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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There's a big mistake a lot of dentists make when trying to stimulate practice growth, and explaining it takes a little doing, but here's roughly how it plays out. Say we have Doctor A, whose practice collects about $90,000 a month on average and sees about 30 new patients a month. Doctor A calculates how much revenue comes specifically from those 30 new patients, and it works out to about $40,000 a month, so $40,000 of that $90,000 total is directly attributable to new patient traffic.
Wanting the practice to grow, Doctor A does the math: if 30 new patients generate $40,000, doubling that to 60 new patients should generate another $40,000, bringing total collections from $90,000 up to $130,000. So he goes through all the motions to attract an additional 30 new patients a month, paying for the marketing, running the campaigns. Once those extra 30 new patients actually start coming in and he's seeing 60 a month, he only sees a marginal revenue increase, maybe $5,000 to $10,000 a month, possibly not even enough to cover what he spent on the marketing itself.
So what happened, and why didn't revenue increase the way he expected? This is a variation of what's called the law of diminishing returns, a basic economic principle, and that's what I want to talk about this week. I want to cover how this shows up in a dental practice, because it happens constantly, it might be happening to you right now, it confounds a lot of doctors trying to expand, and more importantly, what to actually do about it to keep growth on track. My name is Jeff Blumberg, and I'm your host.
This doesn't just apply to new patients. We see it with adding hygiene days, adding an operatory or two, buying expensive equipment with the assumption that the purchase alone will drive the numbers up, or even relocating an entire office, spending $500,000 to $700,000 on a build-out expecting it to magically boost revenue. All of this falls under the same heading, the law of diminishing returns.
So what is it, exactly? I don't want to turn this into a full economics lecture, but here's a definition worth sitting with, from Investopedia, a solid resource for basic investing terminology: the law of diminishing returns is an economic principle stating that as investment in a particular area increases, the rate of profit from that investment cannot continue to increase if other variables remain constant. In other words, the effectiveness of each additional unit of input decreases.
Let's apply that to Doctor A's example. New patients are the "input" here, that part's intuitive. But what are the "variables" that have to increase alongside it, and didn't? What does it actually take to turn a new patient, a total stranger who just walked into your practice, into a genuine patient of record who's actually purchased meaningful treatment? A lot of steps go into that. If new patients go through hygiene, the hygienist needs actual time to see them and build rapport. You, as the doctor, need time for a thorough exam, proper charting, and enough time with the patient to explain their treatment plan. Your treatment coordinator needs that same kind of time, and the patient ultimately has to agree to pay and get onto the schedule.
For Doctor A, his existing setup handled 30 new patients a month just fine, maybe with some give, 25 to 40 wouldn't have broken anything. But the doctor's time, the treatment coordinator's time, the hygienist's time, none of that scaled up. The doctor didn't suddenly gain ten extra hours a month to handle the additional patients, and neither did anyone else. So once that second batch of 30 gets poured into the same practice, Doctor A finds he doesn't have as much time per patient anymore, he's rushing, spending less time on case presentation, handing things off to the treatment coordinator earlier than he used to, and not having time to properly answer patient questions. The hygienist runs into the same wall, hygiene gets so busy that some days become assisted hygiene, with the hygienist bouncing room to room. The treatment coordinator loses the time they used to have to walk a hesitant patient through their financial options, time that used to turn "maybe" into "yes."
That's the time variable, it stayed constant while patient volume doubled. Something similar happens in straight sales too, something I've seen repeatedly in sales training. Say a salesperson gets 40 qualified prospects a month, a number that's manageable in some industries and enormous in others depending on deal size, and they're genuinely good, careful with each one since they know they can't afford to waste any. Now give that same person 140 prospects a month. Their systems were built around handling 40. With 140, a few things happen: they stop spending as much time per prospect, and what I'd call their "waste factor" starts climbing. If I used to sink a full hour into qualifying a prospect before moving on, I now only have half an hour, and honestly, I don't feel like I need that particular prospect as badly anymore, since I've got 140 of them instead of 40. It takes a genuinely unusual person not to let quality slip in that situation. What typically happens instead: if that salesperson was closing five out of ten, and you hand them twenty, they don't close ten out of twenty, maybe they close seven. You see a modest bump, not a proportional one. Very few people naturally think to pull back and ask, how do I maintain the same quality of attention across three and a half times the volume? That's rare.
The same dynamic applies if you're pushing 60 new patients into a practice that used to handle 30, it stops feeling as urgent to run every patient through the full, careful process, since there are simply more of them now. That's part of why revenue increases end up marginal, or nonexistent. You might also see fallout in scheduling: a doctor who could previously get a patient with a larger case back in within three days might now be pushing them out a week or two, since the schedule's more crowded. Internal service quality drops as a direct result of pushing more volume through the same system, and that's exactly where the missing revenue goes.
Here's the broader pattern: people often focus on one single lever that seems to drive growth, without examining the entire cycle that actually produces that growth, and then they're surprised when pushing that one lever doesn't produce the expected result. Take another example: say you've got 4,000 inactive patients sitting in your charts, and you decide to focus on reactivating them into hygiene. You're currently running two full-time hygienists, four days a week, eight days of hygiene total, with new patients running through hygiene and a decent soft tissue management program. You think, if I get these inactive patients back in, I'll add hygiene days and see more revenue. You will see more hygiene revenue. You won't necessarily see more doctor revenue, and you might actually see it decrease.
There's an ideal doctor-to-hygienist ratio, generally one to one or one to 1.5. For every doctor day, you shouldn't really exceed about one and a half hygiene days. Here's why: say you push that ratio to three hygiene days for every doctor day, one full-time doctor supporting twelve days of hygiene. What is that doctor doing every hour? If every hygiene patient needs an exam that hour, the doctor is gloving and degloving repeatedly just to get back to whichever patient they're currently with. The time available for actual production, talking with patients about needed treatment, in other words, sales, starts shrinking. So yes, you've boosted hygiene production by adding hygiene days, but you've actually reduced the doctor's own productivity in the process. That's the law of diminishing returns at work again.
Let's look at a new patient conversion example too. Say you want more new patients, so you increase marketing spend to generate more phone calls. Say you're averaging 100 new patient calls a month currently, converting 50 of them into actual new patients, a 50 percent conversion rate, not bad, could be better. You reason, if I can get that call volume up to 200, I should get 100 new patients a month. So you do exactly that, without addressing the rest of what actually creates a new patient. Sure, the extra marketing generates the 200 calls, but someone still has to answer and effectively handle each one, and you need the actual scheduling capacity to see all these additional people.
When that doesn't happen, here's what typically occurs: call volume doubles from 100 to 200, but instead of converting half into new patients like before, you go from 50 to maybe 80, a drop to a 40 percent conversion rate. You might assume it's lead quality, but it's not, you simply didn't increase the number of people, or the amount of time each person has, to actually handle these calls. Whoever's answering the phone might now be juggling other responsibilities, putting callers on hold repeatedly. If they used to average eight or nine minutes per new patient call, long enough to build genuine rapport and sometimes even pick up a referral in the process, a spouse calling in and bringing their partner along too, they now only have four minutes per call, and those referral opportunities quietly disappear along with everything else. On top of that, you run into a capacity problem: patients who used to get seen within 24 to 48 hours are now being pushed out one to four weeks, which produces a wave of no-shows.
I've experienced a version of this myself. If I run a seminar and know roughly what percentage of attendees typically upgrade to a certain package, doubling the number of attendees doesn't automatically double that revenue, because I don't yet have the staff or facilities to handle that many people at the same level of quality. I could build up to that capacity over time, but it's not there the moment attendance doubles. Growth isn't that simplistic, however much I wish it were.
Back to the new patient phone example: you could train the person answering the phone, and that genuinely helps, but there's a hard limit to what training alone can fix. If that receptionist genuinely needs eight minutes per call to do it well, and they simply don't have eight minutes anymore, no amount of training changes that math.
These are all just concrete examples of the law of diminishing returns showing up in real dental practices, because we've seen it happen constantly. The actual fix falls under organization and executive skill. If you're trying to grow, walk the entire cycle of production backward from the final outcome. That might sound a little abstract, so let's make it concrete: say the goal is more new patients. How would you define a new patient? Someone standing in your office, ready to be seen, who's never been there before. What did it take to produce that outcome? They had to arrive, which means they had to be scheduled, which means someone spent time on the phone with them, which means someone had to actually call the practice in the first place. So working backward: a person becomes interested enough to call or fill out a form, whoever they reach is good at their job and converts that call into a scheduled, showing patient, and the patient physically arrives.
That tells you that if you want more people standing in your practice, you have to increase every one of those upstream points, not just the first one. You need more incoming calls, sure, but also enough staff and capacity to handle that higher call volume at the same level of quality, and enough scheduling capacity that you're not pushing people out two or three weeks, which is exactly where no-shows come from.
Here's why that matters so much: if I'm a referral, say my spouse already sees you and refers me, I have some real connection to your practice already, a small degree of loyalty, and I'm not likely to go shopping for another dentist since my spouse is already happy with you. But if I found you through a Google search, a pay-per-click ad, Facebook, or a postcard, I have zero connection to you. Walking through the process: I see your ad or postcard, your marketing worked, I call. If whoever answers isn't very good, or is overloaded and puts me on hold repeatedly, there's a real chance I just hang up, and you've lost the conversion right there. Say they are good, and they get me scheduled, but three weeks out. I might accept that appointment anyway, especially if the new patient special is appealing enough to make me want to try you out. But because I have zero connection to your practice, if my tooth keeps bothering me in the meantime, and I'm still seeing other dental ads pop up on Google or Facebook retargeting, there's a real chance I call a different practice that can see me in two days instead, like their look, book with them instead, and simply never call to cancel my original appointment. Most no-shows aren't the person being a bad person, it's just unfortunately common behavior, similar to why some higher-end restaurants charge a fee for missed reservations, because people genuinely do this regularly.
Here's an interesting data point on this. I was talking to a company that builds contact management and analytics software for dental practices, based in Canada, now expanding into the US market. In Canada, their system let patients book their own hygiene appointments directly from a text message link, pick their preferred provider, pick a time, and it would go straight onto the schedule, no staff confirmation needed. In Canada, that produced a no-show rate under 20 percent, meaning over 80 percent of patients who self-booked this way actually showed up, which is genuinely solid. When they rolled the same self-booking feature out in the US exactly as it worked in Canada, the no-show rate came in over 75 percent.
As an American myself, I think part of this comes down to how heavily marketed-to we are here generally, we're genuinely oversold on everything, constantly, in a way that seems to shape consumer behavior around commitments like this. I remember noticing, touring the canals in Amsterdam with my Dutch wife, how much blank wall space there was that could have easily held billboards but simply didn't, a small but telling cultural difference. Anyway, because of that gap, the company had to change how the feature worked in the US market: patients still get the text, click through, and pick a provider and time, but the appointment doesn't actually go onto the schedule until staff confirms it with the patient the next morning. Especially with US consumers, there's a real fickleness worth planning around. If you're booking a new patient two or three weeks out off a postcard or a PPC ad, with zero built-in loyalty to your practice, you should expect real no-show risk.
So walking back through this: even if you've increased your capacity to handle incoming calls well, more staff, no quality drop-off between people answering the phone, if you haven't also increased your actual scheduling capacity, you can end up spending marketing money without seeing the return you expected. And if you haven't expanded internal sales and diagnostic time to match the new volume, the same thing happens on the revenue side.
This tells you that whenever you're trying to grow any area of the practice, you need to look at everything connected to that final outcome. If you want more treatment accepted, more production, trace backward through where production actually comes from. Say you pull up your incomplete treatment list and find $4 million sitting there, and it genuinely bothers you, maybe there's a specific patient you really wanted to help who's heading off on a cruise instead of doing the treatment you explained clearly, and it affects their actual health, not just your numbers. Before you can produce that treatment, the patient has to accept it and make financial arrangements. Before they can accept it, you need enough time to actually present it properly. Before that, you need a patient who genuinely needs the treatment in the first place, which, if you check your own incomplete treatment list, usually isn't the bottleneck, most offices have plenty of that sitting there already.
So walking backward: patient in the chair ready for the procedure is the expected outcome of a successful sales process. To get there, they need to accept and pay for it. Before that, you need time to properly explain it to them. Before that, you need a patient who needs it in the first place. If production isn't where you'd like it to be, you can usually trace the actual breakdown somewhere along that chain: maybe you have patients needing treatment but aren't spending real time presenting it, maybe you're presenting but not especially effective at closing, or maybe you're good at both but your financial arrangement process is falling apart and people simply aren't paying.
Whenever you're trying to grow an area of the practice, always walk it back from the final outcome and examine every step involved, because you won't get the increase you want unless every one of those steps scales up together. If you increase incoming calls, you have to proportionally increase your ability to handle them, and your capacity to actually see the resulting patients.
So the natural next question becomes: where do you actually start, since it can feel a bit like a chicken-and-egg problem? Take new patients as an example, and if you want the fuller picture on actually growing new patients specifically, I'd recommend checking out the MGE New Patient Workshop, I'll put a link on the episode webpage, that's where we teach this in depth. But broadly: do you hire the extra staff, open new patient time blocks, and bring on an additional hygienist first, before doing any of the marketing? Or start with the marketing itself? It really comes down to how confident you are in actually producing the increase. If you're genuinely confident, I know that doing X, Y, and Z will reliably get me an extra 30 new patients a month, then go ahead and build the infrastructure to handle those 30 patients ahead of time, since you're confident the volume is coming. If you're not confident yet, start with the actions you believe will generate that growth, prove it out for yourself first. The tradeoff is you might run a bit inefficiently for a month or two while ramping up, but as the new patients actually start showing up, you move quickly to put the supporting infrastructure in place to handle them well.
I'd apply this same logic to anything you're trying to grow. If you're adding hygiene days, figure out where you'll actually max out your current setup and at what point you'll need to start looking for an associate. Do you start that search now, or wait? It depends on how easy associates are to find in your area, if they're plentiful, you can probably wait a bit, if they're scarce, you might want a head start, since a good candidate may need to give a month's notice elsewhere. Either way, it comes down to how confident you are in your own ramp-up timeline. These are all fundamentally questions of organization and executive skill.
If you have questions about any of this, or you're currently going through a growth phase and want to talk it through, we're happy to help, you can get a free practice consultation, I'll put a link on the episode webpage, and we can work through it together so you can grow with real confidence.
I hope this helps, and I hope it at least gets you looking closely at whatever area you're trying to expand or change, since this concept applies to virtually anything. Walk it back from the end result, and you'll start to see exactly where things could go wrong, along with everything you'd need to expand in step with it, whether that's new patients, hygiene days, or overall production. That's all I have for you this week, folks. If you have any questions about MGE, you can find us online at mgeonline.com, or call us at (800) 640-1140. Have a great week, and we'll see you at the next episode.