What is the Leaky Bucket in Orthodontics?

How to Plug 3 Major Leaks in Your Orthodontic Practice’s Revenue

Key Takeaways

• Fixing revenue leaks could help practices recover lost income from missed appointments, weak follow-ups, and poor patient transitions.
• Up to 10% of new patient calls don’t convert into exams.
• A poorly managed observation system risks losing 20% of potential annual starts.
• Strengthening Phase 1 to Phase 2 transitions can prevent 36 missed starts for every 100 Phase 1 patients.  

Every day, new patients call your practice. But are you maximizing those opportunities?

Missed appointments, weak follow-ups, and poor transitions can quietly drain orthodontic practice revenue. It’s a phenomenon we call the Leaky Bucket—and it adds up to thousands in unrealized revenue every year.

To thrive, practices need to identify these leaks and take action. Here’s what you can do to spot the problem areas—and why addressing them is critical to your success.

The 3 Biggest Revenue Leaks in Orthodontic Practices

Identifying leaks in your practice’s patient flow can help you recover revenue and maximize growth.

Here are the most common areas where practices lose opportunities:

1. Not Converting New Patient Calls to Exams

New patient calls are your first opportunity to grow your practice, but too often, these leads don’t turn into exams. Industry benchmarks show that 90% of new patient calls should result in completed exams. Yet, many practices only convert about 80%.

Revenue loss: Losing 10% of new patient calls can cost over $220,000 annually.

For every 835 new patient calls, that 10% gap means 76 fewer exams. With a case acceptance rate of 67% and an average treatment value of $5,514, the financial impact is clear.

Why it happens:

• Overbooked schedules: When Future Exams Scheduled outpaces New Patient Adds, it’s a sign availability is too tight. Add exam slots or bring on a Treatment Coordinator to handle the volume.
• No-shows: Younger patients or referrals from certain sources may miss more appointments. Tracking these trends and offering virtual exams or flexible options can reduce no-show rates.
• Weak intake processes: The first call sets the tone. A friendly, professional interaction builds trust and ensures more patients follow through in receiving orthodontic care.

2. Poor Management of Observation Patients

Observation patients are future starts, but without proper follow-ups, many never return. Benchmarks indicate that 20% of new patient exams should transition into observation, and 20% of your annual starts should come from this group.

‍Revenue loss: A poorly managed observation system risks losing up to 20% of annual starts.

For every 130 patients placed in observation, that could mean 26 missed opportunities to start treatment—leaving significant revenue unrealized.

Why it happens:

• Lack of follow-ups: Parents often forget about the next steps without timely reminders, delaying decisions or losing momentum entirely.
• No clear system: Without consistent tracking, it’s easy for observation patients to fall through the cracks, leaving team members unaware of how many are ready for treatment.
• Unclear communication: Parents who don’t understand the importance of staying on schedule are far more likely to delay. Clear, proactive updates can maintain engagement and keep patients on track for treatment.

3. Losing Patients Between Phase 1 and Phase 2

Transitioning patients from Phase 1 to Phase 2 treatment should be straightforward, but many practices struggle to meet the industry benchmark of 85%. Instead, the average practice only achieves 49%.

Revenue loss: For every 100 Phase 1 patients, falling short of the benchmark means 36 missed starts—resulting in thousands of dollars in unrealized revenue.

Families often fail to transition to Phase 2 because they lose clarity or urgency about its importance.

Why it happens:

• Lack of communication: Without clear timelines and expectations after Phase 1, parents may not understand the need to continue treatment.
• Inconsistent follow-ups: Patients who aren’t actively monitored between phases are likelier to fall off the radar. Virtual exams can be particularly effective here, offering parents a simple way to reconnect with your practice and discuss the next steps without the inconvenience of an in-office visit.
• Unresolved concerns: Parents may have unanswered questions about costs, timing, or the necessity of Phase 2, making them hesitant to proceed.

Turn Revenue Leaks into Orthodontic Practice Growth

From missed calls to lost observation patients, each leak represents thousands of dollars in unrealized revenue—but they don’t have to.

Fixing these leaks could help your practice recover up to $480,000 annually. With Gaidge, you can identify inefficiencies, track progress, and capture every patient opportunity.

Don’t let revenue slip away. Schedule your demo today and see how Gaidge can transform your practice.

FAQs About Increasing Orthodontic Practice Revenue

What metrics should I track for orthodontic practice growth? Focus on New Patient Adds, Case Acceptance, Treatment Starts, Observation Pool conversions, and Phase 1-to-Phase 2 transitions. They can pinpoint opportunities for growth and areas where revenue may be slipping.

How often should I review my practice’s performance metrics? It’s a good idea to review your metrics monthly. Monthly reviews help you catch trends early and fix small issues before they turn into bigger problems. They also keep you focused on hitting your revenue goals.

How can Gaidge help my orthodontic practice increase revenue? Gaidge provides powerful analytics tools to monitor key performance indicators, uncover bottlenecks, and optimize patient flow. Plus, Gaidge's practice management consultants help your team improve retention, streamline operations, and boost revenue growth with tailored strategies.

How do I create a stronger observation system for future starts? Tools like Gaidge Consult Manager make it easy to manage observation patients. Real-time tracking, follow-up reminders, and customizable dashboards ensure every patient stays on your radar. With streamlined communication and better organization, you can keep patients engaged and increase starts.