Most healthcare practices acknowledge the importance of tracking certain metrics that contribute to their business growth. While there are several ways to measure business growth, we will focus on 6 distinct metrics that help you establish a baseline for key performance indicators (KPIs) at your dental, chiropractic, physical therapy, or other private practice.
Inquiries: These include all new inquiries you receive from prospective patients. They may correspond via email, phone, or even social media. Identifying how many new inquiries you are getting per month is the first step in measuring the potential for success at your practice. Distribute a counting sheet for everyone answering the phone. Its a great way to make sure all incoming calls are monitored for new inquiries. Aggregate the number of new inquiries from email / social media to arrive at a specific numerical of new inquiries per month. When you communicate with the prospective patient, ask them how they heard about the practice…
First consultations: When a prospective patient advances to the next step, which would likely be an initial consultation or assessment at your practice, you can consider this to be the conversion rate from your number of initial inquiries. If you want to get even more granular, you can calculate the number of prospective patients that schedule an appointment and the number of patients that physically show up for their appointment. If you’re reminding your patients of their appointments and confirming them between 24 and 48 hours in advance, there should be no ‘no-shows’.
Treatment bookings: Once a prospective patient has been seen for their initial consultation and goes on to book their next visit where they will receive treatment, you can consider this to be a sale or a “converted patient.” With this information you can calculate the “close rate” by looking at the number of initial consultations that lead to confirmed treatment bookings. Without the knowledge of your initial inquiries converted to initial consultations, and these initial consultations turning into confirmed treatment bookings, there will be no baseline to measure how effectively you are growing your healthcare practice. By finding out the source of a patient’s inquiry, you will be able to backwards induce the effectiveness of your marketing campaigns to see which ones are yielding the best value.
Procedures: Most healthcare practices have more than one procedure for each patient. It is certainly useful to keep track of your most popular treatment procedures as well as any combination of different procedures that patients are likely to adopt. Watch out for any trends that you can identify over time such as patients opting in for more procedures after X number visits after their initial consultation, or a certain combination of procedures is more appealing to patients when bundled together at a discount.
Average price: While it is possible that a certain procedure performed on different individuals was not priced exactly the same, it is definitely recommended to establish an average price of each procedure offered at your practice. This helps you determine which procedures might work better for patients that could be highly price sensitive. Keep in mind that price sensitivity goes both ways as there is a perception of value. If you are a dentist charging $800 for a porcelain veneer and the super high-end dentist across the street is charging $2500, the patient will probably correspond the lower price to lower value.
Average margin: Each procedure performed at your practice has components of fixed and variable costs. Consider allocating your fixed costs to all procedures equally and adding their respective variable components to establish an average total cost for each procedure. When you subtract this average total cost from the average price of each procedure, you will arrive at the average margin for each specific procedure. You can then assess which services at your practice add the most value to your bottom line.
Many healthcare practices benchmark their success rate with more elaborate and comprehensive KPIs. The 6 measures listed here are by no means an exhaustive list of growth indicators but they serve as a great starting point as these useful insights are not likely to be found in a profit statement or balance sheet that is prepared by your accountant.
Contact us at Connect the Doc to learn about measuring your business growth through the power of patient referrals and online reviews!