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4.14.06 Issue #214

 
   
Sink or Script


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

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Recently a blurb appeared in the news about a sinkhole in Brooklyn, New York that swallowed an SUV. According to the Associated Press report, a city street collapsed under the vehicle, leaving it barely visible inside the large hole. Thankfully, no one was injured. Over time, the soil beneath the street had been washing away. But it wasn’t until the earth gave way that anyone realized there was a problem. Worse yet, the damage to the area transportation infrastructure likely extends well beyond that great big gaping hole.

Unfortunately, that’s frequently how it is. Oftentimes we don’t realize there’s a problem until we’re facing a crisis. We don’t see the foundation of something we depend upon washing away because outwardly everything looks fine or it’s so much a part of our routine that the possibility that some aspect of it needs to be changed or fixed never even crosses our minds.

Such complacency prevails in many practices when it comes to day-to-day patient interaction. Dental teams discuss scheduling, finances, appointments, treatment with patients day-in and day-out, yet few give any thought to how these everyday exchanges could be slowly eroding the effectiveness of the systems and the profitability of the practice. Why? Because they are “routine” and likely they’re handled with little thought or preparation. Seldom do dental teams think about the words they choose. Rarely do they consider how rephrasing a routine exchange with a patient could elicit an entirely different response. Hardly ever do they consider that the words they are choosing send an entirely different message than the one they intended to communicate.

When it comes to day-to-day patient communication, little thought or planning goes into it. Rather the focus is typically on completing the task and not necessarily on completing it effectively.

Here’s the typical scenario: Jane, the Scheduling Coordinator, is expected to confirm appointments. It’s on her “to-do” list every day, and being a task oriented person she wants to get that task done so she can enjoy the satisfaction of scratching it off the list. Jane calls Mrs. Madison and following her typical approach, the conversation goes something like this, “Good Morning, Mrs. Madison. I was just checking to see if you’ll be in for your appointment on Thursday.”  Mrs. Madison, responds with “No, I need to cancel that. I will call back to reschedule.” Jane concludes with a hearty, “Thank you for letting me know,” and promptly goes on to the next call, that much closer to completing today’s tasks.

If you’ve been growing more concerned about those sinkhole-size openings in the schedule, if you’ve been puzzled by the problems with patient retention, if you’re starting to worry about cash flow and just can’t understand why things aren’t where you believe they should be, it may be time to script a different scenario for your office. Those routine exchanges between staff and patients, those perfunctory phone calls, those everyday interactions may be slowly eroding the foundation of your practice.

But be prepared for some resistance. Say the word “script” to the dental team you may well be greeted with a chorus of groans, a fair number of “you-must-be-kiddings,” as well as a smattering of sneers and sideways glances. Somewhere along the way, the idea of the script became taboo. The typical response to the mere suggestion of scripting is, “We’ll sound canned.” Or, “It won’t sound natural.” “What if I mess up my ‘lines.’?”

Not a surprising reaction, after all, you’re suggesting a change in how things are done, so resistance is to be expected. Not to mention the fact that recommending scripting indicates that something is wrong with the way staff handles patient communication now. Scripts are often mistakenly viewed as barriers to natural conversation when, in reality, they are tools for effective communication that build patient relationships and keep systems on track.

Next week, stop sinking and start scripting.

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

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"Cash Cow or Money Pit?"
A McKenzie Management Case Study


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

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“Money Pit” was a great movie.  Don’t let the movie become a true story about your dental practice!

Actually, Dr. Freeman is not the first dentist that has called McKenzie Management for this reason.  “I need to make more money!”  OK, seems like a legitimate concern.  When an office isn’t producing enough, this means that it also isn’t collecting enough…funny how that works!

Let’s face the truth, doctors.  Most of you do not hold MBA’s in dental business and you will buy because you don’t know how to say “no”, and this includes a dental practice. Understanding how to calculate a healthy overhead by reviewing over your Profit and Loss  or Income statement that your accountant gives you is very important to avoid the feeling of being overwhelmed later on when you find yourself in debt.

Dr. Freeman Facts:

  • He just purchased an existing practice from a retiring dentist
  • He chose to purchase this practice because he liked the location
  • The practice was seeing 4 New Patients a month at the time of the purchase

My first question to Dr. Freeman was: “Who held a gun to your head and forced you to purchase this practice?” Smiling shyly, his response was: “I liked the location.”

Now, THAT is a really good reason to make one of the biggest purchases of your life!  Granted, location is an important factor when purchasing a practice BUT it is not the only factor. My next logical question was: “Do you have a game plan on how to market your practice to bring in more new patients?”  I didn’t have the heart to tell him that he was going to starve to death with 4 new patients a month, unless dentistry is a hobby and he is independently wealthy! Again, almost blushing now, he answered: “That is a really good question!”

Recommendations:

  • Attempt to rebuild the hygiene program by reactivating as many past due recall patients as possible.
  • Implement as many internal marketing programs as possible to encourage existing patients to refer their friends and family.
  • Seek professional advice and assistance from a dental marketing expert.

Conclusions:
There is so much valuable information that can be obtained from the computer.  Run the following reports to help you evaluate the history of the practice:

  • Production and collection reports for the past 5 years, if available.
    • Look for trends – increasing, decreasing, flat? 
    • What is the history of the collection rate of the practice?
    • What mix of services have been provided in the past?  More basic and less major?
  • Adjustment reports for the past 5 years.
    • Look for trends –PPO adjustments – more bad debt write-offs – was the selling doctor giving away his services?
  • Accounts Aging Report.
    • What percentage of the total A/R is over 90 days?
    • How many dollars are credit balances?
    • How much is still outstanding in insurance claims over 60 days?
    • What is the ratio of net production to A/R?
  • P&L statements for the past 5 years.  Analyze the 7 areas and look for trends.
    • Office Supplies
    • Dental Supplies
    • Lab Expenses
    • Facility Costs
    • Staff Gross Salaries
    • Staff Benefits and Employer Taxes
    • Miscellaneous

To help you determine the possible future profitability of the practice, look at:

  • Production Summary reports that show the # of the various ADA codes that were performed over the years. 
    • Look for trends in the # of new patients seen (D0150 code).
  • Past Due Recall Report for the past 12 months.
    • This will indicate how well the practice has retained its hygiene patients.
  • Recall Report for the next 12 months for patients with and without appointments.
    • This will indicate how many hygiene days you will need to service the existing patients.
    • This is also the number of your “active” patients.  Because, guess what?  All those patient records that are on those shelves are NOT all active patients.

Review a sample of the “active” patient records to determine how much dentistry has been diagnosed and already completed.

  • Print the Outstanding Treatment Plan Report.
    • This will give you an idea of whether treatment plans are performed and how much is outstanding.  (This report is not always accurate, depending on the performance of the staff).

Do your homework before you purchase an existing practice to avoid investing in a “money pit” due to lack of cash flow!

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What They Are Not Telling You


Scott McDonald

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Your patients know which staff person you should “let go.” They know where the stain on the carpet is that “grosses them out.”  They are sure they know whether you are overcharging them. In fact, they know exactly the secret to bring your practice wealth and success or destruction and poverty. They know, but, they aren’t telling.

Why?

There are lots of reasons. One is that they think you already know. They assume that you have been told the good and the bad of your practice before by other, braver souls. They also firmly believe you would be angry at them if you told them to your face. After all, they LIKE you. They continue to come, right? But, when all is said and done, they haven’t really been ASKED? Right?

Enter the Patient Survey.

If done correctly, a patient survey can take only 15 minutes of your patient’s time and deliver a wealth of good and bad news upon which you can rely to make physical, financial, and personnel changes that can lead you to success or, at least, to avoid future problems.  It is true, however, that the WAY that patients are asked for their input can have a great impact upon the reliability of their answers. For this reason, a person who has experience in knowing how to ask non-leading questions and those that are obvious “pats on the back” can be invaluable.

Does EVERY patient need to complete a survey? Certainly not!  You only need a statistically reliable number of responses taken in a scientifically reliable way. If the average practice has 2,500 active patients (roughly 1,000 households), by getting 100 surveys completed, the practice can get results that are within 3% of a margin of error.

The ideal survey is NOT via telephone or personal interview although these anecdotal inputs can be useful. The interview itself tends to influence decisions. That is why political organizations are so fond of telephone polls as a way to “push” opinion. Besides, with the advent of cell phones and the ubiquity of answering machines, telephone surveys are actually becoming less reliable.

We have experimented with post-card surveys but found that when the returned samples represented less than 5% of the total sent out, the margin for error become larger than acceptable. Also, people who respond are disproportionately older (and less satisfied) than the average patient.

The solution: an in-office patient survey that can be administered and collected during a single appointment. A professionally prepared research instrument to measure your patients will be just the ticket to have patients tell you what they really think; not just the bad news or just the good news.  “Just the facts, Ma’am.”

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