With more than 210,000 dentists currently practicing in the U.S., competition can be fierce, especially if you practice in a metropolitan area with a high concentration of dentists.
To increase your success and keep your dental practice competitive, you need to think more like a CEO.
According to Roger P. Levin, DDS , founder and CEO of dental practice consulting firm Levin Group, “If you’re like most dentists, you already know that performance statistics can provide critical insight into practice operations. But unless you look at data the way a corporate CEO does—unless you understand that metrics not only document current status but can also drive growth—you can’t take full advantage of this powerful management tool.”
Regularly monitoring the following five key performance indicators (KPIs) can help your practice improve and remain competitive.
Your active patients directly affect your revenue, which is why it’s KPI number one. If you steadily increase this number each month, your practice grows and your cash flow increases. If this number is decreasing, you should take corrective action immediately. For example:
Your practice management software can help you monitor your active patients and generate monthly reports.
Next on your radar should be your active patients in hygiene. This number represents those who have visited your office for a hygiene appointment within the last 12 months. Knowing this number helps you estimate the number of active patients your practice will have during the next 12 months. It’s also your practice’s leading source of production growth.
If you notice that hygiene patients aren’t reappointing:
Your practice management software should be able to automate many of the above tasks for you.
When you want to know if your practice is actually making money or just keeping busy, this is the KPI to track. The production KPI also provides insight into where your team needs to improve to increase practice profitability.
Your practice management software should be able to track production numbers for hygienists and dentists separately. Your goal should be a healthy dentist-hygienist mix: 65 to 75 percent doctor production and 25 to 35 percent hygiene production.
If your production number is falling, enlist everyone in your practice to improve case acceptance. Make your team aware of your production goals and teach them how to help patients overcome barriers to treatment.
Accounts receivable, or collections, tells you if your practice is really making money—not just breaking even. Successful dental practices (your competitors) strive to collect at least 98 percent of their total adjusted production. Adjusted production is gross production minus adjustments (discounts and insurance write-offs, for example).
To maintain a steady revenue stream, monitor these numbers each month:
How you track and manage your accounts receivable—and quickly address any collections issues—directly correlates with your profitability.
Optimizing your daily schedule affects every KPI for practice success and profitability. It maximizes production, minimizes team stress and increases patient satisfaction.
Unfilled hours directly affect your bottom line. Losing just one hour of dentist time per month costs your practice more than $100,000 in a year.
Your practice management software should help you create ASAP lists of patients who can fill any schedule gaps. You can also keep track of patients who cancel or miss appointments and reach out to them when you have open time slots.
With the right practice management software, you can easily gather the KPI data you need to improve your practice’s success and compete with the best of them.