Improving Patient Engagement
Patient engagement is closely related to your average revenue per patient and encapsulates most of the efforts and KPIs described above. Button up your patient engagement by developing a welcome campaign for new patients:
Now lets take a look at your costs. Having a complete understanding of where you’re spending is equally important to boosting profitability.
Monitoring and decreasing costs
Today, a general dentist’s overhead averages 75% of income. That means for every dollar you bring in, you’ll only net 25 cents. Like we just mentioned, if you don’t have a solid hold on your collections, this ratio can decrease even more.
Overhead costs are all of the costs associated with running your practice.
To monitor your overhead, calculate each expense as a percent of income. Example of overhead costs might be:
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Staff
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Lab
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Rent
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Equipment
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Office Supplies
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Dental Supplies
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Marketing
Your staff will be your largest overhead expense by a good margin (this is true for almost any business).
With that being said, most folks try to decrease costs by doing things like renegotiating supply contracts. In reality this may only decrease 20% of a cost that makes up 5% of your overhead expenses.
That’s not an effective strategy.
The real way to decrease overhead is through building systems related to your staff – making them as efficient as possible.
Decreasing the number of no-shows
Your no-show rate, or FTA (failed to attend), is a huge cost driver for your practice. You should aim for this to be less than 10% of booked appointments.
To reduce your no-show rate, there are a few things you’ll need to do:
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Develop a response time. A simple system to remind patients will typically do the trick.
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Analyze the profile of the clients where FTA is typical, then tailor your marketing away from that type of patient. For example, have you found that many of your no-shows are unemployed? Make employment benefits prominent in your marketing materials.
All of this boils down to your profitability percentage
Finally, to get a holistic view of your profitability, monitor the improvement of your profit margin (net income / total revenue).
If you’ve hired a strategic consultant, at the end of the day you should be measuring them by an increase in your profit margin. Plain and simple.
