Managers of high-performing dental offices understand that a lot of hard work goes into keeping everything running to standard. A strong bottom line is the result of a variety of moving parts working well together to deliver high-quality dental care. Dental offices can boost their productivity and efficiency through regular systematic evaluations of each factor that keeps their business moving forward. Evaluating trackable key performance indicators regularly sheds light on what’s working well and can redirect an organization so it can reach its full operating potential.
- Production of overall practice
Most dentists consider this KPI the most important one to track because it reflects business growth. High performance is directly tied to a practice’s ability to grow production in some form. Because growth is so important, dental managers should track production with greater frequency and attention to detail.
- Percentage of patient appointments
Certainly, active patients are an important metric to track. The percentage of active patients who are scheduled for an appointment, however, must also be closely monitored. Many practices fall below 85% when they should be aiming for about 98%. With increased competition, dental practices should consider any unscheduled patient a threat to their retention goals. Practices that hold to a solid number of active, scheduled patients are more likely to be in excellent business health and have the potential to grow.
If overhead is running too high, businesses should step back to understand why. An analysis can determine which categories are above the desired level and produce data on how to create strategies to roll back costs. Fixed expenses are not easily reduced and can absolutely put a dental practice in a difficult budget situation. That’s why it’s vital for managers to scrutinize overall numbers and then take aggressive action so it stays within the PKI range.
- Average production for new patients
Tracking current patients is an obvious metric to closely watch, but the average production of new patients should not be overlooked. In fact, this metric should be at least two or three times greater than the current patient tabulation. Frequently, when dentists see new patients, it’s more likely that they’ll diagnose them for larger cases. This is because the patient might have lacked prior care or needed a second opinion.
- Case acceptance rate
For many practices, this will be the KPI with the most variance. Because the majority of practices will have a low average production per patient, the acceptance will also be high, especially when smaller cases are considered. Generally, dental practices ought to aim for 90% of case acceptance on all single-tooth procedures. When larger cases are added into the mix, the case acceptance will be lower. Still, dental offices will want to be at around 85% in overall case acceptance.
- Attrition of patients
A recent study examined the attrition rate of highly successful dental offices. This rate is simply the overall number of patients who are no longer with the practice. Generally, dental practices should aim for no more than 7% of patient attrition to sustain robust operations.
Next to overall practice performance, collections are a clear indicator of cash flow and income. After insurance adjustments and discounts, successful dental practices will collect about 98% of all billing.
- Staff labor percentage
While technically part of overhead, the staff labor percentage warrants its own bucket given the size of this expense. A reasonable target is about 25% for general practices and lower for other specialties.
If you have any questions about how to improve your performance indicators, contact us today!