3.28.14 Issue #629 info@mckenziemgmt.com 1-877-777-6151 Forward This Newsletter
 

7 Signs You’re Busy, But Not Productive
By Sally McKenzie, CEO

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So what’s your definition of “busy”? A patient reception area that is full to the brim? A schedule that has you and your highly energized staff doing hallway sprints from 8 a.m. to 5 p.m.? Is it a day that keeps you and your team at the top of your game and on track with your goals?

The definition of “busy” means different things to different people. For some it is synonymous with stress. For others it means excitement and challenge. And then there are those who see “busy” as the precise balance between a fully engaged team and profitable practice. They, however, are the exception. 

In far too many practices, “busy” means frantic but far from financially sound. Why? Because the business team members are doing precisely what the doctor has told them to do. Keep him/her … well … busy. Yet, in spite of the persistent pace, production continues to lag and profits don’t measure up. And the doctor is at a loss to figure out why.

After all, just look at the schedule. There’s barely an opening to be found. Naturally, dentists will assert with utmost conviction that the “full” schedule is an obvious indication they are running successful practices. The “keep the doctor busy scheduling strategy” seems to be working - so why don’t the numbers back it up? In the dental practice, busy is often an illusion that doesn’t necessarily translate to productive. A busy-but-not-productive practice often has a number of tell-tale signs:

1. The doctor is booked more than three weeks out, and patients have to wait several weeks for even the most routine procedures.
2. There is little if any consistency in the time scheduled for procedures - 30, 60, 90, minutes.
3. The objective is simply to keep the schedule full.
4. The hygiene schedule is booked for months.
5. “Lunch hour” is a nice euphemism for 10-minute lunch breaks for the team to catch their breaths and grab their protein bars.
6. Patient retention is weak.
7. Revenues are flat.

I recommend you take your focus off of merely busy and pay attention to what it means to be truly productive. First: Define Goals, Objectives, and Priorities. The doctor must develop a clear picture of the practice’s financial demands and desires. It is the first and most critical step in understanding the importance of scheduling to meet daily production goals.

You need to consider the fundamentals, including the following: How much are your bills? How much do you need/want to pay your staff and yourself? How many hours per day and days per week do you want to work? How much vacation time do you want to take? What about costs for bonuses, retirement, continuing education, equipment and computer upgrades and maintenance, etc.? All of those financial needs and desires play a role in determining the practice’s revenue goals. How many hours per day and days per week do you want to work? How much vacation time do you want to take?

Next: Setting production objectives. Rule #1 in building a profitable dental practice is to ensure that the Scheduling Coordinator is scheduling to “meet” production objectives vs. scheduling and then “hoping” at the end of the day that the goal was met. Set scheduling goals based on your overhead expense - scheduling goals can sometimes be pulled from the air and then you’re scratching your head wondering why you’re not reaching the objective. 

Setting a production objective requires the practice to know its overhead expense. How much money does it take to pay the bills and payroll?  For example, let’s say that expenses and payroll total $46,500/month and your objective is to have overhead be no more than 62% of your monthly collections.

$46,500 is 62% of $75,000 in collections per month (46,000 ÷ .62). If you are collecting at a 98% collection ratio (collection divided by net production) you will need to produce $76,531/month (75,000 ÷ .98). If you work 48 weeks a year which is 4 working weeks a month and see patients 4 days a week, that would equal $4,783.19/day in net production.

The industry standard for hygiene is 33% of the practice production, which would equate to hygiene producing $1,578/day and the doctor producing the difference of $3,205 and working an 8 hour day, which equals $401/hour. If you are seeing patients on 10 minute units and there are 6 units in an hour, the doctor must have net production scheduled at $67/per 10 minutes.

Next week, from here on out, you’re productive not busy.

For more information on this topic, visit my blog: The Lighter Side

Interested in speaking to me about your practice concerns? Email sallymck@mckenziemgmt.com
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