3.2.07 - Issue # 260 Forward This Newsletter To A Colleague

Nancy Caudill
Senior Consultant
McKenzie Management
Printer Friendly Version

Do You Have a Practice Road Map?

A McKenzie Management Case Study

Dr. David Campbell -  Case Study #26

“I have no idea what my business staff do all day long.  It seems that every time I walk past the front business area, Kathy and Janice are talking with one another…and it doesn’t appear to be business related because they are laughing!”

This was one of the concerns that Dr. Campbell shared with me during our dinner the first night of my arrival.

“I don’t feel like I have a handle on my practice.  I know that my patients are being taken care of but I don’t know if my practice is being taken care of.  And honestly, I really don’t know how to take care of it.”

Practice facts:

  • 9 year old practice in the same location
  • Gross production and collections have leveled off during the past 2 years
  • No additional days of hygiene added since the practice started

Interestingly enough, Dr. Campbell was not aware of other important practice statistics that he should know in order to determine the “health” of his practice.

“Why do I need to focus on numbers?  I don’t want to think of my patients as “walking dollar signs”, was Dr. Campbell’s heartfelt remark to me.

“Dr. Campbell, I understand what you are saying to me.  At the same time, whether you like it or not, you are a business owner and you have an obligation to yourself and to your employees to manage your business in a profitable manner”, I responded to him.

What any practice owner should know to make sound business decisions:

  • # of new comprehensive exams per month – this is vital in determining how many patients are “coming in the front door”
  • Patient retention percentage – this tells you how many patients you are keeping vs.“going out the back door”
  • Referral sources monthly – helps you determine where to spend your marketing dollars…and where NOT to spend them!
  • Net production per provider – monthly and daily – this tells you if you are meeting or exceeding your daily scheduling goal (which you should have based on your overhead)
  • Monthly production adjustments –how much dentistry you are giving away to friends and family, insurance and bad debt.
  • Net collections –how much money you have to pay bills.  This amount should be 98% of your net production.
  • Outstanding Insurance Claims over 60 days –shows if your Financial Coordinator is working or taking too many personal phone calls.
  • Outstanding Accounts over 90 days.  Should not be more than 12% of your total A/R.  This also tells you if the FC is performing her responsibilities.
  • Credit Balances – how much money you owe to your patients.
  • Total Accounts Receivable – How much money do patients and insurance companies owe to you?  This should be no more than 1 times your monthly net production.
  • Over-the-counter collections – this tells you whether your schedule coordinator is asking for the patients “investment” when the services are performed.  If she is collecting 35-45% of the net production for the month, she is doing a good job.

Most of these statistics are very easy to obtain through your software program.  EVERY practice owner should know these figures monthly.  Dr. Campbell was not aware of his. 

Dr. Campbell’s observations about his own practice:

  • He thought that his accounts receivable was not as healthy as it should be because he saw the number of statements that were being mailed monthly as they stacked up at the front desk!
  • He didn’t have scheduling goals in place but he knew that there were many days that he saw lots of patients but didn’t produce much, as he reviewed his “day sheet”.
  • He felt like he wasn’t seeing very many new patients like he used to but didn’t really know the number or where they were coming from.
  • He definitely knew that it was harder and harder to pay all the bills at the end of the month and have anything left for him to take home.
  • He had no idea how to “stop the bleeding”.

During my four-day visit with Dr. Campbell and his team, they learned how to run the appropriate reports to get the information that was necessary to plot statistics.  Much more importantly, they learned how to analyze these figures and discuss trends.  What is causing them?  What can we do about them?  What is working and what isn’t working?

As I hear from Dr. Campbell monthly and see his practice numbers, we discuss these trends and he feels “on top of things”, as he puts it.  Let’s just say that it is like taking a trip by car….if you haven’t determined the routes that you are going to take, how do you know when you are lost.  You may be making good time but you will never arrive at your destination.  Study your “road map”!

If you would like more information on how McKenzie's Practice Enrichment Programs can help you IMPLEMENT proven strategies….. email info@mckenziemgmt.com.

Forward this article to a friend.

 

McKenzie Newsletter Information:
To unsubscribe:
To discontinue receiving the Sally McKenzie eManagment newsletter,
click on the link at the very bottom of this page for instant removal,
To report technical problems with this newsletter or to request technical help,
please send a descriptive email to: webmaster@mckenziemgmt.com
To request services, products or general inquires about The McKenzie Company activities
please send a descriptive email to: info@mckenziemgmt.com
If you would like to have any of your dental practice concerns answered personally by Sally McKenzie,
please send a descriptive email to her at: sallymck@mckenziemgmt.com
Copyrights 1980-Present The McKenzie Company - All Rights Reserved.