All things being equal, all orthodontists KNOW the following to be true:
- A higher conversion rate is better than a lower one.
- A higher collection rate is better than a lower one.
- A lower no-show rate is better than a high one.
Unfortunately what we know is wrong. All things are not equal. Especially in the way we mean it when we speak of these things. You can only focus on so many things and what you choose to focus on has major, untoward impact on everything in your office – often with devastating effect. Allow me to clarify:
- If you focus on having a high conversion rate (say 90 percent is your goal as this seems to be a common number I hear) then you will do things to improve this metric that are likely bad for your practice. Things like screening new patient phone calls to make sure the caller is “serious”, categorizing new patients into quality leads or low quality leads, judging people based on where they live, how they talk, how they look, etc. or even not counting certain types of “those people” when you figure your conversion rate because “they don’t really count”. All of these things sound reasonable to someone focused on improving conversion rate and they may even be effective in doing so but they also run off people who would pay you for braces if you didn’t exclude, offend or ignore them.
- If you focus on having a 98 or 99 percent collection rate you will do things that make obtaining this metric more likely. Things like demanding a higher down payment, shortening the time you’ll finance treatment, keeping patients in braces until they finish paying, running credit checks, judging people by where they live, how they look or other random traits and raising the down payment as you see fit as a result of your assessment. All of these things will likely raise your collection percentage but it will also run off people who would pay you if not for the artificial barriers you construct in the name of a higher collection percentage. Most of these things are dumb at best and unethical at worst (i.e. financial wires and prejudging individuals based on group affiliation – AKA prejudice). All of them will cost your business money. The biggest, most profitable practices I know of generally have collection percentages in the 95-96 percent range. They don’t brag about their collection percentage (they generally don’t brag at all) but if they were to brag it would be about serving hundreds more patients a year and collecting millions more dollars than the tiny practices that brag about their 99 percent collection rate.
- Of course we would all love for our patients to show up on time, every time but in the modern world this is unrealistic. When you take actions to try and limit no-shows then you may accomplish that but you will also run off people who would pay you if you didn’t piss them off or exclude them. Things like banning new patients from the practice after a couple no shows, requiring a credit card before making an appointment, charging for new patient visits/records and the like are practice killers championed by consultants/gurus as ways to make sure patients value your precious time. By the way, your time is not valuable, it costs you money if you’re not starting patients.
I know what I say here won’t make sense to some, will offend many and will be ridiculed by most but I suspect those doctors who produce in excess of 4 million per provider know exactly what I’m talking about. The hope is those who want to learn to produce like that will take the time to understand what I’m saying and ask questions if it’s not clear.