Key Performance Indicators by Charlene White

To be successful in the current highly competitive, ever-changing dental profession, it is essential for orthodontists to routinely evaluate and measure their key performance indicators. A key performance indicator (KPI) is a measurable value that demonstrates how effectively a company is achieving targeted business objectives. Organizations use KPIs to evaluate their success at reaching target goals. A set of quantifiable measures can be created to compare performance in terms of meeting their strategic and operational goals. The best way to accomplish this is to have a good understanding of the most important KPIs to track in the orthodontic practice that will help gain better results.

A well-orchestrated KPI program leads to staff retention and healthy morale for the doctor and the team. If each person on the team has an excellent understanding of their role and how it integrates with the practice's KPI goals, the results will be a win-win for the employee and the practice.

Recommended KPIs to track in the orthodontic practice

• Patient days (7- to 8-hour days) per doctor per year. 165 patient days is the average per doctor.
• Net collections and net production compared with the previous year each month and year-to-date.
• Year-to-date net production should be ahead of collections, which indicates practice growth. Compare net collections with the previous year. If net production is down, less will be collected the next year.
• Total number of new patient exams seen compared with the previous year. A 5 percent increase is good, and a 10-plus percent increase is excellent.
• Total number of full and partial starts seen compared with the previous year. A 5 percent increase is good, and a 10-plus percent increase is excellent.
• Net production per start. $4,000–$5,000 is average (total net production divided by the number of starts).
• Net production per day per doctor should ideally be $9,000 or higher. If your net production per start is $4,500 and you start two patients per day, that equals $9,000 of production per day. Many doctors are producing $6,000 per day, which equates to about 1.5 starts per day. Multiply 165 patient days by $6,000 per day to get $990,000 in production. If you have $9,000 of production per day, you have $1,485,000 in production.
• Review the total accounts receivable due to the practice for patients and insurance. In a growing practice, the accounts receivable total is increasing.
• Total amount for patients over 30, 60, and 90 days should be 5 percent or less of the total patient A/R due to the practice.
• Insurance accounts that are over 60 and 90 days past due should be
• 3 percent or less of the total insurance A/R due to the practice.
• Administrative staffing formula: For every $35,000 you collect per month, one administrative person is needed. For example, one treatment coordinator, one front desk coordinator and one financial coordinator are needed for a $1,200,000 practice.
• Clinical staffing formula: On average, you need a clinical assistant for every 14 patients you see a day. The high end is for every 18 patients seen per day.
• Track how many observation recalls are seen each month. Compare it with the year before. Ideally, it should increase annually by 5 to 10 percent.
• Total number of observations in the practice: Compare the number with the previous year.
• Number of observations that have no future appointment: Ideally, 90 percent or more of the observations should have a future appointment.
• The number of Phase I patients waiting for Phase II with no appointment: Ideally, 90 percent or more of these patients should have an appointment.
• Total number of active patients in the practice: Ideally, this should be growing.
• Total number of actives with no future appointment should be 5 percent or less.
• Number of patients past their removal target date: 10 percent or less is ideal.
• Average number of removals per month should be in line with average number of starts per month.
• Number of retainer checks per month should be less than two times your number of removals.
• Track the number of patients seen per day so you can evaluate the percentage of no-shows and repairs.
• Trends for overbooked days and slow days should be evaluated.
• Track number and types of repairs each month. Compare with the previous year. Five percent is average and 3 percent or less is excellent.
• Number of no-shows should be 5 percent or less.
• On average, the overhead for an orthodontic practice is 61 percent. The following are other norms:
  • Rent: 6 percent.
  • Clinical supplies: 6 to 8 percent.
  • Office supplies: 1.5 percent.
  • Staff payroll: Total off the W2 forms, 18 to 20 percent (this does not include the lab tech, marketing coordinator or family members).
  • Lab salary and outgoing lab fees: 3.5 percent (this does not include aligner treatment lab fees or lab setup fees for new starts. Also, a new concept is having a digital assistant which is too new to report trends).
  • Marketing: 3-plus percent.
• Invisalign lab fees vary due to volume.
• Collections per patient visit for Invisalign should be $300–$400 per visit after you subtract the lab fee.
• Collections per visit for braces should be $250 or more per visit. $350 or more is excellent.
• Case acceptance for the recall-ready patient should be 90 percent or higher.
• Case acceptance for those ready for Phase II should be 80 percent or higher.
• Case acceptance for a child's exam should be 75 percent or higher.
• Case acceptance for an adult's exam should be 50 percent or higher.
• Many practices do a poor job of tracking, "How did you hear about our office?" Compare the number of referrals from dentists, from friends, family and other sources with the previous year.
• Track new patient calls into the practice versus number of exams seen.
  The percentage of time running on schedule should be 95 percent or better.
  Set goals for the amount of time needed for each procedure. Evaluate each chairside through your software patient-flow reports.

The team can be instrumental in tracking data each month. They can assess where they stand in terms of the goals. For example, to track true new patient case acceptance for children, the following should be tracked:

The national average for case acceptance is 55 percent. A good percentage is 65, whereas excellent is 75 percent or higher. The treatment coordinator should be informed of the benchmarks and track their performance daily, monthly and year-to-date. The KPI format can also be used to evaluate a practice for purchase. It is an excellent way to assess the potential purchase price based on the practice's potential to excel. It can also show if the practice is in a significant decline.

Conclusion
KPIs are an important scorecard for any business. They keep you on track and allow you to manage and achieve your desired goals. Ask yourself, "Am I settling for average or taking action to be excellent?" Week after week, I visit offices that have average case acceptance. Improving that one statistic can make a huge and instant increase in your production.