From DentistChats Blog:
Vanity metrics give people a nice ego boost, but… … we’ll save them for another (life) time. It’s incurably wasteful to efficiently measure things that don’t need to be measured at all. If you’re the type of person who prefers to cut the fluff and get straight to the heart of what actually matters, this article is for you. These are the 2 metrics that matter most for your practice:
1. Production. How many $ in treatment do you sell?
2. Profitability. How many of those dollars do you keep?
This gets right down to the basics, how much do you produce and how much do you keep? Those may in fact be the most important metrics, however in reality it isn’t quite that simple. Production must come first but the second number, profitability is much more significant. Which would you rather have 5% of two million dollars ($100,000) or 30% of a half a million ( $150,000). The trick is to increase productivity while keeping costs low.
Unfortunately what often happens is that high production offices achieve these goals with hectic over booked schedules and a large teams of auxiliaries. Reducing costs while maintaining efficient production is a challenge. Fortunately technology can help reduce costs in two of the most significant areas for typical general dentists; staff and lab.
Well chosen and properly implemented technology can increase staff productivity by 84%. (Think no time spent pulling charts, calling to confirm, filling in forms and much more.) That means if you have six staff members using traditional administrative systems you only need thee and a half to get the same work done using up-to-date digital systems. You will save the cost of 2.5 staff salaries. Another way to look at it. If your current employee costs are 25% of gross you could reduce that to 13.5%.
Cad Cam technology will reduce your lab costs from as much as $200 a unit to $20 a unit. As a percentage lab could go from 8% of gross to 0.8%.
of course this requires efficient use of the technology you pay for. Sadly many times the dentist buys the technology, keeps the same staff in place using it poorly and never actually gets the costs reductions that are possible.