of Your Hospital Performance Metrics

Arun Joseph VargheseArun Joseph Varghese on September 19, 2021

A hospital KPI is a measurable hospital performance metric used for hospital management.  It’s important to measure KPIs because they provide a benchmark or baseline that is used to develop operational plans that can be analyzed by the hospital's leadership team.

For example, on a hospital's patient satisfaction survey, patients may be asked questions that allow the hospital to get feedback on patient perceptions of their care. This feedback can then inform hospital administrators about how to improve performance or quality.

Some hospital KPIs are used to measure a hospital's financial performance and efficiency, while others may be used to monitor patient satisfaction. It is not unusual for hospitals that have been around for many years to develop their own unique hospital metrics based on the needs of specific hospital departments. 

In this blog post, we cover a variety of hospital performance metrics. 

Healthcare KPI measurements can be broken down into two categories: operational metrics and financial metrics.

Operational metrics include the following: 

  1. Hospital occupancy rates: The percentage of hospital beds occupied over a specified period is used as an indicator for hospital capacity and demand levels.

  2. Hospital-acquired infection rates: A hospital's calculation of the number of hospital-acquired infections in patients during their hospitalization. 

  3. Hospital length of stay: This hospital metric is the total number of hospital days, or hospitalization time, that a patient spends in the hospital during an episode of care. It can be measured as the average length of stay for all patients and also separately for different diagnostic categories.

  4. Adverse/sentinel events: A hospital KPI that measures hospital-acquired infections or adverse drug reactions. It can be calculated by dividing the total number of hospital-acquired infections/adverse events to the hospital's patient census for a specified time period and then multiplying by 100,000.

  5. Readmissions rate: The number of times patients who have been discharged from the hospital return for treatment within 30 days after discharge.

  6. Patient satisfaction: Hospital quality measures are used by hospital administrators to evaluate hospital performance concerning standards for quality and safety.
  7. Client complaints index: The percentage of clients who formally complain about services received from your hospital. This metric shows how many potential customers are unsatisfied with hospital services.

  8. Hospital staff turnover rates: The percentage of hospital employees who have voluntarily left or were terminated within a year, which helps hospital leadership understand how many people are unhappy and looking to leave their position for another job. 

  9. Reported medication errors: A hospital KPI that measures the number of medication errors. This hospital metric can be calculated by dividing total reports of hospital-acquired infections and adverse drug reactions by the number of medications administered.

  10. Mortality rate: This hospital metric measures the percentage of patients who die in the hospital relative to those who are admitted. The hospital's mortality rate is an indicator of quality, safety, and risk management. 


Financial metrics include the following:

  1. Profitability by doctor and department:  This metric calculates the total hospital revenue for all hospitalizations in one year divided by the number of hospital beds to generate this KPI.

    This helps hospital leadership understand how much money their hospital is making on each patient who stays with them.

  2. Average cost at discharge:  This hospital metric is a calculation of the average cost for hospitalization, which includes hospital charges such as room and board, surgery, lab work, and medications.

    This number helps hospital leadership understand how much each patient costs them to care for in their hospital setting.

  3. Cost per day: The cost per day KPI calculates the total hospital charges during a hospital stay, minus any portion covered by Medicare and/or Medicaid, divided by hospital days.

    This KPI helps hospital leadership understand how much the hospital charges for each day of hospitalization.

  4. Claim processing time: This is a very important KPI because it calculates the average time in minutes between when an insurance company sends back their denial to when hospital staff enters and submits the claim.

    It helps hospital management decide whether or not they have enough personnel on hand that can process claims quickly, which could lead to more profits for them if they can process hospital bills more quickly.

  5. Claim rejection rate: This is the number of claims denied during one billing cycle, divided by total hospital charges. It helps hospital leadership understand how many hospital admissions they have that are unable to be processed because the insurance company denies them after sending back their initial response.

    This helps hospital leadership understand how many of their hospital admissions can be processed and billed. It's important for hospital management because they should know if the hospital is successful or not with their claim process to make any adjustments, as needed.


As you can see, there are many different types of hospital metrics that hospitals should be tracking in order to make well-informed decisions. With so much information available and a variety of ways to measure success, it’s important for every stakeholder at the hospital, from physicians to nurses to administrators, to understand what their role is in contributing KPIs towards the organization's goals. 

At Insta, we take hospital metrics very seriously. This is why we have designed a hospital management software aimed at improving your metrics.

Insta offers:

  • Automated bill charge postings based on the patient’s period of stay basis configured bed charges for hourly, half-day, full-day charges, duty doctor charges, and nursing charges.
  • Efficient patient care management, reducing unnecessary patient readmissions.
  • Coder claim review features to ensure tracking of changes and liaising of changes between the medical coder, clinician, and administrative staff.
  • Claim management, batch creation, denial management, resubmission batch management by correction, or internal complaint.

Want to know more? Book now for a free demo!

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September 19, 2021


September 19, 2021