“It's the economy, stupid! Or is it? ”

07.31.2008

In a previous entry, I talked about percentage of staff pay and how to get that lowered by making your staff more efficient. The other way to get your percentage of staff pay into an acceptable range is increase collections by increasing the percent of cases that are accepted. If your case acceptance percent runs 80% - and what I mean is that 80% of your patients commit to, pay for and complete full treatment plans within a reasonable amount of time - then you're in the Michael Jordan league of case presentation. An acceptable amount is 70%. Anything less means your practice is hemorrhaging money.

This is an area where I find many doctors misdiagnose their office’s problem. Production is down, they can't get people in, so they go to the front desk and the receptionist is saying they've talked to this guy, this guy and this guy, but they can't get them in. So the doctor blames the economy or the time of year or his location or that they walked under that ladder while their office was being built.

But the real reason those patients aren’t coming in is a hard one to accept: You didn’t create enough value in the treatment when you presented it. Ouch! So the patient goes to the front desk and says, “gee that's a lot of money” and the financial arranger, for whatever reason, immediately agrees and devalues the treatment and tells the patient to do just what’s covered under their insurance for the year.

Patients will commit to, pay for and complete full treatment plans within a reasonable amount of time when the patient places value on the treatment after proper education by the dentist.

Here are just few pointers to get patients better committed to their treatment plan.

Pointer #1: Talk to them in layman’s terms. Don’t assume your patient knows anything about dental health. Many times we listen to a dentist presenting treatment and the dentist uses terms that assume the patient just got back from an advanced course on altering occlusion function and esthetics.

Pointer #2: Use an inter-oral camera, draw pictures, show them models or their x-rays. You’ll lose their interest if you don’t. But in doing so, do not violate pointer #1.

Pointer #3: Use analogies. Compare tooth decay to rust on a car. Compare periodontal disease to a post trying to hold itself up in a hole where the soil has eroded. There are a thousand different ways to describe dental conditions in terms your patients will immediately relate to.

Stay tuned for more pointers because I’m just getting warmed up. In the mean time do yourself a favor and take our free practice analysis here.

“What are the collections today???”

07.24.2008

Is this a question you ask your front desk regularly? Dentists who are frantic about their profitability always seem to be bugging their front desk about the collections. What’s worse, they try to “save” their way out of bad financial situations and that’s the wrong solution.

Now don’t get me wrong. You should save money where you can, but the fact is that most of your expenses are fixed. Instead of asking, “What are the collections today?” you should be asking, “What percent of my collections goes to staff pay?”

Why? Because the percentage of staff pay tells you what kind of manager you are and whether your staff are efficient or not. It’s hard to be profitable if you have a high staff pay percent. On the other hand, a low percent of staff pay pretty much guarantees profitability.

Percentage of staff pay is figured by taking your staff pay and dividing it by your collections. Keep in mind that staff pay includes matching payroll taxes, unemployment, 401Ks, uniforms, health insurance, etc.

A profitable practice is under 25% but really profitable practices run around 15 to 20%. A practice collecting $100,000.00 with a 70% overhead has the same profitability as a practice collecting $60,000.00 with a 50% overhead. Except the dentist in the $100,000 a month practice is working a whole lot harder!

Really profitable offices are run by dentists who train and demand production from their staff. They keep them focused on the product they are delivering. So next time you have the urge to ask your front desk, “What are the collections today?” take a deep breath and ask yourself, “What percent of my collections go to staff pay?” If it’s more than 25% you need to train your staff so they are more efficient and productive. When you do this, your collections will go up and your percent of staff pay will go down.

With proper training, staff can become more productive. And you don’t even need to pay them more! Want your staff more productive? A good start is to take our free practice analysis here.

Should You Have Been A Hairdresser?

07.17.2008

How many of your female patients would miss their hair appointments? My wife tells me, "not many".

Is that because there’s such a thing as hair insurance now? Maybe I’m out of the loop, but I don’t think so.

Do you know women generally spend about $100 to $150 on their hair appointments and they do this about every 4 to 6 weeks. That’s at least $1200 per year on their hair! And it’s all out of pocket, without the necessity of being confirmed or reconfirmed. They arrive on their own free will, without needing to check with their husbands to see if it’s okay.

Perhaps you’ve even had a patient or two cancel their appointment with you so they could make their hair appointment!

Here’s something you can do: Pull a stack of charts out that are for patients with insurance. How many of them came in twice a year? Keep in mind that their out of pocket cost is almost always near zero.

So why is it that hairdressers have a much easier time than your hygiene department? The reason is they have a desire and want for the salon service.

This is what your hygiene department needs to create with the patients in your practice. They need to educate the patient on hygiene care, on preventive dentistry; and create desire, want and value for the service. We can help. To find out how, begin here.

The True Loss of Your Practice's Income

07.10.2008

Is your staff pay (including hygiene) under 25%?

If not, it's time to make your current staff more productive, not hire or fire more people.

Here's a datum you need to have under your belt: The less in-house training you provide your staff, the higher your percent of payroll will be. Why? Because proper training puts your staff in the driver's seat. Without it they end up as road kill along with you and your practice.

You can’t just train your staff with conversations over the water cooler, pep talks or group hugs. You need to actually apprentice them on the nuts and bolts of their jobs and then continue to educate and correct them. This is how you’ll create a team of professionals producing high numbers with a low payroll percent.

Here’s a typical situation: You hire an "experienced" front desk person but you don't provide any in house training or apprenticeship. So the new person does it "her way" and often creates more headaches than the person you just got rid of.

The highest producing staff members are those that are trained and apprenticed in house.

Now I know what you're thinking. Who has time for all this? And we have heard you. Our training manuals will get the ball rolling for you. They even include apprenticeship checklists. You can check out samples here.

Do You Spend $300 to Collect $100?

07.03.2008

Here's a scenario typical at many dental offices: A patient comes up to the front desk after receiving their services and doesn't know there's a co-pay. Perhaps they thought their "dental insurance" would cover it. They say they didn't bring their wallet, checkbook or whatever. So the front desk says, "No problem, we'll send you a bill." Your collections person prepares the bill and sends it out. No payment comes in. A second bill is sent. No payment. The patient is called. A message left. More calls. More answering machines. But still no payment. A letter is sent telling the patient they'll be turned over to collections. Zippo. The account is turned over. The agency collects on it and you receive a fraction of what the service was worth. Congratulations. You've just spent $300 to collect $100 and as a bonus you now have a former patient in your backyard who'll probably be bad mouthing you. Unfair, but true.

As a consultant, I'm always looking for ways a dental office can be more efficient. At least half of these scenarios could be avoided if, as an example, the front desk simply reminded the patient during the confirmation call that there will likely be a co-pay.

It's a simple solution but sometimes you don't always have time to think about these things. That's where we come in. Check out our free, no obligation, practice management analysis. You have nothing to lose. Simply go here.

Archives:

August 2008

July 2008

June 2008

May 2008