Small group practices are the fastest growing segment of the dental industry. Entrepreneurial dentists are seeing the attractive economic opportunities of building a small group practice business, which can then affiliate with a large dental service organization (DSO). This is the route that I took by growing from one to 14 dental offices in seven years.
When building a group of dental practices, you soon become aware that the more offices you have, the harder it becomes to scale the business. A perplexing and misunderstood challenge is getting accurate real-time analytics that are diagnostic, actionable, and predictive.
What if you had the ability to predict a revenue downturn before it happened? You could then be proactive instead of reactive. How much more successful would your business be with that kind of “crystal ball”?
Evolution of dental analytics
Let’s look at how analytics in dentistry have evolved over time. Early analytics were composed of a number of individual reports that measured key data, such as production, collections, new patients, and recall visits. Each report was only a small piece of the entire puzzle. These measures are also “lag measures” (after the event), so it is difficult to understand how to connect them to current financial results.
The next evolution of analytics was dashboards. They allowed us to look at multiple reports in one view to try to determine their effects on the business. While this allows us to see a better view of our KPIs (key performance indicators), it is still a lag measure and hard to understand the full impact of each data point on financial success.
Predictive dental analytics
There are ways to use predictive analytics in dentistry. One such solution is with QL Analytics, a dashboard that allows business owners to predict future results using historical data. This dashboard was developed by my company, Quantum Leap Dental Partners, in conjunction with the Dental Care Alliance’s analytics team, with the goal of helping practices identify one or two key behaviors that will drive their growth. The key to training and accountability is to focus change on only one or two behaviors at a time. If we try to focus on more behaviors at one time, then it is highly likely that none will become permanent.
This dashboard, called the Revenue Cycle, looks at revenue growth as being composed of two main components: number of visits (capacity) and dollars generated per visit (revenue). These components are further broken down into 11 critical KPIs that ultimately lead to 21 MITs (most important tasks) or behaviors that influence the KPIs. What we have done at Quantum Leap is pair up our training modules to the specific MITs/behaviors that will ultimately grow revenue.
Let’s look at the KPI “patient visits per provider day” and take it through the Revenue Cycle. Patient visits are composed of two KPIs: new patients and returning patients. New patients can be internally referred or externally referred. Returning patients can return to hygiene or the doctor’s schedule.
If we are looking to drive new-patient visits, then phone answering training may be the behavior we need to improve. That training would be customer service based and address both call answer and call conversion rates. We use historic data to identify the opportunity, the amount of lift needed, and the value of the change (the size of the prize).
For returning patients, the most predictable behavior to train is making the next appointment before the patient leaves the office. We measure this KPI in walkout stats. To drive the walkout appointments, we would use our training modules for that specific behavior.
Predictive analytics are a decisive advantage in the operation of one practice and are absolutely critical in the operation of a group practice. Solutions such as QL Analytics allow us to identify our biggest opportunities for growth and then match training to those opportunities. This helps us focus on the one or two things that will have the biggest impact on the business. This limited focus allows us to create accountability to turn the behaviors we are training into habits that are part of the office culture.
MICHAEL KESNER, DDS, built a group of 14 practices that ranked five years in a row on the Inc. 5000 List of America’s Fastest Growing Companies. He is the author of the book Multi-Million Dollar Dental Practice and president/founder of Quantum Leap Consulting, which partners with dental practices for faster growth. Contact Dr. Kesner at [email protected].
