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Capacity vs. Capability: What’s the Difference?

March 20, 2024
Capacity vs. Capability: What’s the Difference?

In our experience, the goal of every eye care clinic we work with is to see as many patients as possible without compromising patient care, the overall patient experience, or provider and staff satisfaction. Ideally, appointments would be scheduled so that each patient flows through the system smoothly without encountering bottlenecks, technicians work at peak productivity because hand-offs happen seamlessly, and providers maximize their time spent in direct care, thereby achieving the clinic’s patient capacity. 

What is Capacity? 

Capacity refers to the maximum number of patients a doctor is able to see in a given day, assuming an efficient workflow. It is the ideal production rate for that doctor. Understanding the average length of an exam and the percentage of time a particular doctor has available to spend on direct care, i.e. his or her utilization, we can figure out each doctor’s capacity. 

Calculating capacity takes into account all aspects of a provider’s day, including direct patient care, indirect care (such as interpreting test results, patient phone calls, filling out forms, ordering prescription refills, preparing for the next patient), administrative tasks (such as staff meetings, etc.), and personal breaks. 

Using the percentage of time each doctor spends in direct care (ideally between 60 and 80 percent depending on the provider specialty and the care model deployed within the practice) and the average length of his or her examination time with each patient, we can determine how much of the day is actually available for direct care, that is, the doctor’s capacity:

Total time available in a typical day x % time spent in direct care ÷ exam length in minutes = maximum patient capacity 

Capacity, therefore, is the ideal patient volume for a specific provider.

What is Capability?

The reality is, however, that the actual number of patients a provider sees on a given day is often quite different from his or her capacity. More often than not, providers see fewer patients than they could based on the above calculations, largely because of roadblocks in patient flow or inefficient scheduling. They are not capable of working to capacity.

Capability is the actual patient volume a clinic achieves based on current conditions.

Direct care doesn’t occur in a vacuum and there are many interdependent steps involved in a successful patient visit. When a provider’s capability is less than his or her capacity, inefficiencies have worked their way into the system, meaning that the interdependent steps in the workflow are not effectively working together. Everyone involved in the patient visit, from receptionists, to testers, dilation, and workup technicians must work together to ensure consistently smooth handoffs from one step to the next in order to avoid bottlenecks and log jams. 

The failure to attain capacity can have myriad causes. Unfortunately, instead of fixing the underlying causes, schedules are often reduced to address the issue which means that both on-time performance and profitability suffer. 

Do More With Less

When bottlenecks, logjams, and other barriers to smooth patient flow are identified and removed, however, clinics can achieve capacity without increasing existing resources or reducing schedules. Anyone with the right data and insight into a clinic’s workflow can use that information to put scarce resources—providers, staff, space—to more effective use, which translates into measurable improvement in the area of greatest value to patients: percentage of time devoted to direct care.

Why Does It Matter?

To fully understand the financial significance of bringing capability closer to capacity, we must look at a provider’s revenue per encounter. Using data from the prior 12 months we can calculate a given provider’s revenue per encounter (RPE) by dividing net collections by the total number of patients seen (excluding surgeries). Using RPE we can plainly see the financial impact improvements in efficiency can have. Using the example below, even a 10% increase capability leads to a significant increase in revenue.

The chart below is based on the following data collected at Clinic X: Net collections for the prior year for Dr. A was $1,000,000 with a total of 5000 patient encounters. This translates to an average of $200 revenue per encounter. Using the formula above, we also know that Dr. A’s patient capacity is 51 patients per day (assuming 75% of her day is spent in direct care). We assume 160 clinic days per year in this example.

CapabilityCapacity
Current Direct Care Capability (Dr. A)10% Increase in Direct Care Capability18% Increase in Direct Care CapabilityDirect Care Capacity (Dr. A)
41 Patients45 Patients48 Patients51 Patients
$8,200 revenue per day$9,000 revenue per day$9,600 revenue per day$10,200 revenue per day
$800 daily incremental revenue $1,400 daily incremental revenue $2,000 daily incremental revenue 
Annual incremental revenue: $128,000Annual incremental revenue: $224,000Annual incremental revenue: $320,000

When we clear inefficiencies in the workflow in order to optimize time spent in direct care, we maximize the economic value of the clinic. For a closer look at Capacity vs Capability in eye care clinics read our article titled Optimizing Direct Care to Improve Clinic Performance.

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