Murphy's Law: Missed Opportunity Costing You Big Bucks
Murphy's Law: Missed Opportunity Costing You Big Bucks
I hear from many dental laboratories and dentists about the current economy and its effect on their business. In times like these we begin to react to the changing circumstances because we start to feel the pain. We then strive to correct things that were already broken but caused no pain. Let me explain.
Most dental practices are losing more patients than they realize by not measuring, monitoring and managing their hygiene retention rates. If a practice had all of their current active patients in twice annually for re-care visits (I know some are scheduled quarterly and a few annually) and saw 20 new patients per month, they should be adding hours (maybe days) to their dental hygienists schedule every year. But very few are. The gap between what is for them and what is possible often amounts to more than $100,000 annually in lost hygiene revenue. That may seem large (trust me, it is a very conservative estimate see calculator below), but it is only part of the loss.
Dental practices have between 25 percent and 33 percent of their revenue in hygiene activity. That means that between two and three times more revenue is also lost in the practice by not having the opportunity to do the restorative dentistry in their hygiene patients mouths. That means an additional $200,000 to $300,000 is also missing from their profit and loss. This is a huge gap that can easily be closed.
When I work with the practices for the laboratories I consult with, or when Mercer Advisors steps in and does a full scale consulting service, they always look at the hygiene retention.
Hygiene Retention Calculator
Current Hygiene Schedule
Number of weeks per year 48
Number of hygiene days per week 4.0
Number of hygiene hours per day 8.0
Number of hygiene hours per year 1,536
minutes fee
Duration and fee for average adult hygiene visit 60 $125
Duration and fee for average child hygiene visit 30 $75
Current Patient Base
Reported number of hygiene patients 1500
Adjustment for conservative estimate 80% 1200
Estimated percent of hygiene patients that are children 20%
Number of new patients per month 20
Number of known patients lost per month 5
Net patient inflow per month 15
Number of times per year each patient should have a hygiene visit 2
When we plug in average numbers for the available hours and days, lower than average fees and numbers of active patients, we get a huge $90,000 gap. And these numbers are extremely conservative.
Current Patient Needs
Reported Adult Patient Hours per year 1920
Reported Child Patient Hours per year 240
Total Hours Hygiene for current 2160
NEW Patient Needs
New Adult Patient Hours Needed 144
New Child Patient Hours Needed 18
Total net new patients 180
Total Hours New Hygiene 162
Hygiene GAP Analysis
Hours for current patients (using 80% of total) 2160
Hours for net new patients 162
LESS Total Hygiene Hours Available 1536
Hygiene GAP in hours 786
Child Economic Opportunity per year $11,790
Adult Total Economic Opportunity per year $78,600
TOTAL ESTIMATED REVNUE OPPORTUNITY PER YEAR $90,390
If we then take the conservative two to one ratio of restorative to hygiene revenue in a practice, that adds a whopping $180,000 to the total gap. This practice is missing out on at least $270,000 in incremental revenue. One third requires adding hygienist’s hours and the other has only variable expense. What an awesome tool to help our doctors understand what is possible. That would be more than $1,000 per month in laboratory fees for the associated new restorative work. Not a bad way to help your doctors grow and subsequently grow you. No new patients either. Just better retention. Multiply these results during 10 or 20 years and the loss is in the millions for the dentist and hundreds of thousand for you .
The behavior for the team that will improve retention is easily accomplished. Practices are lulled to complacency by fairly full schedules and strong economies. The gap exists even during good times but we hardly ever look for solutions until we feel the pain a bit. Here is a list of what the dental team can do to improve retention. I work through each of these and help implement a system for making sure these behaviors become commonplace and standardized. Mercer Advisors even has a behavioral software tool to help the team achieve what is possible.
- Confirming today’s appointment.
- Preappointing the next visit.
- Building value for the next appointment
- Celebrating something with them.
- Reinforcing a proactive periodontal paradigm.
- Discovering restorative needs together
By implementing these simple behavioral changes, dental teams I have worked with have driven phenomenal results with better retention and stronger relationships with clients and increased hygiene and restorative revenue. Having this kind of an impact on or really with or for your clients cannot be outsourced. I am always happy to help laboratories implement the kinds of proactive thinking and systems that yield these results. When we do, you win, the practice wins and I feel good about helping. That’s a huge win too.
