When reviewing our practices, we often get caught up in focusing on the little details. We can easily forget to take an overall inventory of our progress with the Five Pillars of our Practice Foundation. Turning your attention to the five systems; Production, Cash Flow Metrics, Schedule Success, Patient Retention, and Growth and Treatment Planning, can change your view and point to the best direction forward.
Production is usually first and foremost on everyone’s list. You’ll want to compare your past production with your present production before you can decide where it needs to go in the future. A practice that remains at the same level of production for more than two years is stagnating and losing financial ground since many of your expenses (wages, sundries, and rent) have likely increased over that time. Relying on increased fees from the fee guide each year is not enough to boost your practice production to cover increased expenses. Take the time to make strategic decisions moving forward regarding the production goals you need to hit.
Without a strong Cash Flow pillar, you’ll feel stress creeping into every aspect of your life. Be aware of what your practice production needs to be each month to cover all your expenses including your own draw and payments towards any existing leases. Your accountant can provide this total each year. With this figure, ensure that your accounts receivable is at least 98% of your monthly production, and your accounts owing over 90 days are below 15% of your overall total. Your flexible expenses should be within the industry norm, with sundries at 6.5% and wages between 25% and 28% of your overall production. At the same time, keep in mind that it’s hard to increase office production without enough team members.
Schedule Success is essential for every office. It means having 5% open time for the dentists, and 10% open time for the hygienists. Several factors will secure these numbers. Have you balanced the patients need for hygiene appointments based on the frequency of perio intervals in your office with the number of available hours of the hygiene team? Offering too many hours may be a problem because condensing days for openings is actually quite harmful to both your team and the patients. Offering too few hygiene hours is a problem as well, patients may receive delayed care, affecting their perio health in the long run. As for openings in the dentist’s schedule, we always need to ensure that the hygiene chairs are filled for diagnosis opportunities as well as for treatment acceptance. If basic treatment acceptance is below 90% and major restorative treatment acceptance is below 80% you’ll be left with openings in the dentist’s chair.
The expected metric for existing Patient Retention is 80%, meaning we expect 80% of our patients to participate on a timely basis in our hygiene program. We also want to track patients who have left the practice (as well as their reason for leaving). If they remain on your list as you repeatedly contact them for several years, you’ll have a false sense of the number of patients in your practice. New patient growth is the other side of patient retention, and it should exceed the number of patients who have left your practice. And there is no point in attracting new patients if you can’t keep them in the office system. Internal referrals and social media visibility are viable new patient sources – track and use the information you collect to generate growth.
Some assume that the Treatment Planning pillar is covered by production, but I feel that it needs to stand alone. All team members must have thorough patient education on the consequences and benefits of diagnosed treatment, equipping them to support patients as they make knowledge-based treatment decisions. Among dentists, there are many schools of thought regarding treatment planning. Some plan only for patients’ immediate needs and some make long-term plans for patient care. Regardless of the philosophy you hold, all diagnosed treatment must be accurately entered into reliable software where it won’t get lost.
This is strictly an overview of the Five Pillars of a Dental Practice, but it’s smart to stay on top of each one to prevent any cracks in the foundation. Whether you feel them or not, they’ll impede your growth in the long run. With the proper systems in place, you’ll be confident those pillars have the solid support needed to drive your practice continually forward.