Track These Key Performance Indicators to Help Your Dental Practice Thrive
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1 Track These Key Performance Indicators to Help Your Dental Practice Thrive A guide to the metrics you should be measuring to understand and guide your practice s success.
2 In the operatory you know exactly what you are looking at, and more importantly, what you are looking for. Whether monitoring a patient during a routine recall visit, diagnosing a complex case, providing a restoration, or tracking your treatment during a follow-up appointment, you know the details to watch and the measurements to take in order to provide your patients with the best possible care. After all, that s the goal of any dental practice. Providing the best possible patient experience is also the goal of the business side of your practice. And as it turns out, properly managing the business aspects of your practice doesn t have to require a completely unfamiliar approach. By gaining an understanding of several key performance indicators that can be found in your practice management software, you can monitor, diagnose and correct business trends that impact the success of your dental practice. This ebook explains the value of several Key Performance Indicators you can monitor to gain a deeper understanding of how well your practice is operating. 2
3 What is a Key Performance Indicator (KPI) A Key Performance Indicator (or KPI) is a type of performance measurement an organization uses to evaluate its success, or to evaluate the success of a particular activity in which it is engaged. For your practice these statistics can be calculated from data already captured and tracked in your practice management software. When used properly KPIs not only provide a snapshot of how your practice is performing in different areas at a specific moment, but how those performances are changing over time. Monitoring them can help you understand the changes in your patient base, the measure efficiency of your workflows, and test out the impact of new practice clinical offerings and marketing efforts. Putting KPIs to use for your dental practice starts in your practice management software. This is where all of your patient data is kept, and software such as Dentrix Ascend is designed to help you make the best use of all this information. KPIs put into action are reports and dashboards you can easily find and set up in your software. With these tools at your fingertips, you re all set to keep a closer eye on your practice and to see the best path toward success. 3
4 Five Key Practice Indicators There are numerous KPIs that can be tracked by a dental practice, and the most important one is something that differs from practice to practice. With that in mind, this book is focusing on five KPIs that apply to most dental practices with details on how to find and track this data in Dentrix Ascend. The five KPIs are: Production Per Patient Collections Per Patient New Patient Percentage to Total Patients Seen Doctor Days Worked Hygiene Production 4
5 Production Per Patient Production per patient measures how much dentistry you are able to bill for the average patient. At it s most basic level, this number is calculated by dividing the total amount your practice billed in a given time period by the total number of patients seen during this time period. You want to be sure you re looking at production per patient, and not per appointment because some patients might be in your office multiple times during the measurement period. Production per patient is important because it can give you a good idea of how much income your practice is missing out on when holes in the schedule go unfilled or a patient decides to leave the practice. It can also tell you the potential every new patient brings to your practice when he or she comes in for that first appointment. This KPI can also be used to help guide your practice, if you break it down to look at what different types of patients mean in terms of production. Does your practice do better when it cares for pediatric patients, or do you really bring in the best production from treating patient emergencies? You can also look at whether existing patients or new patients are most valuable to your practice. This can help you determine whether you promote to your existing patients or focus your marketing efforts on attracting new patients. Watching production per patient is a good overhead view of how much work your practice is doing. 5
6 Collections Per Patient Much like Production Per Patient, Collections Per Patient provides a detailed overview of the value each patient brings to your practice. This KPI is the amount of money the practice collected over a given time period divided by the number of patients seen during that time period. It is again important to make sure this metric is looking at the number of patients and not the number of appointments. Collections Per Patient is a key metric because it tells you how quickly and how completely you receive payment for the services you provide. Understanding when and how you get paid for the work you do, can allow you to monitor the practice s cash flow, and being able to tie it to the number of patients you see can help you predict cash flow changes as your patient base changes. If you have a sense of your average Collections Per Patient, you know how much extra cash the practice will have when your patient list grows, as well as how much belt tightening is going to be needed when a patient moves away. This is another KPI that you can use to understand the value different types of patients bring to your practice. If you segment this KPI by insurance plan you can quickly see how rapidly different plans remit payment. By looking at new patients versus existing patients you can get a sense of which group is easier to collect from. Comparing Production Per Patient to Collections Per Patient can show you if your practice is having a problem turning production into revenue, and can help you understand which types of patients to target with marketing efforts, recall programs and other outreach efforts. 6
7 New Patient Percent to Total Patients Seen Your practice s New Patient Percentage is a measure of the segment of the patients you saw during a given period who were new to your practice. This is a very important thing to keep track of because a steady flow of new patients is critical to ongoing practice success. No matter how great a dentist you are, patients move away, pass away, and just plain leave the practice for one reason or another. Bringing in new patients is key, but all your marketing and demand generation tactics are less valuable if you are not tracking this influx. By monitoring Production Per Patient and Collections Per Patient you already know how much each patient you see is worth to the practice. Knowing how many of these patients are new can help you tailor your workflows to provide the great first impression that will keep these people coming back. New patients are also valuable because they often need more restorative care than your regulars who are kept in great oral health by you and your team. On a very basic level, knowing how many patients are new to the practice during a given time period lets you prepare for their arrival with staff training, supplies and new patient procedures such as practice tours. However, this metric is even more important for diagnosing practice issues. If new patients make up to small a portion of your patient base, you might have a patient shortage on the horizon. Spotting this early can help you head it off with increased marketing or new patient specials. If new patients make up too large a percentage of your patient base it can indicate that you are doing something that discourages return visits. In either case, watching the data will help guide your future path. 7
8 Doctor Days Worked Doctor Days Worked is a seemingly simple KPI that can be used to unlock deep insights into your practice s operations. This KPI is the simple measurement of how many days each doctor works in the practice. This is not a measurement of which days of the week a doctor was on site, but rather how many days total all of the doctors worked. For example, if your practice has 3 doctors on staff, and they each work 3.5 days a week, your practice would record 10.5 doctor days worked each week. Knowing how many days the doctors work might seem basic, perfunctory information. After all, not a lot of work gets done if the doctor is out. However, with this metric being recorded and tracked you are able to combine it with other KPIs to get a breakdown of practice performance based on how many doctors are working at a given time. This can help you see if it s time to bring on an associate, or conversely when it s time to cut back on the hours. It can also help you predict the impact of a time when one of the doctors is on vacation or help the practice discover when time is not being used as efficiently as possible. 8
9 Hygiene Production Hygiene production is the basic measurement of the work being performed by your hygiene department. This measurement calculates how much revenue your hygiene team is bringing into the practice. It should take into account the amount billed for each hygiene appointment while subtracting the supplies, staff time and other costs of each hygiene appointment. Your hygiene team sees both new and returning patients, and provides the first line of contact with most of them. Making that team as productive as possible can have a major impact on any practice s bottom line, and this cannot be accomplished without an understanding of what each hygiene appointment costs and how much it brings in to the practice. When you track hygiene production, you can spot the trends in the numbers to see if your hygiene production is impacted seasonally, or by other external factors. If the numbers are trending down you might want to put out a recall effort for lapsed patients while also jumpstarting your marketing to attract new patients. If the numbers are up, you can use them to plan an expansion if that seems warranted. Just as importantly, by tracking Hygiene Production, you also gain the ability to directly measure the impact when you try out new workflows, new products, and new services. This way you can see if the changes you make have a positive or negative impact on the practice, and then adjust them accordingly. 9
10 Other Key Practice Indicators While the previous five KPIs can tell you a lot about how your practice is doing, where it s heading and how you should guide your future, there are numerous other metrics that can be valuable to your practice. Here are some additional KPIs you might consider putting to work in your practice: Cost Per Acquisition of Each Patient A measurement of how much your practice spends on marketing, time and other costs for every new patient you see. Case Acceptance A simple metric tracking how many of your patients say yes to treatment plans, as well as to optional services offered during hygiene appointments. Payor Mix This is a measurement of where the money coming in is coming from. Knowing the sources of your revenue can help you maximize that revenue. Doctor Production vs. Hygiene Production This measurement compares the production of your hygiene department to that of your doctors. Knowing who generates what percentage of your production can help you determine what innovations to invest in. Cancellation and No Show Rates This measurement tracks how many people skip their appointments against the total number of appointments on your schedule. Knowing how many people are likely to skip out on you can help you be ready to fill the expected last minute schedule openings. Benchmarking Each Practice Against Each Other For multisite or group practices this measurement lets you break down the numbers for each office to see the differences and to share the strengths of your best locations. EBITDA Earnings Before Interest, Taxes, Depreciation, and Amortization or EBITDA is a way to look at your practice s profitability before deducting those costs. Used to guide future business decisions. 10
11 Knowing what KPIs to pay attention to and how to find them in your practice management system are great first steps toward putting your practice data to work. But there s a lot more you can do than just take a look at the data every so often. In fact, that timing element is an important part of putting your KPIs to work. Build regular reviews of the metrics you track into your schedule, get used to checking the numbers, and optimally set up automated reporting so you get the latest set of numbers on your desktop or in your inbox at the same time every week or month. Your KPIs can be the guideposts to tell you that your practice is on the right path, or the canaries singing out a warning when things are just starting to go awry. When you have a solid grasp of using KPIs, they can help you make decisions about investing in new technologies, hiring new team members or even opening a second location. The best part about putting your KPIs to work for your practice is that the metrics are already there waiting for you to use them. You have the patient and financial information securely saved in your practice management system, and once you bring them to the surface and put them to work, your practice can run on an evidence based foundation, just like the care you provide in your operatories. 11
12 Copyright 2017 MWA CPAs + Business Advisors. All rights reserved.
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