Friday, February 14, 2020
Practice Management and Marketing
March 2018 Volume LIII Number 2
LCP Dental Team Coaching (the new name for Julie Weir & Associates) is recognized as the premier consulting firm specializing in pediatric dentistry since 1996.
Ten Internal Marketing Steps That Will Increase New Patients and Patient Retention
Internal marketing will increase new patient referrals and set a practice apart from its competitors through building and maintaining relationships, brand awareness, positive reviews and a strong online presence.
Many practices do not have a structured internal marketing program and/or these marketing efforts often get pushed aside for other priori- ties. Therefore, it is important to set up consistent internal marketing ac- tions to regularly produce a strong flow of new patients each month. At your next team meeting, discuss the importance of internal marketing and how everyone is a part of the marketing team and responsible for creating a positive experience as they interact with parents and patients.
I. BUILD PERSONAL RELATIONSHIPS
Make every visit an experience the children and their parents want to tell all their friends about. People remember how you make them feel and like to share positive experiences. The best compliment an office can receive is a personal referral.
Be sincere and genuine when speaking and take time to understand their questions and concerns. This will create trust and loyalty which increases treatment acceptance.
Inquire about their personal interests or hobbies. Make a note in the patient’s chart that can be used for conversation topics at future visits.
Show appreciation to your patients and their parents by sending handwritten notes thanking them for joining your practice or tell- ing "Johnny" what a good job he did being brave at his appoint- ment. Kids love to receive mail addressed just to them.
Host an annual patient appreciation event that shows gratitude towards existing families. This can be done at the office or off-site at an ice cream shop, local park, movie theatre or family entertain- ment center.
II. ESTABLISH A MARKETING TEAM
Encourage a team approach to marketing by selecting multiple team members to assist with marketing tasks.
Designate a marketing team leader who will be responsible for delegating the various marketing duties and holding the marketing team accountable.
Choose team members who have the right skills and personality to assist with specific responsibilities, such as social media tasks and creating and delivering gift baskets.
Print and review the referral report monthly.
Are monthly new patient goals being met? If not, what will be done differently or what marketing actions need to be imple- mented moving forward?
Where are referrals coming from?
Are the current marketing actions producing new patients?
Who needs to be sent a thank you note/gift for referrals?
III. CREATE A REFERRAL APPRECIATION SYSTEM
Make sure all referral sources are being tracked in dental software under the referred patient.
Create a system to thank parents and patients who refer new pa- tients. Write handwritten thank you notes which can include small gifts (Starbucks, iTunes, Amazon, local restaurants and ice cream or frozen yogurt shops, etc.).
Check state regulations for gift giving guidelines, as some states have specific rules regarding what type, how much or if gifts can be given at all.
IV. IMPLEMENT THEME DAYS
Start out small and schedule one theme day/month. Preschedule all theme days for the entire year.
Ideas for theme days include: Sports Day, Moustache Day, Crazy Sock Day, Twin Day (pair team members up to dress like each other), and Crazy Hair Day. Also, host theme days according to the season, such as Hawaiian Day in the summer or Cozy Pajama Day in the winter. Have fun with your theme days.
The entire team should participate.
Take photos and videos and post on social media (Facebook, Insta- gram, etc.)
As the team gets more comfortable and confident, plan theme days more frequently.
V. HOST RAFFLE PRIZE GIVEAWAYS
Host monthly raffle prize giveaways for patients and families. Giveaways can be in the form of holiday gift baskets, fun toys and games, tickets to a local sports game or amusement park, etc.
Take a photo of the giveaway, if possible, and post to social media promoting the raffle prize. The presentation of the giveaway should be exciting and colorful, attracting families to the prize.
Once a winner has been drawn, take a photo of the patient holding the giveaway they won and announce on social media, with signed parental consent.
VI. CELEBRATE PATIENT BIRTHDAYS
Celebrate patient birthdays that fall within one week prior to or after their scheduled appointment.
Prepare small wrapped birthday gifts or gift bags in advance so they are ready to be given each day. When the patient arrives for their appointment, designate a gift to them by writing their name on a gift tag or notecard attached to the present. Kids love receiv- ing gifts.
The small present could be a gift card, movie tickets or special birthday prize.
Have the patient open their gift while in the office. Use a birth- day hat or cut-out photo frame to take a photo and post to social media.
Utilize patient communication software by creating a birthday vid- eo with entire team to send to patients by email on their birthdays.
VII. VERBAL SKILLS
Review verbal skills for phone calls with the front office team. A parent’s first impression of the practice will determine whether or not they keep their appointment. First impressions are lasting impressions.
Use the patients’ and parents’ names when speaking to them.
Encourage VIPs (Very Important Parents) to tell their friends and family about the practice. Let them know the practice is always accepting new patients.
Encourage VIPs to write an online review on Google, Facebook, Yelp, Health Grades, etc.
Respond to every positive review so that others can see the kind interaction between the patients and the team.
VIII. CREATE A SOCIAL MEDIA PRESENCE
Take time to review the website and all social media accounts to view them from a parent’s perspective. Parents tend to research dental practices online before inquiring about a new patient visit. The website will give the parent a first impression, while any social media accounts will allow them to see reviews and give them a look into the practice, team and community involvement.
A Facebook page is a platform to show potential families what it is like to be a patient in the practice. The page displays the relation- ships you have amongst your team and your families.
Getting existing patients involved in social media is a great way to create organic content on Facebook. In the office, encourage parents to post a photo of their child on their personal page and tag the practice page. All of their Facebook friends will see that their child had a fun and stress-free visit. This is organic marketing, not paid advertising.
Designate a team member to monitor and post on social media ac- counts one to three times per week. Post fun and engaging content such as patient photos, theme days, team member birthdays and anniversaries, community event photos, and current contest give- aways and the lucky winners.
Many younger parents prefer to have Instagram accounts instead of Facebook so make sure to create an account and post frequently. Link the two pages and the option will be there to share the Insta- gram post to Facebook.
IX. UPDATED FACILITY AND MAINTENANCE
The appearance of your office (exterior and interior) shows your attention to detail. Parents will assess the skills of a doctor by how modern and clean the office looks. They may think the doctor’s skills are inadequate if the office décor is outdated. Office décor should be updated every five to seven years.
When an office is not spotless, parents will worry if sterilization is a priority. Employ a cleaning service, apply touch-up paint to walls that have scuff marks and abrasions, keep carpets and upholstery clean, keep floor boards clean and dust free.
Update equipment and technology, as necessary, to keep up with the progressive changes in dentistry.
Consider replacing fixtures and toys once they begin to show wear and tear.
Replace exterior sign if it begins to fade or looks dated.
Update the practice logo if it looks dated.
X. TEAM OBSERVATION EXERCISE TO IMPROVE YOUR FACILITY
First, take the time to observe what a new family would see when they arrive for their first visit. Start with sitting in a car in the parking lot. How does the surrounding location and office build- ing look; road and building signage, front door, building paint, windows, corners of ceiling under entryway roof (spider webs?), walkway, parking lot and landscaping?
Second, have the front office team walk through the clinical area and have the clinical team walk through the reception area. Each team (front office and clinical) retraces their own footsteps many times a day and may become oblivious to disarray in their work area. Have each team make notes of clutter, disrepair, dirt or dust. Pay close attention to outdated or damaged items and the cleanli- ness of the furniture, doors and walls.
Third, hold a team meeting to discuss each person’s observations. Create an action plan of items that will improve and upgrade your facility.
Referrals from satisfied parents are a direct result of strong and consistent internal marketing actions and a family’s commitment to the practice is directly correlated to the confidence and trust they have in their dental care team.
"People influence people. Nothing influences more than a recommendation from a trusted friend. A trusted referral influences people more than the best broad- cast message. A trusted referral is the Holy Grail of advertising." Mark Zuckerberg
Metrics Pediatric
Pedometrics: The ‘scaffolding’ of a successful pediatric practice
These experts in pediatric dentistry realize there are many differences between practices designed for adults and those designed for children. Developing the practice around those differences will make a pediatric venture more successful.
Sanger Roger G Dds
Scott Lauer
In a previous series for Dental Economics, the term pedonomics is defined as the economic impact of pediatric dental care. With pedonomics, profitability management supplements productivity analysis as dental reimbursement declines as a percentage of practices’ usual, customary, and reasonable (UCR) fees.
It’s no longer enough to focus on what is billed in fees per procedure; offices also need to focus on their profit per visit. Practicing better, faster, and easier dentistry with new pediatric game-changing technologies can shorten the time needed per visit. This results in an increase in the number of procedures performed, which can yield greater overall profitability despite lower reimbursement rates.
With the birth rate at about four million per year in the US,1 a caries epidemic that is now attacking preschoolers to teens, a pediatric dental uninsured rate hovering at 10%,2 and an explosion of new technology in innovative pediatric dental materials and equipment, a new paradigm shift into pediatric dentistry has begun.
Traditionally, analyzing the clinical and business metrics of pediatric dental practices without accounting for how they differ from adult practices has led to incorrect conclusions and poor management decisions. To address this shortcoming, we coined the term pedometrics. Pedometrics refers to the appropriate collection and analysis of the clinical and business metrics for practices that primarily treat children.
Clinical metrics are measurable statistics relating to recruiting, treating, and interacting with patients and their parents. These include new patients (from both internal and external marketing), case presentations, case acceptance, appointment scheduling, appointment incompletion by failure or cancellation, patient doctor visits, patient recall and recare visits, time per procedure, procedural doctor code billing, procedural recall and recare code billing, complete care numbers for new and recall patients, average revenue per new patient, and more.
Business metrics are measurable system statistics that relate to operating and maintaining a practice. These include facility expenses, marketing expenses, staff salaries and benefits, lab-related expenses, supplies or materials expenses, income per days worked, and more.
Pediatric practice metrics versus adult practice metrics
Clinical metrics are generally different in a pediatric practice than in an adult practice. For instance, the average number of new patients per month in pediatric practices is often reported in surveys as being higher than the number of new patients in adult practices. Why? Because the average revenue generated by completed care in a pediatric patient is less than for an adult. Therefore, less revenue per pediatric patient requires that a practice primarily treating young patients attract more new patients than an adult restorative practice.
Likewise, in a pediatric practice, the average time for both doctor procedures and staff procedures is less than in an adult practice due to the behavior management of children. Moreover, some pediatric practices prefer to age out older teenagers, which means these practices must attract new young patients if they are to replace the lost production from teenagers. A smart pediatric practice often establishes a teenage atmosphere as well as child décor if both cosmetic and orthodontic care are offered. So, when comparing new patient metrics, the child, teen, and adult care variables within this metric are important.
Similarly, business metrics in a pediatric practice are generally different than in an adult practice. One reason is that laboratory expenses in a pediatric practice are often negligible, while they can be substantial in an adult practice. Another reason is that pediatric practices tend to require less investment in expensive equipment than do adult practices.
The point is that it’s like comparing apples to oranges if someone attempts to compare certain clinical and business metrics in a pediatric and teenage practice to those of an adult practice. While the daily billed production per doctor from treating patients might be higher in an adult practice, the profit per day may be higher in the pediatric and teenage practice due to the greater number of patients seen per day, the negligible lab expenses, and the lack of subsequent appointments.
The “scaffolding effect” of metrics in making strategic decisions
Clinical and business metrics form the “scaffolding” with which strategic management plans toward greater profitability are erected. However, don’t get caught up in metric paralysis where you measure, measure, measure and never apply human interaction to effect positive change. Instead, measure, analyze, decide, manage, and repeat.Using metrics in a proactive way will stop knee-jerk reactive management and lead to proactive planning that will have a positive effect on profitability.
Accounting for capacity
Capacity must be factored in when analyzing the metrics of a pediatric practice. What good does it do to increase new patient numbers with the goal of boosting production if the number of doctor appointments is limited by a shortage of (1) available days to schedule (time), (2) available operatories (space), (3) available staff (human resources), and so on? Likewise, the needs of new patients (high caries, low caries, no caries) also must be factored in. A practice that treats children with low to no caries rates will need greater capacity to generate the same production as a practice that treats children with high caries rates because hygiene-dispensed services produce considerably less revenue than doctor-dispensed services.
Marketing is a favorite topic among pediatric dental practices. Many practices pride themselves on marketing metric success when the scheduling of new patients is well into the future. The scheduling metric, however, may indicate that capacity has been reached as doctors, chairs, staff, and more are insufficient to provide greater access to urgent scheduling. A practice that cannot accommodate same- or next-day new or returning appointments may need to examine its capacity. The old adage is often overlooked—the most important day in scheduling is today, and the next most important day is tomorrow. After that, patients lose interest. The point is that one metric (i.e., new patients) may be reduced by another metric (available appointments) when appointment availability does not match marketing response.
This is the basic concept behind pedometrics.
References
1. Martin JA, Hamilton BE, Ventura SJ, Osterman MJK, Wilson EC, Metthews TJ. Births: Final data for 2010. Natl Vital Stat Rep. 2012;61(1):1-72.
2. Nasseh K, Vujicic M. Dental benefits coverage rates increased for children and young adults in 2013. American Dental Association website. http://www.ada.org/~/media/ADA/Science%20and%20Research/HPI/Files/HPIBrief_1015_3.ashx. Accessed February 28, 2018.
Mastering clinical metrics
Clinical metrics are related to recruiting, treating, and interacting with patients and parents. There are five main categories of clinical metrics: marketing, sales, scheduling, production, and collection. These metrics should be computed on daily, monthly, quarterly, and yearly bases.
Marketing metrics
New patients per month/year and by amount of revenue produced—These metrics are influenced by the caries rate (high, medium, low, none) of the new patient and the funding source for care (private pay, indemnity insurance, PPO, government program). Target marketing to parents of children with higher needs. Greater funding may require smaller numbers in this metric. Both external and internal metrics for sourcing new patients should be calculated.
Set your new-patient goals based on your desired mix for caries rates and funding sources with profitability in mind. For instance, one in three children today is covered by a governmental dental plan. These children tend to have higher caries rates.
A pediatric practice may accept children on these state or federal plans, but regular analyses should be performed to ensure the practice’s patient profile does not become too skewed toward this patient population.
Recall patients per month/year with amount and percentage of total patients—This metric is influenced by customer satisfaction. Parents who like the way they and their children were cared for will often schedule an appointment to return (six-month recall). Even parents who like the way they and their children were cared for but decide to delay recommended care will schedule a return care evaluation. Pediatric practices must respect parents’ time for customer satisfaction today. For example, the “waiting room” should now be the “reception experience,” with a minimal amount of time spent waiting.
New or returning emergency patients, urgent-care patients, and episodic-care patients—These metrics, while sometimes involving patients with problematic behaviors, are useful in filling up the schedule, increasing production and collected revenue, gaining new patients, etc. Never consider these patients undesirable. If this metric is high, buffer capacity should be built into the schedule to accommodate these patients.
Sales metrics
Case acceptance rate and average dollar amount of case per new and returning patient—This metric is influenced by the caries rate and funding source, plus the ability of the doctor and staff to diagnose, plan treatment, and get acceptance for both care and payment. You should not aim for higher new-patient numbers with high caries rates if case acceptance is low; your focus should be on increasing your case acceptance rates. If your case acceptance metric is low for new patients, it is probably lower than it should be for recall patients, as well.
Same-day treatment sales and production—This is a new metric for most practices. Same-day care, although demanding of all, can remedy scheduling upsets and enhance profitability if the entire staff is committed to work as a team. Millennial parents like same-day care.
Scheduling metrics
Alternative care choice, cancellation, and/or failure rate—These metrics are influenced by the behavior of parents and children and such considerations as need, time, convenience, fear, and finances. A cancellation and/or failure rate above 10% may indicate a poor or nonexistent scheduling policy.
Production metrics
Billable revenue generated over a period of time (hour, day, month, quarter, year) by dental provider (dentist, dental hygienist, dental auxiliary)—These metrics are influenced by state regulatory compliance (who can legally do what) and by the treatment plans that are presented to and accepted by both new and returning patients. These metrics are also influenced by the owner/doctor’s decision regarding what constitutes a “workweek” or a “workday”—four days a week, seven hours a day, etc. Fee analysis also plays a role here. The most-used procedural codes and their fees should be evaluated and adjusted for inflation and/or community provider comparison every six months.
Collection metrics
Collection metrics include the following:
• Revenue collected as amount and as percentage of billed production by third-party entity (check and/or direct-wire transfer), patient direct pay at visit, patient pay from billing, or patient use of credit services
• Percentage and aging of accounts receivable by time periods (under 30, 60, or 90 days; over 90 days; collection service, etc.)
• Write-off amounts and percentage from patient direct discounting, PPO contracting, or governmental program contracting
In general, adjusted collections should be at least 96%, and accounts receivable should be no greater than an average of one month’s adjusted production. (Adjustments take write-offs, etc., into account.)
This myriad of clinical metrics is influenced by the doctor’s decisions on the practice’s patient payment policies, contracting into PPO and governmental program provider networks for the practice, etc. As PPO and governmental plans outpace indemnity insurance and private pay plans, these metrics need significant attention.
Mastering business metrics
These are segmented more by facility, human resources, technology, external services contractors, specialized consultants, etc., and generally are reported by historical accountancy on monthly, quarterly, and yearly bases. Multidoctor and multioffice groups may have different ranges as consolidation of services is achieved.
Facility and equipment metrics
Lease or mortgage payments, maintenance, janitorial, utilities, telephone, cable, taxes, etc.—The normal range is 5%–10% of collections, depending on ownership status and size of building.
Equipment lease or debt, tenant improvements lease or debt—This variable expense depends on the age and growth curve of the practice. Newer or expanding practices will have a higher range, and the amount and length of the lease or debt will also influence this metric.
Marketing metrics
Marketing, website and social media, advertising, promotions—The normal range is 3%–4% of collections, but with aggressive and diversified technology, the metric can be higher.
Human resources metrics
Staff salaries, benefits, taxes (excluding associate doctors)—The normal range is 19%–27% of collections, depending on the size of the staff and their qualifications (dental hygienists versus dental assistants, office management versus clerical) and the types of benefits (insurance, retirement plans, etc.).
Supplies metrics
Dental supplies—This variable expense has a normal range of 4%–6% of collections, depending on the complexities of orthodontic, pulpal, and restorative care delivered.
Office supplies, bank, credit card, postal, computer, printings, and fees—This variable expense has a normal range of 2%–5% of collections, depending on the complexities of computer and credit usage.
Contracted service metrics
Contracted laboratory services—This variable expense is usually below 2% of collections unless orthodontic services are delivered.
Contracted service consultants (accounting, legal, insurance, business)—This variable expense has a normal range of 2%–5% of collections, depending on associates, partners, number of offices, network contracts, etc.
The breakeven point: The best motivator
One of the most motivating metrics for any practice is knowing the point during the month when the month-to-date collections equal the month’s total fixed expenses plus month-to-date variable expenses. After that point, the only expenses that will need to be covered before profit is declared are month-to-go variable expenses, which are far lower than fixed expenses. This point is called the breakeven point—the sooner it comes in the month, the more profitable the practice will be in that month. The same is true on a quarterly and yearly basis.
Of course, you can make your breakeven point arrive earlier simply by reducing expenses. Better yet, by embracing pedometrics, you can combine controlling expenses with incorporating game-changing technologies and techniques that allow you to work better, faster, and more easily and achieve greater profitability. We want you to choose the latter.
These experts in pediatric dentistry realize there are many differences between practices designed for adults and those designed for children. Developing the practice around those differences will make a pediatric venture more successful.
Sanger Roger G Dds
Scott Lauer
In a previous series for Dental Economics, the term pedonomics is defined as the economic impact of pediatric dental care. With pedonomics, profitability management supplements productivity analysis as dental reimbursement declines as a percentage of practices’ usual, customary, and reasonable (UCR) fees.
It’s no longer enough to focus on what is billed in fees per procedure; offices also need to focus on their profit per visit. Practicing better, faster, and easier dentistry with new pediatric game-changing technologies can shorten the time needed per visit. This results in an increase in the number of procedures performed, which can yield greater overall profitability despite lower reimbursement rates.
With the birth rate at about four million per year in the US,1 a caries epidemic that is now attacking preschoolers to teens, a pediatric dental uninsured rate hovering at 10%,2 and an explosion of new technology in innovative pediatric dental materials and equipment, a new paradigm shift into pediatric dentistry has begun.
Traditionally, analyzing the clinical and business metrics of pediatric dental practices without accounting for how they differ from adult practices has led to incorrect conclusions and poor management decisions. To address this shortcoming, we coined the term pedometrics. Pedometrics refers to the appropriate collection and analysis of the clinical and business metrics for practices that primarily treat children.
Clinical metrics are measurable statistics relating to recruiting, treating, and interacting with patients and their parents. These include new patients (from both internal and external marketing), case presentations, case acceptance, appointment scheduling, appointment incompletion by failure or cancellation, patient doctor visits, patient recall and recare visits, time per procedure, procedural doctor code billing, procedural recall and recare code billing, complete care numbers for new and recall patients, average revenue per new patient, and more.
Business metrics are measurable system statistics that relate to operating and maintaining a practice. These include facility expenses, marketing expenses, staff salaries and benefits, lab-related expenses, supplies or materials expenses, income per days worked, and more.
Pediatric practice metrics versus adult practice metrics
Clinical metrics are generally different in a pediatric practice than in an adult practice. For instance, the average number of new patients per month in pediatric practices is often reported in surveys as being higher than the number of new patients in adult practices. Why? Because the average revenue generated by completed care in a pediatric patient is less than for an adult. Therefore, less revenue per pediatric patient requires that a practice primarily treating young patients attract more new patients than an adult restorative practice.
Likewise, in a pediatric practice, the average time for both doctor procedures and staff procedures is less than in an adult practice due to the behavior management of children. Moreover, some pediatric practices prefer to age out older teenagers, which means these practices must attract new young patients if they are to replace the lost production from teenagers. A smart pediatric practice often establishes a teenage atmosphere as well as child décor if both cosmetic and orthodontic care are offered. So, when comparing new patient metrics, the child, teen, and adult care variables within this metric are important.
Similarly, business metrics in a pediatric practice are generally different than in an adult practice. One reason is that laboratory expenses in a pediatric practice are often negligible, while they can be substantial in an adult practice. Another reason is that pediatric practices tend to require less investment in expensive equipment than do adult practices.
The point is that it’s like comparing apples to oranges if someone attempts to compare certain clinical and business metrics in a pediatric and teenage practice to those of an adult practice. While the daily billed production per doctor from treating patients might be higher in an adult practice, the profit per day may be higher in the pediatric and teenage practice due to the greater number of patients seen per day, the negligible lab expenses, and the lack of subsequent appointments.
The “scaffolding effect” of metrics in making strategic decisions
Clinical and business metrics form the “scaffolding” with which strategic management plans toward greater profitability are erected. However, don’t get caught up in metric paralysis where you measure, measure, measure and never apply human interaction to effect positive change. Instead, measure, analyze, decide, manage, and repeat.Using metrics in a proactive way will stop knee-jerk reactive management and lead to proactive planning that will have a positive effect on profitability.
Accounting for capacity
Capacity must be factored in when analyzing the metrics of a pediatric practice. What good does it do to increase new patient numbers with the goal of boosting production if the number of doctor appointments is limited by a shortage of (1) available days to schedule (time), (2) available operatories (space), (3) available staff (human resources), and so on? Likewise, the needs of new patients (high caries, low caries, no caries) also must be factored in. A practice that treats children with low to no caries rates will need greater capacity to generate the same production as a practice that treats children with high caries rates because hygiene-dispensed services produce considerably less revenue than doctor-dispensed services.
Marketing is a favorite topic among pediatric dental practices. Many practices pride themselves on marketing metric success when the scheduling of new patients is well into the future. The scheduling metric, however, may indicate that capacity has been reached as doctors, chairs, staff, and more are insufficient to provide greater access to urgent scheduling. A practice that cannot accommodate same- or next-day new or returning appointments may need to examine its capacity. The old adage is often overlooked—the most important day in scheduling is today, and the next most important day is tomorrow. After that, patients lose interest. The point is that one metric (i.e., new patients) may be reduced by another metric (available appointments) when appointment availability does not match marketing response.
This is the basic concept behind pedometrics.
References
1. Martin JA, Hamilton BE, Ventura SJ, Osterman MJK, Wilson EC, Metthews TJ. Births: Final data for 2010. Natl Vital Stat Rep. 2012;61(1):1-72.
2. Nasseh K, Vujicic M. Dental benefits coverage rates increased for children and young adults in 2013. American Dental Association website. http://www.ada.org/~/media/ADA/Science%20and%20Research/HPI/Files/HPIBrief_1015_3.ashx. Accessed February 28, 2018.
Mastering clinical metrics
Clinical metrics are related to recruiting, treating, and interacting with patients and parents. There are five main categories of clinical metrics: marketing, sales, scheduling, production, and collection. These metrics should be computed on daily, monthly, quarterly, and yearly bases.
Marketing metrics
New patients per month/year and by amount of revenue produced—These metrics are influenced by the caries rate (high, medium, low, none) of the new patient and the funding source for care (private pay, indemnity insurance, PPO, government program). Target marketing to parents of children with higher needs. Greater funding may require smaller numbers in this metric. Both external and internal metrics for sourcing new patients should be calculated.
Set your new-patient goals based on your desired mix for caries rates and funding sources with profitability in mind. For instance, one in three children today is covered by a governmental dental plan. These children tend to have higher caries rates.
A pediatric practice may accept children on these state or federal plans, but regular analyses should be performed to ensure the practice’s patient profile does not become too skewed toward this patient population.
Recall patients per month/year with amount and percentage of total patients—This metric is influenced by customer satisfaction. Parents who like the way they and their children were cared for will often schedule an appointment to return (six-month recall). Even parents who like the way they and their children were cared for but decide to delay recommended care will schedule a return care evaluation. Pediatric practices must respect parents’ time for customer satisfaction today. For example, the “waiting room” should now be the “reception experience,” with a minimal amount of time spent waiting.
New or returning emergency patients, urgent-care patients, and episodic-care patients—These metrics, while sometimes involving patients with problematic behaviors, are useful in filling up the schedule, increasing production and collected revenue, gaining new patients, etc. Never consider these patients undesirable. If this metric is high, buffer capacity should be built into the schedule to accommodate these patients.
Sales metrics
Case acceptance rate and average dollar amount of case per new and returning patient—This metric is influenced by the caries rate and funding source, plus the ability of the doctor and staff to diagnose, plan treatment, and get acceptance for both care and payment. You should not aim for higher new-patient numbers with high caries rates if case acceptance is low; your focus should be on increasing your case acceptance rates. If your case acceptance metric is low for new patients, it is probably lower than it should be for recall patients, as well.
Same-day treatment sales and production—This is a new metric for most practices. Same-day care, although demanding of all, can remedy scheduling upsets and enhance profitability if the entire staff is committed to work as a team. Millennial parents like same-day care.
Scheduling metrics
Alternative care choice, cancellation, and/or failure rate—These metrics are influenced by the behavior of parents and children and such considerations as need, time, convenience, fear, and finances. A cancellation and/or failure rate above 10% may indicate a poor or nonexistent scheduling policy.
Production metrics
Billable revenue generated over a period of time (hour, day, month, quarter, year) by dental provider (dentist, dental hygienist, dental auxiliary)—These metrics are influenced by state regulatory compliance (who can legally do what) and by the treatment plans that are presented to and accepted by both new and returning patients. These metrics are also influenced by the owner/doctor’s decision regarding what constitutes a “workweek” or a “workday”—four days a week, seven hours a day, etc. Fee analysis also plays a role here. The most-used procedural codes and their fees should be evaluated and adjusted for inflation and/or community provider comparison every six months.
Collection metrics
Collection metrics include the following:
• Revenue collected as amount and as percentage of billed production by third-party entity (check and/or direct-wire transfer), patient direct pay at visit, patient pay from billing, or patient use of credit services
• Percentage and aging of accounts receivable by time periods (under 30, 60, or 90 days; over 90 days; collection service, etc.)
• Write-off amounts and percentage from patient direct discounting, PPO contracting, or governmental program contracting
In general, adjusted collections should be at least 96%, and accounts receivable should be no greater than an average of one month’s adjusted production. (Adjustments take write-offs, etc., into account.)
This myriad of clinical metrics is influenced by the doctor’s decisions on the practice’s patient payment policies, contracting into PPO and governmental program provider networks for the practice, etc. As PPO and governmental plans outpace indemnity insurance and private pay plans, these metrics need significant attention.
Mastering business metrics
These are segmented more by facility, human resources, technology, external services contractors, specialized consultants, etc., and generally are reported by historical accountancy on monthly, quarterly, and yearly bases. Multidoctor and multioffice groups may have different ranges as consolidation of services is achieved.
Facility and equipment metrics
Lease or mortgage payments, maintenance, janitorial, utilities, telephone, cable, taxes, etc.—The normal range is 5%–10% of collections, depending on ownership status and size of building.
Equipment lease or debt, tenant improvements lease or debt—This variable expense depends on the age and growth curve of the practice. Newer or expanding practices will have a higher range, and the amount and length of the lease or debt will also influence this metric.
Marketing metrics
Marketing, website and social media, advertising, promotions—The normal range is 3%–4% of collections, but with aggressive and diversified technology, the metric can be higher.
Human resources metrics
Staff salaries, benefits, taxes (excluding associate doctors)—The normal range is 19%–27% of collections, depending on the size of the staff and their qualifications (dental hygienists versus dental assistants, office management versus clerical) and the types of benefits (insurance, retirement plans, etc.).
Supplies metrics
Dental supplies—This variable expense has a normal range of 4%–6% of collections, depending on the complexities of orthodontic, pulpal, and restorative care delivered.
Office supplies, bank, credit card, postal, computer, printings, and fees—This variable expense has a normal range of 2%–5% of collections, depending on the complexities of computer and credit usage.
Contracted service metrics
Contracted laboratory services—This variable expense is usually below 2% of collections unless orthodontic services are delivered.
Contracted service consultants (accounting, legal, insurance, business)—This variable expense has a normal range of 2%–5% of collections, depending on associates, partners, number of offices, network contracts, etc.
The breakeven point: The best motivator
One of the most motivating metrics for any practice is knowing the point during the month when the month-to-date collections equal the month’s total fixed expenses plus month-to-date variable expenses. After that point, the only expenses that will need to be covered before profit is declared are month-to-go variable expenses, which are far lower than fixed expenses. This point is called the breakeven point—the sooner it comes in the month, the more profitable the practice will be in that month. The same is true on a quarterly and yearly basis.
Of course, you can make your breakeven point arrive earlier simply by reducing expenses. Better yet, by embracing pedometrics, you can combine controlling expenses with incorporating game-changing technologies and techniques that allow you to work better, faster, and more easily and achieve greater profitability. We want you to choose the latter.
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