Two terms that every practice needs to understand before devising growth strategies: “Practice Production” and “Treatment Service Mix”

Whether you operate a single chair practice or a multi-location group, they all share a common attribute; ultimately, all dental practices are businesses. The longevity and the success of every business depend on profitability. The more profitable a dental practice, the more that can be reinvested into the business to ensure that you provide the best patient care. 

For a successful dental practice, profitability and Practice Production go hand in hand. In this article, we explore what Practice Production is, what makes up production and how to increase productivity through Treatment Service Mix, thereby increase profitability to grow your practice. 

While there are many definitions for Dental Practice Production, we will be looking at it from a practice management software and business intelligence perspective. In the simplest terms, Production means how much you invoice your patients. The invoice figure is at its core, whether you are looking at KPIs such as Daily Production, Hourly Production, Production per Provider or Production per Patient.  

When looking at what makes up Total Practice Production, the formula is quite simple: some call it Production Formula while others call it Profitability formula. 

Total Practice Production = Number of Hours X Hourly Production  

As you can see, Total Practice Production comprises two elements: one is finite, and the other is not so much. Let’s look at each in detail. When looking at the number of hours, it goes without saying that every practice must aim for the maximum possible chair utilisation. Chair utilisation in itself is a broad subject that we will not cover in this article but let’s assume that dental practices have near-perfect chair utilisation. 

There is a finite number of hours in the day, and therefore one can only increase their work hours to a certain extent in their quest to increase productivity and thereby grow their practice. What can really make a change to the Total Practice Production is the Hourly Production. While there is a myriad of ways to increase Hourly Production, it is important to understand its make up before delving into any strategy. The most important metric in understanding Hourly Production is Treatment Service Mix, how much each category contributes to the revenue and the time of the practice. 

Although most practice owners who are familiar with the concept of Treatment Service Mix limit their analysis to Treatment Revenue Mix, it is equally important to understand Treatment Time Mix (how much time you spent on a particular type of treatment) to see the full picture. Let’s look at an example from a fictional “XYZ Dental Practice”. 

“Practice Production” and “Treatment Service Mix”

 

The chart on the left informs us how each treatment category breaks down the revenue, while the chart on the right shows the time breakdown for the same categories. Together, Treatment Revenue Mix and Treatment Time Mix form Treatment Service Mix. We can see here that the time XYZ Dental Practice spends on each treatment category is not proportional to the revenue generated by the respective category. This is a prime example of the opportunities at a practice to improve Hourly Production and thereby increase Practice Production while working a finite number of hours. 

Understanding the Treatment Service Mix at a dental practice allows the practice managers to recognise and reduce the number of hours spent on low-production treatment categories while maximising production per hour. The service mix allows the practice not only to understand past trends but also to create future strategies for growth. 

We hope the next time you look at your Practice Production, you will do so with a deeper understanding of what makes up production and how Treatment Service Mix directly impacts maximising production. 

About the Author 

Sean Perera has 18 years of experience in the Australian Dental Information System industry and currently works as the Product Manager for Centaur’s flagship products, Dental4Windows and Dental4Web. Sean holds a Bachelor of Applied Science from RMIT University and a Master of Business Administration from Swinburne University. 

Sean is a passionate data analyst who loves everything data. Sean spends most of his time doting on his little daughter Amelia outside work. 

The most vital element of practice management for you, your patient and your practice

An effective recall system is the most critical element to the success of any dental practice, impacting growth, profitability, and optimal patient care. 

If a practice is successfully bringing new patients through the door but unsuccessful in bringing them back through that door for regular check-ups and other treatment, that business will very likely be struggling, and unable to sustain this long-term. Retaining current patients is 6 to 7 times less costly than acquiring new ones (Bain & Company), so a focus on your practice’s recall strategy will deliver financial benefits for your business, better oral health outcomes for your patients, and a thriving practice for you.   

There are a variety of ways to effectively recall dental patients, so what makes any one recall system particularly effective? Let’s review some of the best practice processes used by successful dental businesses around the country. 

It’s a team effort 

Ensuring your recall system is hitting the mark and bringing your existing patients back to you is not the sole responsibility of front office staff. Top recall systems are executed as a collaborative approach by all staff.  

It is important for the whole team to communicate the same message during each interaction with a patient and for that consistent messaging to become a routine talking point with patients.  

Patient information should be checked and updated regularly, with the front office team, always attempting to prebook the next visit prior to the patient leaving the practice. Dental assistants and practitioners should use patient education techniques when the patient is in the chair to reinforce the need for, and benefits of, regular visits to the dentist.  

Educate patients 

Patient education is perhaps the primary key to giving your recall strategy the best chance of success. Clear and regular communication with patients about the importance of maintaining good oral health before, during, and after their visit, enhances patient commitment and participation in the ongoing relationship they will have with you and your practice.  

Helping your patients to appreciate the importance of oral hygiene maintenance may not always be easy, but if they don’t believe it, they simply won’t book.  

Automated systems and monitoring 

Automating your recalls through your practice management software is a practical way of ensuring no patients fall through the cracks and your recalls stay regular and consistent. Automation makes it easy to contact patients via a variety of communication channels. A first recall message might be sent as an SMS, the second as an email, and the third as a printed letter or postcard. A multi-channel campaign will deliver the best results. An automated recall system will also allow you to consider each patient’s preferred contact method and send via their preference efficiently as well as personalising communication with each patient’s personal details, specific recall date and a link to your online booking system. This makes it easy for your patients to respond and book their appointment on the spot.  

The goal is a successful recall system, but what does success mean? Before you can measure recall effectiveness, you will need to establish what your practice considers an effective recall – is it that your patient books within 14 days or within the month? Or is it whether your patient books at all, no matter the timeframe?  

Once you determine the desirable recall outcome for your business, the next step is to look at your patients’ demographics and ask yourself, what form of communication do you think will they respond to? To work out what the sweet spot is for your patients and your practice, start by measuring the effectiveness of each contact point and contact method, then with this information, tailor your recall cycles to suit your patient base and your business.  

Last, ensuring your appointment book is set up to achieve the established effective recall. Making sure you have reactivation communication also set up as part of your overall recall strategy will further aid this success.  

Conclusion 

Successful practices understand patient acquisition costs are high and on the rise, and general marketing is expensive and time-consuming. They invest time in setting up an ongoing, effective recall system that keeps patients coming back, making this a priority to ensure growth and business longevity. 

About the Author – Kath Lewis  

Kath Lewis is a Product Manager at Centaur Software and has 13 years of experience in the dental industry across practice management, marketing, and product management. She holds a Bachelor of Media from Macquarie University. Kath is an avid reader and cinema enthusiast, spending her spare time-consuming stories across all genres.  

Optimising appointment utilisation to grow your practice

The last eighteen months saw numerous disruptions to dental practice operations due to lockdowns. These disruptions had significant impacts on all aspects of dental practices, including appointment scheduling. Planned treatments were postponed, and preventive care cycles became out of sync. Now with patients returning to practices, front desk staff have a difficult task on their hands to manage appointment schedules with great efficiency that maximises patient care, practice revenue, and clinical efficiency.

In this climate, dental practices must take a regimented approach to maximise their appointment utilisation. This approach involves identifying the root causes of poor performance in appointment utilisation. Appointment utilisation performance (or lack thereof) always comes down to three fundamental factors. Understanding those factors and dealing with them correctly automatically increased the appointment utilisation at any practice.

  1. Failure to Attend (FTA)
  2. Last-minute/ short notice cancellations
  3. Not booking appointments in the first place

We should always look at Whitespace (dead space/unused appointments) as a loss in revenue for the practice. For example, suppose a practice has 20% of Whitespace in their appointment book, and the hourly production value of the practice is $400.00 for every full-time clinician (40 hours a week). In that case, the lost revenue through Whitespace will amount to $3200.00 per week.

Failure To Attend (FTA)

Patients that fail to attend their appointments cause an immediate loss of revenue for the practice. While there may be legitimate reasons for no shows, the practice should take note of every single failure to attend so it can identify the patients who habitually fail to attend

Once identified, the habitual FTAs must have alerts in their file prompting the front desk staff to alert such patients of the cancellation fees, ask for a deposit for the appointment or make a double booking if the patient does not show up.

Whether you decide to double book these patients with others so that it does not leave you with Whitespace in your book, decline to take a booking from them altogether, or decline to take a booking unless a deposit is taken from the patient, your practice must have an effective protocol to manage patients who FTA regularly.

Short Notice Cancellations

We know things come up like illness, a change in plans or that a patient simply forgets they have an appointment with you, and this causes a patient to cancel their appointment with you at short notice.

This is when having an updated Standby List can come in handy.  If there is enough time, you can get another patient to fill that appointment space in your books.

But sometimes last-minute cancellations come about simply because the patient did not know they had an appointment.

Setting automated appointment reminders, a week before the patient’s appointment and also on the day can help solve this issue but not all patients are created equal.  You know your patients best, so work on an automated appointment reminder schedule that fits your patients and for those who need special care, add in a call to check-in and remind them – they’ll appreciate you for it and you’ll keep that whitespace out of your books!

Patients Not Booking Appointments

When a patient is checking out, sometimes they don’t know what they will be doing in the future and do not want commit to an appointment 6 months down the track.

Setting up an automated recall system that works with your practice and your workflows is important to ensure patient retention.  By including a link to an online booking service in your recalls, you are making it easier for your patients to book in with you for a time that suits them, when it suits them, 24/7.

By being aware of the contributors of poor appointment utilisation, you can plan and minimise the risk of whitespace in your books and ensure high production value efficiency.

About the Author

Rebecca joined Centaur Software in 2015 and has had many roles throughout the company including Customer Service, eServices Consultant, and is now Product Manager for eServices and Support & Upgrades.  With an extensive background in event management, Rebecca assists in running Centaur events and marketing.

Rebecca enjoys spending time with her two Siberian Huskies and can often be found at the local dog park with Luna and Lucy with a camera in hand capturing their adventures.

Net Patient Gain: The three-word mantra that every practice should know when growing their patient base

When you start out as a new practice, new patients are of absolute importance. Your main focus should be on acquiring quality new patients to grow your patient base and fill up your appointment books. However, dental practices often overlook the necessary change in strategy towards patient retention once they have been operating for a few years. While it is vital to look for new patients through various advertising mediums on a regular basis, it is equally important to nurture and retain your existing patients.

Today’s dental practices spend an average of $200 per patient to acquire new patients, while it only costs them a fraction of that to retain an existing patient. An increase of 5% in patient retention can lead to a staggering 25% increase in practice profit. Most do not realise how expensive patient churn (the number of patients who stop being patients) can become for any business.

In this article, we unpack the concept of Net Patient Gain rather than focusing on new patient or patient retention strategies as they can vary from practice to practice, and there is no “one size fits all” approach. If your practice is a “leaky bucket” for dental patients, first, you need to understand how big the leak is before trying to patch it up.

For this discussion, we use the traditional three six-monthly recall cycle to illustrate patient churn. It is important to note that, nowadays, dental practices tend to tailor their recall strategies and intervals to align with their overall marketing strategy and, therefore, may not necessarily adhere to the traditional recall cycle. However, the concept of patient churn remains true.

If your patient has not returned after 18 months, the harsh reality is that you are likely to have lost that patient. Based on our recall cycle above, the 19th month since the patient’s last visit is when the practice should count them as churned patients.

We often see dental practices religiously tracking their new patients and recall effectiveness. What is surprising is that practices seldom put the two figures together to identify their net patient gain. Without understanding the correlation between these two metrics, they are just metrics on their own, not key performance indicators which are indicative of the growth and performance of the business.

Now that we know a little more about the concept of patient churn and how to calculate it, let’s put all this together to form our Net Patient Gain formula.

Net Patient Gain = New Patients – Churned Patients

If a practice acquired 25 new patients in a month but had 40 patients churning (going inactive) in the same month, their net patient gain would be:

Net Patient Gain = 25-40 = -15

Would you still call this practice a growing practice when it comes to patients? While it would cost the practice $5000 to acquire the 25 new patients at an average of $200 per patient, how much would it cost them to retain 25 of their churning patients to maintain a net patient gain of 0?

Let’s look at another example of two practices (Practice A and B)

If one simply focused on new patients, they might applaud Practice B for a large number of new patients. Yet, if you were looking at overall practice growth, which one is really growing its patient base?

For any practice, new or well-established, there is no question about the utmost importance of new patients. However, Net Patient Gain becomes an even more important statistic to help the practice avoid becoming a “leaky bucket” for dental patients.

We hope the next time you look at your new patient numbers, you also remember to check your net patient gain.

About the Author

Sean joined Centaur Software in 2021 as the Product Manager for Dental4Windows and brings with him 17 years of dental technology experience in both small business and enterprise dental arenas. He holds a Bachelor of Applied Science from RMIT University and a Master of Business Administration from Swinburne University.

Sean is a passionate data analyst who loves everything data.  Outside work, Sean spends all his time doting on his little daughter Amelia.