"Tracking the numbers is possibly the single most important factor in practice success," said Dr. Roger P. Levin, CEO of practice management and marketing consulting firm Levin Group. "Targets should be set. It is not necessarily about working harder but working more efficiently."
Below are five metrics that can help you track your way to success.
Production is by far the most important metric to quantify practice success, according to Levin. It's reasonable for a dental practice to aim for an increase of 18% production annually for a three-year period, Levin noted.
Dr. Roger P. Levin
"By setting an annual production target, this can then be broken down to a monthly goal, weekly goal, and daily goal," he said.
One person in a dental practice should be responsible for gathering the performance metrics. Ideally, this is the office manager, according to Levin. At a minimum, the same person who tracks performance data should also track production so there is consistency in the data collection.
"You need somebody watching the numbers, understanding what the numbers mean, and making the necessary modifications along the way," he said.
The Levin Group philosophy centers on increasing revenue every year, but you can't do that if you don't track your numbers.
One way to boost your revenue is to look at your overhead. The average general dental practice in the U.S. has an overhead of about 65%, Levin said.
"For every percentage point that a practice can lower the overhead, it can increase the percentage of profit," he said.
Dentists also need to remember that revenue generation does not necessarily translate to revenue collection, Levin stressed.
"You may have patients who are not paying you," he said. "If you are not collecting at the time of service, you might end up with less revenue. Your production may reflect $1.4 million annually, but you may only be collecting $1 million annually."
How do your new patients find you? If you don't track referrals, you won't know, said Rosa Pasquantonio, practice manager at TGO Orthodontics in Westmount, Canada.
Pasquantonio advised dental practices to track how new patients heard about the dental practice -- for instance, through a referral, Google search, social media channels, or signage.
"If you study the website analytics, you can see where the visits to your website are stemming from," Pasquantonio said. "You can determine if the visit happened organically, or if it originated from an email blast, or from looking at an Instagram account or other social media."
Conversion is another key metric that is top of mind for Pasquantonio. It denotes if an initial visit from an individual converts to someone who becomes a regular patient in a dental practice.
"Diagnostic records will contain treatment objectives and the goals of the treatment plan," Pasquantonio said. "We monitor how many of those diagnostic cases actually translate to a treatment case."
If a first visit from an individual does not convert to regular visits, Pasquantonio advises seeking constructive feedback from that person to determine the reasons for the lack of conversion.
"People may look for a practice because it is close to their school or their place of work," Pasquantonio said. "In orthodontics, they will be visiting the practice every six to eight weeks."
5. Case timelines
You may want to keep track of not only the number of patients in your practice but also your timeline for completing those cases. This metric can ensure cases are completed in a timely fashion and treatment plans are not prolonged, Pasquantonio said.
"You want to see that there is a balance in new cases and outgoing cases," she said. "You want to see that you are finishing cases on time."
If there are too many cases on the books, the schedule becomes jam-packed and there is too much foot traffic in the office, according to Pasquantonio.
"You want to make sure you have room for new patients in the schedule," she said.
Using metrics in your office
It's great to know the numbers, but making meaningful changes depends on communication. Communicating about the practice's performance metrics needs to be done regularly, according to the experts.
"Team members in the office need to know where we are at," Pasquantonio said. "They need to know how many cases we started and how many we finished."
Levin advised leaving the metrics out of a morning daily huddle. Instead, relay the metrics at team meetings, which are usually held every six to eight weeks.
What's the ultimate goal? Using the metrics to fuel a successful practice.
"You want to be successful so that you have an income that allows you to fund your lifestyle and save for retirement," Levin said.
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