Editor’s note:This is the first of a two-part article on the concept and detailed elements of pedometrics. Part two will appear in the June issue of Dental Economics.
In a previous series for Dental Economics, the term pedonomics is defined as the economic impact of pediatric dental care. With pedonomics, profitability management supplements productivity analysis as dental reimbursement declines as a percentage of practices’ usual, customary, and reasonable (UCR) fees.
It’s no longer enough to focus on what is billed in fees per procedure; offices also need to focus on their profit per visit. Practicing better, faster, and easier dentistry with new pediatric game-changing technologies can shorten the time needed per visit. This results in an increase in the number of procedures performed, which can yield greater overall profitability despite lower reimbursement rates.
The right metrics for today’s practices
With the birth rate at about four million per year in the US,1 a caries epidemic that is now attacking preschoolers to teens, a pediatric dental uninsured rate hovering at 10%,2 and an explosion of new technology in innovative pediatric dental materials and equipment, a new paradigm shift into pediatric dentistry has begun.
Traditionally, analyzing the clinical and business metrics of pediatric dental practices without accounting for how they differ from adult practices has led to incorrect conclusions and poor management decisions. To address this shortcoming, we coined the term pedometrics. Pedometrics refers to the appropriate collection and analysis of the clinical and business metrics for practices that primarily treat children.
Clinical metrics are measurable statistics relating to recruiting, treating, and interacting with patients and their parents. These include new patients (from both internal and external marketing), case presentations, case acceptance, appointment scheduling, appointment incompletion by failure or cancellation, patient doctor visits, patient recall and recare visits, time per procedure, procedural doctor code billing, procedural recall and recare code billing, complete care numbers for new and recall patients, average revenue per new patient, and more.
Business metrics are measurable system statistics that relate to operating and maintaining a practice. These include facility expenses, marketing expenses, staff salaries and benefits, lab-related expenses, supplies or materials expenses, income per days worked, and more.
Pediatric practice metrics versus adult practice metrics
Clinical metrics are generally different in a pediatric practice than in an adult practice. For instance, the average number of new patients per month in pediatric practices is often reported in surveys as being higher than the number of new patients in adult practices. Why? Because the average revenue generated by completed care in a pediatric patient is less than for an adult. Therefore, less revenue per pediatric patient requires that a practice primarily treating young patients attract more new patients than an adult restorative practice.
Likewise, in a pediatric practice, the average time for both doctor procedures and staff procedures is less than in an adult practice due to the behavior management of children. Moreover, some pediatric practices prefer to age out older teenagers, which means these practices must attract new young patients if they are to replace the lost production from teenagers. A smart pediatric practice often establishes a teenage atmosphere as well as child décor if both cosmetic and orthodontic care are offered. So, when comparing new patient metrics, the child, teen, and adult care variables within this metric are important.
Similarly, business metrics in a pediatric practice are generally different than in an adult practice. One reason is that laboratory expenses in a pediatric practice are often negligible, while they can be substantial in an adult practice. Another reason is that pediatric practices tend to require less investment in expensive equipment than do adult practices.
The point is that it’s like comparing apples to oranges if someone attempts to compare certain clinical and business metrics in a pediatric and teenage practice to those of an adult practice. While the daily billed production per doctor from treating patients might be higher in an adult practice, the profit per day may be higher in the pediatric and teenage practice due to the greater number of patients seen per day, the negligible lab expenses, and the lack of subsequent appointments.
The “scaffolding effect” of metrics in making strategic decisions
Clinical and business metrics form the “scaffolding” with which strategic management plans toward greater profitability are erected. However, don’t get caught up in metric paralysis where you measure, measure, measure and never apply human interaction to effect positive change. Instead, measure, analyze, decide, manage, and repeat.Using metrics in a proactive way will stop knee-jerk reactive management and lead to proactive planning that will have a positive effect on profitability.
Accounting for capacity
Capacity must be factored in when analyzing the metrics of a pediatric practice. What good does it do to increase new patient numbers with the goal of boosting production if the number of doctor appointments is limited by a shortage of (1) available days to schedule (time), (2) available operatories (space), (3) available staff (human resources), and so on? Likewise, the needs of new patients (high caries, low caries, no caries) also must be factored in. A practice that treats children with low to no caries rates will need greater capacity to generate the same production as a practice that treats children with high caries rates because hygiene-dispensed services produce considerably less revenue than doctor-dispensed services.
Marketing is a favorite topic among pediatric dental practices. Many practices pride themselves on marketing metric success when the scheduling of new patients is well into the future. The scheduling metric, however, may indicate that capacity has been reached as doctors, chairs, staff, and more are insufficient to provide greater access to urgent scheduling. A practice that cannot accommodate same- or next-day new or returning appointments may need to examine its capacity. The old adage is often overlooked—the most important day in scheduling is today, and the next most important day is tomorrow. After that, patients lose interest. The point is that one metric (i.e., new patients) may be reduced by another metric (available appointments) when appointment availability does not match marketing response.
This is the basic concept behind pedometrics. In the June issue we’ll write about how you can apply this concept to your practice.
References
1. Martin JA, Hamilton BE, Ventura SJ, Osterman MJK, Wilson EC, Metthews TJ. Births: Final data for 2010. Natl Vital Stat Rep. 2012;61(1):1-72.
2. Nasseh K, Vujicic M. Dental benefits coverage rates increased for children and young adults in 2013. American Dental Association website. http://www.ada.org/~/media/ADA/Science%20and%20Research/HPI/Files/HPIBrief_1015_3.ashx. Accessed February 28, 2018.
