Let’s say your revenues are up over last year. That means you have a growing dental practice, right?

Maybe. Maybe not.

Revenues are one thing, your PRACTICE is another.

If a practice with 1000 active patients raises fees 10%, the practice could indeed outperform last year on a revenue basis but end the year with only 901 active patients. A fee increase only affects revenues, not true practice growth.

How you can know if you’re growing or not?

Go into your practice management software and run a recall report for 10-1-2015 thru 10-1-2016. Count the number of existing patients on your recall report. For example, let’s say the total number of patients overdue on the recall report is 200.

Now, run a new patient report. Warning: Do NOT take your practice management software’s answer for what a real new patient is. Your software has no clue what a new patient is. What you need to do is count the number of new comprehensive exams.

Typically, you would use ADA code 00150 for a comprehensive new patient exam. Run production reports for the code(s) your team uses when you examine a new patient. Run the report for 10-1-2015 thru 10-1-2016. Tally the number of new examinations you did in the last 12 months.

Let’s say the total number of new patients in your practice is also 200.

In our example practice, we have 200 new people coming in and 200 people on the way out. This is your front door and your back door. What do you think would be the net effect on the practice?

Depending on how long this has been going on, at best this is just the start of a future production and revenue plateau. At worst, this has been going on for years creating a mountain of frustration for the owner dentist.

What is a healthy practice?

A healthy practice will show at least a 2:1 ratio. In other words (using our example again), 300 new patients coming through the front door and only 150 existing patients on the overdue recall list. That would mean there was a net gain of 150 additional patients in that year. The future in a practice like this would look much brighter than if the ratio were 1:1 (or worse).

If your numbers aren’t that good, our first advice is don’t panic. Yesterday they were the same and you didn’t know the answer. Now you know the answer. So, today, you are ahead of the game. If your back door is wide open, we would likely refer you to a reputable practice management firm to help you analyze exactly where the problems are and help you and your team get them fixed. That should take care of the back door being opened so wide. Many practice management firms refer clients to us AFTER they’ve taken care of minimizing the attrition. They close the back door – we (NPI) fill the front door.

In general, a solo GP (in an existing practice less than 5 years old) needs about 19 to 22 quality new patients per month to offset the average attrition and continue to grow production and revenues. If you multiply 20 new patients a month times 12 months in a year, you get about 240 quality new patients per year for a GP that works a 32 hour work week. Obviously, if you have 2 full time GP’s in the practice, you need double this amount.

What to do with what you know

Let’s list some example results that may help you understand the cause and effect relationship along with potential action plans. In the examples, we will assume a solo GP working 32 hours per week.

Example #1

240 new patients in and 240 existing patients out

This is a statistically stagnated practice. This practice is not growing. Yet, 240 new patients is a good number for a solo GP. Attention to the back door is needed.

Example #2

150 new patients in and 240 existing patients out

This practice hit a plateau a while back but the owner didn’t know it. Attention needs to be spent on both the front door (attracting more quality new patients) while simultaneously working on the back door.

Example #3

280 new patients in and 150 existing patients out

This practice is growing quite well. This dentist will hit a capacity plateau. But that’s ok. Once a practice hits a capacity plateau, they can either choose to increase capacity (add time, treatment rooms, provider hours), or, put all dental marketing budget into attracting only the highest quality new patients in the area. Even at (or slightly beyond) capacity, a dental practice can continue to grow revenues if the dental marketing plan is effectively bringing in the right kind of patients.

With knowledge comes power. We urge you to know your numbers and then act on that knowledge so you can know for sure that you have a growing dental practice.