Staring at information causes blindness

by Blog, Business growth, Performance reporting

Staring at information causes blindness    By Jonathan Fine. December 30, 2016.

I reckon you’ve probably heard the phrase “if you can’t measure it you can’t manage it” and it’s fair to say that most practices have management software that delivers information. Masses of it, in fact, all of which is relevant, but unfortunately the same cannot always be said for the management process (what gets done with this information). Often I see practice owners who are paralysed by too many numbers struggle to prioritise things and make decisions. This is the worst type of business process if you ask me, it’s information overload. Your business process should help not hinder you and, in the end, the only bad decision is indecision, because it leads to inaction.

The whole point of information in a dental practice is to empower you to take some action that will result in a correction or an improvement. In my experience, for performance information to be actionable it has to be clear, simple and sparse. That’s why we divide our Key Performance Indicators into three levels, the first being so basic that it enables the recipient to be alerted and not get side-tracked. Once the alert has been raised, levels two and three drill progressively deeper to help with diagnostics so the right levers are pulled to effect action.

Typically there are also three levels of information available in any software practice system — the problem is that it’s often impossible to see the woods for the trees! Let me show you how our KPIs would help you if you wanted to focus on, say, new patients. Remember, we’re trying to ascertain here whether there is anything wrong with your new patient levels or, if not, whether new patient levels are particularly good this month and, if so, why. We want to know, in short, if action of any kind is required and, if so, what it is.

Level one (the simplest gauge)

  • number of new patients seen by your practice in December

Level two (a bit deeper)

  • the treatment type of your new patients
  • the conversion rate of inbound enquires to appointment by treatment type
  • the conversion rate of appointment to treatment uptake by treatment type

Level three (even more granular)

  • the revenue by treatment of your new patients
  • the hierarchy of sources (where have these patients come from?)
  • the acquisition cost per patient by treatment type
  • the conversion rate from appointment to treatment uptake by clinician

You can see that there’s an awful lot of information to look at, should you need to, even on a single metric such as new patients. But the secret here is to only go deeper if you have to. Can you imagine trawling through all of this stuff every Sunday at 2am in the hope of randomly finding something meaningful to act on? Impossible. (But that’s what a lot of practice owners I’ve met actually do.) You need a clear hierarchy of information and you only want to get granular when the information tells you to.

Everyone on your team should be aware of level one at all times, so have this number visible in your staff room and update it daily. From there different team members need to be looking at different data sets, as follows (what you are doing here is getting eyes on different aspects of your business so that if anything happens, whether good or bad, it will be caught and brought to you in good time; you are also ceding responsibility and trusting your team, which encourages individuals to feel invested in your enterprise and hence more motivated to help it succeed):

Clinicians — a monthly pack of five KPIs

  • average daily yield (ADY) for this month and ADY year to date
  • new patient numbers and total conversion to treatment this month by treatment type and year to date
  • average active patient value this month and year to date
  • treatment hierarchy — this month and year to date
  • monthly gross and year to date gross

Treatment coordinators — a weekly pack of five KPIs

  • number of new patient enquires by treatment type
  • conversion of new patient enquires to appointment by treatment type
  • conversion of new patients from treatment coordinator appointment to appointment with clinician
  • conversion of new patient appointment with clinician to treatment uptake
  • number of patients in ‘nurture’ stage that converted to an appointment

Practice manager — a weekly pack of five KPIs

  • weekly gross objective against target this month and year to date
  • diary utilisation objective against target this month and year to date
  • number of new patient appointments this week, this month and year to date
  • debt report, monthly
  • practice facilities check and presentation — weekly score and monthly

Management team monthly KPI pack in preparation for your monthly review meet

Financial — monthly

  • P&L — management accounts by the 15th of the following month by practice and consolidated / against targets / budget
  • Cashflow — rolling three months
  • Debt collection
  • ADYs
  • Average active patient value
  • Attrition rate (rate at which you are losing patients)

Production — weekly and monthly

  • Practice utilisation
  • Average active patient value
  • Incomplete treatment plans after three months

Marketing — monthly

  • number of new patient enquires generated by treatment type and channel
  • conversion ratio to appointment by treatment type and channel
  • acquisition cost by treatment type

Sales — weekly and monthly

  • number of treatment coordinator appointments by treatment type
  • conversion ratios of new patient appointments with clinician
  • average value of new patient treatments
  • GDP referrals: number and treatment type

I know, it’s a stupendous amount of information isn’t it? But don’t worry, if you ask your team to stick to level one and only dig when they need to you can steer your ship with timely skill and poise through the uncertain waters ahead in 2017. And if you require an audit of your practice management software and management process get in touch so we can book one in for you early in the new year.


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“Often I see practice owners paralysed by too many numbers”

Jonathan Fine, MD

Author: Jonathan Fine