10.14.11 Issue #501 info@mckenziemgmt.com 1-877-777-6151 Forward This Newsletter
 

Doctor, Put Those New Practice Fears to Rest
By Sally McKenzie, CEO

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Fear is an interesting sensation. On the one hand it is a profound motivator in all of us to take swift action when necessary. On the other, we can be paralyzed by our fears. Some of the world’s great leaders and philosophers have tried to help us look at fear rationally. A few centuries ago, French Renaissance writer Michel de Montaigne summed up our tendency to create worrisome imaginary scenarios pretty well. “My life has been full of terrible misfortunes most of which never happened.”  Franklin Delano Roosevelt’s immortal words from his 1933 inaugural address remain true today, “The only thing we have to fear is fear itself.”  And Dale Carnegie’s words remind us that fear is something we create, “Fear doesn't exist anywhere except in the mind.”

For dentists, fears often come down to the day-to-day challenges of running a practice - such as patients saying “no” to recommended treatment, or patients leaving for the dentist down the street, or not being able to pay the bills, fund retirement, etc. 

We talk to dentists about their fears regularly, particularly newer dentists enrolled in our Practice Start-Up Program. We find that virtually all of them have similar fears. While some of these worries are warranted, others are a waste of energy.

What are the top five fears for dentists? Read on.

# 5 - Insurance Dependent
Many dentists starting out in their careers fear that their practice will be dependent on insurance. Insurance is largely demographic driven. However, in these economic times, taking insurance - at least a few of the better plans - is an excellent way to quickly build a solid patient base. The practice can still be primarily fee-for-service, but it is important that the new dentist make an informed decision based on demographic information about the community.

Making insurance work for the new practice requires that it be treated as you would any other practice payment system. Co-pays and deductibles should be collected from the patient at the time of service. Additionally, once a year the fee schedules must be updated for each preferred provider organization that the office is affiliated with. If the fee schedules are not updated in the practice's computer system, then over time the practice is billing the insurance provider for less than what it could be. For example, XYZ PPO had an exam reimbursement rate of $55 in 2010, but in 2011 that rate was increased to $60. Yet a practice will continue billing the insurance for only $55 because the business team hasn't updated the fee schedule, the years go by, the fee schedules change, and the practice loses money it can never recoup.

#4 - Paying the Bills
New dentists are always surprised by the overhead benchmarks that are established for dentistry: Dental supplies - 5%, Office supplies - 2%, Rent - 5%, Laboratory - 10%, Payroll - 20%, Payroll taxes and benefits - 3%, Miscellaneous - 10%. They have to carefully manage their start-up monies and consider purchases thoroughly. Oftentimes, new dentists get so caught up in the sparkle and shine of all their new state-of-the-art equipment, that there's no money left for other critical start-up expenditures, such as marketing and business education.

What's more, it is common for new dentists to be treating family and friends when they open their practices, and many feel pressured to give freebies and discounts. Freebies and discounts will not pay for staff salaries, taxes, or supply and equipment purchases. But they will give you many sleepless nights worrying about how the bills will be paid. Nothing in the new practice should be given away for free. Fees must be set at a level that is appropriate for the area, and, most importantly, patients must be charged.

Additionally, now is the time to begin educating patients about the value of care that you are providing. Talk about what is involved in the procedure; explain the instruments on the tray, the many steps in the process. Very quickly the patient begins to realize that a so-called “simple” filling is a highly detailed procedure that requires numerous steps, a multitude of instruments, and a variety of materials that must be precisely applied. Too often dentists at every level - new and experienced - minimize the care that they deliver. Remember, dentistry requires a level education, training, and skill that most people simply don’t have.

Next week, the top three fears for new dentists.

Want more of me? Click here to visit my blog, The Lighter Side, for more Dental Practice Management info.

Interested in speaking to Sally about your practice concerns? Email her at sallymck@mckenziemgmt.com. Interested in having Sally speak to your dental society or study club? Click here.

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