End-of-Year KPIs: What They Mean and How to Use Them

As the year comes to a close, it’s an ideal time to take a deep dive into your Key Performance Indicators (KPIs) to evaluate your practice’s health and plan for the future. KPIs are measurable values that reflect how effectively your practice is achieving its goals. From production and collection metrics to case acceptance and efficiency measures, these numbers provide a clear picture of what’s working and where there’s room for improvement.

What Are KPIs, and Why Are They Important?

KPIs are essential metrics that help you monitor and manage your practice’s performance. They give you actionable insights into growth, efficiency, and financial stability. While many practice management systems (PMS) can generate these metrics, you can also use a third-party platform like Gaidge to pull KPIs directly from your PMS for more comprehensive reporting and analysis.

Key Growth Metrics to Monitor

1. Net Production vs. Net Collection

This metric evaluates how well your production translates into collected revenue, highlighting growth opportunities. Gaidge recommends a 5-20% difference between Net Production and Net Collection, provided that your collection percentage exceeds 95%. Falling within this range typically reflects a growing practice where contracts outpace collections, indicating expanding patient commitments. Monitoring this metric helps ensure steady collections while maintaining healthy growth through new contracts.

2. Gross vs. Net Production

This metric measures the impact of discounts and write-offs, referred to as Production Adjustments. Gaidge recommends keeping Production Adjustments below 7% of Gross Production. There are two main types of adjustments:

• Insurance write-offs: Some practices choose to be "in network" with certain insurance carriers, especially in areas where a large employer provides specific coverage. While this can attract more patients due to lower fee schedules, it's important to weigh the actual benefit against potential drawbacks. Lower contracted fees might not always translate into a net benefit for your practice.

• Patient discounts: Offering discounts directly to patients can often be perceived as a better benefit than being "in network." This approach allows you to control the narrative of the conversation with potential patients, focusing on the value you provide rather than being limited by insurance constraints. Leaning into discounting strategically can enhance the perceived value of your services while maintaining profitability.

3. Accounts Receivable (AR)

For orthodontic practices, AR growth is unique because it often signals a positive trend. Given the nature of how orthodontic offices collect payments through time-based contracts, outstanding AR reflects ongoing patient commitments. Growth in AR is generally a sign of practice expansion, as it indicates more contracts coming in than payments completed. As long as a practice has a healthy collection process in place, AR growth is a strong indicator of overall practice growth and financial health.

Efficiency Metrics to Consider

1. Production per Doctor Hour or Staff Hour

Efficient use of time directly impacts profitability. Targets include:

• Greater than $1,850 per Doctor Hour

• Greater than $175 per Staff Hour

Referencing doctor and staff hours can help you determine scheduling efficiency and identify areas of optimization. In orthodontic practices, less-than-ideal targets might reveal opportunities to consolidate office days, thereby lowering overhead costs. Additionally, these metrics can inform staffing adjustments—whether increasing team capacity to manage higher demand or reducing it to align with current needs. Tracking these figures also plays a critical role in assessing readiness for associateship expansion, ensuring that growth is supported by both efficiency and demand.

2. Repair Visits

Non-productive repair visits consume valuable chair and staff time. Understanding the nature of these visits can help refine systems and materials, reducing their frequency.

Repair visit data can be critical for modifying clinical systems such as bonding braces, attachment placement, appliance seating, laboratory communication, timing of appointment intervals, materials selection, and clinical technique. For example, if a trend of recurring repairs is identified with a specific appliance, this insight could lead to a review of the material or technique used for placement. Similarly, frequent attachment issues might suggest the need to adjust bonding protocols or patient instructions. By analyzing repair data, practices can make targeted improvements that enhance clinical outcomes and create a smoother patient experience. It should be seen as valuable information that offers an opportunity to improve both clinical outcomes and the patient experience.

3. Patients Beyond Estimated Completion Date (ECD)

Patients extending beyond their estimated treatment time negatively affect efficiency and satisfaction. Gaidge recommends keeping this number below 10% of active patients.

Patients Beyond Estimated Completion Date (ECD) require a thorough inspection of several factors. Addressing these factors can lead to measurable improvements in both efficiency and patient satisfaction. For instance, refining treatment planning estimations can result in more accurate timelines, which improves trust and transparency with patients. Enhancing patient compliance programs can reduce delays caused by missed appointments or improper appliance usage, while optimizing scheduling efficiency ensures that patients are seen promptly. Additionally, improving treatment mechanics can streamline procedures, reducing overall treatment time and contributing to a more positive patient experience. Each of these areas plays a vital role in achieving better outcomes and maintaining a high standard of care.

Case Acceptance Metrics

1. Case Acceptance Rate

Case acceptance is the foundation of growth. It is calculated as the number of treatment starts divided by the number of exams seen. Refine this further by excluding exams where treatment wasn’t recommended, ensuring you focus only on cases with active recommendations.

A high case acceptance rate reflects your ability to convert exams into active treatments, which directly impacts practice growth. Gaidge recommends a target range of 70-80%. To achieve this, it is crucial to refine your approach to the new patient process. This includes leveraging your team—Scheduling Coordinators (SC), Records Technicians (RT), and Treatment Coordinators (TC)—to pre-frame expectations, communicate clearly, and emphasize the unique value of your practice. Cutting-edge technology like Dental Monitoring (DM) should be highlighted as a differentiator, along with flexible scheduling options and tailored treatment plans. By building trust and creating a seamless, value-driven process, you can significantly enhance case acceptance rates while reinforcing your practice’s growth.

2. Starts from Observation or Between Phases

Patients in this category already know your practice and should have higher case acceptance rates. Gaidge suggests that 25% of your starts each month should come from this pool. This KPI emphasizes the importance of maintaining a robust observation management program to keep these patients engaged and returning for treatment. Regular updates through educational content or reminders are essential, but leveraging technology like Dental Monitoring (DM) takes this a step further. DM can monitor key factors such as Phase 1 retainer fit or deciduous tooth loss remotely, reducing the need for in-office visits while maintaining patient connection and care quality. Additionally, implementing re-engagement marketing campaigns can help incentivize these patients to return for treatment. All these efforts should aim to create a positive and seamless patient experience, fostering loyalty and ensuring that these patients are ready to move forward when the time is right.

Financial Metrics to Evaluate

Value Per Visit

Value per visit is a critical financial metric that highlights the efficiency and revenue generated per patient appointment. Breaking this down by treatment type can uncover inefficiencies that may otherwise go unnoticed. The industry target is $310 per visit, and achieving this goal requires a balance of clinical excellence and operational efficiency.

Using tools like Dental Monitoring (DM) can drastically reduce the number of in-office visits required, allowing patients to stay engaged in their treatment while optimizing your clinic’s resources. DM tracks patient progress remotely, ensuring that both patients and clinicians save time without sacrificing care quality. Additionally, efficient treatment mechanics, such as digital setups and advanced orthodontic technologies, can streamline workflows and boost overall productivity. Combining these efforts with patient education about the value of fewer, more efficient visits ensures alignment with expectations, leading to improved outcomes and reinforcing the perceived value of your practice.

Annual Review: Refining for Growth

As you conduct your year-end KPI review, focus on actionable insights that can lead to measurable improvements in the year ahead. Whether it’s optimizing your New Patient Process, adjusting fees, or refining clinical efficiency, understanding your KPIs is the first step to evolving your practice. With platforms like Gaidge, you can dive deeper into these metrics and make data-driven decisions that drive sustainable growth.