Unlocking Unlimited Growth for Your Dental Practice

As you step into owning and leading a dental practice, it is important to understand and embrace the fact that from this point forward, your responsibilities extend beyond delivering excellent dental care to your patients. You must also consistently monitor and refine your business systems and processes, not to mention lead a team of dental professionals who will be working alongside you every step of the way. 

A common misstep dentists make is not staying intentionally in tune with the overall health of their practices. Often, they only ask for help once issues are so deep that it takes a great deal of time and effort to get back on track. However, by measuring what truly matters, you can course-correct sooner and recover faster or, ideally, stay on track right from the beginning.

Measure What Matters: Key Performance Indicators

So what are the key performance indicators that we at Jameson recommend you measure to make sure that your practice stays healthy? Here are a few of what we call the critical factors of the business of dentistry:

1. Production

Set production goals for your practice and make everyone on your team well aware of them. Then break these numbers down into tangible categories: annual, monthly, weekly, and daily. These figures should cover your practice’s baseline needs, allow fair compensation for you and your team, and cover other performance-related expenses (e.g., up-to-date technology and marketing).

These numbers will increase as you continue to hit your goals consistently. By monitoring whether you are indeed meeting your production goals, you’ll be able to make sure your systems, patient care, and marketing practices are working well for you or if (and where) you need to make adjustments.

2. Collections

We want you to collect what you produce! If you choose to be in network with many insurance plans, you may notice a significant gap between production and collections. Therefore, it is important to regularly monitor collections to see just how much you are writing off to those plans, to see if accounts receivable is starting to snowball, and to make sure there’s money in the bank to cover practice overhead. Remember, it’s what you collect that pays the bills, not what you produce.

3. Accounts Receivable

As I mentioned above, you want to collect what you produce! For this reason, your accounts receivable (AR) should not exceed your average monthly production if you are accepting assignment of benefits. It is important that you have someone on your team who is clearly responsible for collections and keeping your AR in check. The more AR snowballs, the more difficult it becomes to collect. Stay out of the banking business.

4. Patient Financing Programs

Patient financing programs are valuable options to help your patients pay for treatment they want or need. As I stated earlier, you want to stay out of the banking business; leave that to the financial experts! Instead, designate your treatment coordinator or financial coordinator to become familiar with your practice’s financing options so they can present these solutions in treatment consultations. Tools like patient financing programs are how you are going to help increase case acceptance and completion.

5. Overhead

Overhead control is an ongoing critical factor for any business. After all, acceptable profit margins are only attainable if you’re managing overhead well. 

As our founder, Cathy Jameson, says, “It is from profit margin that salaries can be increased for any team member—including the doctor—and where additional benefits can be developed. If a salary increase or an increase in benefits is distributed but there has been no increase in profit margin, then those distributed dollars come out of the doctor’s pocket—which is not healthy.

If and when the entire team begins to work cohesively toward the control of overhead and the increase of profit margin, then the doctor’s salary and compensation can be increased, and it is my hope that the same will be done for the team members.”

There are three key ways to raise profit margin and lower overhead simultaneously:

• Increase production
• Decrease costs
• Increase fees

I recommend that you work on all three of these areas. When you invest the necessary effort into each, you will see your bottom line increase significantly.

Stay tuned for part 2.

In the next article, we will address the remaining critical factors. Spoiler alert: scheduling, case acceptance, and hygiene are just a few that we will cover! In the meantime, don’t hesitate to email me at [email protected] if you have questions about your practice.