By Sandy Odle, co-founder and CXO of eAssist Dental Solutions
As a dental practice owner, you want to know where your practice stands at all times, based on facts. Data lets you understand how your practice is actually performing instead of how you hope it is. Your Practice Management Software (PMS), and perhaps other financial software you use, are rife with data and reports you should be leveraging to help set achievable goals and track performance.
Practice owners who look exclusively at gross production often don’t understand how they can be making so much money, and yet be under constant financial stress because they never seem to have enough. In reality, gross production tells you what the practice has the potential to earn for all the products and services rendered, but not what has actually been collected for those services after deducting all expenses. To know and improve upon what you’re actually making (aka net profit), monitor and manage performance in these four key areas:
No. 1. Patient retention & acquisition
You should always be working to fill your chairs with new patients and referrals, but your existing patients provide your best and fastest opportunities to increase the number of visits. The ideal patient retention rate is 85%, which is far above the average patient retention rate of 41%.
No. 2. Production per patient visit
Increase your profitability in this area by improving on everyone’s ability to make effective treatment plan presentations and making the most of the patient’s time when they are in your practice.
No. 3. Set collection ratio benchmarks
Use collection and A/R reports to track performance against two key goals. Know where your office stands now, regardless of industry stats. If necessary, set goals for continuous improvement as you work toward the ideal result.
- Zero dollars past 30 days for insurance receivables. You can quickly get closer to this goal by switching to EFT payments from insurance companies so you get the money faster; working your aging report almost daily, and being assertive with insurance representatives so you get 100% of what your practice is owed.
- 98-100% collection ratio. Know how much of your gross revenue should be collectible and how much of that you actually collect, on average. Start with a goal that’s attainable. Achieve it, then set a higher one. Your best tool is your A/R report, and your best strategies are to submit accurate and complete insurance claims daily, and consistently and assertively follow up on outstanding claims.
No. 4. Dental practice overhead
Large or small, multi-location or single-office, you should be maintaining a complete and accurate Profit & Loss (P&L) statement. Your P&L tells you where you stand on all the elements of the business that you need to be monitoring and controlling to ensure profitability, especially overhead costs. Break out overhead into numerous categories specific to a dental practice so you can be proactive about addressing anomalies and negative trends, finding ways to reduce costs (without adversely impacting patient care and service), and optimizing total overhead percentage.
Streamline the processes that drive your dental practice revenue
The more eyes on your revenue cycle, the quicker you will catch roadblocks and errors. Streamlining processes to remote team members alleviates the tedious tasks from your in-office team, and keeps cash flow consistent no matter what. Streamlining these processes is important whether you accept the assignment of benefits for twenty insurances or none at all. But who can you trust with these processes? At eAssist, we fight for all that is rightfully owed to you while you and your staff focus on serving your patients.
Sandy Odle is the co-founder and CXO of eAssist Dental Solutions, the nation’s leading platform for outsourced dental billing, patient billing, insurance verification, and more. Sandy partnered with Dr. James Anderson 11 years ago, and now they work every day to provide dentists across the country with the peace of mind that they deserve. Email Sandy for more information at [email protected]