In order to be successful, dentists can't simply focus on providing excellent health care -- you also need to know how to run a profitable practice. Like any other small business owner, you'll need to monitor certain KPIs (Key Performance Indicators) to understand your dental practice's performance. Tracking these metrics will not only enable you to identify opportunities for improvement, but also help drive data-driven decisions that will ultimately result in better care for your patients.
Collecting + analyzing your data
Collecting data is the first step towards understanding where your practice currently stands. Most likely, you are already collecting data about your practice from your practice management software. Many PMS systems come equipped with various standardized reports, which are useful for providing a general sense of where you stand. If you want to dive into more detailed metrics, you may want to invest in a business intelligence software system that is designed specifically for dental practices, such as Dental Intelligence (read our full review here). This type of software is useful not only for generating reports, but also for helping you discern which metrics are most relevant, and putting them in front of you on a daily basis. This is an important, but often overlooked, aspect of running a data-driven dental practice -- after all, collecting data is pointless unless you take the time to actively analyze it.
Many dental practices that understand the benefits of analyzing their data often make the mistake of flooding themselves with too many metrics, which can cause paralysis by analysis. From a practical standpoint, you should only analyze data that can provide actionable insights. For this reason, it's important to focus on just a few relevant KPIs that can have a meaningful impact on your practice, and create a strategy to try to improve them. Once you begin implementing a strategy, make sure to keep track of the results in order to determine which actions create the desired impact.
What are some important KPIs for dental practices to monitor?
We'll provide some concrete examples of important metrics to monitor, as well as healthy ranges that are observed in successful practices. We will also suggest some strategies for improving these metrics if you determine that your practice's numbers are drastically different from the recommended target range. Of course, you'll want to monitor your daily/weekly/monthly production. However, simply monitoring your production can leave you in the dark. In order to identify opportunities for improvement, you'll need to monitor more granular metrics, which will ultimately help increase your production.
Hygiene pre-appointment rate
This is often considered to be one of the most important KPIs for dental practices to monitor. Hygiene visits are important, not only because they typically generate about 25%-30% of a practice's production, but also because they give you the opportunity to diagnose any issues, and keep patients healthier, and engaged with your practice. Typically, the higher the hygiene pre-appointment rate, the better. Although it's unrealistic to shoot for 100%, practice management consultants typically suggest that you aim to hit 85%-90%.
How to improve it: The best way to boost your hygiene reappointment rate is to make sure that you schedule each patient's next visit before they leave your office. To do so, it's important to implement a system, where you make a conscious effort to pre-appoint patients. This is often a team effort that requires your hygienist to work together with the front desk. As with treatment case acceptance rate (see below), presentation matters -- so you will want to make sure that your employees are adequately trained to give every patient a firm but friendly reminder to schedule their next hygiene appointment before leaving the office.
Treatment case acceptance rate
Ultimately, it's important that patients agree to the treatment plans that you present. Not only does this ensure that patients are receiving the best care possible, but it also plays an important role in improving your practice's bottom line.
Target: According to Dental Intelligence, the top 10% of dental practices have 90% of patients saying yes to a component of the treatment plan presented.
How to improve it: The first step to improving case acceptance rate is to educate patients about the importance of their treatment. By simply spending a few extra minutes to make sure that patients understand the importance of their treatment, and to address any questions or concerns they may have, can pay dividends in improving your case acceptance rate.
You may also want to revise your presentation. It's said that 93% of communication is non-verbal -- this means that, regardless of the words you say, if you present the case confidently and authoritatively, you'll improve your presentation and likely your overall case acceptance rate.
Appointment no-show rate, cancellation rate
Patients can decide to cancel or not show up for their appointment for a variety of reasons. Though some appointments will inevitably be broken due to unforeseen circumstances, there's a lot that dental practices can do to minimize no-shows and cancelled appointments.
How to improve it: One study conducted by King Saud University orthodontic clinic asked patients how they keep track of their appointments. Of those surveyed, 27.8% responded that they relied on their memory to keep track of their appointments. In addition, when the respondents were asked what their reasons were for missing appointments in the past, about 40% of the respondents missed previous appointments due to simply forgetting.
This demonstrates that sending appointment reminders, and requiring appointment confirmations, can be a powerful way to reduce your practice's broken appointments. Patient communication software, such as Lighthouse 360, Demandforce, and SolutionReach can help automatically send these appointment reminders and confirmations. According to Lighthouse 360, their software can help reduce no-shows by an average of 40%.
In addition to patients who forget their appointment, there are also patients who break their appointments simply because they don't understand the importance of their treatment. For these patients, it's important to educate them, and make sure they're bought in to the treatment plan being prescribed, and understand the risks of delaying or foregoing treatment.
If you follow these steps but still have more broken appointments than desired, you can also consider implementing a fee for broken appointments to discourage no-shows. A small fee for no-shows or cancelled appointments within 48 hours can be a strong motivator for patients to show up for their appointments.
New patients per month
Every dental practice needs a steady flow of new patients in order to compensate for the natural patient attrition rate that will occur. However, it's also important to keep in mind that by strictly acquiring patients without having a strong patient retention strategy will result in new patients who never return to your practice. For this reason, you should prioritize patient retention first, and then focus on acquiring new patients if you still have additional capacity.
Target: ~25+ per month per doctor
How to improve it: If you're looking to improve your new patient growth rate, the first thing you need to do is assess your current marketing approach, and identify your top referral sources. If most of your referrals are coming via word of mouth, you may want to invest in amplifying your web presence, as this will enable you to reach a wider audience of potential patients.
One way to do this is to create a visually appealing website and then generate and publish quality content, so that new patients can discover you when they're searching for dentists in their local area.
You may also want to invest in reputation management software, which can help you solicit reviews from patients and identify negative reviews, so that you can address them. These reviews can also provide you important feedback, which can be an excellent chance for you to discover opportunities to improve your practice.
In addition, it may be helpful to revamp your marketing strategy, and offer deals or incentives to get new patients in the door by sending out email marketing campaigns. These newsletters have the added benefit of keeping patients engaged with your dental practice.
Analyze how changes to KPIs can impact your practice
These are just some examples of KPIs that are important to your dental practice. To visualize and quantify how certain changes to some of these KPIs can impact your practice, you can check out our Dental Simulator Tool.
Once you've selected a few KPIs that you believe are important, and begin analyzing your practice's performance, you'll likely identify opportunities for improvement. Armed with this information, you can create a strategy to improve your performance on these metrics, and then to test your strategy to make sure that your approach is working. By measuring your performance, and taking the appropriate actions to improve, you'll ensure that your practice is constantly growing.