Opinion A


lot of time in my musings I focus on the “soft” stuff, which is simply designed to get you thinking. I get nice emails a lot of the time that


lets me know that I have set some of you thinking – which is, after all, my goal. Today I have decided, as a result of my


own 60-month plan, to give you a much more “hard” skill exposure: this is to introduce the concept of Key Performance Indicators (KPIs) to those of you who are not using them already. I encounter many practices that have


no idea how they are doing and refer to their historical accounts for information, which is sometimes years out of date. A KPI is something tangible and measurable that shows instantly how effectively the practice is achieving key business objec- tives. Note the emphasis on the word “key”, which should be interpreted as very important or KEY! There are countless pundits who do


not actually run practices who talk about KPIs and I have seen articles where there is reference to up to 21 KPIs. If there are really 21, then they can’t all be key, can they? I look at five only and I rank them in a very specific order. I keep it really simple as that seems to work for me and my teams. Looking at KPIs in a practice is like


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Column


with Dr John Barry


Are you tracking your performance?


checking the health of the practice. If you were checking medical health you would pick vital signs such as blood pressure, body mass index, various blood tests, allergens, etc. Some health checks, you will notice, have 21 tests or more. We keep patient trackers in every


practice and this tells clearly the number of enquiries, where they came from and when they convert to new patients. New patients equal life, no new patients means the death of a practice. I have worked out, after almost 30 years in practice, that for a private practice to prosper, a dentist needs approximately 700 regular patients on the list and an average of 12 new patients per month to inject new treatment plans and to replace departing patients. This is surely not a difficult task. If you


want to grow bigger and get associates, you need to enhance these numbers. So KPI one is patient numbers. Know them. KPI two is monthly average revenue


actually taken in (not billed out). Make your target and if you are not reaching it, change things and fast. KPI three is really important. I have a


target of 95 per cent of our money taken in at the time of the appointment or before. I don’t want bad debt and this is avoided by clear estimates, care co-ordinators dealing


with the money in advance and signed policies on paying for treatment. KPI four is failed appointments. We measure this. If it’s greater than 5 per cent you have a problem because patients are not valuing you. I like to see it down at zero per cent and we get it there a lot by being clear on appointment times, the value of the appointment and contacting every patient the day before and also having a failed appointment policy signed by all patients. KPI five is staff wage costs as a


percentage of gross revenue (not turn- over). I am only interested in what is in the pot, not what we have to retrieve. I see practices with tens of thousands of “debt” which is very hard to get back. After all, the value of a service is often greatly diminished after it has been performed. We set our target at 22 per cent of revenue in. In conclusion, if you are not measuring, you are not in touch.


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