The Four Operational Levers that Drive Profitability

Practice Guidance from Dr. Barrett Straub, CEO of Smile Source

I’ve said this before: "Gross production is a poor metric unless you know the values of some other metrics that help tell the story." The difference between a struggling dental practice and a highly profitable one often comes down to what they measure. If your team is obsessed with last month's collections alone, they are driving by looking in the rearview mirror. If you are looking at gross production rather than future production (driven by reappointment, new patient engagement, and treatment acceptance), you underperform as a business manager.

True success is predicted by focusing on Leading Indicators that dictate future production and collection. 

The Profitability Formula: Your Economic Roadmap

Financial health in dentistry can be simplified into the Profitability Formula. To sustainably grow, you must actively maximize the first three variables in the formula while effectively managing the fourth: 

Profitability = Visits x Production Per Visit x Collection %  ̶  Overhead

Think of the variables as levers you can press to improve outcomes. Each variable is a metric to track monthly, quarterly, and annually.

Four Critical Questions Driving Future Revenue

Every time a patient is in the chair, it is the highest-value opportunity your practice has. Before they leave, your team can seamlessly integrate the following four questions to increase the number of visits, production per visit, and collection percentage. 

• Is the next hygiene appointment scheduled?
• Do any family members need an appointment?  
• What treatment needs to be scheduled?  
• What amount does the patient owe?
• How can I motivate the patient to refer new patients?
  
  

The Five Leading Indicators in Action

Guide your team to increase the following leading indicators intentionally. One or more team members will be responsible for monthly tracking and reporting metrics to the entire team for discussion and responsive action. 

1. Hygiene Reappointment Rate: If your reappointment rate is low (e.g., below 90-95%), you have a significant future revenue leak. You are sacrificing guaranteed internal growth and increasing external marketing spend to replace patients you’ve lost. Retention is the foundation of the Visits lever.
   
   
2. Family Appointment Rate: Leveraging your relationship with the present patient is the least expensive way to grow. Ensure the entire family unit is up to date and scheduled. This increases your number of Visits without spending on lead-generation marketing.  
   
   If the patient is single, you can replace the question about family needs with teeing up a future referral: “It’s always great to see you. We would love more patients like you.” A statement like that, made before every patient leaves the office, bolsters retention and attracts new patients.
   
   
3. New Patient Engagement Rate: This indicator tracks the efficiency of converting an initial inquiry (from a call or digital form) into a scheduled, kept first appointment. This is the key metric for turning marketing (an overhead cost) into future revenue. If your engagement rate is low, your marketing dollars are being wasted. A highly engaged new patient is primed for Comprehensive Care and has the highest potential for Production Per Visit. Tracking this rate helps the front office team identify barriers to conversation, scheduling issues, and follow-up gaps that are causing potential patients to drop out of the system.
   
   
4. Treatment Appointment Rate: The direct driver of the Production Per Visit lever. The goal is not just to diagnose, but to ensure the patient understands the value of recommended treatment and schedules treatment before leaving. Be mindful that chasing patients to schedule treatment increases Overhead.
   
   
5. Collections Percentage: Maximize the Collection % by having transparent, confident financial conversations before treatment begins and securing payment at the time of service. Outstanding balances slow cash flow and increase administrative overhead. The longer a balance remains in accounts receivable, the more difficult it is to collect. 

Many established fee-for-service practices collect a portion of the fee before treatment to increase the patient’s commitment and ensure the dentist’s preparation time and incurred lab costs are covered if the patient does not return for treatment.
 

Comprehensive Care & Trust: The Foundations of Production Per Visit

While the Treatment Appointment Rate is the leading indicator that measures a patient's commitment to care, the philosophical backbone of Production Per Visit is Comprehensive Care. This is not simply a business strategy; it is your commitment to the highest standard of patient health, which means treating the whole person and the entire masticatory system for optimal health, function, and comfort, and genuine concern for the aesthetics of the patient’s smile.

The aim is to move your practice from reactive, patch-and-repair dentistry to developing a complete, long-term health plan. This shift directly affects Production Per Visit because comprehensive treatment plans, which may include high-value procedures such as full-mouth reconstruction or complex restorative work, have significantly higher dollar values than single-tooth episodic care. 

Trust is paramount. When patients understand that the doctor and hygienist are looking out for their long-term well-being, they are more likely to accept a comprehensive plan, thus raising the Treatment Appointment Rate. Think of Comprehensive Care as the ethical engine that powers your financial success. Every patient encounter is an opportunity to build rapport, foster understanding of the need for and value of comprehensive care, and ultimately cultivate a desire for the comprehensive treatment approach.

On the spectrum of dental practice models, there is “a lot of dentistry with a small number of patients” (at one end) and “one to two-tooth dentistry with a lot of patients” (at the other end). Our Smile Source members can, and do, shift from reactive dentistry to intentional comprehensive care with community mentorship and guidance. They don’t do this overnight. They do this through routine conversations with patients that engage the mind, stir positive emotions, facilitate ongoing discussion of the patient's needs, and develop the patient's interest in treatment options for their preferred oral health future.

Many dentists fear that transitioning from insurance dependence to a fee-for-service model is nearly impossible. It’s not, and Smile Source | ACT Dental will help you with this. The point I’d like to make in the context of this article is that the first step toward fee-for-service is to align philosophically with that “ethical engine.” A clear distinction between health-centered and money-centered approaches is a meaningful driver of effective, comprehensive care conversations with patients. Leading people to optimal oral health becomes your purpose, and the money follows.

With commitment, take steps to put that philosophy into practice and don't give up on leading patients to want the highest level of care you know you can provide. One patient at a time, you will find moments of deep connection and make progress across the full spectrum. 

The Fourth Operational Lever: Overhead

The first three levers—Visits, Production Per Visit, and Collection %—focus on maximizing the practice’s revenue. The fourth lever, Overhead, is about optimizing the cost structure to ensure that a higher percentage of that revenue translates directly into profit.

Controlling overhead requires a profit-minded culture driven by two key focus areas:

Team Optimization and Accountability

Your team is your most significant expense and your greatest asset. Maximizing their value is not about cutting salaries; it’s about strategic efficiency and financial ownership. Every team member should have a foundational understanding of their role in controlling those costs and minimizing waste.

Establish clear, delegated responsibility for tracking and controlling expenditures. When team members own a stake in the practice’s financial health,  whether by monitoring supply costs, reducing inventory waste, or ensuring timely billing, you improve overall efficiency.

Get the most out of your team members by ensuring they are focused on high-value tasks that directly impact the four leading indicators.

Technology ROI (Return on Investment)

Dental technology is a capital investment that should be subject to the same level of scrutiny as hiring a new team member. Having the latest technology does not guarantee a return; successful implementation is key. Before a purchase, clearly define how the technology will save time, increase production, or improve the patient experience. Your investment is only realized once the technology is in regular, effective operation. This requires educating the team and holding one another accountable to learn how to implement and use the new systems effectively.

Successful technology integration drives improvements across the entire practice, directly supporting the revenue levers:

Improved patient experience and higher level of care support Visits and Case Acceptance.

Guidance for Creating “Best Practice” Habits in 2026

By focusing on the four Operational Levers, Visits, Production Per Visit, Collection %, and Overhead, your dental practice shifts from reacting to past results to proactively shaping its profitable future.

This intentionality is the fastest path to control and freedom. As Kirk Behrendt often says, “You will have more time for yourself and can stop working so hard when you uncover where money is leaking out of the practice and plug those leaks.”

By making the five Leading Indicators, Hygiene Reappointment Rate, Family Appointment Rate, New Patient Engagement Rate, Treatment Appointment Rate, and Collections %, a daily focus, you gain foresight, confidence, and control. As you measure success, celebrate your intentionality and recognize that simple, strategic habits result in sustainable, exponential growth.