One of the things that orthodontists constantly ask one another is “What key performance indicators are most important?”This question is only slightly less popular than “What’s the one thing…?” and both have very simple answers. Of course everyone has an opinion on the matter and mine is just one but I’ve been asked to share so here goes.
Top three KPI for orthodontic practices:
- Starts
- Starts
- Starts
Seriously. It’s that simple. There are a couple more we can discuss if you’d like:
4. Bank account getting bigger or bank account getting smaller?
5, How much money you net after taxes divided by how many hours a year you work.
That’s about it… Since I know that’s not enough for a proper article I guess we can discuss the why of our way of thinking and also why we think the other more traditional KPIs are pretty worthless and even counterproductive.
Leads – leads are great and necessary in as much as they lead to starts. Leads are also the only thing you can reasonably expect to get from your marketing people/service. Expecting your marketing people to be responsible for starts is nonsensical. You MUST follow up on the leads you get in a timely, efficient and courteous manner and follow up with every staff member at every step of the process to make sure they are doing their jobs well to get the most starts possible out of the leads you are given. What’s that percentage? Who knows and who cares? Starts are all that matter and all you can do is do your part of the process to the best of your ability every day to get and many starts as possible.
Conversion rate – the conversion rate is of zero value in and of itself. It is only useful in knowing roughly how many leads will become appointments, how many appointments will show up, how many patients who show up will be ready for treatment and finally how many who are ready and recommended treatment will start. The only thing this info is good for is to know roughly how many leads one needs to get to the desired number of starts per day/week/month/year. To focus on conversion rate or try to artificially influence it outside of doing the best possible job for every lead/call/visitor every day is an exercise in futility that can actually reduce your number of starts. Don’t believe me? Where do you think rating NPs A B or C and other forms of prescreening/prequalifing new patients came from? Do you not see how this could reduce your number of starts while increasing your chosen method of calculating conversion rate?? If you want to measure conversion rate to look for variations from the norm that can be useful I suppose. If you have an ungodly complicated fee plan and new patient process that requires you to have overpaid and over incentivized TCs then you’ll probably need conversion rate to know how much they will take you for (ahem, I mean how much bonus they will earn). I guess that’s a good reason for measuring conversion rate. But honestly in that case it’s just artifact from your convoluted NP process not a useful KPI.
Collection percentage – more is almost always better but not always. You will never collect 100 percent, there will always be leakage and people who don’t pay and all you can do is do your best every day and make sure your staff does the same. If you go too crazy on collections it will negatively impact your business. If you are too sloppy, it will cost you money. At the end of the day we want the business to do as well as possible with the happiest possible customer base while making the most profit after taxes per hour worked. The percentage is useful to see change over time but trying to artificially improve this stat is bad for business. There are too many ways that practice “accounting” can be “managed” so that you can tell everyone you “collect 99 percent” to cover here but you know what I’m on about. If not, you’re fooling yourself.
Lab, appliance, bracket, supply costs – if you’re not using the least expensive, most efficient technique you can find then there is no sense tracking this. Most people choose to use things that cost more than necessary and that is fine but it’s not useful to track how bad at efficiency we are. If you want to spend the least you can on this while delivering “quality results” then go find someone who is doing that and copy them. That’s what we did for years and still do today. Why wouldn’t you? If someone else is already doing it then it’s probably possible. If it can be done without in house printers for much less then why not do that? If you don’t have to pay thousands for aligners then why do that? If a bracket that costs a few cents works as well as an expansive one why not use it – especially since “precision” doesn’t matter when you never fill the slot?!?! And on and on and on…
There are literally dozens more “vital KPIs” that we orthodontists think are important but that may not be. You get the point. Oh and to answer the question about “what’s the one thing?”
THERE IS NOT ANY ONE THING!!
There are also lots of things you need to track in your office that aren’t KPIs but are important. Bridget will share the sheet she looks at daily/weekly/monthly in a future post. We have shared this and many things we look at and track in older posts on OrthoPundit as well. All 600+ articles are open to the public now so have a look – you can laugh at my mistakes and enjoy the tips that work from me and others. I recently went through the old posts when I made it all free and it was like going back in time. Change is good and change is the only constant. Happy Holidays to you and yours!