Managing multiple dental practices while ensuring consistent, high-quality patient care is a big task that requires a strategic approach. One of the most effective ways for Dental Support Organizations (DSOs) to stay on top of operations and make informed decisions is by tracking key performance indicators (KPIs).
KPIs are measurable values that help organizations gauge their success in specific areas. For DSOs, understanding and monitoring the right KPIs can lead to better decision-making, improved patient outcomes, and enhanced profitability.
These KPIs are useful for gathering an overall snapshot of business health and quickly identifying areas for improvement.
1. Patient Acquisition Cost (PAC)
Patient acquisition cost (PAC) is a critical metric that measures the cost associated with acquiring a new patient. It includes expenses related to marketing, advertising, and promotions.
Why It Matters:
Understanding PAC helps DSOs evaluate the effectiveness of their marketing strategies and determine if they are getting a good return on investment.
How to Track It:
To calculate PAC, divide the total marketing and advertising expenses by the number of new patients acquired during a specific period. A lower PAC indicates that your marketing efforts are efficient and attract patients at a lower cost.
What to Aim For:
DSOs need to understand their existing budget, historical performance, and capacity for growth to calculate a patient acquisition cost target. There is no one-size-fits-all number for this metric as it depends on these factors, but costs should ideally go down, not up, over time as marketing becomes more efficient.
2. Average Revenue Per Patient
Average revenue per patient is a KPI that measures the average amount of revenue generated from each patient visit. It is related to total practice production, which is the amount of total amount of revenue generated by the practice.
Monitoring this KPI helps DSOs understand how well their services are being utilized and whether there are opportunities to increase revenue through additional services or upselling.
Why It Matters:
It’s a valuable metric for assessing the financial health of your practices and identifying opportunities for growth.
How to Track It:
To calculate average revenue per patient, divide the total revenue generated during a specific period by the number of patients seen during that time.
What to Aim For:
While the ideal average revenue per patient varies, DSOs should aim for steady growth in this metric. If it’s stagnating or declining over time, consider offering additional services, such as cosmetic procedures or orthodontics, to increase revenue per visit.
3. Patient Retention Rate
The patient retention rate measures the percentage of patients who return to your practice for additional services. Acquiring new patients is important, but retaining them is even more crucial for long-term success. It’s about five times more expensive to acquire a new patient than it is to retain an existing one.
Note that the flip side of patient retention is patient attrition, or how many patients are leaving your practice. Either KPI is worth tracking. You may even choose to track both if you want.
Why It Matters:
A high retention rate indicates that patients are satisfied with their experience and trust your practice with their ongoing dental care. Good job!
How to Track It:
To calculate the patient retention rate, divide the number of returning patients by the total number of patients seen during a specific period and multiply by 100. This KPI provides insights into the effectiveness of your patient engagement and loyalty programs.
What to Aim For:
A retention rate of 80% or higher is considered excellent in the dental industry. The average attrition rate is 17%.
If your retention rate is low, consider enhancing patient communication, improving follow-up processes, or offering loyalty incentives to encourage repeat visits. Maybe it’s time to implement that prize box idea you had a while back.
4. Case Acceptance Rate
A case acceptance rate is the number of treatment plans that are presented to patients and accepted, usually expressed as a percentage. It works best when used to measure how well treatment plans are communicated to patients and how thoroughly the hygiene team is performing their dental examinations.
However, this KPI can’t always be trusted and usually requires some extra investigation. For example, if you propose three new crowns to a patient in need of them and they only accept the one their insurance will cover, that’s an accepted case but two lost potential crowns. A high case acceptance rate is good, but be aware it may illustrate an incomplete picture and lead to a false sense of security. For best results, it should be tracked in tandem with other revenue-related metrics.
Why It Matters:
A high case acceptance rate shows patients trust recommended treatments and are willing to proceed, which directly impacts revenue and patient health outcomes. This metric can help DSOs identify areas where patient communication and education might need improvement.
How to Track It:
To calculate the case acceptance rate, divide the number of accepted treatment plans by the number of treatment plans presented during a specific period and multiply by 100.
What to Aim For:
A case acceptance rate of 70% or higher is ideal. If your rate is lower, consider training staff on effective patient communication, providing more detailed explanations of treatment benefits, or offering financing options to make treatments more accessible.
5. Hygiene Reappointment Rate
The hygiene reappointment rate measures the percentage of patients who schedule their next routine cleaning appointment before leaving the practice. Having the appointment scheduled right away greatly increases patient retention.
Why It Matters:
A high reappointment rate indicates that patients value preventive care and are committed to maintaining their oral health, which contributes to long-term patient retention and practice stability. This metric is a strong indicator of patient engagement and the effectiveness of your hygiene department.
How to Track It:
To calculate the hygiene reappointment rate, divide the number of patients who scheduled their next hygiene appointment before leaving by the total number of hygiene patients seen during a specific period, and multiply by 100.
What to Aim For:
An ideal hygiene reappointment rate is 80% or higher. If your rate is lower, consider training staff to emphasize the importance of regular cleanings and offering convenient scheduling options to encourage patients to book their next appointment before leaving the office.
6. Cancellations
An ideal practice operates at 100% capacity, with all appointment slots filled all the time. However, this isn’t a perfect world, and cancellations and no-shows do happen. The goal is to minimize them as much as possible.
Why It Matters:
Canceled appointments lead to lost revenue and wasted time. Patients cite a number of common reasons for cancellations. Understanding how many people cancel and why can help identify gaps in service.
How to Track It:
Make note of any cancellations in a given time period. Then divide the number of cancellations by the number of booked appointments in that same time period. Multiply the result by 100 to end up with a percentage.
What to Aim For:
On average, around 10% of dentist appointments end up getting canceled. This number increases when patients are previously inactive and returning after years away.
A few missed appointments is okay, but multiple cancellations can add up quickly. Any increase in cancellations is a cause for action. Make sure patients have appropriate financial arrangements before their appointment. Consider creating a more robust appointment reminder system that lets patients choose how they prefer to receive their communication.
And finally, before appointments are booked, train staff to effectively communicate treatments and explain exactly what the patient can expect. That way no one books out of obligation with no actual intention of showing up.
Tracking KPIs for Long-Term Success
Tracking the right KPIs is essential for DSOs looking to achieve long-term success. By monitoring metrics like these, DSOs can make data-driven decisions that lead to improved patient care, increased profitability, and sustained growth.
While the process of tracking and analyzing KPIs might seem daunting, having the right tools can make all the difference. Oryx dental software offers comprehensive solutions that help DSOs monitor and optimize their KPIs with ease. By providing real-time data and insights, Oryx empowers decision-makers to make informed choices that drive success across all practices.
Ready to take control of your KPIs and elevate your DSO’s performance? Learn more about how Oryx can help you track and achieve your goals.
