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2.03.06 Issue #204  
   
Know Where to Find Tens of Thousands of Dollars? It's Obvious


Sally McKenzie, CEO
The McKenzie Company
sallymck@mckenziemgmt.com

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A few months ago one of the network news organizations reported that a state department of natural resources spent $100,000 of taxpayer money to study landfill waste. After an exhaustive look at garbage from 14 sites in this state, the conclusion? People need to recycle more. Well, now there’s a revelation. Pretty obvious conclusion it would seem.

When faced with a dilemma we often agonize over how to solve the problem. We analyze and we study and we fret. We spend hours and hours and, in some cases, thousands of dollars, only to eventually discover that the best solution is often the one that should have been the most obvious.

Dental teams frequently face the same challenge. For example, production is lagging, doctors feel like they are working and working and working but just not getting ahead. They want to perform more comprehensive dentistry. They want patients who are open to their recommendations. They want new patients, better patients. They search for that single formula that is going to bring the very best patients into their practices, the ones who will pine for their services and clamor for any appointment – not just those after 4 p.m. They believe they have to go out and find, and recruit, and somehow coax this very special patient breed to come to their practice.  Maybe that expensive new equipment will bring in the perfect patient, maybe a pricey marketing campaign, maybe this, maybe that. They commonly overlook what is right there in front of them. They seldom consider the obvious ...

What’s in the patient records? It is here that you are most likely to find your perfect patients. They are the ones who trust you and already believe in what you can do. In those records, you’ve documented countless recommendations for treatment over the last several months. Although dentists and their teams look at patient records every day, few notice the obvious:  tens of thousands of dollars in unscheduled treatment that is wasting away unnoticed, and, worse yet, unpaid for!

We see it repeatedly, case after case recommended to patients but never pursued, a mere note in the record because the office doesn’t have a treatment presentation procedure. The dollar figures are huge. In one dental practice alone, nearly $400,000 in unscheduled treatment was sitting in the patient charts because there was no standard protocol for follow-up. If you are not impressing upon your patients regularly, the importance of pursuing the care you’ve recommended, they will not see the value in receiving that care. It’s as simple as that.

I recommend you implement a protocol for treatment presentation. First, assign a member of the team to serve as Treatment Coordinator. And while you’re at it, train another staff member so they can step in when necessary. A Treatment Coordinator is a liaison with the patient who is both a “treatment advocate” and a “patient advocate.” But this isn’t a job that just anyone in the office can do. The Treatment Coordinator should be able to connect easily with patients. She/he should have a clear understanding of dentistry and dental procedures. The coordinator should have complete confidence in the doctor and his/her clinical abilities, and should be the doctor’s loudest cheerleader. This person must be well organized. She/he must be assertive without being pushy, and she/he must be comfortable discussing those difficult issues – such as finances, fears, etc. – with patients.  

When you’ve chosen the right person for this essential responsibility, ensure their success by providing professional training. You should be able to count on your well-trained Treatment Coordinator to skillfully handle each patient and expertly address any general reticence that may impede treatment acceptance.

Next week, developing your plan to get treatment out of the patient records and into the schedule.

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Quicksand in Your Office


Nancy Caudill
McKenzie Management
Senior Consultant
McKenzie Management
877-777-6151
nancy@mckenziemgmt.com

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“Quicksand “– It is not unique and can occur anywhere under the right conditions.  A feeling of helplessness occurs as the victim struggles to get free.

As a professional dental consultant, I see you sinking in quicksand quite often.  Sometimes you don’t even know it…you don’t see the quicksand but you feel like you are drowning and can’t breathe.

Let’s take a look at the deepest area of “quicksand” in your practice – Cash Flow!

Making a couple of assumptions at this point, I assume that you feel you are working as hard as you can and the production appears to be adequate; however, “Show me the money!”  Bills are not getting paid on time, retirement plan is not being funded and the staff wants raises.

Primary Causes:

  • Accounts Receivables Over 90 Days
  • Outstanding Insurance Claims over 60 days
  • Overhead
  • Internal Payment Plans Offered
  • Over-The-Counter Payments
  • Adjustments

Accounts Receivables Over 90 Days

Somewhere in dental management history a vicious rumor was being spread that having a large A/R was good because it would guarantee cash flow for the future if the office were to close!  “What were they thinking?”  We all know that the older the outstanding balance becomes, the harder it is to collect it. The following chart illustrates how money depreciates over time:

 Follow these guidelines for improved A/R:

  1. Establish a specific format for those patients who did not pay at time of service and are to receive a statement. For example:
    1. Send current statement within 1 week of treatment.
    2. 31 days – call account holder and send statement with message
    3. 45 days – call account holder and send statement with message
    4. 60 days – call account holder and send statement with message
    5. 90 days – turn over to collection agency and write off as bad debt.  The A/R over 90 days should be no more than 12% of your total A/R.
  2. Send statements daily or weekly instead of monthly  This will distribute cash flow evenly, as well as the preparation time.
  3. Always provide your patient a “Print out of Today’s Procedures” that includes an itemization of services provided.  The increases perceived value for the patient.  For example:
    1. Oral Cancer Screening
    2. Toothbrush and Floss
    3. TMJ Analysis

These procedures can be set up to generate automatically by your dental software to print on the Receipt of Today’s Procedures (Walk-out slip).

  1. When checking the patient out, the Business Coordinator should be aware of how much the patient is responsible for and the patient should also be aware.   This information was given to them when the appointment was made!…and a copy of the treatment plan was presented!  Here is the script:
    1. “Mrs. Jones, Dr. Brown delivered your beautiful crown today (KISS principal) and your portion is $500.”  At this point, the Business Coordinator continues to look at Mrs. Jones and simply smiles.  The next person that speaks will lose!
  2. Accounts Receivable totals should be no more than 1x your monthly net production.  Keep in mind that some software programs include your credit balances with your debit balances. This will reduce your true A/R so be sure and add back your credit balances if this is the case with your software.  Don’t let the computer fool you!

If you determine, after reviewing your Accounts Receivable Report generated by your computer, that you are above 1x your monthly net production (of course, this means that you need to know what your net production is!)…be patient. 

It is impossible for your Business Coordinator to turn it around overnight“She doesn’t know what she doesn’t know.”  Maybe you have never given her guidelines such as these to follow.  Monitor the statistic monthly and set a reasonable goal to achieve this healthy ratio of 1:1.  Maybe 6 –12 months is reasonable.  She may have old payment habits of patients that she will need to break.

Total Accounts Receivable – Credit Balances = Ratio
Net Production for the Month            

$125,000 - $15,000 = 1.833
$60,000

More “quicksand” solutions to come in the future.  If you have any questions about this information or would like to share your solutions, feel free to contact Nancy Caudill at Nancy@mckenziemgmt.com or call toll-free at 1-877-777-6151 x 31.

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The Mirror of the Practice
The Patient's Perspective

Walk into a home, a business, a retail store, a physician’s office, and without even realizing it you begin to make judgments about the homeowners, the staff, the care or service provided, and the people associated with the space. The physical environment is a mirror – a reflection – of the quality inside.

Dental offices are no different and the environment has a direct impact on how patients perceive your care and how they respond to your treatment recommendations. When was the last time anyone on the staff sat in the waiting room and in the dental chair? Is the space comfortable or uncomfortable? Do you feel welcome or unwelcome? If you were the patient, would the sites, sounds, and smells put you at ease or cause stress? Perhaps it is clean and orderly but stark and unwelcoming. Maybe it is cozy and warm and patients happily curl up in one of the chairs and just enjoy the space.

From colors, to furniture, to smells, to lighting, the feel of the space affects the temperament of the patients, and acceptance of treatment is always easier in a relaxed and comfortable atmosphere. While creating the spa-like experience continues to grow in popularity, fashioning a calm and enjoyable environment for the patient doesn’t demand that every practice install waterfalls and offer foot massages. Rather the space can be enhanced merely by looking at the surroundings from the patients’ viewpoint.

When was the last time the office was painted? How is the furniture wearing? Depending on the traffic, an office should have a new paint job approximately every five to seven years, and the walls should be washed periodically. 

Painting the walls is an easy and inexpensive way to give a fresh look to an office and convey a particular feeling in the space. Primary colors red, yellow, and blue can add drama and life to an otherwise dull area. Used well, they provide brightness and visual bounce. A warm yellow infuses a room with happiness. This is an excellent color for a dental office especially if the room does not have a lot of windows. In a room that has dark leather furniture, you might consider painting the walls in a sage green. It provides the room with balance and relaxes the formal leather pieces. Soft blue walls are very soothing to the eye and create a feeling of calm.

Monochromatic schemes do not fight the setting of the room. The one-color room, especially white, is very effective in offices that lean toward an ultramodern, state-of-the-art look. But it also can be cold and stark if other features in the room don’t balance the bright white.

Photographs are low cost, attractive, and can command lasting visual attention. Changed regularly, the effect doesn’t become static and provides ongoing interest. One office chose to take black and white photographs of the area. The pictures were then changed with each season. The patients looked forward to seeing what local pictures would be used for a particular season. Black and white photos are particularly striking on a brightly colored wall such as yellow or blue, and they do not fade as quickly as color snapshots.

Another doctor featured flowers from his yard. He showed the flowers starting to bloom in spring, fully blooming in summer, leaves collecting in fall and snow covering the area in winter. The patients looked forward to seeing the changes. Consider partnering with a photography club at the local high school or college. It will provide a steady stream of visually interesting pieces and provide a venue for amateur artists to showcase their work.

Collections are another means to provide visual pizzazz to the space and give patients something to focus on while waiting for the doctor. Some practices create specific themes in the individual operatories from sports, to children’s movies, to history themes. The options are virtually limitless, and creating the themes can be a fun and interesting project for the staff.

Look at the surroundings from the patient’s eye, from the front door, to the flooring, to the waiting area, to operatories, to the restrooms, to the collection area. The entire environment and physical atmosphere of the space is a direct reflection of the doctor and team. Does this mirror capture your best side?

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2006 Location Sponsor Information Topic Speaker
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