AUTHOR: The Dental CFO
August 31, 2023
Dental practices, like any business, must prioritize profit and manage production efficiently to ensure long-term success, offer best-in-class patient care, and remain competitive within the industry.
Tracking key performance indicators (KPIs) on a daily, weekly, monthly, quarterly, and annual basis is fundamental to achieving this. Among the most important metrics to track are production and collection.
Keep reading to learn more about how your practice can regularly measure production, keep track of important dental KPIs, and make any necessary adjustments to boost profitability and, ultimately, success.
The First Step to Measuring and Analyzing Dental Practice KPIs
Wondering how to increase dental production? What about how to increase dental practice revenue?
It starts with getting into a routine of measuring, reporting, and analyzing specific KPIs from your practice. This must become fully integrated into your day-to-day operations to ensure implementation and execution are successful.
Everyone in your office, from clinical to administration, should be aware of the dental practice benchmarks set, as well as any specific production goals that need to be met within a certain timeframe.
Your team is a huge investment and asset to your practice. Make sure to keep everyone informed so they can collaborate to achieve goals with speed and excellence.
Key Performance Indicators for Dental Offices
In general, dental practice metrics should look similar across the board. However, offices that provide specialty treatments such as cosmetic or sedation dentistry services may need to track additional KPIs.
Dental Metrics to Track Daily
- How many patients have scheduled their next appointments?
- How many patients are overdue?
- Of the patients that were contacted today, how many scheduled their next appointment?
- How many patients paid outstanding balances?
Dental KPIs to Track Weekly, Monthly, Quarterly, and Annually
Production by Provider
Measuring the production of each provider in your office will help you identify how much revenue each provider generates for the practice. We consider this to be the single most important metric to measure because production is directly tied to revenue and business growth.
The standard recommendation is to collect 98% or more payments. However, according to Dental Claim Support, “the average dental practice is losing 9% of their production to uncollected revenues.”
To find your collection percentage, divide your production amount by the amount collected, but be mindful of insurance reimbursement delays when calculating.
Overhead, Revenue, and Profit
It’s an industry standard that your staff labor expenses should be around 25% of your revenue.
Hygiene Re-Appointment (Re-care) Rate
Hygiene re-appointment (sometimes referred to as re-care rate) is a very important dental KPI to measure if you seek to understand and increase your patient retention rate. This is especially true for dental practices that offer additional services such as cosmetic dentistry.
Treatment Case Acceptance
This KPI for dental practices is a key insight into predicting profit and revenue growth. If you are dissatisfied with your current treatment case acceptance rate, consider new avenues of educating patients about their prescribed treatment plans and diagnoses.
Increasing your treatment case acceptance rate should be a goal for any dental practice seeking to grow revenue.
Appointment No-Show/Cancellation Rate
Keep a close eye on appointment cancellations and no-shows. These add up and can be damaging to any dental practice.
“All successful dental practices have a broken appointments policy, and patients are made aware of it. A great way to remind your patients of this policy is to have it written on the appointment reminder card, which is handed to the patient before they leave after each visit.”
–Tom Loeblein, President/CEO, The Dental CFO
Number of New Patients and Lost Business
Is your dental practice gaining more patients than it’s losing? This KPI is essential to get an accurate picture of your patient retention rate.
Cash on Hand
Your practice should maintain at least three or four months’ worth of cash on reserve for emergencies or other unforeseen events.
Example Goals and Benchmarks to Increase Dental Practice Profit
Based on industry standards, here are some dental office goals examples to aim for in your practice.
Daily Production Goals
- Dentist: $4,500 to $5,000
- Per Hygienist: $750 to $1,000
Annual Production Goals
- Dentist: $864,000 to $960,000
- Per Hygienist: $144,000 to $192,000
These benchmarks assume the dental practice staff has a 4-day work week with four weeks of vacation.
Total Production Goals
- Daily: $6,000 to $7,000
- Annually: $1,152,000 to $1,344,000
These benchmarks assume the dental practice employs one full-time dentist and two full-time hygienists.
The Importance of Dental Practice KPI Reporting
As you measure and analyze your chosen dental metrics, it’s also important to create detailed reports and keep track of them for future reference.
After a few weeks or months of setting production goals and measuring KPIs, you should start to notice trends. Whether these trends are positive or negative, the data you collect and analyze in your KPI reports will help you make informed business decisions down the road.
Reporting also gives you the opportunity to revise and optimize processes that are causing inefficiencies within your practice. Staying consistent and paying close attention to your dental practice KPI and production goals will help reduce future frustrations or stressors related to performance.
Dashboard Reporting for Dental Offices
Think about the purpose of the dashboard in your car. It’s designed to provide continuous monitoring of various vehicle components, which are critical to ensuring optimal performance — and that the car will get you where you want to go.
If cars were not equipped with dashboards, unanticipated problems would be very likely. The same can be said for dental practices.
Once your practice is up and running, there needs to be a mechanism in place to evaluate KPIs. Some electronic health record (EHR) and practice management systems have integrated dashboards to help you monitor vital areas of your operations and achieve peak performance. There are also data mining products that pull the information from your existing system.
If you’d like to learn more about dashboard reporting and how it can help your practice, we’d love to give you the scoop.
Managing Production Based on Dental Practice KPIs
After measuring KPIs, creating reports, and analyzing your findings, it’s time to create a plan for managing production. Production comes in many forms for dental offices — cleanings, treatments, and complex procedures all contribute to the overall production and success of your practice.
Managing Production Starts With Patient Scheduling
Inefficient patient scheduling is one of the biggest reasons patients transfer to another dental practice. Avoid making your patients wait long past their scheduled appointment time to help ensure they’re satisfied with their visit. Failure to do so may damage your practice’s reputation.
Additionally, make sure your administrative staff schedules appointments with the goal of ensuring hygienists and dentists have enough time with the patient. Nobody likes to rush; optimizing your practice’s scheduling habits will eliminate any unnecessary stress on both your patients and your staff.
Other patient scheduling mishaps to avoid include:
- Starting late at the beginning of the day or after lunch
- Not having needed lab work ready for the appointment
- Not having each operatory setup when the patient enters
- Unexpected and unplanned procedures or changing procedures
- Not having a “late patient” protocol or not consistently applying the “late patient” protocol you do have in place
- Non-patient interruptions such as phone calls and vendors
- Not having morning huddles to check for glitches in the day’s schedule
- Dentists not moving from room to room efficiently and getting too focused on one patient
“The most expensive thing in a dental office is an empty chair. It’s crucial for your practice’s financial success to have a patient schedule that’s full daily and constantly monitored for the inevitable cancellations and reschedules that will occur. Always maintain constant vigilance on your patient schedules to ensure all providers are busy treating patients and producing revenue for your practice.”
–Tom Loeblein, President/CEO, The Dental CFO
Other Ways Tracking Metrics Can Help Manage Production
If just one production goal isn’t aligned with your KPIs, you may need to adjust a process or policy. For example:
- If your collection percentage is down, you can try adjusting the collection process or policy to alleviate the drop.
- Hygienists may complete a high number of cleanings per day, however, cleanings are not a big income generator. Therefore, dentists must set goals as to how many complex procedures are completed per day or week to meet revenue goals.
- Are treatment acceptance rates low? Analyze how these cases are presented to the patients. Is enough education being provided to influence decisions?
- Underestimated time of procedure? This could upset patients on a strict schedule, which could lead to patients transferring to a different dental practice. This is easily avoidable by scheduling patient procedures for an adequate amount of time, especially if the procedure is predicted to be complex.
- Patients aren’t paying on the day of the procedure? Establish and consistently enforce a past-due policy.
Extend the Longevity and Success of Your Practice by Measuring Dental KPIs
If you want to know how to make your dental practice more profitable, you need to measure, report on, and analyze key dental metrics on a daily, weekly, monthly, quarterly, and annual basis.
The dental industry is constantly growing and changing, which is why you need to position yourself as a competitive practice in your area with top-notch client care — and we can help.
We offer strategic dental financial management and accounting solutions tailored to your specific needs and goals. Whether you’re looking to improve your individual practice or want to expand into multiple locations, we’ll help give your business a competitive edge.
Request a consultation now and let our team of experts guide your practice to success.