Could you use more revenue? Sure. Increased Net Profit? Of course. Then, with our guest author, Mr. Rick Willeford, let’s take a journey to plug profit leaks and find revenue enhancement opportunities in your practice.
A successful practice realizes that it is imperative to ‘know their numbers’—but which numbers? It is interesting to track last month’s production, collections, etc., but you need to know the why behind those figures if you want to up your game.
Have you ever stopped to think that, in the world of cause and effect, things like production are the end result (effect) of underlying measurable causes? For instance, you can’t just say, “Let’s increase production by 10%," and then go about your day. Instead, you need to study and track those underlying causes using actionable Key Performance Indicators (KPIs).
Before we dive into the details, there are a few questions you should ask yourself that will impact your ‘journey’:
- How is the Dream coming? You know, the dream practice you envisioned in dental school. How does that compare to what you have now? Are you motivated enough to make some changes?
- What style of practice do you want—Medicaid, emergency, general, cosmetic, etc.? That impacts the kind of patients you want to focus on.
- Do you want a high volume practice or a highly productive practice? You probably can’t have both.
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- Note that I said high Productivity, not high Production. You can increase raw production by throwing more labor and overhead into the fray. But Productivity measures how efficient and effective you are by measuring production per patient visit.
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- If you have a number of associates doing all the work at PPO fees and they are feeding you high-value cases, you may still be doing fine as the owner. But if you are the only owner/partner and YOU have to do the PPO production, then that is a different matter.
Moving on, we can categorize KPIs into 3 P’s of success: Patients, Production, and Profit.
PATIENTS (We will discuss Production and Profit in future articles.)
Without patients, you can’t have Production or Profit. But how many patients do you need, and what ‘kind’?
KPI for Net # New Patients.
Most offices track New Patients, but most do not watch the back door to see how many patients they lose each month. If you have 50 new patients but lose 40 each month, you are not having much true growth. Think of all the time and supplies you invested in those 50 new patients. I would rather you have 30 ‘good’ patients and only lose 5.
Believe it or not, most offices have too many new patients and are on a merry-go-round. You have the comfort of being booked six months out, but many of those may be low-production visits. Remember, you are like an airline with only a certain number of seats to sell. You need to maximize the use of your precious chair time.
Rather than accept every prospective new patient who calls, I suggest that the front desk screen them to see if they are a fit for your philosophy and style of practice. It would be better if the prospect ‘votes themselves off the island’ before taking up your time.
KPIs for the Vitality of New Patients
- % who get diagnosed with future procedures
- Average 4-month value of NP
- % of emergency patients who return for D0150 Comp Exam
- % who get enrolled in Recare
KPIs for Vitality of All Active Patients
- How many truly Active Patients do you have (i.e., seen within the last 18 months)?
- % who have more than two procedures in 18 months
- Retention rate
- Recare rate
Scheduling
- Recare preappointment rate
- # with future Due Dates but no appointment
- # Delinquent Recare patients
- Distinguish failed/no-show BA vs. short-notice Canceled.
- % open chair time
Learn More
With its Professional strength and robust analytics, DentaMetrix is a great add-on to retail programs like DI for discerning consultants and sophisticated practice administrators.
DentaMetrix explains the “why” behind the numbers as it helps you track PPO changes, NP enrollment, Retention (to ‘close the back door’), and many other Profit Leaks and Revenue Opportunities.
Let us know if you want to add this professional-grade analytic tool to your practice toolbox! Not sure where to start? Contact us today!
About the Author
Raymond F. “Rick” Willeford, MBA, CPA, was a Dental CPA for 40 years—and he also has an Electrical Engineering degree from Georgia Tech! He developed DentaMetrix, a professional strength analytics program used by Parkhurst Consulting to automatically extract the KPIs he discusses. Let us know if you want to dig into any of those KPIs further.
References
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