7 Important Growth Metrics for an Orthodontic Practice

At least once, every practice owner has looked at the state of the orthodontic industry and thought, "What just happened?" It seems like every few years, the industry undergoes another seismic shift. To start, the market is becoming diluted by anyone and everyone. New orthodontic competitors sprout up while pediatric and general DDS competitors have the best intentions for growth, sometimes this encroaches on the specialists' opportunities. Corporate dentistry now controls approximately 16% of total US practices, and it is projected to grow at approximately 15% annually over the next few years.(1) DIY and doctor-directed orthodontics have also started to take the industry by storm.

Orthodontists who purchase or open new private practices have no choice but to think as strategic business owners. It is essential to spend time and resources obtaining patients, requiring creative thinking and additional spending. For recent grads, this only compounds the reality of having to grapple with higher debt than they have in the past few years.(2)

With many factors outside of one's control, the area to focus when grappling with the question - what just happened? - is what you have control over and knowing what you can do to better arm yourself to navigate the changing dynamics.


How Tracking Metrics Can Help Grow Your Orthodontic Practice

If you feel like the market is passing you by, the problem might be that you don't have the benchmarks you need to see how the orthodontic industry as a whole is performing. Taking it one step further, you might not know where your practice stands next to those benchmarks or your own goals.

To grow your practice, or even simply maintain the financial health of your practice, it's imperative that you track your practice's performance and gain a better understanding of where you stand in the market. Analytics are no longer a nice-to-have.

You have to remain future-oriented and focus on growth metrics or risk getting eaten up by the other players in the market. That means tracking where your business is succeeding, where it can improve, and knowing what the industry standards are.


What Are Some of the Most Important Practice Metrics to Track?


New Patient Adds

What Is It:

The number of patients who call the office inquiring and provide information such as name, address and referral source so you can add them into your system.

Why It's Important:

Every orthodontist knows it's important to get the phone to ring, but we assert that a call from a new patient is really only helpful if you can turn that initial interaction into an exam and then a case start. Using your intake protocol, it's imperative to capture specific, actionable data in their first conversation so that if you aren't able to schedule an exam right away, you at least have enough information to act on as you guide new patients toward scheduling an exam. By the time a patient or family member calls your practice, it's likely they have already done a fair amount of research on your practice.The information you gather from an initial phone call can be an excellent measure of how well your marketing, phone protocol and referrals are working.


New Patient Adds to Exams

What Is It:

The number of patients who have called and scheduled an exam to be seen.

Why It's Important:

When a new patient calls, they may still shopping around for the right practice for them. While marketing and referrals will help get patients to this point, the impact and effectiveness of your intake protocol will take patients over the line to the next step in the process - a scheduled exam. Turning the phone call into an exam and getting patients through the next level of your practice's funnel is critical to your new starts funnel. By measuring New Patient Adds to Exams next to New Patient Adds, you gain insight into how effective your intake protocol is.


Case Acceptance

What Is It:

This is the number of patients who accept and agree to their treatment plans, as a percentage it is number of exams/patients who accepted treatment.

Why It's Important:

Case Acceptance is an extremely valuable growth metric on two fronts. First, we like to see case acceptance of 75% or more. This means out of every 100 prospective patients you spend time bringing into your office to meet with your team, 75 of those say yes to treatment. If your case acceptance conversion is less than 75% that means there is room for improvement in one or more areas above. It could also be related to personnel, office culture, or a number of other factors that are unique to your situation. We know not all patients are going to say yes for another set of reasons that are outside of your control, but by leveraging industry benchmarks and tracking performance, offices should strive to maximize their yield of patients who say yes. Second, Case Acceptance is the single KPI that leads to a patient entering a contract, starting a treatment plan, and enabling you to start receiving revenue through collections.


Treatment Starts

What Is It:

Treatment Starts are the active treatments in your practice. With Gaidge you can see the delineation by treatment type: Phase 1, Phase 2, Full Treatment, Aligner, Limited, or Other.

Why It's Important:

This is the bread and butter of every practice. Treatment Starts represent your flow of production, making it an essential metric for growth, forecasting and benchmarking. Profitability can't start until a steady flow of patients are in the chair and every practice should be tracking this metric to ensure sustainability of the business. Owners should set goals for treatment starts and ensure the entire team works toward achieving the number on a yearly, monthly and even weekly basis. Furthermore, this metric is an excellent tool for forecasting growth in the coming year and identifying which types of treatments may provide greater growth opportunities and/or are contributing most to your bottom-line.


Observation Pool

What Is It:

Patients that you have examined but are not ready for treatment.

Why It's Important:

Industry benchmarks guide us to know that about 20% of exams should move into pre-treatment observation while 20% of starts should come from those patients that have been in pre-treatment observation pool. It's critical to educate your referring dentists and community about the right age kids should begin observation. Most orthodontists suggest around 7 years old for the initial exam. This ensures that you are able to assess each patients' development and also builds a healthy pool to pull from to contribute to your ongoing annual starts from observation. Be sure to have a regular protocol to review and follow up with your obs patients.


Phase 1 - Phase 2 conversion

What Is It:

While not all offices offer phase 1, this metric shows the conversion ratio from a patient who has been treated with phase 1 and moves to phase 2.

Why It's Important:

Phase 1 treatment may be offered to help a child develop while they still have some of their primary teeth. To conduct this treatment the office has already spent the time, energy and resources to bring the patient in and provide a positive experience throughout their phase 1 treatment. It's normal to expect the child will come back when they are ready for phase 2. However, based on the aggregate data housed in Gaidge, the average conversion ratio is only 49%. To ensure a phase 1 patient returns for treatment instead of going to another practice, it's essential to communicate several key points during and at the conclusion of their phase 1 treatment. Communicate why phase 2 is necessary, the value and continuity of returning to see you and an estimate on when patients should expect to return.


Net Production

What Is It:

This indicates your total amount of work available for collection, less adjustments.

Why It's Important:

Net production is an extremely important KPI for measuring the efficiency and profitability of your business. Your gross production informs you of how much work was performed, which is a great goal-setter for increasing revenue or improving efficiency. But net production tells a bigger story. If you're inundated with insurance write-downs, write-offs, discounts, or other adjustments, your net production takes a hit. By evaluating this metric alongside gross numbers, you can see whether you should focus on controlling adjustments.


Net Collection

What Is It:

This metric indicates how much cash is flowing into your practice. It is the measure of income collected from patients, minus any refunds or payments posted in error.

Why It's Important:

Net collections pay the bills. Additionally, this metric alone can tell you a lot about where you might be struggling and where you might be succeeding. Gross collection can inform you on whether your new patient flow needs a boost or not. But net collection can inform you about the overall processes of your practice, your efficiency, and if you're doing everything you can to ensure successful payment processing.


Treatment Efficiency

What Is It:

Treatment Efficiency shows how long you estimated treatment would take, compared to how long treatment actually took.

Why It's Important:

The importance of Treatment Efficiency is twofold. For patients and family members, positive Treatment Efficiency signals a quality job done well as treatment ends when it was estimated. For practice owners and managers, Treatment Efficiency is an important cost metric. Consider chair time like you would a piece of production equipment in a factory. If delays in a patient's treatment leads to your chair time to be occupied longer than forecasted, those delays negatively impact your chair utilization and your production efficiency.


No-Shows and Repairs

What Are They:

These are the number of patients who did not show up to their scheduled appointments, and the patients who are in need of repairs, such as broken brackets.

Why It's Important:

No-Shows and Repairs aren't necessarily factored into your productions; they're contingencies. So when patients end up off track with their treatment plans, either by missing appointments or breaking some part of their appliance, it not only disrupts your schedule, it can derail their progress and your efficiency. By tracking No-Shows and Repairs you have line of sight to trends that may be occurring and actions you can take the manage increases in this area. You may need to explore clinical staff training, patient protocols or your choice of supplies/suppliers/lab products to mitigate the issues you find. Continuing to track this metric on an ongoing basis will tell you if you've implemented the right changes or if there is more to be investigated.



Gaidge Tracks the Most Important Growth Metrics for Your Practice

We have only highlighted a few of the metrics available in Gaidge. Keeping a careful eye on critical metrics isn't easy to begin with, and it becomes increasingly difficult to do so with clunky downloads, spreadsheets and manual entry. For many practices without the right tools and systems in place, tracking the health of their practice is often time-intensive, costly, and sometimes inaccurate. We encourage practices to find the best methods to ensure they are monitoring their performance and health of their practices. Gaidge is a custom-designed program for orthodontists that provides organization and clarity using data science to enhance knowledge for business owners, so they have the confidence to make the best possible moves going forward. Ultimately, Gaidge helps these owners make their practice a better place for patients while improving their own peace of mind and quality of life.

Gaidge offers a cloud-based data analytics solution that fully integrates with your practice management software and automates the tracking of more than 80 metrics important to growing and managing a profitable, efficient practice. Gaidge also leverages the industry's largest, most robust data set to provide users with accurate comparisons and benchmarks against which they can measure their practice.

Ready to run a better business? Contact Gaidge today.




Sources:


(1) ADA Supply of Dentists in the U.S.: 2001-2018.

(2) Orthodontic Marketplace Overview: Trends Affecting Owners and New and Younger Doctors. https://www.aaoinfo.org/system/files/media/documents/Bentson_Orthodontic%20Marketplace%20Overview_0.pdf.

Back to Blog Home