Profitability and peace of mind in a down economy

July 22, 2009
This is the first in a series of articles that addresses how you can use some powerful technology and some not-so-high technology tools and techniques to help you uncover and recover profitability in your practice.

This is the first in a series of articles that addresses how you can use some powerful technology and some not-so-high technology tools and techniques to help you uncover and recover profitability in your practice. The next articles will be available on www.dentistryiq.com (search for "Vijay Sikka") in upcoming weeks.

In this article, we will discuss how you can better understand:

  • Your business and your patient
  • Marketing return on investment analysis
  • Treatment plan aging
  • A/R and insurance analysis
  • Reactivating patients
  • Clinically benchmarking your providers


We're living in a very tough economy. Depending on who you speak with you get different opinions, including some who say the economy has had absolutely no impact on dentistry. However, after measuring over 5,700 installations in dental practices and understanding the impact, we know that there is indeed a slowdown.

I've spoken at several meetings in both the United States and Canada. We are working with more than 5,000 installations, and this article will attempt to share what you can do to reclaim your peace of mind and profitability in this time of economic crisis. I refer to these as the Four Reclaims.

1. Reclaim profitability

  • If your practice has not optimized its fees, now is the time to align them with your practice's unique style and maximize profitability. How can you do that? First, get procedure revenue (adjusted), frequency, time units, and current fees from your practice management system. Then figure out your doctor production per hour, assistant salary per hour, and chairtime splits, along with lab and supply costs. Next, determine the rough cost fields for each procedure code using these cost numbers, and subtract that from the adjusted procedure revenue. Now you have a profitability vector. Next get a zip code level comparison metric for other dentists in your area. Remember to maximize your profitability and not your fees. It is not about putting your fees to 95% or adding fixed dollars to your fees. It is about understanding how your fees contribute to your profitability. So if you take a raw graph of how much production you have for each procedure, you're looking at only a partial picture. In the next article, we will address overhead control, ROI for marketing, and insurance company rating.

2. Reclaim patients

  • The most important thing to consider when reclaiming patients is to know what recare is being missed. Example: Let's say you expect a patient who gets prophy 1110 procedure code to show up every four months for prophy appointments. Those who receive scaling/root planing 4341 should visit every six months and also come in for perio maintenance procedure 4910. If you could have this report and run it every month, you would address the problem of recare. You can do this by running your practice-management system reports with powerful new technology such as Dental Practice Optimizer Dashboard, which allows you to do this with one click!
  • How do you learn which patients left your practice because they were unhappy with a provider or had a bad experience? Patients leave for one of four reasons. They die, move away, change insurance, or hate the most recent visit with your office. If you can filter out the first three, you have an instant list that you can pursue with the very simple message, "We want you back!" In the last five years, Sikka Software has worked with optimizing dental practices. We have seen two patients return for every eight letters sent by the dentist saying he or she wants them back. For an average dental office, this translates to about a $25,000 revenue increase in a single quarter!
  • In the next article we'll discuss how to reclaim patients from your inactive patient pool and no-show list, and how to calculate the lifetime value of consistent patients, including those who refer other patients.

3. Reclaim control

  • Through the use of technology and effective tools, including your practice-management system or Dental Practice Optimizer® by SikkaSoft, you can manage by the numbers and get the control back in your hand. Effective control mechanisms include morning meetings, profit and loss tracking, and clinical and business dashboards and benchmarks. You may want to know where other dentists in your peer group handle their business and clinical standard of care. What if you had all this information available to you in real time? We will discuss all of these in the next article.

4. Reclaim Zen

  • Peace of mind is a function of the first three items on this list. If you have reclaimed profitability, patients, and control, you will have more revenue and improved quality of life.


As professionals, dentists are satisfied with what they do. Surveys indicate that their chief business concerns are overhead, profit margins, team, and insurance write-offs. This series of articles help you identify each element of your practice, and use tools such as Dental Practice Optimizer Dashboard by Sikka Software in conjunction with your practice-management system and financial system.

Sikka Software Dental Practice Optimizer Dashboard, available in a trial version from Dental Economics, www.hotoptimize.com, helps you achieve these objectives. It automatically installs and reads data from all major dental practice-management systems, including Dentrix, Softdent, EasyDental, Eaglesoft, PracticeWorks, Mogo, DentalVision, AbelDent, PCS, OpenDental, Maxident, and more.

Author bio
Vijay Sikka is the president and CEO of the five-year-old Sikka Software Corporation. He is a health-care informatics expert with more than 17 years of software development and quality experience, including large-scale projects with National Institutes of Health, Glaxo Smith Kline, Roche, and UCSF affiliates. These projects continue to be used by several thousand physicians, medical professionals, and scientists. In 1996, Vijay founded IBrain Software, Inc. and served as CEO until its acquisition in 1998 by Entigen Corporation, a health-care information company that later became part of Roche. Vijay holds an M.S. degree from Syracuse University New York, pursued graduate studies in neurosciences at Stanford University, and is a Registered Continuing Education Provider with the Dental Board of California. He is a speaker at quality conferences and participates in W3C standards groups. Vijay has published a book on Maximizing ROI on Software Development by Taylor and Francis International.