The prime focus of a dental practice is on providing quality care. However, running a dental practice is like running any other business and dentists have to pay attention to their bottom line. Making data-driven decisions by tracking key performance indicators (KPIs) can go a long way in improving practice performance as well as patient care. Partnering with an experienced dental billing company can help you do this. Here are 6 KPIs that can indicate the health of your dental practice.
- Production: This is a top KPI for a dental practice. Measuring production will show you if your production levels are satisfactory, which means that your practice is performing well. Production can be measured in terms of number of visits and production per visit (PPV).
If production is low, it would signify that the volume of patients is decreasing, while low PPV could be because scheduled patients are accepting less treatment. Practices should set an annual production goal. According to practice management consulting firm Levin Group, most practices have a minimum production potential increase of 30% to 50% over a three-year period (www.dentaleconomics.com). Another noteworthy statistic from Dental Intelligence: the top 10% of dental practices have 90% of patients accepting a component of the treatment plan presented to them.
- Active patients: The number of active patients is another critical KPI. The active patient count is the number of different individuals seen in the practice during a prior specified time period, which is typically the prior 18 months. So, according to this definition, an inactive patient is a person who has not come in within 18 months. However, according to the Levin Group, while this interpretation was valid before the pandemic, 18 months is much too long of a timeframe post-pandemic. Now, the Levin Group defines an inactive patient as a person without their next appointment scheduled, and an active patient as a person with an appointment. A Dental Economics article recommends monitoring this critical KPI on a daily basis. Practices with a sufficient number of active patients will earn more income to support the business.
Note: Reviewing your active patient base will tell you how many patients have future appointments or pre-appointments. Though attracting new patients is important to grow your dental practice, pre-appointing your existing patients to improve patient retention will ensure a higher return on investment. A high pre-appointment rate means many of your active patients are coming back. Maximizing patient visits increases your ability to increase production and visits.
- Annual patient value (APV): This key dental practice metric is the collections per patient for all active patients. It means calculating how much a new patient is worth to your practice. Dividing the adjusted net practice income by the number of patients in the active patient count provides an individual patient value. According to GetWeave, APV will tell you:
- How much you can spend on advertising to obtain a new patient
- The number of active patients your practice needs to meet financial goals
Tracking APV will also help you avoid overbooking yourself, which can lead to burnout. When you know how much an active patient can bring in, you can gauge whether you can expand your team by adding more dental professionals or more support staff at a profit, while making more time for yourself.
- Percentage of hygiene reappointments: This KPI is critical for dental hygienists. In addition to minimizing risk of oral diseases such as tooth decay and gum disease, hygiene visits improve overall health by helping to avert diabetes, heart disease, and many other health issues. Getting patients rescheduled for hygiene is an important measure of performance. A DentistryIQ article recommends that hygienists keep a watch on the following metrics:
- Hygiene preappointment
- Hygiene reappointment
- New patient hygiene reappointment
- Perio visit
- Hygiene visits per hour
According to the American Academy of Cosmetic Dentistry, hygiene visits usually account for about 25%-30% of a practice’s production and keep patients engaged with the practice.
- Revenue: Revenue is what a practice is collecting. Collections will be higher in practices with more insured patients and reliable dental billing services. Dental insurance plan types vary from fee-for-service to entirely PPO, and practices should understand their model and build the appropriate collection systems to make it profitable and succeed with the right KPIs.
Profit, overhead, and cash are other KPIs that dental practices should be tracking consistently, according a Dental Economics article. Outsourcing dental billing to a competent medical billing outsourcing company that specializes in the field is a practical strategy to maximize reimbursement as you focus on your patients. Experts will ensure regular reports are reviewed on the performance of your practice, which will allow you to leverage analytics to improve your bottom line.