Discover True Dental KPI

Dentists, are you looking at data from your practice that informs you on how to improve? In my 15+ years consulting with dentists all around the country, I have discovered that most practice owners, old and young, are unsure of what indicators matter most when looking to expand, making decisions on hiring and really evaluating the health of the practice. While Production and Collection totals tell part of the story, there is a wealth of insight you can gain when you know what to do with these numbers. I'll just say, your practice software is not doing this for you. Your fancy data-mining software isn't doing it either. Let's take a look at what data really matters. I think you will see how this is really what you are looking for.

1. Direct Referrals - Most dental practices don't track their referrals. Check it out. I bet you're one of them. This is an easy number to track so long as it is being inputted when the patient account is made. If you aren't doing this, start today. If you are one of the few who are tracking it, take a look. How many new patients are coming to your practice on a referral from other patients? How many are coming in because of your marketing? These are two very important numbers and I would pay special attention to where your patients are coming from. You want to put more money into the external avenues that patients come to you through, unless you look at see that your patient referrals are low. Why? Your direct referrals (patient referrals) should account for 50% or more of your New Patients. If you don't have this you may have an internal issue that needs to be addressed. At the very least, you and your team need to be trained on how to ask for referrals, but this can also be an indication that your patients don't like you; that is they don't like your hours, they are confused about treatment, they may not feel heard, etc. This issue should be addressed before doing future external marketing. A good goal for this year would be to increase your direct referrals and get that number to over 50% of your total referrals for the practice.
2. Production per Employee - Let's get real. More production doesn't always equate to greater success or more profits. This is one of the most important metrics in your office. Do the math and you will have a better understanding of how your team is performing. To do this, take your Net Production (Production after adjustments) and divide it into the amount of team members you have. For a good practice, the result will be between $20,000-$25,000 per employee or higher. Most practices will likely do the math and find they produce $13,000 or less per employee. What does this tell you? If the number is lower than $20,000-$25,000, you don't need to do any more hiring. In fact, you need more productivity out of the team you currently have. You may be overstaffed, or the team is undertrained. Let's say your average is closer to $35,000 per employee. You may need to higher a part-time employee to expand your ability to provide services. This number can give you a good handle on how to contextualize your hiring decisions. I'd be curious to know what yours is. A good goal for you this year is to make decisions that help you achieve the benchmark above.
3. Production per Operatory - This is hands down the best way to evaluate your productivity in relation to your space. If you don't have at least $25,000 per op, your space is either too big, or you have some ways to go to grow into it. If you are thinking about expanding and it is no where close, you are not ready. If expansion is not on your mind, now you have data. Between you and your team, you have the capacity to produce an average (in net production) of $25,000 per operatory.
4. Two Hygienists Per Doctor - This is a crucial strategic step. If you have only one hygienist, you may be missing out on production. Let's find out. Each hygienist can see 1000 patients every six months. If your practice has less than 1000 patients, then one hygienist is sufficient. If you have 1500 patients, you need one and a half hygienists. However, if you have three hygienists, it is likely that you are underproducing in your doctor's ops because you are spending so much time in hygiene. It may now be time to hire a part-time doctor. Use this metric to scale your practice and take action. A good goal is to grow your practice to turn your hygiene department into a profit center. Run a report and find out how many future recalls you have currently and organize yourself accordingly.
5. 98-100% or Higher Collection Rate - Let's find out what your rate is. First take your Net Collections (Collections after Refunds) and divide it into your Net Production. That is your rate. Sadly, most team members, unless they have been told, will believe that any collection rate over 90% is "pretty good." But let's do the math. If you have a $1M practice, every percentage point is $10,000. So, if your collection ratio for the year is 94%, you are missing $60,000. What could $60,000 do for you? Helping your team to understand the importance of collecting at this level is crucial to running a good business. More often than not, a practice who is collecting less than 98% has a Financial Arrangement problem, not a collection problem. A good goal would be to make it a priority to tell patients what they will owe ahead of time, and gain their acceptance. Never skip this step. If they don't accept, then you know not to do treatment.

So how would you rate yourself? What is next for you? Practice owners who really want to grow are working with a good coach. If anything in this article resonated with you, or inspired you to take a closer look, let's connect for a FREE assessment to see how you can take your business to the next level here in 2025.

PS ~ Everyone who reaches out will receive my FREE Ebook on Scheduling and FREE access to my webinar training on January 23rd.