5 metrics every dental practice should be tracking
When dental offices know their metrics, their bottom line grows. But how do they do that? Here are the top 5 metrics dentists should watch in order to keep their practice on track.
As a dentist, you’re constantly assessing the overall health of each patient. To do this, you use a variety of methods, technologies, and procedures. You also draw upon your previous experiences with each patient when determining what each one needs.
This mental “database” is unique to you and is a critical part of your ability to provide treatment and healing. In a similar way to how you use all of your expertise and resources in caring for patients, there are also important metrics, procedures, principles, and tools that can help you assess the health of your dental practice. Not only can these key performance indicators (KPIs) help you diagnose what’s happening in your practice, they can also be used to help you treat and improve the health of your practice.
My team works with thousands of providers across the country. We frequently hear some variation of this question from them: “How can I keep track of the pulse of my practice?” This is an excellent question, and it reflects the commitment these providers have to improving their practices. They often ask this question with some frustration and even a bit of anger. Clearly this is something these caring professionals have been trying to figure out for some time, but without success. In spite of investing significant expense, energy, and effort into understanding which metrics matter and why, many of these providers are still searching for answers.
My team uses our “Profitability Formula” to gather and analyze data.
Here I will address a few of the elements in this formula. My goal is to help you think about where your practice is today, what steps you can take to improve, and how you can be inspired to take action. In his best-selling book, The Seven Habits of Highly Effective People, Dr. Stephen R. Covey shares a story about teaching one of his children the importance of taking ownership of assigned responsibilities. He referred to this experience, which involved caring for their lawn, as green and clean. We use this phrase often at Dental Intelligence when talking about teams becoming owners of their KPIs. What is green and clean to you, your team, and your practice?
Here are the five metrics, based on our Profitability Formula, that every practice should be tracking.
Annual patient value
Are you increasing the value of your patients? Annual patient value (APV) is determined by calculating collections per patient for all active patients. If APV is increasing, it’s a great sign that you’re increasing the value of your patients, meaning they’re receiving more of the treatment they need. Determining APV gets rid of a lot of “fluff” around gross production. Knowing the annual value of each patient helps you accurately answer questions such as, “Is my practice healthy?” “What am I collecting per active patient?” “Are we seeing our patients enough?”
APV is an important lagging indicator. If you look at this compared to production per visit (PPV), you can see deeper into the health of your practice. For example, if your APV is $600 and your PPV is $325, this means you’re seeing your patients about two times annually, which indicates there is likely a lot of unscheduled treatment and production sitting in your practice management software. This is a really good metric for determining the health of the practice, and it relates directly to the next two metrics you should be tracking.
This metric is determined by looking at your active patient base to learn how many patients have future appointments. This tells you not only whether you’re getting new patients, recurring patients, etc., but also how many of them have a scheduled appointment. This greatly impacts visits because if your pre-appointment percentage is low (less than 30%–40%), it means many of your active patients are not coming back, which means you’re not using patient visits as well as you could be. Thus, your ability to increase production and visits is diminished.
Production per visit
This is one of the top metrics to examine. PPV helps you identify how much and what kind of treatment you’re providing. Are you decreasing, are you seeing lulls, are you seeing cyclical patterns? I recently received an email from a dentist and dental study group leader in Pennsylvania asking for industry benchmarks (see below) to help the dentists he works with understand why they’re seeing a decrease in production. Measuring PPV lets you see if the volume of patients is decreasing or if it’s caused by patients accepting less treatment. It also helps you identify at what rate you’re getting acceptance of treatment and it helps you see how you’re doing in overall treatment in relation to your patients.
Hygiene reappointment percentage
How are you doing daily in reappointing patients who come in for hygiene? How did you do yesterday with getting your patients back in the practice and scheduled for hygiene? This also impacts annual value.
Periodontal treatment percentage
This helps you see from a preventive side how you’re doing as a whole, which drives production per visit. Are you increasing the amount of hygiene care you’re providing? This also drives hygiene production per visit. If you’re not finding perio-related opportunities, are you finding restorative production? How are your hygienists doing in codiagnosing this type of treatment?
Once you start tracking and understanding these five metrics, you can start drilling down into your case metrics, such as treatment dollar acceptance percentage, patient acceptance, and patient diagnostic percentage. These are the hardest KPIs to change but will also provide you with the clearest window into the health of your practice. Once you have a firm grip on these metrics, you can start delegating responsibility to team members to take ownership of the different metrics—green and clean! For example, your hygienists should be at a periodontal treatment percentage of 35% or better. This will drive some great behavior from them. Your front desk should be at $850 annual value per patient, and other metrics.
So, if there’s one metric to start with, it’s production per visit. Where are you currently on PPV? Calculate this for each month. Figure out where you are and begin building from there. Be sure to calculate for this year and last year. Where do you think you should be? Where do you want to be? The benchmarks here can help you compare.
Are you where you want to be, and if not, do you know what to do to get it there? Metrics help you correlate your data with personal and team member behaviors. It gets you to your case metrics, which can vary each day depending on the patients and how healthy their teeth are, but still open a wide window into patient health and practice performance. Once you know where you are, you can set goals to impact your production per visit, which is your green & clean?