Unlock hidden growth: How KPI’s can elevate your dental practice’s success

Based on these observations, the practice seems to be underperforming across most categories, including revenue, expenses, and profitability. However, there is another layer to consider in this data. Since all expenses are expressed as a percentage of revenue, underperformance in the revenue metrics can skew the analysis of key expense categories. From the above data, it can be determined that, all else being equal, if revenue had kept up with increases in the provincial fee guide, then the practice should have realized revenue of $1,423,653 for the 2023 fiscal year. By comparing key expense categories against this normalized revenue figure, additional insights can be gained.

This analysis shows that despite increasing costs, the real issue wasn’t with expenses –– it was with revenue. When compared to normalized revenues, most of the practice’s key expense categories are within a reasonable range of industry benchmarks. 

Analyzing operational KPIs

With a clearer understanding of the financial situation, the next step was to dig into operational data to pinpoint what was holding back the revenue. By layering operational data on top of the financial data, we’re able to further narrow down focus areas requiring further investigation.

To understand the revenue issues better, Dr. Denethor’s advisor analyzed key operational metrics. The findings were eye-opening:

• Dental billings per patient were 23 percent below expectations.
• Dental billings / doctor days are increasing consistently.
• Hygiene billings per patient were 27 percent below benchmarks.
• Hygiene salaries as a percentage of revenue were above benchmarks.
• Hygiene revenues as a percentage of total revenues were gradually decreasing over time.
• Average recall appointment times were increasing.
• Despite increased marketing successfully attracting new patients, the practice has not been able to keep up with existing patients, resulting in no net new growth.

Uncovering the root causes

Data on paper can only provide so much insight regarding business performance. To truly make use of this data, it requires additional context from Dr. Denethor and his team’s observations. Dr. Denethor used these insights to provide a focus to guide discussions with his team and better understand what is driving the performance issues. This team exercise led to the following observations:

Dental revenue and efficiency

• Complex cases – The practice has experienced an increase in the number of complex and emergency cases. These have been challenging for Dr. Denethor to treat, taking more of this time and requiring additional retreatment.
• Administrative burdens – As demands for Dr. Denethor’s time have increased related to practice administration, he is spending less time chairside.
• Fees – Dental procedure fees were being correctly captured at the provincial fee guide rate.

Hygiene services

• Turnover – There had been significant turnover in hygienists, which caused inefficiencies due to training new staff.
• Missed appointments – Inefficient scheduling was creating gaps in the schedule, leading to lost revenue.
• Hygiene times and activities – Both weren’t being billed properly to reflect increased recall times.

Patient retention

• Marketing efforts – While the efforts were bringing in new patients, inefficiencies in scheduling and service delivery were causing existing patients to fall off the active list, resulting in no net growth.

Building a plan for success

Armed with a detailed understanding of the financial and operational metrics driving his practice, Dr. Denethor and his team put together a focused action plan. Instead of trying to tackle everything at once, they prioritized five key areas:

With these targeted improvements, Dr. Denethor is now positioned to improve efficiency and boost revenue. By regularly tracking his KPIs, holding his team accountable, and adjusting strategies as needed, he’s set up to see measurable progress in both the short and long-term.

The bottom line

KPIs aren’t just numbers on a spreadsheet –– they’re powerful tools that reveal hidden challenges and guide your decisions. By focusing on the right metrics, Dr. Denethor has uncovered the key issues affecting his practice and is on the path to improved profitability and performance. You can do the same for your practice. Start by analyzing your financial and operational KPIs and take control of your practice’s future.