In the land of the blind, the one eyed man is king

by Blog

In the land of the blind, the one eyed man is king    By Robert Powell. May 9, 2016.

When I first came into the world of dentistry in 1994 to help establish a little known New Zealand-based company, Software of Excellence, in the UK, life was exciting. They had a great offering on a pretty new platform called Windows, and it came with a three button mouse to drive it! Dentistry was changing too with the rise of ‘independent’ dentists (private was a dirty word!) and these early adopters were keen to adopt new technology to drive their practice forward. I spent my time over the next few years selling the key features and benefits of practice management software to principals who were also doing pretty well.

Not much changed until the recession hit dentistry in 2010/11, a little later than the general malaise that was already affecting the rest of the population. The profession started to suffer dramatically with dentists openly reporting patients failing to attend for routine appointments, recall periods being extended by several months and hygiene services declining.

However, some practices were still doing well, apparently riding the recession and actually thriving. They were bucking the trend by using information held in their practice management systems to measure where they were and set goals to improve their performance. Clearly there were an emerging number of Key Performance Indicators (KPIs) that were critical to their success. Over the past five years, through the Thrive Business Services programme I launched at SOE, I have worked with practices to identify underperformance and devise strategies for improvement, from increasing chair usage, squeezing more hourly profit out of a surgery or simply by reducing missed appointments.

While the UK economy is slowly recovering, so too is dentistry, but it’s clear that practices measuring their performance and taking positive action really are streets ahead of the rest. However, measurement is only one aspect; you also need to know how to read the data, fix the issues and put strategies in place that really work.

Net practice growth

New patient count minus number of patients leaving

So do you know if your practice is growing? You may have a gut feeling that you are taking on a good number of new patients but how many is enough? The answer clearly depends on how many you are losing at the same time, as well as the quality of the patients you take on.

My experience suggests that an average practice needs to take on 20 new patients per month per full time equivalent dentist just to stand still, with some variation for location, type of practice and demographics. Are you achieving this? If not, you are probably going backwards. While measuring your new patient numbers is important, it is also critical to understand where they come from so you can measure the effectiveness of your marketing campaigns. For most practices, the best source of new patients is from happy patient referrals, followed by their website. Do you measure these?

New patient value

The value of a new patient’s first treatment plan

How much is each new patient’s worth on average to your practice and is this improving? Which of your marketing activities attracts the most valuable patients to your practices? Measuring this will give you a good insight into a number of critical success factors at the practice.

Attracting the right sort of patients for the level of investment you have made in the practice or the type of dentistry you wish to perform is key. If you are a cosmetic dental practice, you need to be targeting higher net worth individuals with discretionary spend rather than those who require simple restorations and maintenance. Make sense?

New patient treatment plan uptake

% of patients who take up proposed treatment

How successful are you and your colleagues at converting those new treatment plans offered into completed treatment? You’ve worked hard at getting the patients in and probably spent a lot of money doing so. My experience suggests that some dentists are much better at it than others.

Take a look at the success rate of the overall practice and each associate. Are there any trends that you can see in terms of the treatments being rejected? Is it the type of treatment or the value?

I worked with one practice that had a bit of a revolving door in terms of patient numbers, unknown to the principal until he started measuring it. Turned out his new associate, who had the spare capacity to see new patients, had a very poor chairside manner! Quite often this can be rectified through mentoring and building confidence in a less experienced colleague, or it may require more drastic action. Surveying those patients who don’t take up plans or return can be really enlightening. It might reveal what your competitors are doing or charging for similar services.

Average patient value

The average revenue per patient over the past 12 months

Having secured a new patient at a not insignificant cost, do you know what that patient is worth to the practice over the next 12 to 24 months? This is a key measure and will help you understand how much time to invest in patient retention as well as patient recruitment. Again, once you know this, you can start to influence it.

On average it costs about seven times more to attract a new patient that retain an existing one. So, are your patients aware of the additional services you offer? Do you use patient surveys and smile questionnaires to understand patients’ concerns or desires? I have lost count of the number of patient surveys detailing their desire for cosmetic treatment that have been filed away or scanned onto the practice management system, never to be seen again.

Average daily yield

Gross fees per day per clinician

This for me is where the rubber hits the road. How much do you or your associates gross in a day? The majority of practices I ask this question to haven’t got a clue! They may have a gut feeling that they are busy and it is getting busier, or maybe not.

Most equate busy to good but that is actually no longer the case (as it was 10 years ago). Busy doing what is the question. All exams and minor restorations with no time for high value treatment that your patients require? While having a full book gives you a warm fuzzy feeling and was OK in the past, now it is not. The right treatment mix is important.

Also key to this area is to know where you are and set production goals by provider – and make sure you communicate these and review them regularly, even at daily huddles. Many of the principals I have worked with are reluctant even to share the numbers. That’s a bit like asking a taxi driver to take you for a drive without giving him any clue of the destination! You will get taken for a ride all right, and it will probably cost you without getting you where you want to be.

To achieve your targets, review where you are against the last 12-month period, look at the mix of treatments actually being carried out at the practice, review chair time occupancy and set some s.m.a.r.t goals – specific, measurable, achievable, realistic and time dependant. It is critical to have your finger on the pulse here. Do you know your chair time utilisatation? The average mixed practice in the UK is only around 60%. What are your cancellation and failed to attend rates? How effective is your recall programme? With good effective practice management software these days you should be able to achieve recall effectiveness greater than 90% (source: Software of Excellence Business Insight Seminars).


Practice gross minus practice costs over a 12-month period (against target)

At the end of the day (or the year) this is what it is all about. Are you making any money – or enough money? There are only really four areas to look at here in affecting profit. Sales volume, sales price, fixed costs and variable costs.

Understanding which levers to pull to have the greatest effect on the bottom line is key. Your fixed costs are usually just that – fixed. You need to cover them first with sales. Quite often practices think that beating an extra 5% discount out of consumable suppliers will help with variable cost. Actually it has little effect or even makes things worse by compromising quality and service. However, adjusting the price on your top 10 treatments will have much more affect as will increasing the sales volume or varying the mix of treatments.


Many dental practices are transforming themselves in dental business, driven by increasing competition and the corporatisation of the dental market. They are doing so by effectively monitoring the performance of their practice through measuring and reporting KPIs. Only by doing this can you generate a true picture of how your business is performing now, and what actions you need to take to grow it. Practices that adopt a formal approach to measuring KPIs do see a significant uplift in gross earnings and patient revenue. These practices are in the top 10% of high performing practices in the country but they are not the norm. In my experience, over two thirds of practices do not even know where to find the information needed – or even what information is key.

However, it’s never too late to start. If you need help calculating your KPIs and building a performance monitoring plan, get in touch and we can help you.


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Author: Robert Powell