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3.14.08 Issue #314 Forward This Newsletter To A Colleague
Employee Theft
Dentist Demographics
Team Development

Stop Employee Theft
by Sally McKenzie CEO
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It’s the stuff nightmares are made of. By chance you discover your loyal employee has been stealing from you for years. You were curious about her resistance to changing the computer systems. You were puzzled by her seemingly lavish lifestyle. But you were happy with the fact that she just “took care of” the financial side of the practice. So you ignored the warning signs because your trusted employee would never do such a thing. How wrong you were.

If misery loves company, dentists can have quite the pity party. When it comes to incidents of fraud in the practice, three out of five dentists report that an employee has stolen from them. In one particularly shocking case last spring, a bookkeeper and her husband pleaded guilty to stealing nearly $2 million from a Washington family practice over a seven-year period. It was the largest embezzlement case in the county’s history.

So who’s most likely to be pilfering from your practice? Fraud experts refer to it as the 10-10-80 rule: 10% of people will never steal, another 10% will steal at any opportunity, and the other 80% will go either way depending on how they rationalize a particular opportunity. The good news is that for those in the 80% category, if they believe they will get caught, they won’t take the chance.

It’s the small businesses, such as dental practices, that are prime targets for fraud and embezzlement. Why? Because (a) controls tend to be very lax and there’s little staff accountability and (b) there tends to be a close relationship between doctors/owners and employees. They become trusted friends, which, sadly, encourages a dishonest employee to take advantage of them.

As the Association of Certified Fraud Examiners (ACFE) reports, the most common small business scheme is check tampering. It frequently occurs when one individual has access to the company’s checkbook and also has responsibility for recording payments and/or reconciling the company bank statement.

First and foremost, dental practices must divvy up the financial duties. The doctor may want to only do the dentistry, but this attitude is inviting disaster. As one Wisconsin dentist discovered recently, his/her trusted employee of 28 years who had “total run of the practice’s financial operations” is accused of stealing at least $41,000 and that is believed to be just the tip of the iceberg. 

Separating billing, collections, and delinquent account responsibilities is critical. The employee making the bank deposit should not be the same employee responsible for checking the deposit slip that is returned from the bank. Consider rotating the responsibility for making bank deposits among employees, and monitor deposits for unexplained increases or decreases.

Look at the reports daily. In particular, examine the day sheet and the deposit. Investigate any adjustments made on the day sheet. Pay close attention to increases in refunds or write-offs, large adjustments, or missing documents. Print and review an audit trail report daily. It reflects every transaction that has transpired in the office since the last printed audit trail. In addition, generate a report monthly listing all patients that have had changes made to their accounts. This helps to identify a recurring problem or detect a discrepancy. Routinely conduct random checks of different accounts.

In practices with small staffs, the doctor must take a much more active role in monitoring the financials. Ideally, the doctor should write all the checks and do his/ her own payables. The doctor should reconcile the bank statement monthly and cancelled checks should be sent, along with the bank statement, to the doctor’s home. In addition, monthly credit card statements should be received unopened and compared with original receipts of purchases. These steps enable the doctor to know exactly where the money is going. 

Checks received should be immediately stamped on the back with the practice’s bank deposit endorsement stamp. Periodically check the account number to ensure it is the practice account. Do not use signature stamps.

All employees should be required to take at least one week’s vacation every year, particularly those in charge of practice finances. And, most importantly, don’t let the work pile up. During that time, the vacationing employee’s duties should be carried out by someone else.

Take complaints seriously. If patients claim that they’ve paid but didn’t receive credit investigate it. If an employee tips you off that something isn’t right check it out. If you sense that things just aren’t adding up, don’t dismiss it. Ignorance could cost you thousands if not millions of dollars.

Interested in speaking to Sally about your practice concerns? Email her at sallymck@mckenziemgmt.com.
Interested in having Sally speak to your dental society or study club? Click Here.

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Scott McDonald
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The Other Shoe: Women in Dentistry

When women started entering the profession as dentists in greater numbers 30 years ago, everyone was thrilled at the benefits of diversity. Equal opportunities for women in the profession have always been considered a virtue. From an individual dental standpoint, this is undeniable and laudable. No one seems to be noticing, as the number of licensed female dentists reaches parity with licensed male dentists, that the way dentistry is practiced is changing.

From our work in helping evaluate locations for dental practices, we have noted some “truisms.” Please note that we have no means to prove these assumptions--this would cost far more time and money than our organization has to do so--but we can see that these truisms are going to have a profound effect:

  1. Female dentists tend to practice fewer years than their male counterparts.
  2. They spend less time in uninterrupted practice, often entering and exiting full-time practice three to six times in their careers.
  3. The retirement age of female dentists is significantly younger than male dentists (which appears to be increasing in many cases).
  4. Female dentists are most abundant in suburban locations near population centers with significant employment.
  5. These female dentists are almost non-existent in rural, low-population, or very urban settings.

Rather than prove these truisms with a table of statistics for every part of the United States, we have seen this pattern in nearly every county or parish that we analyze. 

  1. The primary care provider for children continues to be the mother, regardless of her income or education. Childbirth will always be an interruption of a career path for women who are both anatomical and social. Many demographic and lifestyle indicators point to a trend of professional women wanting to drop off and pick up their careers. They can be both a professional and a mother, but not simultaneously.
  2. Well-educated professionals (such as dentists) tend to marry other well-educated professionals both in and out of healthcare. These well-educated spouses tend to have their own careers that require them to live and work in locations with high employment.
  3. An unmarried female dentist is likely not to want to practice in a site where there are few social prospects (the same as their single-male counterparts) but a married female dentist usually considers where her spouse will work when considering a practice location or associate opportunity. This is much less the case with married male dentists.

If we take, for example, a community about 90 miles west of Richmond, the reality of this trend is visible. In this case, we note several female dentists who are licensed to practice but do not (roughly 5). The population is roughly 65,000 residents (28,678 households) with 52 general dentists. Because this is a city-center (serves many unincorporated rural communities surrounding it), the dentist-to-population ratio for Lynchburg is actually better than these numbers suggest. But, if we note that 10% of this number is dentists out of practice, the ratio drops from one dentist per 1,233 residents to one dentist per 1,383 residents.

The situation is exacerbated as we look at more rural communities. Another city in Virginia is only 17 miles further to the west with four general dentists. With a population of about 6,000 (2,813 households) the ratio of dentists-to-population is only one dentist per 1,500 population. But one of these practices is only open 3 days per week even though there are two female-dentists. Each works a maximum of 1.5 days per week.  Therefore, their practice is not really full-time and the doctors feel their schedule is sufficiently full that they do not seek new patients. More realistically, the ratio of dentists-to-population is one dentist per 2,000 population.

At first, this may appear to be very good news to a dentist coming out of dental school and considering his or her prospects for practice. The net effect is that there are fewer dentists per population. But the reality is a little more complex. Keep in mind that suburban locations have become more crowded as these neighborhoods become more desirable because they are near the home and schools of professionals in the area.

The result is a re-shuffling of dentists and dental need areas. In some locations, there will be an overabundance of dentists, many who do not want to practice continuously over their careers and are happy to associate rather than own. In other locations, there will be a decreasing number of dentists willing and able to serve the population. In this article, we will not discuss the implications of larger migrations of populations (and professionals) to warmer climates and rising economies in the South and West. Still, this continues to “enflame” the effect.

If we were living in a truly free-market society, this would not be a terrible concern.  Eventually, the market would induce dentists to open practices in more rural or very urban locations because there is a natural vacuum (and “nature abhors a vacuum”).  Unfortunately, we live in an age in which State and Federal governments want to “fix things.” The result is a publicly funded dental practice that will be opened in these settings. There may also be pressure upon dental schools, particularly those that are government funded, to produce more dental school graduates. They will assume that the natural response to a market condition like this is to produce more dentists to fill the vacuum. In reality, it may tend to lower dental school standards as a greater percentage of applicants are accepted and raise the pressure to practice in already over-crowded settings.

Scott McDonald is the largest provider of dental marketing research to dental practices.  For more information, demographics@mckenziemgmt.com

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Dr. Nancy Haller
Dentist Coach
McKenzie Management
coach@ mckenziemgmt.com
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Invest in Your Practice: Develop Your Team

I work with my husband, who is a general dentist. For some time now our staff members have not been motivated and they are acting like school children. They always have issues with each other. It seems nobody can get along with each other. This has become very frustrating for both me and my husband. I am at a point that I do not know how to handle this problem anymore and it is affecting the productivity of the office. I would appreciate if you could give me some guidance.

You pay your office staff well. They are experienced in the dental field. But little things still don’t get done unless you tell them what to do. Even worse is the sniping and conflict between members of your team. It takes up a lot of your time when you should be seeing patients. You wish you didn’t have to deal with employees. You see them as a burden.

Your employees are an investment, not a burden. From small businesses to large corporations, people are the most valuable resource of any organization. In Fortune 500 companies, employees are now referred to as “human capital” and they are typically the greatest untapped resource of any business!

Lackluster job performance frequently results when employees don’t know that anything more is expected of them. Blaming your staff for not meeting your unspoken expectations is like complaining about a waiter who failed to bring the ketchup you never asked for.

Leading employees need not take lots of time, especially if it becomes part of the normal day-to-day functioning in the office. It starts with agreement on expectations about job duties and responsibilities. Once there is alignment, follow up with timely feedback, better known as performance reviews.

Those words can cause negative reactions. Most dentists think of performance reviews as the yearly chore that should be done but frequently isn’t. It eats up lots of time as you try to recall events of the past 12 months. No wonder you avoid performance reviews. Here’s a model that will make the process manageable.

First, move away from yearly reviews and into quarterly developmental meetings. The purpose is not to review an employee’s behavior but to have an open discussion about what you need from each other to be successful.

The process works best if you model courage and encourage growth. This starts with you, the dental leader. Schedule a special team meeting to talk about the “big picture”…what you want for your practice. Set purpose by describing the context of what you expect. For example, “By improving in each of our roles, we will be more productive and provide better patient care. In turn this will lead to higher revenue and that means more income for everyone.

Build perspective. Briefly share your own strengths as well as your needs for self-improvement. It is likely that your staff already know what you’re good at and what you need to do better. By verbalizing it you show good awareness and you set the standard for continual learning.

Next, involve your staff in their own development. Ask each of them to write their own job description. This is actually pretty simple if you break it into three main areas:

  • Responsibilities (what are their job duties)
  • Strengths (what do they bring to the table that helps them perform their duties)
  • Potential Areas for Improvement (what will they do to be more effective in the office, team and practice).

You also write a job description for each employee independently. This doesn’t need to be a Pulitzer Prize winning piece of writing. Get the main ideas on paper even if it’s in a simple outline format.

Schedule an individual meeting with each employee to establish job responsibilities. Compare your respective job descriptions. Talk openly about areas of agreement. Give sincere compliments about the employee’s strengths and the things she/he does well. Then move the conversation to areas where there are gaps.

During the dialogue, remind employees of your overall goals for the practice and the benefits for them. Give them behaviorally specific feedback about what to continue doing (their strengths), what to stop doing (actions that are not productive or helpful), and what to start doing (their developmental need). Avoid defensiveness by keeping your focus on the “solution” not the “problem.”

Monitor employee performance. As I noted above, annual appraisals are insufficient for employee training and development. Monthly reviews should be scheduled with each team member. As their performance improves, reduce the frequency to quarterly. Build a climate of feedback in your office.

Next time: Giving feedback that works.

Create the right environment that sustains high employee performance and commitment. Contact Dr. Haller at  coach@mckenziemgmt.com.

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