Improve Your Dental Practice With Leading and Lagging KPIs

Throughout the healthcare and life sciences sectors, monitoring key performance indicators (KPIs) is crucial for sustaining financial and operational well-being. Dental practices are no exception; they should use KPIs to benchmark performance and inform future strategies.

What are the benefits of using KPIs?

KPIs can be categorized into two types: leading indicators and lagging indicators. Leading indicators help a practice anticipate future outcomes by providing early signals, while lagging indicators offer insights based on past performance. Both types are important and can be applied across various aspects of your practice, including operational, financial, and clinical areas.

Integrating KPIs into your annual budgeting process, monthly leadership meetings, and quarterly goals can enhance accountability and keep your entire team strategically aligned with the practice’s objectives. Regularly monitoring these indicators helps your practice anticipate challenges, improve patient satisfaction, and enhance overall performance.

By understanding and leveraging KPIs for your dental practice, you can gain valuable insights into operations, make better-informed decisions, and strategically plan for future growth.

Use leading KPIs to forecast and influence outcomes

Leading KPIs are forward-looking metrics enabling dental practices to anticipate and shape future performance. These indicators provide early warnings about whether the practice is on track to meet its strategic goals.

Examples of leading KPIs in a dental practice include:

• Operational KPIs — Number of new patient inquiries, appointment scheduling rates, and provider availability
• Financial KPIs — Cash flow projections, pro-forma financial statements, and budget forecasts
• Clinical KPIs — Appointment fill rates by day and by provider, treatment plan acceptance rates

For instance, tracking cash flow projections and pro-forma financial statements helps set the practice’s financial course, aiding in budgeting and financial planning. Monitoring these metrics allows dental practices to identify trends and proactively address potential issues.

Use lagging KPIs to showcase historical performance

Lagging KPIs reflect past performance and provide concrete data about your practice’s operations. These indicators are essential for assessing the overall health and success of the practice. Examples of lagging KPIs in a dental practice include:

• Operational KPIs — Employee satisfaction scores, staff turnover rates, and appointment no-show rates
• Financial KPIs — Profit and loss statements, EBITDA (earnings before interest, taxes, depreciation, and amortization), and per-patient revenue
• Clinical KPIs — Patient satisfaction scores, net promoter scores, number of completed treatments per patient

For example, analyzing profit and loss statements offers insight into your practice’s financial performance, highlighting areas where costs can be managed better. Evaluating patient satisfaction scores helps assess the quality of care provided and identifies opportunities to enhance the patient experience.

Opportunities to integrate KPIs into practice management

To fully leverage the power of KPIs, embed them into your practice’s regular management processes. This integration transforms KPIs from mere metrics on a dashboard to active tools driving decision-making and accountability.

Annual budgeting process

An annual budgeting process is a cornerstone for setting financial goals and aligning resources with strategic priorities. By incorporating KPIs into your budgeting, you can:

• Set realistic financial targets — Use leading financial KPIs like cash flow projections to inform revenue and expense estimates.
• Allocate resources effectively — Align budget allocations with areas identified by KPIs as needing improvement or offering growth opportunities.
• Monitor progress — Establish benchmarks based on KPIs to measure financial performance throughout the year.

Monthly leadership meetings

Regular monthly meetings with your leadership team are vital for reviewing KPIs, discussing performance, and making necessary adjustments. In these meetings:

• Review KPI performance — Analyze both leading and lagging KPIs to get a comprehensive view of your practice’s health.
• Identify trends and issues — Early detection of negative trends allows for prompt corrective action.
• Engage in strategic planning — Use KPI insights to inform decisions on marketing, operations, and patient care strategies.

How CLA can help your practice leverage KPIs

Whether you’re just starting your KPI journey or are already a sophisticated KPI user, CLA’s national dental practice can help.

When combined with our tax, digital, and deal services teams, we can help your practice with much more:

• Determining a list of KPIs relevant for your practice and benchmarking against your goals and your peers
• Enhancing your understanding of KPIs and their utility in making strategic decisions
• Streamlining practice operations
• Assisting with cost management strategies and other options to increase revenues
• Leveraging our national dental experience to provide insights and outsourced accounting services
• Developing a digital KPI dashboard and budget/scorecard creation for ease-of-use and understanding
• Providing tax strategies and wealth management services

Contact us

Use KPIs to elevate the growth potential of your dental practice. Complete the form below to connect with CLA.