Dentists spend almost every day assessing the dental health of their patients, but evidence suggests most don’t spend enough time examining the current state of their own practices.1 And although dental practice management software (PMS) will provide many reports, my experience consulting with practices is that they continue to find it difficult to determine what to look at and receive no clear direction from PMS software vendors on where to focus attention. The solution to this challenge is to tap into clear and concise practice intelligence in the form of a Practice Health Assessment.2
What Is a Practice Health Assessment?
A Practice Health Assessment is a comprehensive, data-based report derived from a deep dive into the PMS database. It produces practice metrics that objectively report on the current health of the practice and how well it is performing. The purpose of performing a practice assessment is to:
- Consolidate all key performance metrics on one comprehensive report to quickly identify practice areas that require attention, as well as to discover new-found opportunities;
- Provide the insights needed to set relevant practice goals and achieve them;
- Compare results to industry-average benchmarks (depending on region) that act as a reference guide for producing practice performance “scorecards”;
- Gather data for producing more valid practice valuations rather than reliance on outdated and flawed valuation models.3
Benefits of a Practice Health Assessment
A Practice Health Assessment saves a practice significant time producing desired performance metrics by eliminating the need to compile and reconcile numerous PMS reports. It also provides more insight than is typically available from PMS reports due to the ability to access the PMS database and present data in meaningful and revealing ways. In addition, PMS fields missing data can be identified so that the dental team can populate them to improve data integrity and provide for more comprehensive reporting going forward. Rather than relying on anecdotal evidence, guesswork and assumptions, a practice health assessment gives practices an eye-opening, 100 percent transparent look at what’s really going on.4 Some of the metrics produced are included in the chart on the right.
The practice assessment is also an indispensable tool for determining a practice’s true value. When purchasing any practice, a condition of any offer should be access to the practice’s PMS database for the purposes of conducting a Practice Health Assessment – similar in concept to a buyer requiring a physical inspection of the premises when making an offer on a building for sale. It can save a prospective dental practice purchaser much grief and cost if it is determined by the conducted assessment that the practice listing price is significantly overstated compared to the true potential of the practice. Similarly, when selling a practice, a practice assessment validates the asking price, using real time data to objectively document the practice’s current and potential performance.
Practice Assessment Scorecard Metrics
Immersed in the day-to-day needs of their practices, many dentists find it difficult to step back and gain a truly objective view of how well they and their teams are performing. Some practices endure challenges for many years without ever knowing how to solve them. Since a Practice Health Assessment provides an objective opinion about practice performance and operations, it can be the catalyst for effective solutions that get a practice back on track.5 Regardless of what stage a dental practice is at, investment in a Practice Health Assessment can identify problem areas for correction, find new opportunities for growth and profitability, and avoid costly mistakes with practice ownership transfers.
References
- Presti, G. Do you know how to measure the success of your dental practice? Dentisty iQ, Sept. 8, 2016.
- Lavery, W. Know Your Numbers for Dental Practice Growth: Top 5 Metrics to Help You Prevail Through Turbulent Times. Oralhealth Office. December 4, 2020.
- Lindgren, R. A dentist’s practicle guide to dental practice valuation methods. Dentistry iQ, Sept. 12, 2016.
- Levi, R.P. Objectively Assessing a Dental Practice. Compendium of Continuing Education in Dentistry, May 2012, Volume 33, Issue 5.
- Levi, R.P. Objectively Assessing a Dental Practice. Compendium of Continuing Education in Dentistry, May 2012, Volume 33, Issue 5.
About the Author
David Rajczak, founder of DJR Consulting, is a dental practice management and technology focused expert as a result of over two decades of experience working with industry leaders such as ABELDent, Henry Schein and CareCru. He holds a Bachelor of Commerce degree and an MBA from McMaster University in Hamilton, Ontario. He can be contacted at drajczak12@gmail.com or 905-577-5252.
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