Annual Patient Value (APV) is a crucial metric for dental practices, reflecting the average revenue generated per active patient annually.

Understanding and improving your APV through both production and collections is essential for your dental practice’s financial health. Addressing discrepancies and implementing effective strategies can enhance your practice’s profitability, sustainability, and overall
work satisfaction.

Calculating your APV to compare both production and collection metrics

  • APV by Production: This is the total annual gross production divided by the number of active patients.
  • APV by Collections: This is the total annual collections divided by the number of active patients.

The difference between APV by production and collections can indicate several important aspects of a dental practice’s financial health:

  • Insurance Write-Offs: A significant difference between production and collections often points to high insurance write-offs.
  • System Management: Poor system management, such as ineffective billing practices, delayed collections, and lower-than-ideal case acceptance can also cause discrepancies between production and collections.

Example Practice

Practice X has an APV by Production of $1,268 and an APV by Collections of $992. The $276 difference indicates potential areas for improvement in managing insurance write-offs
and collections processes.

Now, consider the same practice with an APV by Collections of $689. The $579 difference becomes significant and potentially unsustainable. Despite needing the same resources, staffing, and supplies to produce $1,268 per patient, significant changes are necessary for continued sustainability. By addressing these issues, the practice can enhance its financial health and create a more efficient and rewarding environment for both staff and patients.

How to Improve Your APV

  • Maximize Reimbursements: Ensure accurate and comprehensive coding for all procedures.
  • Regularly review and update office fee schedules to reflect current costs and to build leverage for insurance fee schedule renegotiations.
  • Offer a wider range of services, including high-margin procedures like cosmetic dentistry, implant placement, or orthodontics.
  • Invest in technology and continuing education to stay updated with the latest treatments and technologies.
  • Optimize Billing and Collections: Streamline billing processes to reduce delays and errors.
  • Consider reducing participation in low-reimbursement PPO plans, renegotiation, and lease structuring.
  • Focus marketing on attracting more fee-for-service patients who provide higher revenue per visit.
  • Improve patient retention by providing excellent customer service and follow-up care.

A healthy APV contributes to a healthier practice culture and work-life balance, ultimately benefiting patient care.

Burkhart’s Practice Support Team welcomes the opportunity to support your healthy business. Reach out for your Practice Analysis to calculate APVs and schedule a strategy call with a business coach—complimentary to our Supply Savings Guarantee and Platinum buying level clients.

 

Your success is our success. Please reach out to us anytime.
To learn more, visit the Practice Support Team page, email us at PracticeSupportTeam@BurkhartDental.com, or call 1.800.665.5323.

Burkhart Dental Supply – Practice Support Team

Category: Practice Consulting

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