Any dentist who wants to find profit leaks and increase output must know their numbers. Understanding your practice using key point indicators or KPIs can help identify areas where your business needs help so that you can create an effective solution. Our dental office consultants at Bryant Consultants share on the blog today how to watch your KPIs for clinic/operational areas instead of just your financial or administrative ones. Every practice should track production, adjustments, collections, new patients, etc., to determine growth areas, and when you stop monitoring KPIs, each one can affect another. However, merely telling your team to improve overall output by 10% won’t be an effective method that delivers results. So, changes in fundamental metrics are necessary to improve these dental practice pillars in production, patients, revisits, and collections to improve your practice’s performance and health.
Production
- The Procedure Mixture
- Price of each Operation
- Provider’s clinical efficiency: per day, per hour, and per patient visit
- Adjustments and write-offs
Our dental practice coaches believe the Production Per Visit metric is the most accurate model, especially when comparing providers or dental offices. Dr. 1 earns $400/hr or $3,200/day, while Dr. 2 earns $800/hr or $6,400/day. Dr. 1 may seem less productive at first, but there are underlying factors. Dr. 1 has eight appointments in one room or $400 per patient. Dr. 2 has 24 appointments in two rooms, or $267 per patient. However, not all caseloads are the same, and some include extensive treatments and increasing daily production.
Patients
- Open Time vs. Patient Contact Time in Hours
- Case Presentation Quality and Acceptance
- Number and Origin of New Patients
- Percentage of Failed and Short-Notice Cancellations Rescheduled
Break last-minute or no-show appointments and enter an adjustment code into the system to indicate whether it was a short-notice cancellation or a failed/no-show/no-call. Even though they may reschedule the appointment, cancel the original one. You may discover that the patient has a lengthy appointment cancellation history. Although you can’t avoid broken or canceled appointments, you can track rescheduling success. Low rescheduling rates may indicate how well your team communicates, especially with an 85 percent rescheduling rate. On the other hand, you also want no more than 8% of your to be broken or canceled appointments.
Recare
- Repeatedly Absent Recare Clients
- Retention, Reactivation, and Adoption Rates
- Future Due Dates, but No Appointment
- Revenue Lost to Medical Leave and Office Idle Time
Everyone loves new patients. However, our dental practice consultants explain that you can lose money when you ignore your regulars. Monitoring your dental hygiene program can help increase patient retention, which should be 85% or higher based on patient demographics. First, find out how many patients are in your hygiene program. Check how many new patients had two hygiene visits in nine months. Next, find out how many new patients had three appointments in 18 months. Ideal retention rates are 75% at nine months and 60%+ at 18 months but can vary based on proximity to a military post and community stability. Next, estimate how many patients are due next month. Then compare them to how many people visited or had an appointment. Few practices retain 80% of patients.
Collections
- Revenue Receipts as a Percentage of Revenue Produced Net
- Payment percentage collected at the time of service (Over the Counter)
- The Typical Time Required to Collect Accounts Receivable
- Credit Balances and Accounts Receivable Age
Let’s say two workplaces earn the same amount annually. Office 2 has $200,000 in A/R compared to Office 1’s $100,000. Office 2 receives 98.3% of its net collectible production, while Office 1 receives 97.8%. The current collections percentage includes previous months’ funds. A 5% loss on a $1,000,000 practice over 20 years is $100,000. A conventional approach aims for 1.5-2 times monthly net collectible output, but third-party financing may reduce this target. Office 1 may take 40% more “Over the Counter” (for “time of service”) money than Office 2. Office 1 collects accounts in 30 days, while Office 2 takes 50 or more. These are two key performance indicators to monitor to avoid or minimize A/R.
Bryant Consultants
Establishing and tracking KPIs can provide valuable insight into your practice. We only scratched the surface of trackable performance indicators, but monitoring them can improve your practice’s health and success. Our dental office consultants at Bryant Consultants can help you redesign your KPIs or help you begin the process. So, schedule a consultation by calling (877) 768-4799 or contacting us online.
