Collections ratio

The collections ratio is collections divided by production for the same period, and it is one of the first three numbers Ryan checks on any practice. It answers a single question: of the dentistry that got done, how much actually turned into cash. Ninety-eight percent or higher is the target, and it is achievable for a normal mix of PPO, fee-for-service and Medicaid patients. It is not a number reserved for cash-only boutique practices.

A ratio sitting at 90% or below is not bad luck; it is a diagnosis. The cause is almost always one of three things: a fee schedule that has fallen behind what plans actually allow, financial arrangements collected loosely or not at all at the time of treatment, or an accounts receivable process nobody owns, so aging balances quietly write themselves off through inattention. Each has a different fix, which is why the ratio alone only tells you there is a leak, not where it is.

Run it monthly, by provider and by insurance plan, not just for the practice as a whole. A strong overall number can hide one associate or one plan dragging the average down, and that is exactly the detail a single company-wide figure will never show you.