You want to be a successful dental clinic, but how will you know if you’ve made it? And more importantly, once you’ve reached success, how do you stay there?
Quantifying success can be done in a variety of ways: client satisfaction surveys, new patients, five-star reviews, revenue. In business, the most common method of measuring success is through tracking Key Performance Indicators, or KPIs. Sure, there’s the standard corporate KPIs of Profit = Revenue – Costs. But how does that help you analyze the wealth of dental specific data at your fingertips?
Choose KPIs that help you analyze the data collected from your practice management system. This will empower you to make the best decisions for your business. The following KPIs are tried-and-true measures of success in the dental industry.
- Total Production
- Treatment Acceptance
- Doctor vs Hygiene
- New Patient Intake
- Active Patients
- Cancellations & No-Shows
Total Production. Many in the dental industry consider this to be the most important measure of success. You want to track your production values daily, monthly, quarterly, and annually. While growth may not happen day-by-day, it’s important to see that it’s trending positively on an annual basis. Increasing production equates to a practice that’s growing, which means your bottom line is too. If you need some help with increasing your practice’s production, check out these 9 tips on how to drive productivity.
Treatment Acceptance. You should be tracking how often patients accept treatment plans that the dentist proposes. Pinpoint trends in acceptance, or non-acceptance, to better understand your patient’s decisions. In turn,this can help you prepare your dentists for these presentations. A higher acceptance rate of treatments corresponds to higher production for your office. According to Dental Economics, a successful practice should have at least 70-80% acceptance. If your practice isn’t meeting acceptance goals, it’s important to analyze how your staff is presenting these cases. Dentalcare.com has excellent, curated research on case acceptance and boasts that it can drive your acceptance rate up to 90%.
Doctor Production vs Hygiene Production. Understanding the driving source of your revenue is key to helping you make informed decisions. This can also speak to the type of office that you’re running. Do you have a lot of low-cost hygiene appointments? Or, do you see fewer visits with a specialized dentist? Having a healthy balance between hygiene and specialist appointments keeps your office’s cash flow diverse.
Profit. Of course, the profit of the practice is one of the most valuable metrics for any provider. You can calculate profit through a basic calculation of Collections – Overhead. Your overhead costs should be less than 60% of your total revenue. Tracking these costs will keep you in tune with your practice’s spending habits. Once you have an understanding of your practice’s profit metrics, you can make informed decisions about how to invest money in the practice. Is one area of your practice driving most of your profit? For example, you can reinvest money from a thriving hygiene program into some of your dental specialties.
Collections. While projected numbers sound great, the success of your practice hinges on your ability to collect money owed. Some experts suggest that 98% of the money owed to your practice should be collected to keep on track with production goals. Many offices find it pays off to hire an Accounts Receivable individual or department to stay on top of bill collection. Your software can help if it has an easy-to-use ledger system that automatically input the EOBs that you receive from insurance carriers.
New Patient Intake. Bringing in new patients while maintaining your current patient bookings is what grows your practice. Aim to grow your client base by 1% each month. Another key aspect to track is where you’re sourcing new patients from. Are you covering all your bases with marketing opportunities? There are a variety of cutting edge methods to grow your practice, which you can read about in our article about dental marketing.
Active Patients. The number of people that you have currently on your schedule are considered your active patients. Staff should be contacting patients who are in your system, but not on the schedule, to take advantage of all your business opportunities. For many offices, patients who are in the system but not scheduled are an untapped pool. Don’t be afraid to reach out and check on their dental health.
Cancellation & No-Show Rate. Track your cancellations and no-shows, because this affects many of the other metrics in the dental industry. A higher no-show rate means there’s a lower visit rate, which results in less production and revenue even though your costs and labor are the same. Strive for a no-show rate of less than 10% to maximize your production. If your practice is suffering from a high proportion of cancellations, no-shows, and last minute changes, read up on some tips and tricks to reduce their occurrence.
If you’re new to the dental practice world, or even if you’ve been in business for years, use these metrics to step up your practice’s success. Understanding how to analyze the data you collect can seem overwhelming, but it doesn’t have to be. Download our eBook that goes into more depth on understanding your data and putting it to use.