Episode 75 – The Most Important Metric in Your Practice
“Figure out who you are, who you serve, and then develop your philosophy of care from there.” ~ Victoria Peterson
There are so many different metrics that we can use to measure the success of your dental practice.
But if you truly want to gauge how well your practice is doing, it comes back to your practice’s philosophy of care. Your philosophy of care drives your patients’ care; how they view their own health comes from how you view their health.
This includes ensuring how well your patients understand what is going on in their mouths. And this means you not only need to be comfortable having these comprehensive conversations with your patients, but your team needs to be on the same page as you, as far as how they convey the reasons behind your treatment plans.
When you get clear on your philosophy of care, you’ll start seeing the sort of success you’ve only read about. And when you pair it with comprehensive treatment planning and providing financial options, you could double or even triple production.
For those who want to own and lead a successful Investment Grade Practice, as you listen to this episode, I want you to think about:
- How do you get your patients to say “yes” to necessary treatment?
- How comfortable are you having that conversation with your patients?
- What are the ways you can change how you present treatment plans so your patients can understand better what is going on in their mouths, and also, how you can help them?
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Victoria Peterson 0:45
EBITDA is a lag number it is what happens once the train is stopped, it’s in the station, it can be measured afterward. It’s a rearview mirror number. So is that really the most important number or are there other factors that that have to happen? In order to get there we call those lead measures or lead metrics.
Welcome to Investment Grade Practices podcast where we believe private practice dentists deserve to get the lifestyle today while building an asset for tomorrow. Join your host, Victoria Peterson, to design the practice of your dreams and secure your financial independence. Let’s get started.
Victoria Peterson 1:37
Welcome to another episode of Investment Grade Practices. I’m wondering what is the most important metric in your practice. I ask this question all the time, I asked it to CPAs. I ask it to private equity individuals. I ask it to people and solo practices and DSOs and brokers and dentist and it’s amazing how the answer is wildly different depending on who I ask. And so I’m really starting to think if I’m building an investment grade practice, what’s the number one number and most people are going to say EBITDA right? My Earnings Before Interest, Taxes, Depreciation Amortization, if it’s not expressed that way, it’s expressed as net profit and if it’s not expressed that way, its profits minus seller discretionary earnings, you know. I usually get a very logical financial accounting term and I think to myself is that the most important? Is that the one that measures the future success of this business or not? And for me, EBITA is a lag number, it is what happens once the train is stopped. It’s in the station, it can be measured afterward, and it’s a rearview mirror number. So is that really the most important number or are there other factors that that have to happen in order to get there? We call those lead measures or lead metrics, and for me, the number one lead metric is does patients say yes. So are we, are we comprehensively diagnosing our patients saying yes, to their own good health and that is really where it all starts and stops and it gets so confusing, because we let that number get muddled, right? Insurance will pay for this or you don’t understand in my area, patients won’t accept this or that. So let’s just start with the premise of your philosophy of care, because that’s what drives patient care. And patients saying yes to their own health depends on how you view their health and the view of your business expands as you expand your mindset of what’s possible for your patients. It’s all one in the same, we’re in the service business, we’re in the health business. So how do we get the courage to share all that we see with the patients without blowing them out of the water? Because for me that as a business owner, in dentistry, nothing is more important than the patient’s honestly knowing what what is happening in their own mouth. You know, it’s difficult for us as providers to look in this dark space the size of a tennis ball, and accurately diagnose what’s going on. Patients have no chance. It’s an invisible disease, much like heart disease, which we have blood pressure and pulse and a few other you know, metrics to predict if you’re going to have a heart attack or not but in dentistry, we’ve got tools, we’ve got insights and we can, we can help but maybe it comes down first in removing the fear of having the conversation. So perhaps patient care and what they say yes to isn’t the most important metric. Maybe it comes back to, on a scale of one to 10, how comfortable am I as a clinician in sharing all that? I see and I’ll tell you, I have doctors give me wildly different answers on why they don’t share everything comprehensively. First is, you know, I’m going to blow the patients out of the water that I’ll get back Google reviews, things like that. If you go deeper, I actually have doctors say, “Well, if I did everything that’s in their mouth today, then I would have to go get more new patients, because there would be no work for me to do tomorrow.” So there’s a there’s a prevailing wait and watch and hygiene annuity, and I’ll get it next time, but what if we could change our communication skills and your philosophy of care? It’s just an invitation. No one, no one listening to this podcast is ever said, “Man, I’m adopting your philosophy of life.” So take from this what you will but there is an invitation that says, What is my philosophy of care? If this were my own mouth? If this were my family, what would I want for them, get rid of all the money, get rid of all the other things? What would I have done in my own mouth, and then find the courage to present that to your patients. So if your philosophy of care is we remove obstacles to care so that patients can get comprehensive care? Fantastic, if it’s, we’re an emergency clinic, and we really focus on serving that segment of the community, where people come in and pain, we relieve their pain, and they come back the next time they’re in pain, define it so you know, that’s what you are. If your practice is we don’t work in pain or comprehensive care, we only do aesthetics. Fantastic define it. There’s a room in every marketplace for all of those scenarios. There’s room to work with those who are the most fragile, and lower on the economic scale, and make that a profitable model. So don’t be confused about your model, figure out who you are, who you serve, and then develop your philosophy of care from there. If you are going into a more comprehensive, particularly if you’re looking and I see that recent survey says 60% of dentists are now either actively downsizing their participation in insurance or considering going out of network completely. If you’re on that path, then I invite you to put this one question into your exam process and it goes something like this, “Victoria. as I, as I go through and I do your exam. I’m wondering, would you like for me to share with you everything I see, so that you could prevent further decay down the line and further problems down the line or would you rather wait until something’s critical and I tell you about it at the time it needs to be repaired?
Victoria Peterson 8:23
It’s just that simple. Find out are your patients preventive mindset? Are they curious about everything that you see in their mouth or are they like, “Hey, Doc, Nope, just just tell me what you got to fix today,” and I know that sounds crazy, like maybe everybody would want to know, but I have a cousin Billy, if you if you guys know me, even for a nanosecond, you know I was raised in the south and the Okefenokee Swamp down in St. Marys, Georgia. It’s coastal, it’s beautiful. All the barrier islands are there. It’s a really beautiful place but we did not grow up with a lot of money and I saw my cousin Billy at a family reunion about six years ago. And he literally had no teeth and coming from dentistry, seeing your cousin with no teeth, I was aghast and I was like, “Billy, what happened?” And he said, “Oh, you mean my teeth?” And I said, “Yeah,” I said, “Where are they?” He said, “Well, I went to the Doc,” I’m gonna get southern here. He says, “I went to the doc and he said, Well, you got 12 teeth that need fixing and it’s gonna be about $12,000,” and I said, “Dang, Doc, I ain’t worth $12,000. I don’t, I’ve never had $12,000, so just pull them,” and I said, “Alright, Billy. well, I get that, but didn’t he give you dentures? Did he give you a replacement for your teeth?” And he goes, “Oh, yeah, he did but my daughter said they look like horsey teeth. So I put them in a drawer and I’ve just learned how to eat and I’m fine. I can eat corn on the cob. I can eat steak. I can eat anything I can.” So patients come in all different flavors. He went through with the treatment, he said yes to treatment but he said yes to treatment on his own terms and hurray for the dentist who said to restore your mouth, it could be this way. So is it EBITDA? Isn’t net profit? Is it patient satisfaction is a patient saying yes? There’s so many things that we can measure But to build an Investment Grade Practice, one that has predictable durable systems, my encouragement is that you really sit down and take the time to craft your philosophy of care. What do you believe is in the best interest of the patients that you serve? And then articulate that through your standard of care with the team? When I see a hole in the tooth that looks like this, I’m most likely to recommend that. When I see bone loss, I’m going to get curious about this. We generally do that. Develop this tooth by tooth, quadrant by quadrant, full mouth by full mouth. How do you view diagnostics and how do your hygienist view diagnostics? Get coordinated on that, make sure that your assistance in your admin can convey the reasons behind your treatment planning. Doctors who do this have doubled their case acceptance within 30 days, just getting clear on what it is. If you combine that with great patient financing so that they can say yes, you will triple your impact. So I’m a great marketer, I love new patient flow. That’s a metric I look at a lot but if you really want to grow your practice and make it predictable, get clear on your philosophy of care, how you want patients to be treated, and offer them an avenue for saying yes.
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