35600577 © Andose24 | Dreamstime.com
Follow these 6 dental practice KPIs for better systems and success

6 dental practice KPIs to measure success and streamline systems

Sept. 13, 2023
Preparation for following dental practice KPIs may take some time initially, but the streamlined systems that will fall into place will be very worth it.

Most dental practices are complex small businesses. In essence, practices need to do nearly everything that much larger businesses do, all while the dentist spends most of their time productively engaged with patients. This is why systems are so critical. Systems ensure the day-to-day tasks and activities are carried out properly. 

But how does a practice owner know if their systems are working and if the practice is successful? Measurements (or metrics) are the indicators of success. Here I’ll focus on six of those major measurements, or key performance indicators (KPIs), that allow practices to know where they stand, and their best options for the future. 

Measurement 1: Production 

I want to be crystal clear that every business has one measurement that indicates more about the business than any other measurement, and it’s the most important. That measurement is production. If a practice understands its production model, then it has enormous opportunities for continual improvement and success. Total production is the most critical number, but it also means looking at ratios of production. A few examples include: 

  • Production per patient
  • Production per hour
  • Production per new patient
  • Hygiene production per patient
  • Hygiene production per hour
  • Average production per day 

Recommendations to improve production 

  1. Designate time every day to contact patients who have not scheduled their next appointment. According to Levin Group data, approximately 20% of dental practice’s patients are overdue for appointments. By making this a daily process within an overall scheduling system, the practice will be able to schedule more patients and increase overall practice production.
  2. Decrease no-shows and last-minute cancellations to under 1%. Levin Group data indicates that in most practices, between 4%–6% of patients no-show annually. By reducing this even slightly, the practice will pick up significant production by using chair time that can never be filled again once it’s empty due to a no-show.
  3. Offer every patient financing, particularly interest-free financing. Every patient in the practice should be reminded at every visit that patient financing is available for treatment. Interest-free financing is a powerful motivator for patients to follow through with treatment.
  4. Maximize insurance benefits by contacting all patients in September who have remaining treatment and benefits. In addition, contact all patients in January who refused to have further treatment until their benefits renewed, and schedule them to finish their treatment. In many practices, this can add $120,000 per year to production. 

Measurement 2: Daily production goal 

Once a practice has an annual production goal, it can easily create a production goal for each day. Why is this important? Because it’s easier to track a long-term goal in shorter time increments. You will recognize progress, or the lack thereof, much faster by tracking daily production goals. The daily production goal helps all the staff understand what the practice wants to achieve each day. Then front desk people will be able to work with the schedule throughout the day in order to come as close as possible to the daily goal. The most important aspect of achieving the daily goal is to review it in the morning meeting every day. 

Recommendations to hit the daily goal 

  1. Discuss the daily goal every morning in the morning meeting. Determine if the schedule for the day will support production above goal, on goal, or below goal. If the production goal for the day is under scheduled, then hygienists (if you have them) can immediately look for treatment through diagnosis with their patients throughout the day. That treatment can become same-day treatment by the dentist and the dental assistants.
  2. Contact senior patients who have more time available and move them forward in the schedule if it’s convenient for them. Many seniors are happy to come in today if they have free time that allows them to be flexible.
  3. New patients being seen that day may have specific recognizable diagnostic needs. They can be treated the same day.
  4. Emergencies should be scheduled for that day and typically have a very high case acceptance rate. 

Measurement 3: Active patients scheduled 

One of the most important statistics is the number of active patients who are currently scheduled. Traditionally, an active patient was thought of as a patient who had been seen during the last 18 months. Today, Levin Group has redefined an active patient as any patient with their next appointment. According to our data, many practices have approximately 20% of patients unscheduled at any given time. The danger is that some of these patients will be lost to the practice. Keeping active patients scheduled is one of the fastest ways to increase practice production. 

Recommendations to increase active patients 

  1. Set time aside every day to contact overdue patients. This process is a system, and systems are the best way for a practice to perform at a higher level. If specific time is not set aside daily for this critical activity, then some patients will be lost, and others will be off cycle, which reduces practice production.
  2. Have a follow-up system to reach out to patients without a scheduled appointment. We recommend having a system of follow-up one week at a time for patients who you were not able to contact. Over the course of approximately nine weeks, a process can be put in place using text messaging, phone calls, and email. Never underestimate the power of continual communication.
  3. Attempt to schedule every patient for their next appointment before they leave the office. We find that prescheduling patients is much more effective in retaining an active patient than having patients schedule closer to the time when they’re due for their next hygiene appointment. This will translate into having all patients scheduled for their next appointment before they leave the practice, regardless of the type of appointment. 

Measurement 4: Collections 

Collections are essential. Although production is the single most important statistic to focus on in a dental practice, collections reflect exactly how much money is coming in. This is how bills are paid, new purchases occur, the team is paid, and the doctor has an income. Collections are essential, and we’d like to see them at approximately 98% of all production. In order to make this happen, the practice needs a system that focuses on collecting fees, balances, and copayment at the time of a visit. However, there will be some cases where a patient ends up owing the practice money after they’ve already had their appointment. 

Recommendations to increase collections 

  1. Create a policy of payment at the time of service. This will increase collections, reduce administrative work, and decrease patient dissatisfaction for those who owe money and don’t realize it. Collecting at the time of service is simply the best way to maximize collections.
  2. For the few patients who end up with a balance following their appointments, it’s essential to reach out to them right away and request payment. The best method is credit cards that can be taken by phone or patient financing if necessary.
  3. Establish a rapid follow-up system for any overdue balances. The longer you allow a patient to owe money to the practice, the less chance it will be paid. The rule of thumb is that after 60 days the chances of collection are less than 10%. Always be polite and positive and offer options, such as credit card payment by phone, that make it convenient for a patient to pay the balance. 

Measurement 5: Cash 

I cannot say enough about cash. I heard the story about a business school professor who asked his class, “What is the most important factor in the success of a business?” Answers ranged from having a great product to excellent marketing to customer service. After listening to those answers, the professor went up to the whiteboard and in giant letters wrote CASH. Although there are many aspects to creating a great business or practice, having cash means you’re always protected. If you have enough cash, you never have to worry, you can sleep well at night, you can invest in your practice, and you have a great future. 

Recommendations to increase cash

  1. Gradually build up three months of cash.
  2. Put this cash in a separate cash reserve account different than your operating account with the goal of never touching it if possible.
  3. You will probably have to pay taxes on this cash as annual income, but it gives you the opportunity to have the security of cash available. Although this is not a financial planning article, keep in mind that the cash can be invested in short-term high interest paying investments. 

Measurement 6: Staff longevity 

This is a metric you’ve probably never thought to measure. However, based on the current staffing situation in dentistry and the fact that it will be with us for some time, Levin Group has now added this as a key measurement. The higher the staff longevity, the higher the practice production. This makes sense in that long-term staff understand how to be efficient, productive, and independent, freeing up the dentist to spend most of their time engaged with patients. Remember, the dentist is the top producer in the practice, and the hygienist is usually the only other producer in the practice. The more time a dentist has to focus on patients, the higher the practice productivity and overall annual production will be. 

Recommendations to increase staff longevity 

  1. Identify a clear mission and core values for the practice so that everyone feels like they’re part of something special and have a purpose in coming to work.
  2. Compensate the team at a high level. Replacing team members is very expensive and Levin Group estimates a loss of $50,000–$100,000 of production based on turnover.
  3. Be a great leader. Be an example. When teams cooperate and work together, people stay longer and feel better in their working environment. Study and work on your leadership skills. Better leaders have higher staff longevity.
  4. Create fun activities where team members can spend time together in a relaxed setting.
  5. Make your meetings productive. Morning meetings should be 10 minutes long and focus on that day. Monthly business meetings should be two hours long and focus on the practice. 

Business often comes down to understanding the numbers. If you understand the key factors in dental practice success, which include production, the daily goal, collections, cash, and staff longevity, your practice will already be well along the way to the highest levels of success.

If you’re already successful, you want to make sure it’s because of deliberate actions, and not simply a “fortunate accident” based on where you practice or the economy. Any of those can change. But practices that are deliberate in understanding their measurements, then apply them to make positive improvements, will be successful now and in the future.

Editor's note: This article appeared in the September 2023 print edition of Dental Economics magazine. Dentists in North America are eligible for a complimentary print subscription. Sign up here.

Sponsored Recommendations

Clinical Study: OraCare Reduced Probing Depths 4450% Better than Brushing Alone

Good oral hygiene is essential to preserving gum health. In this study the improvements seen were statistically superior at reducing pocket depth than brushing alone (control ...

Clincial Study: OraCare Proven to Improve Gingival Health by 604% in just a 6 Week Period

A new clinical study reveals how OraCare showed improvement in the whole mouth as bleeding, plaque reduction, interproximal sites, and probing depths were all evaluated. All areas...

Chlorine Dioxide Efficacy Against Pathogens and How it Compares to Chlorhexidine

Explore our library of studies to learn about the historical application of chlorine dioxide, efficacy against pathogens, how it compares to chlorhexidine and more.

Enhancing Your Practice Growth with Chairside Milling

When practice growth and predictability matter...Get more output with less input discover chairside milling.