Most people think running a dental practice is an easy way to earn a profit. What they don’t know is how managing one can be such a huge challenge. It’s a high investment business, considering you have to finish a degree and buy expensive equipment. Of course, the general opinion is that the craft is worth the investment. But in reality, the investment is only worth it if you manage the practice right.
Good management of a dental practice begins with knowing which figures you have to keep track of. These bits of data, after all, dictate whether or not your business is doing well. Here are three key statistics you have to closely monitor:
Accounts Receivable
Over-the-counter collections are important, but so are the amounts in the patients’ accounts. It’s now common practice for patients to have outstanding balances in their respective dentists. Now, if you don’t keep a close eye on this figure, you might experience a problem with your cash flow. You have to factor in the management side of the practice – and that includes monitoring this key figure.
Insurance Reimbursements
How much do you get per treatment in terms of insurance reimbursements? This is a number you have to be aware of. In many cases, dentists tend to make do with not-so-impressive insurance rates, only for their practices to go through different fiscal dilemmas. What you should do here is monitor how much you receive in every treatment and conduct dental fee negotiations with PPO providers. If you don’t know how to do that, there are professionals who can help you with that.
Net New Patients
The higher the number of new patients, the better for the practice – this is the erroneous mentality many dentists have. Yes, it’s important to attract new names to the clinic, but the number of patients who return for further treatment holds more value. There is not much growth in your cash flow when you only a few of your patients come back.
Running a dental practice is not as easy as other people make it seem. If you want your practice to stay afloat amid a competitive industry, you have to know your numbers – starting with these three.