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Tracking Key Performance Indicators

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Publié dans : Santé & Médecine, Business

Tracking Key Performance Indicators

  1. 1. Health of Your Practice
  2. 2.
  3. 3.
  4. 4. Financial Health of Your Practice Satish Patel, CPA, President, Analytix Solutions www.analytixsolutions.com & Gerry J Casazza, D.M.D, F.A.G.D Future of Dentistry www.futureofdentistry.com
  5. 5. <ul><ul><li>How do you determine the health of your practice? </li></ul></ul><ul><ul><ul><li>Net profits of the practice? </li></ul></ul></ul><ul><ul><ul><li>Your compensation? </li></ul></ul></ul><ul><ul><ul><li>Revenues? </li></ul></ul></ul><ul><ul><ul><li># of patients? </li></ul></ul></ul><ul><ul><ul><li># of employees? </li></ul></ul></ul><ul><ul><ul><li># of hours you work? </li></ul></ul></ul>
  6. 6. <ul><ul><li>Highly profitable </li></ul></ul><ul><ul><li>Managed growth </li></ul></ul><ul><ul><li>Provides a balanced life </li></ul></ul><ul><ul><li>Is less stressful </li></ul></ul><ul><ul><li>How? </li></ul></ul><ul><ul><li>Work on the practice and not in the practice </li></ul></ul>Characteristics of a Healthy Practice
  7. 7. <ul><ul><li>How do you measure how your practice is doing? </li></ul></ul><ul><li>Income statement </li></ul><ul><li>Key Performance Indicators </li></ul>
  8. 8. <ul><li>Production </li></ul><ul><li>Collection </li></ul><ul><li>Overhead </li></ul><ul><li>Profitability </li></ul><ul><li>Average new patients </li></ul><ul><ul><li>Key Performance Indicators </li></ul></ul>
  9. 9. <ul><li>Average daily production </li></ul><ul><li>- Dentist - $2700 -$3000 </li></ul><ul><li>- Hygienist - $700-$900 </li></ul><ul><li>Dentist to Hygiene production ratio </li></ul><ul><li>- 3 to 1 </li></ul><ul><li>Average Hygiene production to compensation ratio </li></ul><ul><li>- 3 to 1 </li></ul><ul><ul><li>Production </li></ul></ul>
  10. 10. <ul><li>Revenue mix </li></ul><ul><li>Scheduling </li></ul><ul><li>- No shows/Cancellation </li></ul><ul><li>Customer service </li></ul><ul><li>Marketing programs </li></ul><ul><ul><li>Factors Affecting Production </li></ul></ul>
  11. 11. <ul><ul><li>Production - Example </li></ul></ul>Average Production per year $800,000 Number of days worked (4 days a week) 200 Average production per day $4,000 Dentist to Hygiene ratio 3 to 1 Average Dentist production $3,000 Average Hygiene production $1,000 Total number of patients 1,800 Total number of FFS patients 1,200 Average revenue per patient $500 Average revenue per FFS patient $750
  12. 12. <ul><ul><li>98% of adjusted production </li></ul></ul><ul><ul><li>Factors affecting collections </li></ul></ul><ul><ul><li>- Insurance Vs Private (delay in collection) </li></ul></ul><ul><ul><li>- Payment options </li></ul></ul><ul><ul><li>Credit cards </li></ul></ul><ul><ul><li>Third party financing </li></ul></ul><ul><ul><li>Courtesy discount for payment upfront </li></ul></ul><ul><ul><li>Invoice after treatment </li></ul></ul><ul><ul><li>Collecting payment in full if the payment is less than certain dollar amount </li></ul></ul><ul><ul><li>Collections </li></ul></ul>
  13. 13. <ul><ul><li>Collections </li></ul></ul>
  14. 14. <ul><li>Total overhead – 55 to 65% of collections </li></ul><ul><li>Includes </li></ul><ul><li>- Personnel (24-28%) </li></ul><ul><li>- Clinical (12-14%) </li></ul><ul><li>- Facility (10-12%) </li></ul><ul><li>- Office and marketing (9-11%) </li></ul><ul><ul><li>Overhead </li></ul></ul>
  15. 15. <ul><li>% of revenue - 24-28% </li></ul><ul><li>What’s included </li></ul><ul><li>- Assistants </li></ul><ul><li>- Front desk </li></ul><ul><li>- Hygiene </li></ul><ul><li>- Administrator </li></ul><ul><li>- Payroll taxes </li></ul><ul><li>- Benefits </li></ul><ul><li>- Workers’ comp </li></ul><ul><li>- Bonuses </li></ul><ul><li>- Continuing education </li></ul><ul><li>- Uniforms </li></ul><ul><li>What’s not included </li></ul><ul><li>- Owner compensation and benefits </li></ul><ul><li>- Associate’s compensation and benefits </li></ul><ul><ul><li>Personnel </li></ul></ul>
  16. 16. <ul><li>Dental supplies (5-6%) </li></ul><ul><li>Lab expense (7-8%) </li></ul><ul><ul><li>Clinical </li></ul></ul>
  17. 17. <ul><li>% of revenues (10-12%) </li></ul><ul><li>- Rent </li></ul><ul><li>- Utilities </li></ul><ul><li>- Security </li></ul><ul><li>- Repairs and maintenance </li></ul><ul><li>- Office cleaning </li></ul><ul><li>- Liability insurance </li></ul><ul><li>- Equipment rental </li></ul><ul><li>- Real estate/Personal property taxes </li></ul><ul><ul><li>Facility/Equipment Expense </li></ul></ul>
  18. 18. <ul><li>% of revenues (9-11%) </li></ul><ul><li>- Advertising </li></ul><ul><li>- Marketing (3-5%) </li></ul><ul><li>- Professional fees </li></ul><ul><li>- Telephone </li></ul><ul><li>- Office expense </li></ul><ul><li>- Computer supplies </li></ul><ul><li>- Depreciation </li></ul><ul><li>- Credit card charges </li></ul><ul><ul><li>Marketing and Office Expenses </li></ul></ul>
  19. 19. <ul><li>Over all profitability before owner’s and associates compensation (35-45%) </li></ul><ul><li>- Owner’s compensation </li></ul><ul><li>- Associates compensation </li></ul><ul><li>- Pension expense </li></ul><ul><li>- Health insurance </li></ul><ul><li>- Other benefits </li></ul><ul><li>Car </li></ul><ul><li>Education </li></ul><ul><li>Dues and subscription </li></ul><ul><li>Conferences </li></ul><ul><ul><li>Profitability </li></ul></ul>
  20. 20. <ul><li>Average 15-20 new patients a month </li></ul><ul><li>Average case average -$2,500 (total collections for month/new patients) </li></ul><ul><li>- Determines </li></ul><ul><li>The quality of your service </li></ul><ul><li>If referral program is working or not </li></ul><ul><li>If you are marketing properly or not </li></ul><ul><ul><li>New Patients </li></ul></ul>
  21. 21. <ul><li>Various plans </li></ul><ul><li>- Based on </li></ul><ul><li>Production - % of over benchmarked production </li></ul><ul><li>Collection - % of over benchmarked collection </li></ul><ul><li>Incentive on reduced payroll % </li></ul><ul><li>Discretionary - Based on profitability of practice </li></ul><ul><ul><li>Bonus/Incentive Plan </li></ul></ul>
  22. 22. <ul><ul><li>Benchmarks </li></ul></ul>Avg % Avg $ Goal % Goal $ Dentist – Gross Production 74.6% 869,000 74.6% <ul><ul><li>869,000 </li></ul></ul>Hygiene Gross Production 25.40% 296,000 25.40% 296,000 Total 100.00% 1,165,000 100.00% 1,165,000 Net Production 87.60% 1,020,000 87.6% 1,020,000 Collections (98%) 86.00% 1,000,000 89% 1,000,000 Overhead <ul><ul><li>Personnel </li></ul></ul>27% 270,000 24% 240,000 <ul><ul><li>Facility Costs </li></ul></ul>12% 100,000 10% 100,000 <ul><ul><li>Clinical </li></ul></ul>13% 130,000 12% 120,000 <ul><ul><li>Other Costs </li></ul></ul>13% 130,000 12% 120,000 <ul><ul><li>Total Overhead </li></ul></ul>65% 650,000 58% 580,000 Net Profit 35% 350,000 42% 420,000
  23. 23. <ul><li>Review your numbers and compare with benchmark numbers </li></ul><ul><li>Review existing systems (scheduling, marketing, collections, billing etc) to determine whether improvements are necessary </li></ul><ul><li>Analyze your service mix for opportunities to increase revenues </li></ul><ul><li>Determine what practice areas can benefit from the use of advisors </li></ul><ul><ul><li>Develop an Action Plan </li></ul></ul>
  24. 24. Questions
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  26. 26. Thank You

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