3.31.17 Issue #786 info@mckenziemgmt.com 1-877-777-6151 Forward This Newsletter
 

Improve Leadership Skills and Grow Your Bottom Line
By Sally McKenzie, CEO

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You likely didn’t focus much on the business side of running a practice while you were in dental school. What you do know, you learned either on the job or from your time observing practice ownership as an associate. It’s no wonder you feel a little overwhelmed in your role as practice CEO.

These days, there’s a lot that dentists need to understand to successfully run their business, including profit and loss, human resources, marketing, hiring and firing. You also need to pay careful attention to the 20 business operational systems especially the ones that directly impact practice revenues. If you’re not, I can pretty much guarantee you’re losing money. But don’t worry. With a little direction, you can turn it around.

To get started, let’s take a look at production. Few dental practices know how to establish production goals or determine the number of hygiene days they need. Here are a few tips to get you on the right track.

Identify realistic financial goals for your practice
Say your goal is to produce $700,000 a year. How exactly are you going to get there? You’ll have to bring in $14,583 per week (minus four weeks of vacation). If you work 40 hours per week, you’ll need to produce about $364 an hour. Want to work fewer hours? Great, but that means your per-hour production number will need to increase.

How can you determine the rate of hourly production? I suggest you follow these steps:

Train your assistant to log the amount of time it takes to perform specific procedures. If a procedure takes the doctor three appointments, the assistant should record the time needed for all three appointments.

• Record the total fee for the procedure.

• Determine the procedure value per hourly goal. Want an example? Let’s say a crown is $1000. Divide that number by the total time it takes to perform the procedure, which is 120 minutes. That gives you a production per minute value of $8.33. Multiply that by 60 minutes and it comes out to $500 per hour.

• Compare that number to the doctor’s hourly production goal. It should equal or exceed the goal you’ve identified.

Train your Scheduling Coordinator to schedule to meet that goal every hour of every day.

Don’t schedule “dream days”
Some dentists have their Scheduling Coordinator block out time for specific procedures. That’s OK, but don’t save slots for procedures just because you enjoy doing them or because they bring in the most money. Base it on the actual number of procedures you’ve performed over the last six months instead. Trust me, this will make your days run much smoother and will keep you on track to meet production goals.

Schedule for the hygiene days you need
You should have an adequate number of hygiene days on the schedule so new and existing patients don’t have to wait weeks or even months to get an appointment. When patients have to wait, you run the risk of them making an appointment with another dentist who can see them sooner. Also remember the hygiene department should account for 33% of your total practice production, and your hygienist should produce 3x her/his daily wage.

Follow this formula to guarantee your supply meets demand:

Count the number of active patients seen in the past year for oral health evaluations.

Keep in mind most patients come in twice a year for these appointments, so multiply that figure by two.

Add the number of new patients receiving a comprehensive diagnosis per year to that figure. For example, let’s say your practice has 1000 active patients + 300 new patients. That equals 1300. When multiplied by two, that gives you 2600 possible hygiene appointments.

Take that number and compare it to the hygienist’s potential patient load.

If the hygienist works four days a week, sees 10 patients per day, and works 48 weeks a year, that means there are 1920 hygiene appointments available.

Subtract that total from 2600. This shows you are losing 680 appointments per year, or 14 patients per week. In this example, the hygiene department should be increased 1.5 days per week.

Another tip? If your practice schedules patients when they are due, examine how far ahead patients are booked for appointments. If there are no openings in the hygiene schedule for three weeks, with some patients getting bumped into the fourth week, I recommend increasing the hygiene department’s availability in half-day increments. If you have several open appointments, it’s probably time to develop a patient retention strategy.

If you’re struggling with the business side of running a practice, it’s likely leading to lost revenues and plenty of frustration. With the right skillset, you can turn this around and finally start achieving true success and profitability. If you’re interested in becoming a more effective CEO, don’t hesitant to contact me at sallymck@mckenziemgmt.com. I’ll help get you there.

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

Interested in speaking to me about your practice concerns? Email sallymck@mckenziemgmt.com
Interested in having McKenzie Management Seminars speak to your dental society or study club? Click here.
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