KPIs for Dentists
Leveraging information for a successful practice can be a daunting task for many practice owners. Let us show you how we can take your practice analytics and make them easy for you to gauge at a quick glance with our Key Performance Indicators.
Most dentists find that dental school provided them with very little education on numbers and business management. Most of our clients would say that they attended dental school to pursue their passion for helping people gain a healthy and beautiful smile. Unfortunately, ignoring the business side of your practice can be a very costly mistake.
As a practice owner, your success demands that you understand your business and the threats within. After all, you cannot improve if you are not aware of what is broken. Some of the most successful practices today have something in common; monitoring Key Performance Indicators (KPIs). Your practice management software quietly keeps the data, you simply need someone to help you turn it into your practice roadmap.
KPIs provide a plethora of information. Think of them as the dashboard in your car. Everything you need to know about the vehicle’s performance is right before your eyes. Now comes interpretation; how well – or how poorly – your practice is performing.
First off let’s talk about your productivity. You probably have a general sense of how productive your practice is every week just by reviewing scheduling calendars, however you should be reviewing actual productivity numbers on a daily, weekly, monthly and annual basis. Doing so can help you spot patterns and trends, helping you move toward your goals.
Because you are running a business, you need to know how profitable that business is. After accounting for operating expenses and other overhead costs, what is your total revenue? Watching this number over time can help you see how adjustments to your overhead or patient marketing are impacting your bottom line.
Let us talk for a moment about your Accounts Receivable (Collections). When you bill patients or their insurance companies for services rendered, what percentage are you actually collecting? Industry targets say you should collect 98% of amounts billed. If your collections amount is lower, you need to take a close look at why that is and determine what you can adjust.
Take a minute to think about your overhead costs, including rent, utilities, operating expenses, equipment and supplies and other expenses associated with running your practice. Keep in mind that this should be less than 60% of your revenue. If your overhead is higher, it is cutting directly into your profitability, so look for ways to lower expenses. When you or someone on your team recommends treatment to a patient, do patients generally accept the plan and move ahead? If not, you may need to re-evaluate how treatment plans are being presented. This is a key and vital part to keeping a thriving practice.
One of the questions we get all the time is regarding new patients, how do we get new patients in the door every year and keep them? This is key in continuing to grow your practice. If your practice is struggling to attract new patients, it may be time to change up you’re marketing and incentive plans.
What to do with cancellations and no shows can be a difficult conversation. You should aim for cancellations or patient no-show appointments to be 1% or less. Watching these numbers over time can help you identify whether you need to make policy changes to discourage such behavior.
Hygiene re-care appointments ensure a full schedule. Most dental practices aim to have 98% of their patients scheduled for their next routine cleanings. If your practice’s numbers are lower,
you may need to evaluate scheduling methods.
Your patient treatments should account for about 75% of practice productivity, with hygiene appointments at 25%. Of course, there will be weeks when these numbers are skewed, but over time, you should aim for this breakdown.
Insurance Production vs. Patient-Pay (Fee-for-Service)
Finally, let us talk about Insurance Production vs. Patient-Pay (Fee-for-Service). Do you know what percentage of your revenue comes from insurance billings vs. the percentage paid directly by patients? It is best to evaluate the breakdown to determine whether there are things you can implement in your practice to reach a target that best benefits your practice.