8.10.07 - Issue # 283 Forward This Newsletter To A Colleague

Budget Wise and Avoid the #1 Technology Mistake
by Sally McKenzie CEO
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After dental school, technology is probably the biggest investment you’ll make in your career. And with so many fabulous options available where and how do you begin to choose what to buy and how much to spend? It starts with careful planning and preparation to ensure that you and your team maximize every penny of this major practice investment.

First and foremost, curb the urge. As dazzling as that new piece looks on the showroom floor and as promising as it all seems to be, resist the temptation to splurge at the next dental meeting unless you’ve done your homework, carefully researched your options, educated your staff, and determined a budget.

Without a budget, the cash outlay for technology can quickly become overwhelming for the doctor and the practice. But how much is enough? I recommend that practices set aside about 5% of their annual gross revenues for both business and clinical technology.

On the business side, the typical budget would be about 1.5%. At that level, practices should be able to purchase the following:

  1. New computer hardware every 36 to 48 months.
  2. Practice management software, regular updates, and unlimited telephone support.
  3. On-site professional technical hardware and network installation and maintenance.
  4. A minimum of 16 hours of on-site software training annually.

Dentists should be able to use their practice management software to easily access a few key system reports regularly. First, the Accounts Receivables report. This shows the total amount of money owed the practice from patients, insurance companies, or other third parties. The report should include every account with an outstanding balance, the date of last payment, and a note indicating if payment was from the patient or the insurance company. Practices also should be able to closely monitor patient retention with the production report. Depending on your software system, it may be called Production by Provider, Practice Analysis, or Production by ADA Code.

The management system also should enable the practice to track unscheduled treatment using the Unscheduled Treatment Plan Report. In addition, the system should make it easy for patients to pursue treatment. For example, certain software programs allow you to determine in just 10 seconds if a patient is eligible for treatment financing through CareCredit. This feature alone can significantly improve treatment acceptance.

On the clinical side, the typical annual budget would be about 3.5%. This would include both operations and clinical information management. At that level, the practice should be able to purchase the following:

  1. New computer hardware every 36 to 48 months.
  2. Practice management software, regular updates, and unlimited telephone support.
  3. All clinical software upgrades to the practice management software.
  4. Digital X-rays, digital imaging (camera), periodontal probing, etc.
  5. On-site professional technical hardware and network installation and maintenance.
  6. A minimum of 32 hours of on-site training each year.

Don’t skimp on the training. That is the biggest mistake that doctors make in purchasing technology and equipment. I’ve talked to too many dentists that didn’t want to pay for training. They convinced themselves that they could figure it out and then teach the staff or reluctantly agreed to training on the condition that all of it be crammed into a few hours.

Six months down the road, the doctor is wondering why that multi-thousand dollar investment hasn’t paid off. Why staff grumble when asked to use it, why no one seems to have an interest in mastering it. Until eventually it’s relegated to the basement, quietly deleted from the system, or secretly buried in the back of the storage closet. And the doctor is out several thousand dollars.

On the other hand, those practices that are using technology and equipment to pave the way to higher profits and greater productivity have planned exactly how they will use it. They’ve thoroughly trained the team and will continue to do so as necessary, and they have an established budget that ensures systems are updated and replaced regularly.  And major purchases take place only after careful research and planning is done.

Interested in speaking to Sally about your practice concerns? Email her at sallymck@mckenziemgmt.com.

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