Running a successful dental practice requires balancing the incredibly complex and varied segments of the business.
The clinic is the driving force of any dental practice. The practice requires managing patient services, such as hygiene and restorative treatments, while maintaining the supplies and equipment that keep the practice running day-to-day.
Once patients enter a practice, the front office must then provide support, schedule appointments, collect money due and coordinate with insurance providers, while also generating timely reports and finding time to conduct any marketing a practice needs.
Finally, a dental practice is still a business, which means keeping a collective eye on overhead, profitability, fees and how to better optimize key components of the practice going forward.
In order to gauge the success of a dental practice, dentists need a system in place that allows them to determine whether these three aspects of the business are working as efficiently and productively as possible. Failing to accurately judge a practice’s strengths from its weaknesses can make achieving profitability a struggle. Considering the current state of the dental industry, underachieving single-provider dental practices may find it difficult to succeed financially.
Dental Practice Income on the Decline
Dentists’ income has seen a consistent drop since 2005, according to a new study from the American Dental Association’s Health Policy Resources Center (HPRC). The HPRC’s study found that the primary reason behind this significant decline was a drop in dental visits. Simply put, patients have been going to the dentist less frequently, a trend the HPRC notes that started back in 2003, predating the economic downturn associated with the country’s latest recession.
As part of the study, the researchers examined the average net income levels of independent practitioners between 1981 and 2009. Using data collected from the ADA’s annual Survey of Dental Practices, which polls a random sample nationally of between 4,000 to 7,000 private practice dentists, the HPRC found that income levels had dropped by 11.5 percent from 2005 to 2009.
Not surprisingly, a decrease in patient appointments has left many dentists feeling less optimistic about the future of dentistry than before. A recent Dentists’ Economic Confidence Survey conducted by the ADA found most dentists were pessimistic about the overall economic conditions relating to their dental practices.
According to the survey, approximately 46 percent of dentists indicated a negative feeling today about the financial state of their practice, and that 40 percent indicated negative feelings about what economic conditions would be like six months in the future. Overall, a prevailing feeling has overtaken many private dental practice owners that suggests little optimism for immediate financial improvement.
Dental Practices Data Analytics and Business Intelligence
A variety of industries have turned to data analytics and business intelligence solutions to provide a detailed understanding of a company’s internal data using tools and techniques like data mining, performance monitoring, reporting and benchmarking to improve decision making, increase profitability and to identify new avenues of business.
The healthcare industry in the U.S. ranks as a recent leader in adopting data analytics as a means of improving clinical quality, reducing costs and improving day-to-day effectiveness of running a practice.
The dental practice management software tools developed by Practice Analytics were inspired from the concept that data tells a story. Where data exists, there’s usually untapped information waiting to be discovered and utilized.
Most dental practices that use a practice management system have no shortage of undiscovered data that could be better utilized and leveraged. Unfortunately, finding that data usually means combing through far too many reports with no clear direction on what to look for.
At Practice Analytics, our online dental practice management software tools streamline the information found deep inside a practice to uncover data that can help dentists better manage their businesses. Our software was developed to break down a dental practice using simple tools that focus on highlighting the three key components of the business: the clinic, the front office and the business itself.
The Clinical Module
The Clinical Module of our dental office software solution focuses on what remains the core of every practice – treatment and appointments. This is an area where a dentist and his or her staff can really drive production and help improve and grow the business. In order to do that, a close understanding is needed of how effectively and efficiently the dental clinic is running.
The clinic can be separated into two key programs: restorative and hygiene. Management of these two programs needs to be measured and kept separately from one another. A practice’s restorative program should focus on production drivers, such as case acceptance and productivity, while the hygiene program becomes a driving force behind the restorative program and the most sustainable aspect of the practice.
Using our online Clinical Module, staff can track key performance indicators that help drive the clinical side of the business using a simple and easy-to-use dashboard. Our dental software tools allow both doctors and staff to actively manage and improve performance by identifying the patients behind their own performance.
For example, restorative utilization – the percentage of time a practice’s restorative chairs are in use – has many driving factors. Treatment scheduling, total number of procedures offered, and case acceptance all factor in how frequently each chair is used. Each of those driving factors has a targetable list of patients that tie into chair utilization. The Clinical Module software has a positive impact on production by identifying those patients that will increase the amount of time the restorative chairs are in use.
The Front Office Module
While the Clinical Module helps to increase production, the Front Office Module of our dental practice management software tackles the administration side of the business by focusing on three strategic areas: scheduling, collections and insurance, and patients.
Most practice management systems on the market today can assist dental office managers and staff with patient scheduling. Unfortunately, they don’t offer much assistance managing how or where to schedule patients. Multiple reports are required just to track down patients that need to be scheduled. The Front Office Module assists office staff with identifying patients who need to be scheduled depending on the need in the practice. Most importantly, Practice Analytics’ software can help identify patients that are more likely to schedule, which reduces the amount of time staff needs to spend calling patients to fill appointments.
So while production remains paramount in importance, the ability to collect fees is still a vital part of any practice’s success. Monitoring collections and targeting specific patients through the Front Office Module will enable staff to collect on fees and strengthen the practice. The module recognizes opportunities by optimizing insurance benefits and by tracking income channel performance.
Finally, in order for a practice to remain stable and expand, patient flow must continue to grow. New patients rank as the biggest source of production. The Front Office Module will help managers and staff better understand where new patients are coming from. Understanding the production of new patients will clarify marketing effectiveness and focus marketing channels on areas of growth and opportunity.
The Business Module
The Business Module further expands on both the Front Office and Clinical Modules to pull together the data hidden deep in the practice management systems of most dental offices.
Considering the advanced and complex nature of the dentistry industry, practice owners need analysis that delves beyond just what happens in the clinic or behind the front desk. Our Business Module offers flexibility and a detailed approach formanaging the little details that help that the big picture components of a practice thrive.
Custom reporting provides an integrated approach to managing the protocols and processes each office operates under, while audit analysis can help identify lost opportunities for production from staff, as well as find mistakes with insurance and collections that can easily improve a practice’s profitability.
Profitability analysis leverages financial information from tools like Quickbooks to identify overall profitability, but more importantly, procedural profitability. Some procedures carry incremental costs above and beyond regular expenses. Understanding those opportunities can yield additional profit throughout the practice.
The data analytics and business intelligence solutions that utilize the three main modules of the Practice Analytics dental practice management software provide invaluable advice and insights regarding clinic performance, reporting, tools and techniques to use for business analytics and benchmarking, all from a convenient and easy to use dashboard control.
These types of business intelligence solutions can greatly improve a practice’s business by focusing on areas such as fee optimization, minimizing no-shows, and, most importantly, patient retention and recall rates.