Practice by Numbers
Painting a beautiful bottom line requires staying within the lines.
by
Linda W. Drevenstedt, MS and David Martin Reznik, DDS
If you’re not keeping score,
you’re just practicing.
- Coach Vince Lombardi
I. Production
Crowns-or-better scheduling analysis (>50% of doctor production)
Production per appointment/pt (Dr + Hyg ÷ # appts. >$575/per)
Production per hour/ea (Doctor >$465/hr; Hygiene >$150/hr)
Case acceptance percentage (>80%)
Schedule to goal percentage (103-105%)
Appointment failures/defects (<7%; Target = 0)
Critical Mass (1500 – 1800 patients per doctor)
Hygiene
Active to recare ratio (>80%)
Hygiene to practice ratio (>30%; pedo>50%)
Perio to practice ratio (>10%)
Perio to hygiene ratio (25 – 35%)
1/3, 1/3, 1/3 (The mix: Prevention/Perio/Adjunct)
1/3, 1/3, 1/3 (The division: Practice/Production/Payout)
II. Collections
Production to collection percentage (FFS: >98.5%; contracts: 100%)
OTC Collections (FFS>45%; 100% on contracts)
Adjustments to total production (<2.5%)
Total AR to average monthly production (0.9 to 1.2)
90-day accounts to total AR percentage (<15%)
Insurance claims pending report (None over 90 days)
“Contract” co-payments receivable aging (None ever!)
III. Overhead
The Big Four
1. Personnel (24 – 32%)
2. Production (10 – 16%)
Lab (8 – 10%)
Remakes (Total cases: 2 – 3%)
Supplies (5 – 6%)
3. Facility (4 – 10%)
4. Gen/Admin (4 – 12%)
Marketing (Internal 2-3%; External 5-7%)
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IV. Leadership
Team balance ratio [DiSC®] ( 1:1:1:1)
“Active” facility/chair utilization (55-65%)
New patients per doctor ratio (20 – 28/mo)
“Cosmetic” procedures to total production (>25%)
Annual “active patients” to NP ratio (6:1)
Expanded duty capacity to doctor efficiency (>50%)
Practice improvements/technology (3 – 5%)
Practice value to wealth estimates ($0 - - - yes, $0!)
Prudent reserves (4 weeks cash plus 90 days open line of credit)
Debt service to production (Youthful: 12 – 15%; Mature: 4 – 6%)
What we measure matters, what matters changes.
- Raymond (Rick) Willeford, MBA, CPA/CFA
* We would like to acknowledge our friend Raymond (Rick) Willeford, MBA, CPA/CFP, for his assistance
and contribution to Practice By Numbers
2534 Britannia Rd, Sarasota, Florida 34231
404-245-6916, [email protected], www.davidmreznik.com
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