Dentists must provide excellent clinical care and monitor practice performance — two completely dissimilar, but vital, aspects of a successful practice. One management tool that can help dentists stay on top of practice performance is the use of Key Practice Expanders™, or KPEs:
- Set a daily production goal. Everyone on the team should know the daily goal for gross production. This goal should represent a realistic increase in production based on factors such as last year’s production, patient retention, new patient projections, treatment planning, and new technology. Additional items such as fee structure, insurance participation, and staff levels will affect this goal. The important thing is to set an annual goal. Divide that number into a daily production goal for the dentist, hygienist, and practice as a whole.
- Assess gross production, collections, and accounts receivable. Make bank deposits and track insurance filings daily. Be sure to run end-of-the-month reports to show how the practice is performing in the areas of production and collections vs. monthly goals. Run a report to see what your accounts receivable looks like. A good rule of thumb is that your total accounts receivable should be less than one month’s production.
- Monitor KPEs each month. Track the number of hours worked each month to determine the practice’s hourly production. According to the Levin Group Data Center™, the average practice produces close to $650 an hour. A good goal for a solo operator who wants to have a million-dollar practice is $850 an hour. Another KPE that needs to be tracked is failed appointments. Dentists should have fewer than three no-shows and six cancellations a month. The target for hygiene is to keep cancellations in single digits and failed appointments below six. Track larger treatments to see how well your team educates and motivates patients to accept treatment. Your target should be a 90% case acceptance rate.
- Track practice overhead. Your accountant can assist you with setting overhead goals. GP overhead tends to run around 65%. The average Levin Group client is closer to 60%. Set budget targets for your fixed and variable expenses — such as labor, supplies, and marketing — that allow you to operate at maximum efficiency.
A strong understanding of your KPEs is critical to practice growth. Know your numbers, set goals, and track them. Share these goals with your team and motivate them to help you reach your targets. The result will be a more successful practice.
To learn how to run a more profitable, efficient, and satisfying practice, visit the Levin Group Resource Center at www.levingroup.com/gp — a free online resource with tips, videos, and other valuable information. You can also connect with Levin Group on Facebook and Twitter (@Levin_Group) to learn strategies and share ideas.
Dr. Roger Levin is a third-generation general dentist and the chairman and CEO of Levin Group, Inc., the largest dental practice management and marketing firm in the United States. As a leading authority on dental practice management and marketing, he has developed the scientific systems-based consulting method that will increase practice production and profitability, while lowering stress. Dr. Levin has authored more than 60 books and over 3,000 articles. He presents 100 seminars worldwide each year.