“What Gets Measured, Gets Done”

Performance management and identifying KPI’s (key performance indicators) are powerful tools to bring about change in your practice. When your practice defines objectives, establishes goals, measures progress and rewards achievement the results can be remarkable. If you take it one step further and share those results with the rest of your organization, you can often turbo charge change and move more quickly towards a new direction.

How do progressive dental practices implement a performance management strategy?

Step one –     Strategize

Step two –     Plan

Step three –   Monitor and Analyze

Step four –    Take Action and then adjust or revise

Are you using performance management strategies and KPS’s to turbo charge your practice?

14 KPIs every dental practice must know if they want to grow:

1. Production: What are the daily, weekly, monthly, and annual production figures? These provide the big picture of how a practice is doing.
2. Diagnostic, preventive and remedial care are three very distinct markets: What is the breakdown in production in these three areas?
3. What percentage of fees charged are actually paid? If a practice isn’t collecting 98%, your policies and scripts may need to be adjusted.
4. Overhead: Is overhead 59% or less of total income? If not, examine expenses to see what can be reduced.
5. New patients: How many new patients are coming in each month and each year? This indicator should be increasing 10% to 15% annually.
6. Case acceptance: How do patients respond to treatment recommendations? Are at least 80% 90% of case presentations accepted?
7. Doctor production vs. hygiene production: What percentage of production is dentist generate and what percentage is from the hygiene department? According to the ODA’s Economic Report 2016 – by the end of this decade, the average practice will go from generating 34% of its revenues from hygiene to 46%, and the size of the hygiene department will increase by about 50%.
8. Percentage of hygiene patients scheduled: Are 95% to 98% of the practice’s patients scheduled for their next appointment at all times?
9. Cancellation and no-show rates: Is the rate 1% or less? If not, the practice may suffer from unproductive gaps in the schedule.
10. Net Profit Margins: How effective is your practice at generating profit on each dollar of revenue you bring in. This financial KPI is a measure of the profitability of your practice and is instrumental in making long and short term financial decisions.
11. Operating Cash Flow: How healthy is your practice? In analyzing the operational aspect of your practice allows you to determine if your practice is producing enough cash to sustain the capital investment that you are or might want to put into your practice.
12. Debt to Equity Ratio: How is your practice funding its growth? A high debt to equity ratio is evidence of a practice that is fueling growth by accumulating debt.
13. Gross Profit Margin: How much profit do you make on each dollar of sales before your deduct expenses? This ratio is calculated by looking at the difference between production costs.
14. Patient Satisfaction: How satisfied are your patients with the quality of patient care? The ultimate test for a successful practice is the delivery of quality patient experience.

Dedicated to your success,

Kathy D. Harris