The modern world dictates that practice principals need to understand the health of their business just as comprehensively as the health of their patients. They need constant indicators of how effectively and efficiently their business is running to ensure growth and profitability. You may be under the impression that your business is strong due to a high volume of patients, but individual figures, like annual turnover, will give a fairly limited and unreliable representation of your business.
In order to assess the real potential of your practice, it is necessary to create, implement and analyse key performance indicators (KPIs). These are used to evaluate and predict the success of your business, which can be defined by not only profitability but also
performance and progress. In choosing the correct KPIs you can measure all areas of your practice in a broader and more accurate way.
Establishing
Once the targets of your business are defined, KPIs enable you create a strategy to reach those goals and then monitor your progress to ensure you stay on the right course. They can help assess the current state of your practice and highlight any areas that need improvement or refinement.
To establish useful KPIs for your practice you can look at the aspects you wish to change, decide how you would like to enhance them and what indicators would demonstrate this progress. The secret to success is in the actions you take as a result of your KPIs – focus on the actions, see the value, enjoy success and build on the momentum from there. By implementing a process rather than making an isolated change, you will get much better results.
Measuring
Your KPIs should measure how effectively your targets are achieved and how efficiently your resources are used to do this.
You can therefore look at your actual and expected sales figures, daily gross income (per practitioner or as a whole practice) and expenses for activities such as marketing. Overheads such as staff wages, routine product purchases, and equipment maintenance need to be kept in mind, but of course cannot be affected by KPIs. Variable costs like dental supplies, laboratory costs and new technologies also need particularly careful management and review with an inventory when production increases. In monitoring what you were aiming to achieve and how close you get to doing so on a regular basis, you can quickly access your financial stability.
Your KPIs can then be used to measure how well you utilise your practice team, equipment and funds to attract and engage new patients, collect payment, provide customer service and perform exceptional dentistry, which can all generate referrals and therefore profit. Other non-financial aspects such as chair occupancy, case completion rates, diary utilisation, patient conversation rates, fee collection efficiency and cancellation rates should also be taken into account.
There is no limit to the data that can be analysed, but it is usually advisable to start with less and to increase them as you and your team become accustomed to the new processes in place. It’s important to remember that even basic tracking can yield results and improved outcomes. A balance of the aforementioned areas will provide an accurate idea of your overall practice performance. Such KPIs will help you not only manage your business more effectively on a day-to-day basis, but also predict profits and growth and implement realistic goals for successful future development.
Monitoring
Effective strategies and systems need to be utilised in order for you to implement and monitor your KPIs in a time and cost-efficient manner. A comprehensive, easy to use computer system is therefore invaluable, and fortunately there are solutions available to you.
An integrated system such as the CS R4 Clinical+ practice management software from Carestream Dental offers complete integration of imaging, case notes and Back Office tasks. Financial statements, production rates as well as monthly or yearly averages can be reviewed at the touch of a button and it is ideal technology for tracking a range of KPIs while simultaneously operating an efficient dental practice.
For any business looking to expand and grow, realistic targets and effective strategies to achieve these targets are paramount to success. Key performance indicators offer an efficient method for implementing processes to improve a variety of areas, while also enabling you to measure and monitor progress in an accurate and tangible way. From this data, you can create the actions you need to enhance your business.