Key Indicators for the General Practice
Our business engagement with a client begins with a thorough assessment of practice performance which requires collection of accurate past and present practice data in addition to the last three years financial statements. Prior to completing an on-site business assessment our client is given a detailed list of information to gather and forward to us for review prior to the on-site sessions. We also request copies of all practice monitors and details about who interprets the data and how it is used to better the practice.
In most cases the client is able to collect all required information but typically does not include practice monitors. Even when practice monitors are sent they are rarely accompanied by an explanation of who interprets the data or how it is used to benefit the practice.
I can state emphatically gathering and interpreting practice metrics is one of the essentials for managing a successful dental practice. Each dental practice must determine the specific benchmark data they wish to collect and assess, however there are key metrics in a general dental practice. Practice performance monitors are a valuable tool for a business owner and practice manager and should provide a realistic snap shot of monthly practice performance, year-to-date and year-over-year statistics. Based on the review of the practice, business action plans can be developed and implemented to improve practice performance.
The common phrase “what gets measured gets done” holds true for the dental practice. By consistently measuring key practice indicators the business owner and team members will be able to evaluate areas of the practice performing well and areas that require attention. However, simply collecting data and assessing it will not lead to a more productive or patient centered practice. The metrics should lead the doctor and team to develop and implement an action plan to better practice outcomes. If you do not use the metrics to improve the practice I would question their value.
To use practice metrics as a tool establish a goal or target for each metric then on a monthly basis examine areas failing to meet your expectations. The dentist and team members would meet to discuss results and develop an action plan and implementation strategy to improve performance in the next month. Continue to work on one area of practice improvement until results meet the target. Once the target in the under-performing area is met select another area of the practice management to improve.
There are so many aspects of a general dental practice that can be measured on a monthly basis so I have listed key practice metrics to collect and assess monthly;
Net production – ensure this data is consistently retrieved from a report illustrating “net” production
Net collection – ensure this data is consistently retrieved from a report illustrating “net” collection
Doctor production –if there are multiple doctors, run this data for all doctors, then by individual doctor (running individual statistics may reveal production issues with a specific provider that could be missed if evaluating only the practice overall)
Doctor collection – in multiple doctor offices run this data for all doctors, then by individual doctor (running individual statistics may reveal collection issues with a specific provider that could be missed if evaluating only the practice overall)
Measure collection – aim for 98% collection to production with a 2% allowance for bad debt (it is unlikely the 98% collection target will be met every month but should be the yearend target)
Downtime – collect these statistics for the doctor(s) and hygienists with targets for an established dentist being 3 – 5% depending on his/her patient load and 10% or less downtime in hygiene schedules
New patient flow – this data should be taken from a billing report by procedure code in a specific date range
Patient attrition – the number of patients not participating in the recare system in the last 6 – 12 months (this does not mean patients have left the practice rather it shows patients not participating in hygiene services)
New emergency patients – collect from a billing by procedure code report then assess the conversion rate for emergency new patients to comprehensive new patient examinations (this will require an internal method of tracking conversion and usually can be tracked using dental practice management software)
Hygiene patient retention – a measure of the number of patients eligible for hygiene in a given month compared to the number treated with 80% patient retention indicating an effective recare system
Wages – each month calculate the percentage of wages as an expense with a target in the range of 25 – 28%
Dental Supplies – each month calculate the percentage of dental supplies (no repairs or small equipment) as an expense with a target in the range of 5–6%
These metrics are a starting point. As you consistently evaluate these areas of practice performance it will become easier to seek solutions and implement enhancement plans. When the core performance indicators are routinely gathered you can expand data collection.
In closing, measuring a few core areas of practice performance and interpreting results is better than copious spreadsheets compiling data for data sake.