Ep. 95. The Law of Diminishing Returns

 

Has this ever happened to you? “We saw double the usual number of new patients this month—so why did production barely go up?” Or, “We expanded into more chairs and added a provider—but why didn’t our collections increase commensurately?” Sometimes when you’re trying to grow, you can see diminished returns even if it seems like you’re doing everything right on the surface. There is a specific reason for this as well as a solution, and that’s what Jeff covers in this episode.

 

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Questions From This Episode

What is the "law of diminishing returns," and how does Jeff apply it to a dental practice?

Borrowing Investopedia's definition, it's the economic principle that the rate of return from increasing investment in one area can't keep climbing if other variables stay constant. Jeff's example: a doctor doubles new patients from 30 to 60 a month expecting revenue to jump from $90,000 to $130,000, but only sees a $5,000 to $10,000 increase, because doctor, hygienist, and treatment coordinator time never scaled up alongside the patient volume.

Why does adding hygiene days sometimes reduce a doctor's own productivity rather than increase it?

Jeff recommends a doctor-to-hygienist ratio of roughly one to one or one to 1.5. Pushing that ratio much higher, say twelve days of hygiene for one doctor, means constant gloving and degloving to handle exams, which eats into the time available for actual case presentation and sales, so hygiene production goes up while the doctor's own productivity goes down.

What did Jeff find when a Canadian self-scheduling tool launched in the US market?

In Canada, letting patients text-book their own hygiene appointments directly onto the schedule produced a no-show rate under 20 percent. Rolling out the identical feature in the US produced a no-show rate over 75 percent, so the company had to change the US version to require staff confirmation the next morning before the appointment actually locked in.

Why does Jeff say a referred patient behaves differently than one who found the practice through an ad or postcard?

A referred patient already has some connection and loyalty to the practice through the person who referred them, making them less likely to shop around. A patient with zero prior connection, responding to a postcard or PPC ad, is far more likely to book elsewhere and simply not show up if another practice can see them sooner, something Jeff says isn't usually a character flaw, just common behavior.

What method does Jeff recommend for figuring out where a growth plan is likely to break down?

Start from the desired final outcome, a new patient standing in the office, a patient accepting and paying for treatment, and walk backward through every step required to produce it: who has to call, who has to answer and convert that call, who has to present treatment, and whether there's enough time and capacity at each stage. Growth in one step without proportional growth in the others is exactly where revenue quietly disappears.

Episode Transcript

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Ep. 96. Practice Health Check

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Ep. 94: Doubling Your New Patients by Using “Social Proof”