In presentations, webinars, and client meetings, we’re asked regularly to provide performance benchmarks for practice management. It’s entirely understandable. Dentists want to know how they’re doing relative to their peers. They also want to identify areas for which they need to make improvements. So we thought we’d put a spotlight on a few key benchmarks and offer strategies to effect change in your dental practice.
Daily Hygiene Production
Each hygienist should be able to handle about 1200 patients per year. When we measure daily production, we include everything that happens in the hygienist’s chair – e.g., hygiene procedures, radiographs, fluoride treatments, periodontal procedures. The average practice drives $1,000 in daily fees per hygienist. We set our sights on $1,500 in daily fees per hygienist. That figure is realistic, if not conservative.
Hygiene production may be low for a number of reasons. Fees tend to be low if the practice has not done a comprehensive fee assessment for some time. They may be low if patients are not screened appropriately for periodontal maintenance. When patients have pocketing of 4mm and above with evidence of bone loss on the x-ray, they should receive root planning and curettage to clean and disinfect the roots of the teeth. These procedures are commonplace among older populations. Deep cleanings require more skill than prophylaxis procedures and typically command an extra $50 charge per appointment. If just one such procedure occurred each day of the year, it would add roughly $10,000 to practice income.
No shows and cancellations may have a dampening effect on hygiene production. In fact, one missed appointment per day could add up to tens of thousands of dollars in lost annual revenue. Fortunately, this issue can be addressed easily with a bit of staff training and better scripts. When patients call to say they can’t make their appointments, don’t be so quick to let them off the hook. Tell them the hygienist reserved an hour (or longer) just for them. Then wait for them to respond. Quite a few will find a way to make their appointments work. It’s a far better approach than simply relying on the cancellation wait list to fill the vacant slot.
The average dentist pays somewhere around 30 percent of practice revenue in staff overhead. This figure gives cause for concern when dentists realize their practice is not producing the returns they’d like to see. It may also be an issue if they inherited staff who had been treated generously by their former employer. As a benchmark, we’d prefer to see this figure hover around 20% of total costs. However, it‘s a tricky line item to adjust when staff members have grown accustomed to the compensation and benefits they’ve received.
Clearly, dentists want to retain outstanding performers as well as keep team morale at a high level. Staff provides crucial support in practice operations as well as customer service. They should be paid competitive rates based on their skill sets, experience and tenure with the practice. If salaries and benefits need to be adjusted, changes should be made incrementally. The employee bonus plan represents a good starting point as it offers the opportunity to build incentives for behaviors the dentist seeks to encourage. Of course, the preferred strategy calls for increasing production with the same staff and associated cost structure. This way, everybody wins!
We’d like to see these costs run about 5 percent of practice revenue. When we see inflated costs, it often traces back to a dentist or staff member shopping around to find the best deal possible. They may unknowingly rack up a lot of shipping and handling fees in the process. They may also lose out on volume purchase discounts should they choose to use a smaller number of suppliers. Be sure to check if your vendor offers exclusive supply discounts — the savings add up in the long run. Besides, the time spent on bargain hunting might be more profitably spent increasing production in the chair!
We reverse trends when considering lab supplies. While we often measure this figure at 6 percent of revenue, we think it ought to be closer to 10 percent. If the practice is doing productive work like crowns, bridges and implants, it’s easy to incur up to 10 percent for supplies. Obviously, it would be a bit less if the office uses some type of milling machine. Either way, a slight increment in cost probably means a significant increase in practice revenue.
At a minimum, dentists should look to add as many new patients each month as they lose through attrition. Attrition happens for a variety of reasons: death, relocation, convenience, changes in insurance coverage, dissatisfaction with fees or service provided. Each loss should be replaced in order to maintain the status quo. If practice growth is on the agenda, then it may be necessary to craft an effective marketing strategy. A ballpark figure would be 15 to 20 new patients per dentist per month.
Most new patients come from existing patient referrals. If a dentist has pleasant, reliable patients, the hope would be that like attracts like. When dentists use direct mail, print advertising, and/or internet marketing, they should insist upon solid metrics to show the effectiveness of their marketing dollars.
Practice growth must account for the available capacity in terms of operatories, staffing and scheduling. It doesn’t make sense to attract new patients in the door if the existing ones leave due to poor service. That’s a loss in patient revenue plus the lifetime of referrals they’d provide. The practice must also allow for a certain number of open slots on the calendar to provide responsive service when a new patient calls for an appointment.
Finally, dentists should put forth the effort to ensure a high percentage of the clientele are active patients. An active patient has visited the office for some form of procedure at least once during the past 18 months. Ideally, each active patient should be scheduled for hygiene appointments every six months.
Benchmarks provide the greatest value when they’re reviewed periodically and provide the springboard for action. Their interpretation should be tempered with a bit of logic. If a figure falls outside the desired benchmark, consider what happened during that month. For example, if the dentist went on vacation while staff worked, staff overhead as a percent of revenue will be elevated due to a drop in production. Likewise, supplies may exceed expectations if bulk orders were placed to build inventory and take advantage of attractive discounts.
The bottom line is practice owners should pay attention to the areas on which they’ve set their intention. When dentists focus on their performance, implement strategies to improve it and monitor their progress, they’re highly likely to achieve the goals they’ve set.