See far into the numbers to manage patients and maximize profitability – By Vijay Sikka
WHAT ARE “SEE FAR” PRINCIPLES?
The two major influencers on survival in today’s retail healthcare environment are:
- 1) How to manage to attract and retain patients
- 2) How to refine processes to maximize profitability
With over 28,000 dental practice installations and over 7,000 more across animal health, optometry, chiropractic and others, Sikka has been studying how to achieve proficiency in both of the above-mentioned influencers for many years. We have summarized our insights into six points that we refer to as “SEE FAR” principles:
1. STREAMLINE YOUR CONNECTIONS WITH YOUR PATIENTS
From the time a patient calls your office – or even earlier, when they see your ad or look you up on a search page or hear about you from a friend – you have started communicating with them. You should manage and improve this connection through what we call “meaningful interaction.”
Meaningful interaction is not just about scheduling an appointment. It goes into reviewing treatment plans, statements, insurance claim payments and balances, and viewing their health history or x-rays online. Let’s face it, how many of your customers want to do this using Facebook? Would you be willing to put your confidential information on a social network? My answer, if you haven’t guessed it, is a forceful NO!
So when it comes to maybe scheduling an appointment, they may send a request using a social network or a patient communication application and maybe they will click on your advertisement, but when it comes to meaningfully being connected to you, the best solution is a patient portal like the one provided by sikkasoft.com/PatientHomePage. This service seamlessly integrates with your practice management system and securely connects your patients to you. What do you have to do to maintain this connection? Nothing, really!! Since the connection with your practice management system is automatic, you just control with one click what information should be visible to them and the rest is done for you. Research studies by Athenahealth and others have indicated that, on average, an office may end up saving over $2,800 per month by harnessing patient portal capabilities.
2. ENHANCE YOUR PATIENT LOYALTY
Why does a patient leave your practice? There are 3 major reasons a patient leaves your practice and doesn’t come back.
- They have passed away.
- They have moved.
- They were not happy with the last visit they had in your office.
Maybe it was an interaction with your team member or the environment or something related to billing. A fourth reason is that the insurance company changed and you are not a registered provider of that insurance company. However, this is a smaller reason. You could also use tools that reward your patients for continuing to visit your practice for their periodic exam or hygiene appointments. Enhancing patient loyalty is a very detailed topic and we are happy to provide you with tools and more information if you are interested.
3. EMPOWER YOUR TEAM WITH INFORMATION TOOLS TO IMPROVE SERVICE
Through the use of technology and effective tools, including your practice management system or Practice Optimizer® by Sikka, start managing by numbers and give control to your team members so they can help you improve your customer service and profitability. Effective control mechanisms include morning meetings and profit/loss tracking, along with utilizing clinical and business dashboards and benchmarks. You also should know how other dentists in your peer group are handling their business and their clinical standard of care. What if you had all this information available to you in realtime?
Visit sikkasoft.com to get free realtime benchmarking results.
4. FOCUS ON PROFITABILITY WITH YOUR PATIENTS
Get a zip code-level comparison metric for other dentists in your area. Remember, it is your profitability that has to be maximized – not your fees. So it is not about putting your fees to the 95th percentile or adding fixed dollars to your fees. It is about understanding how your fees are contributing to your profitability. If you just take a raw graph of how much production you have for each procedure, you are looking at only a partial picture. Sikka offers fee schedules for over 42,000 zip codes at the following site: sikkasoft.com/FeeSurveyforDentistry. Furthermore, the pandemic of 2020 has changed everything, not least of all fee schedules. This has a “domino effect” on profitability, in turn, so we highly recommend that our dentist customers and team members update their fees without delay.
5. ACCELERATE RETURN ON INVESTMENT IN PEOPLE, PRODUCTS & PROCESS
Return on Investment (ROI) is one of the most exploited phrases in the dental industry today. Let me first share the definition of ROI. This is from my 2005 book “Maximizing ROI on Software Development,” available on Amazon and other retailers and as a Kindle eBook. ROI is the (production – cost) / cost x 100. ROI is measured in percentage and should be applied to procedures, marketing and forecasting calculations. Let’s take an example: if you run a Google Ads campaign, whenever a patient comes to your practice as a result of that campaign, you should make sure that your team members enter that information into the practice management system as “referred by.” Also make sure that you record the cost of the campaign into your financial system such as Quickbooks or Simply Accounting or Peachtree, etc. Next you can use a tool such as Practice Optimizer® to give you an actual ROI based on dynamic time periods and any range vis-à-vis production and costs.
This powerful analysis can uncover good marketing vehicles for your practice and also help your team improve their tracking.
6. REDUCE COST OF DOING BUSINESS THROUGH BETTER BENCHMARKING
Clinical benchmarking and business benchmarking are essential tools for dentists and teams who usually work in isolation and do not have comparisons available to help them improve performance. Reducing costs using better benchmarking is possible by identifying areas of improvement and opportunity. As an example, if your hygienist is paid based on a ratio of production or collection that is great, but if he is paid fixed salary based on an 8 hour day, you could benchmark him with his peer group and see where he is tracking on production. If he is at 25% of his peer group on production, then you should discuss this with him as an improvement and cost-reduction area.
Let’s look at some clinical and business benchmarking trends for the full years of 2020 and 2019. Comprehensive exams to new patients (expressed as a percentage) was trending downwards in December of 2020. Considering the hard drop in March of 2020 due to practices being closed for a six-week period, it is a blessing that the industry has recovered very nicely. Hygiene reappointments had dropped sharply in October and November of 2020 but recovered in December 2020. That is another silver lining in the future schedule and production opportunities for dental practices.