Are You On the Giving End of Your Receivables?

Sally Mckenzie, CEO
McKenzie Management
sallymck@
mckenziemgmt.com

       It’s the soft patch in the economy – still or maybe again. It’s those goofy insurance companies. It’s the lack of time. It’s this lame excuse, “Well, you know we’re in a blue collar county and the factory shut down.” Or that inane justification, “You know, our patients just don’t expect to have to pay until they get a bill.”

Maybe it’s the fear of actually asking for money, a weak financial policy, all likely compounded by a practice-wide willingness to ignore all those “things” that cause accounts receivables to

persistently siphon profit from the practice. Accounts receivables is the total amount of money owed to the practice from patients, insurance companies, or other third parties, and it should never be more than one month’s production.

Often treated like that dirty closet down the hall, many practices don’t really want to look at it, so they just avoid opening that door as long as possible. After all, who really wants to see in black and white that they have some $150,000 or more in uncollected fees eating away at their bottom line, dollars that could be used for doctor and staff training, new equipment and technology, perhaps even a salary increase or bonus?

Ignore it and maybe these people will actually pay off their bills by the end of the year, sure, and maybe the tooth fairy will cover the balances for the rest.

We have seen accounts receivables as high as four times monthly production in some practices. Often these are businesses that have long served as dental lending institutions of sorts. It’s so much a part of the practice culture that it is difficult for the team to comprehend that it could ever be any other way – even if the practice down the street in the same community, with the same socioeconomic issues has practically non-existent accounts receivables. What’s more disconcerting is that in many of these situations, the dentist is paying little attention to how high their accounts receivables are.

Rule number one to getting receivables under control – get the numbers.

• Generate an aged accounts receivable report monthly that lists every account with an outstanding balance and date of last payment
• Total all monies over 90 days delinquent. The percentage should not be over 12% of your total accounts receivable.
• Examine the charges in the "current" column of the report. These are uncollected monies produced in the past 29 days. Because the practice should have a minimum of 45% over-the-counter collections for the month, (if you are accepting assignment of insurance benefits) there should be no more than 55% in the current column awaiting insurance reimbursement.
• Always run the report with credit balances because credit balances need to be added back to the total accounts receivable.

If the total exceeds your monthly production, it's a red flag indicating problems in one or more of the following areas:

• Insurance system
• Billing system
• Financial policy
• Presentation of financial arrangements
• Consistent inability of financial coordinator to ask for money

Don’t wait to see red!! Get your systems on the receiving end today!

If you have any questions or comments, please email Sally McKenzie at sallymck@mckenziemgmt.com.

Interested in having Sally speak to your dental society or study club?
Click here

Reluctant to Hire a Coach? You’re Not Alone.

Dr. Nancy Haller
Executive Coach
McKenzie Management
coach@
mckenziemgmt.com

        This week’s question comes from one of our McKenzie Management’s Practice Enrichment Consultants.

I had my consult call with Dr. Smith today. He is the one who was unavailable for your calls, and was not responding to your emails and voice mail messages. He admitted to me that he is just "chicken" to talk to you... fearful of what you may say or what your conversations may

uncover. Is there something I could say that would allay his fears or get people who know they need coaching yet are afraid to go for it?

Thank you very much for bringing this to my attention. I imagine your client is feeling alone and isolated. However, he is struggling with a very human issue- fear of change, fear of being vulnerable, fear of not being perfect. Unfortunately nothing sabotages success as much as fear.
In her book, Feel the Fear and Do It Anyway, Susan Jeffers poignantly describes the limitations that people impose on themselves when they cave into their fears. People who never take any risks ironically live with a dread of something going wrong. They seek security above all else, but the effect is chronic insecurity. It is actually easier, and infinitely more rewarding, to try new things. The decision to incorporate more challenge into your life brings a feeling of security because you know you can tackle anything.

Unless we face our fears, we can’t grow. Without growth, life is stagnant.

One of the biggest obstacles to growth is perfectionism, a common trait of dentists as well as other professionals. For many high achievers, the message came in childhood when well-intentioned parents tried to instill motivation yet delivered fear. I remember being a seventh grade student and being introduced to biology. Although I was blessed with a good brain, I hated dissecting bugs, worms and frogs. I ended up with a ‘C’ in Science on a report card filled with ‘A’s’.

Pleased with my overall accomplishments, I proudly awaited some form of praise from my parents. However, the first comment I heard was, “What’s this ‘C’ doing here?” I was crushed - they didn’t even notice the good stuff I did. And in a small and probably unconscious way, I learned the benefits of being perfect – no one can criticize you.

I suspect that like the client above, many who are reading this also tend to judge themselves too harshly. And the perception is that others will criticize them and find fault too. However, as a ‘recovering perfectionist’ and coach, my job is to offer a safe, non-judgmental place for change to happen, to help identify strengths and talents, and then to leverage those to overcome obstacles for greater success. Coaching is designed to enable people to be ‘good enough’ rather than perfect. Imagine what it would be like to have someone who accepts you as you are, and also helps you to see the part of you that maybe you've forgotten; someone who will stand with you and hold your vision so you can move towards your highest potential.

Coaching is not a punishment but an opportunity. The process entails setting goals for more effective action, and it provides the support needed to make incremental but important behavioral changes. Coaching is akin to having a ‘professional fitness trainer’…someone who works with you on your agenda. A good coach is someone who motivates by pointing out what you did well, someone who encourages by aligning with your values and needs. A good coach is someone on your side.

Along with fear, another significant obstacle to coaching involves financial concerns. A study reported in the January 2001 issue of Business Wire followed 100 executives, half holding positions of Vice President or higher, almost half between the ages of 40 – 49, and one-third earning $200,000 or more per year. The results of their 6 – 12 month study showed an average return on investment of 5.7 times the initial investment in a typical coaching assignment or a return of more than $100,000, according to executives who estimated the monetary value of the results achieved through coaching.

I hope that what I’ve written will help you and your client, as well as others who are reading this. Face your fear, and do it anyway. Coaching will give you confidence AND financial rewards too.

Dr. Haller is available to speak to your dental society or study club on subjects such as interpersonal communication, conflict management, and team building. If you would like information about any of her practice-building seminars, contact her at coach@mckenziemgmt.com or 1-877-777-6151 Ext. 33

The Fear Factor

From the Patient’s Perspective

         What are your biggest fears? Insects? Rodents? Hanging from an airplane over open water? Being buried alive? The so-called reality show FEAR FACTOR exploits peoples’ fears and contestants actually volunteer to participate in this game of public traumatization for a mere $50,000. Fortunately, dental phobia has not been featured

on this program, but as dentists discover early on in their careers many patients can be very anxious about the dental experience. There are varying levels of fear, but when fear reaches the point that it is irrational and causes the patient to avoid treatment, it becomes a phobia.

Patients who are extremely phobic typically have a history of negative dental experiences. However, those experiences aren’t necessarily painful. In many cases anxious patients are as much or more afraid of embarrassment than they are of pain. They may start avoiding the dentist because of a painful experience, but they also often realize they need to return to the dentist. However, they can’t bring themselves to do so because they are afraid they will be scolded and belittled for their neglect.

In other cases, fears are learned vicariously through parents, family members, and friends. They may hear about Aunt Mary’s horrible experience 20 years ago and decide to take ownership of that incident almost as if it were there own. But typically there is not just one reason why people become fearful. It tends to be a cumulative effect.

Managing the anxious or phobic patient can be almost as difficult for the dentist as the experience is for the patient. Dentists frequently are targets of comments such as, “Don’t take this personally, but I really don’t like dentists,” from patients, friends, or even family members. In other cases, it’s the question, “Why did you become a dentist?” as if such a decision surely must be the result of some early life trauma or closeted desire to engage in tortuous activities. Anxious patients are a common source of stress for dentists who are provided very little training in managing and caring for them.

One of the most critical steps a dentist can take in handling an anxious or phobic patient is to listen to them. The fears of the patient will be as individualized and unique as the patient themselves. Taking extra care and time to build a relationship with the patient first and address their dental needs second is vital. It’s a process of gaining and keeping the patient’s trust.

Give patients the opportunity to talk about their fears. Ask them if they have had any negative experiences in the past, if they have concerns about dental treatment, about injections, anesthesia, drilling. The answers to those questions can be every bit as important as the routine health history questions posed. Not only will the patient’s stress level go down, so too will the doctor’s.

Many anxious or phobic patients feel very helpless in the dental chair and this can be particularly traumatic. Helping them to feel that they have some control is critical. The most common approach is to establish a signaling system in which the doctor will stop if the patient raises their hand for any reason – perhaps to ask a question or because they might want to rinse. The key is to ease their fears by emphasizing they have more control of their circumstances.

In addition, it is vital that team members are sensitized to the special needs of this type of patient. Putting the patient at ease the moment they walk in the door will go a long way in improving the entire experience. Dental teams should tune into the patient’s body language such as breathing rates, perspiration, is the patient unusually quiet or particularly boisterous. How is the patient holding their body? Are they gripping their hands? Do you see muscle tension?

Dentists and dental teams that take the time to get to know and understand fearful patients often find that they become some of the most loyal patients in the practice as well as the doctor’s greatest source for patient referrals.

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Hi Sally,
Appreciate your e-mails here in South Africa - I run a large practice and your tips are most helpful in dealing with a miriad of issues that crop up every day. How do you deal with this one? - Mrs Demanding ''needs'' an appointment TODAY - THIS IS HER LINE, '' IF I CAN'T SEE HIM TODAY I'LL HAVE TO GO ELSEWHERE''.

Thanks for your help,
Dr. Brian

Dear Dr.
Well...I think I might alter my answer depending on having some more background information, i.e., how long she has been a patient, what she wanted the appointment for, true emergency or is just a "nose in the air" kind of demanding patient?
If so, I would say, "Mrs. Jones, I am sure you can understand that Dr. Brian has committed to see patients, just like you, at promised times today. There is not an open time for him to devote his full attention to your needs. Now, I might have an opening today should a patient decide to cancel or not show up. So as a courtesy to you, if that happens, I will call you immediately. Now is your cell phone number xxxxxx? In case that does not occur, let me look at the next few days for availability and make you an appointment."

I'm afraid I would have to "kill her with kindness" and hopefully she would see that she was giving me unreasonable demands. Notice that I am not asking her a question, I am controlling the conversation. If after the above she says, I will go some place else. I would say, "I am sorry we have disappointed you. I will be sure and let Dr. Brian know. Where would you like for me to forward your records?"

Bottom line....if it just doesn't feel good ...let her go.
Hope this helps.
Sally