The single most important business task you have

When you run your dental, orthodontic, dental specialty, or any small business for that matter, you have literally thousands of concerns, issues, problems and opportunities to handle.  But as you take care of the business side of your practice, no duty is more important than having information.  And not just any information.  You need relevant, useful information. 

So many practices have been doomed to failure simply because the doctor, staff and related parties did not have timely, quality information to analyze and utilize for decision making.   So many people with whom I have worked simply have no idea of where their practice stands when it comes to data that really drive the practice.  These people either grasp onto one number or nugget that they repeat for months and years on end or think that one good day yesterday somehow paints an overly rosy picture of a successful practice.

When considering the information for your practice, consider 3 important questions:

     1.     What information is most important for me to track?  For help here, see our post on the 5 most important numbers for you to know.

     2.     How do I get the information?

     3.     Once I have the information, how do I effectively analyze it?

As I mention, we deal with #1 in a separate post, so allow me to take question #2 and #3.

How do I get the information?

At this point, virtually all readers here have a practice management software that tracks basic patient transactions and treatment information.  That is always the starting point from data.  From that point, you can choose one of the following:

1.     Read the prepackaged reports generated by the practice management software. 

2.     Send that information to a consultant or practice management company.

3.     You can provide your underlying data in electronic form to a consultant or practice management company.

Once I have the information, how do I effectively analyze it?

No matter how you choose to extract the data, we recommend putting it together in a very simple, usable format on a month-by-month basis to allow effective analysis.  Here’s an example:

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Month end	Collections	New patients seen	Total production
6/30/13	$20,467	34	$30,291
7/31/13	$22,316	47	$31,415
8/31/13	$17,225	33	$29,817
9/30/13	$21,013	31	$27,229

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With the data organized like this, we can do some pretty effective analysis on just a few numbers.  We are looking at the trends in each column, looking for unusual numbers and analyzing ratios between numbers.  Just from this data, we can see the following areas require further investigation:

1.     The main concern here is the drop in collections in August.  Total production is relatively consistent, but we see a collection drop by over 20% in this month before returning back to normal in September.  This bears further investigation.

2.     I also want to know why production in July was consistent with the other months even though my new patients seen jumped by 30+% when compared with other months.  Along those lines, what happened in July that caused new patients to jump like that and how can I repeat that performance?

3.     I am concerned about the declining trends in new patients and production from July through September.

As you dig deeper into each of these issues, there may be perfectly good, rational explanations for each ítem.  Flukes do happen.  On the other hand, you may find that there are disturbing ítems causing these negative trends and in those cases, you want to develop a plan and take action to solve them.

Want to discuss further?  Want us to delve deeper into this topic?   Have another topic you want us to discuss? Want to have MyPracticeEngine analyze your data electronically at no cost with text alerts (standard messaging rates apply) when attention to a particular area is required?  Contact us.