KPIs 101: Make the most of practice management software

You likely use practice management software, but do you know how to make the most of it? Practice management expert Lee Bentz outlined how dental practices can analyze their success using key performance indicators (KPIs) at the California Dental Association's CDA Presents 2018 meeting in Anaheim, CA.

Lee Bentz, practice analyst with CDA Practice Support.

"KPI is not a dental-specific term," said Bentz, a practice analyst with CDA Practice Support. "It's actually pretty utilized in business. It's basically just a data point. So if you're a sales company, your sales numbers are your KPI."

Dentistry also has its own key indicators to measure practice performance. Here are the five important KPIs for dental practices, according to Bentz:

1. Adjusted production
2. Collections
3. Active patient growth
4. Patient retention
5. Case acceptance

All five metrics contribute to your overall practice health, but to improve on them, you have to know where you're starting from, set a reasonable goal, and develop a plan to get there.

"Practices are so unique that I can't say across the board do this and you'll succeed," Bentz said. "But you do have to understand who you are and where you want to go before you can really evaluate your success."

Start with your baseline metrics

To improve a key performance indicator, the first step is to look at the numbers in your practice management software and get an honest baseline measurement of how your practice is doing. When analyzing, it's important to look at the numbers for each individual contributor, as opposed to the numbers for the whole practice, Bentz noted.

"Sometimes you're the only provider, but many other times there are other people working with you," he said. "Get a baseline for every single provider in the practice. That's your starting point."

Bentz likes to start at the top and work down, meaning that he looks at the practice management software data for each individual's performance on a yearly, monthly, and daily basis. By doing this, he finds areas ripe for improvement.

For instance, in one practice he noticed that the part-time hygienists were significantly outproducing the full-time hygienists on daily basis. However, because the part-time employees worked less, it wasn't noticeable when the management team looked at the practice statistics over a longer period of time.

"Obviously, the people who work more are going to have a higher production number than the people who work less," Bentz said. "But the two part-time people actually significantly outproduced the full-time people on a per-day level. We advised the practice to give the part-time people some more opportunities, more shifts, more days, and it ended up being almost a six-figure production increase for that practice year over year."

Set goals and strategize

Once you know what your practice's benchmarks are, the next step is to set a reasonable goal. Bentz advised practices to set individual goals and then combine all the individual goals into a total goal for the practice.

"Be honest with yourself and be specific," he said. "Don't just say, 'I want to make more money' because that's a broad goal to try to get to. How are you going to do that?"

That's why it's important to set a goal as well as plan a way to implement it, such as making more money by adding days, hours, or treatment modalities. You should also set a timeline for when you want to accomplish the goal, Bentz noted.

"The one thing across the board, regardless of who you are, is to look at your data historically and make a future plan," he said. "However far out you want to do that is up to you. It could be next year; it could be a five-year plan."

Bentz also noted that KPIs and practice success may feel overwhelming, especially since it's not a concept taught in dental school and most people already have a lot going on in their lives and practices. If that's the case for you, Bentz said to not be afraid to reach out for help.

"If you need advice or if you have additional questions, do reach out to somebody, whether it's us here in Practice Support, or if you want to go and find your own practice management consultant elsewhere," he said. "A good practice management consultant is going to pay for themselves probably in that first month if they're doing a good job."