Tracking Key Performance Indicators

Tracking Key Performance Indicators

• 1.
  Health of YourPractice
• 4.
  Financial Health ofYour Practice Satish Patel, CPA, President, Analytix Solutions www.analytixsolutions.com & Gerry J Casazza, D.M.D, F.A.G.D Future of Dentistry www.futureofdentistry.com
• 5.
  How do youdetermine the health of your practice? Net profits of the practice? Your compensation? Revenues? # of patients? # of employees? # of hours you work?
• 6.
  Highly profitable Managedgrowth Provides a balanced life Is less stressful How? Work on the practice and not in the practice Characteristics of a Healthy Practice
• 7.
  How do youmeasure how your practice is doing? Income statement Key Performance Indicators
• 8.
  Production Collection OverheadProfitability Average new patients Key Performance Indicators
• 9.
  Average daily production- Dentist - $2700 -$3000 - Hygienist - $700-$900 Dentist to Hygiene production ratio - 3 to 1 Average Hygiene production to compensation ratio - 3 to 1 Production
• 10.
  Revenue mix Scheduling- No shows/Cancellation Customer service Marketing programs Factors Affecting Production
• 11.
  Production - ExampleAverage Production per year $800,000 Number of days worked (4 days a week) 200 Average production per day $4,000 Dentist to Hygiene ratio 3 to 1 Average Dentist production $3,000 Average Hygiene production $1,000 Total number of patients 1,800 Total number of FFS patients 1,200 Average revenue per patient $500 Average revenue per FFS patient $750
• 12.
  98% of adjustedproduction Factors affecting collections - Insurance Vs Private (delay in collection) - Payment options Credit cards Third party financing Courtesy discount for payment upfront Invoice after treatment Collecting payment in full if the payment is less than certain dollar amount Collections
• 13.
  Collections
• 14.
  Total overhead –55 to 65% of collections Includes - Personnel (24-28%) - Clinical (12-14%) - Facility (10-12%) - Office and marketing (9-11%) Overhead
• 15.
  % of revenue- 24-28% What’s included - Assistants - Front desk - Hygiene - Administrator - Payroll taxes - Benefits - Workers’ comp - Bonuses - Continuing education - Uniforms What’s not included - Owner compensation and benefits - Associate’s compensation and benefits Personnel
• 16.
  Dental supplies (5-6%)Lab expense (7-8%) Clinical
• 17.
  % of revenues(10-12%) - Rent - Utilities - Security - Repairs and maintenance - Office cleaning - Liability insurance - Equipment rental - Real estate/Personal property taxes Facility/Equipment Expense
• 18.
  % of revenues (9-11%) - Advertising - Marketing (3-5%) - Professional fees - Telephone - Office expense - Computer supplies - Depreciation - Credit card charges Marketing and Office Expenses
• 19.
  Over all profitabilitybefore owner’s and associates compensation (35-45%) - Owner’s compensation - Associates compensation - Pension expense - Health insurance - Other benefits Car Education Dues and subscription Conferences Profitability
• 20.
  Average 15-20 newpatients a month Average case average -$2,500 (total collections for month/new patients) - Determines The quality of your service If referral program is working or not If you are marketing properly or not New Patients
• 21.
  Various plans -Based on Production - % of over benchmarked production Collection - % of over benchmarked collection Incentive on reduced payroll % Discretionary - Based on profitability of practice Bonus/Incentive Plan
• 22.
  Benchmarks Avg %Avg $ Goal % Goal $ Dentist – Gross Production 74.6% 869,000 74.6% 869,000 Hygiene Gross Production 25.40% 296,000 25.40% 296,000 Total 100.00% 1,165,000 100.00% 1,165,000 Net Production 87.60% 1,020,000 87.6% 1,020,000 Collections (98%) 86.00% 1,000,000 89% 1,000,000 Overhead Personnel 27% 270,000 24% 240,000 Facility Costs 12% 100,000 10% 100,000 Clinical 13% 130,000 12% 120,000 Other Costs 13% 130,000 12% 120,000 Total Overhead 65% 650,000 58% 580,000 Net Profit 35% 350,000 42% 420,000
• 23.
  Review your numbersand compare with benchmark numbers Review existing systems (scheduling, marketing, collections, billing etc) to determine whether improvements are necessary Analyze your service mix for opportunities to increase revenues Determine what practice areas can benefit from the use of advisors Develop an Action Plan
• 24.
  Questions
• 26.
  Thank You