When looking at our practices we very often get caught up in the little details and forget sometimes to take an overall inventory of how we are doing with the Five Pillars of our Practice Foundation. Taking an inventory of these five systems may provide you with a different view of where you need to focus moving forward.
These systems are: Production, Cash Flow Metrics, Schedule Success, Patient Retention and Growth and Treatment Planning.
Production is usually first and foremost on everyone’s list. You will want to know where your production was in the past and where it is now, 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 actually stagnating and losing ground financially because 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 your increased expenses. Take the time to make strategic decisions moving forward regarding production goals that are needed to support your practice.
Without your cash flow pillar strong you will find stress creeping into every aspect of your life. Be aware of what your practice production needs to be each month to cover all of your expenses making sure you take into account your own draw and payment on any leases your may have. This total can be provided to you by your accountant each year. Once you have this total you will want to ensure that your accounts receivable is at least 98% of your production every month and your accounts owing over 90 days is below 15% of your overall total. Ensure that your flexible expenses are within industry norm with sundries at 6.5% and wages between 25% and 28% of your overall production (also keeping in mind that without enough team members it is hard to increase office production.)
Success with your schedule is essential for every office. This includes having only 5% open time for the dentists, 10% open time for the hygienists. There are many factors that you need to look at to ensure you have these numbers in your practice. For your hygiene chairs, have you balanced the patients need for 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 not enough hygiene hours is a problem as well, as patients will often receive delayed care which can affect their perio health in the long run. As for openings in the dentist’s schedule we always need to look to ensure that the hygiene chairs are filled (for diagnosis opportunities) as well as the treatment acceptance for the practice. If basic treatment acceptance is below 90% and major restorative treatment acceptance is below 80% then there will be openings in the dentist’s chair.
The expected metric for existing patient retention is 80%, meaning we expect 80% of our patients to participate in a timely basis with our hygiene program. We also want to track our patients who have left the office and the reason why they have left. Leaving your patients on a list and contacting them repeatedly for several years will give you a false sense of the number of patients in your practice. The other side to patient retention is your new patient growth, you will want to ensure that new patient growth is greater than the number of patients who may have left your practice. There is no point in attracting new patients if you can’t keep them in the office system. New patient sources are internal referrals and social media visibility so you will want to track your sources and use the information that you collect to make decisions regarding your growth moving forward.
You may think that the treatment planning pillar is covered by production, but I feel that it needs to stand alone. You need to ensure that there is thorough patient education of the consequences and benefits of diagnosed treatment so that patient decisions are knowledge based. All team members must have the same knowledge to be able to support patients in their decisions. There are many schools of thought among dentists for their treatment planning, some plan only for patients immediate needs and some make long term plans for patient care, whichever your philosophy is, you will want to ensure that all treatment diagnosed is being entered into your software in the appropriate place so that it doesn’t get lost.
This is strictly an overview of the Five Pillars of a Dental Practice, you will always want to stay on top of them to ensure that there are no cracks in the foundation, whether you can feel them or not they will impede your growth in the long run if the proper systems aren’t in place to support the pillars.