Managing a practice requires that you look at “the numbers” on a regular basis. If you’re like most practicing Doctors, you probably try to glance at the production and collections figures at least monthly. Did you know that there are a lot of other performance metrics that can help you gauge how your practice is performing?
Figuring out which metrics are meaningful is one challenge. The problem is that calculating those metrics and then looking at those performance indicators in a vacuum doesn’t provide you with much insight at all. For that reason, calculating various performance metrics will be much more valuable to you if you can compare your practice’s metrics to your peer group.
My CPA firm currently provides tax, accounting, payroll, and basic practice management services to more than 130 dental practices. This past winter, we collected practice management data from many of our practice clients and used that data to calculate the following ten meaningful performance metrics for general dentists for 2012:
- Number of Active Patients (Defined as an individuals treated at least once during the prior twelve months)
- Collections per Active Patient
- Collections per Doctor Hour
- Collections per Procedure
- Number of Procedures per Active Patient
- Number of Non-Diagnostic and Non-Preventive Procedures per Active Patient
- Re-Care Efficiency (Defined as the percentage of Active Patients who came in for two exams during the year)
- Number of New Patients brought in during the last year
- Percent of New Patients to Active Patients
- Percent of Adjustments and Write-Offs to Gross Production
Please note that even though the data was collected mostly from practices in the Greater Boston area, I feel that most of these metrics are relevant to practices located within all 50 states.
To make these metrics even more meaningful, we calculated each performance metric based on the data collected from all the participating practices, and then re-calculated them based on the practices that collected $1 million dollars or more during 2012. It’s very interesting to see how the performance metrics for the total sample compare with the same metrics calculated from just the million dollar practices.
An part of our analysis, we also created a graph that we call our “Internal Marketing Matrix”. This graph plots Re-Care Efficiency on the x-axis versus New Patient Percentage on the y-axis for each of the participating practices. Depending on your practice metrics and where you fall on this graph, you’ll either be apolitician, engineer, neophyte, or “dentist-preneur”.
To learn more about these ten metrics and the four quadrants of our Internal Marketing Matrix, and to find out how your general dental practice compares against the average practice and the “million dollar” practice, please watch this 13-minute recorded PowerPoint Presentation on Million Dollar Metrics for General Dentists or watch below:
If you’re practicing in the Greater Boston area and would like to set up a time for my firm to help you figure out these metrics for your practice, please do not hesitate to e-mail me that request. We’d really appreciate the opportunity to help you gain some insight on the performance metrics for your practice.