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7.25.08 Issue #333 Forward This Newsletter To A Colleague
Overhead Numbers
Complaint Call Strategy
Consultant Case Study

Numbers Every New Dentist Should Know
by Sally McKenzie CEO
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It certainly doesn’t take long for every new dentist to realize that there’s far more to a dental career than simply “doing the dentistry.” Just as important as your role as doctor is your role as CEO. It is critical that you understand completely the business side of your practice. There are 22 practice systems and you should be well versed in each of them. If not, seek out training for new dentists. The effectiveness of the practice systems will directly and profoundly impact your own success, today and throughout your entire career.

For starters, routinely monitor practice overhead. It should break down according to the following benchmarks to ensure that it is within the industry standard of 55% of collections:

Dental supplies—5%
Office supplies—2%
Rent—5%     
Laboratory—10%
Payroll—20%
Payroll taxes and benefits—3%
Miscellaneous—10%                                  

Keep a particularly close eye on staff salaries. These can mushroom out of control and send overhead into the 70–80% range in record time. Payroll should be between 20–22% of gross income. Tack on an additional 3–5% for payroll taxes and benefits. If your payroll costs are higher than that, here’s what may be happening:

  • You have too many employees. More staff does not guarantee an improvement in efficiency or production. It does, however, guarantee an increase in overhead—unless you are hiring a patient coordinator who will make sure the schedule is full and production goals can be met.
  • You are giving raises based on longevity rather than productivity/performance. If production is going down and overhead is going up, payroll cannot be increased. Establish a compensation policy stating that raises will be given based upon employee performance, but ONLY IF the practice is making a profit.
  • The hygiene department is not meeting the industry standard for production, which is 33% of total practice production. If the doctor steps back and takes a closer look at what is happening, he/she will probably find that the hygienists have far more downtime than they should, that patient retention is seriously lacking and that periodontal treatment is minimal at best. The recall system, if there even is one, needs immediate attention to ensure that the hygiene schedule is full, the hygienist is scheduled to produce 3x his/her salary and cancellations are filled.

Hand-in-hand with practice overhead is production, and one area that directly affects your production is your schedule. Oftentimes new dentists simply want to be busy. Sure you want to be busy, but more important than being busy is being productive. Take the following measures to get your schedule on the path to productivity.

Start by using your schedule to meet production objectives first and establish a goal. Let’s say yours is to break the million dollar mark. Taking 33% out for hygiene leaves doctor with $670K. This calculates to about $13,958 per week (taking four weeks out for vacation). Working 32 hours per week means the doctor will need to produce about $436 per hour.

A crown charged out at $950, which takes two appointments for a total of two hours, exceeds the per-hour production goal by $39. This excess could be applied to any shortfall caused by smaller ticket procedures. Unfortunately, you are probably not doing crowns every hour on the hour.

Use the formula below to determine the rate of hourly production and whether you’re meeting your own personal production objectives.

  1. The assistant logs the amount of time it takes to perform specific procedures. If the procedure takes the doctor three appointments, she/he should record the time needed for all three appointments.
  2. Record the total fee for the procedure.
  3. Determine the procedure value per hourly goal. Take the cost of the procedure (for example, $215) and divide it by the total time to perform the procedure (50 minutes). That gives you a production per-minute value of $4.30. Multiply that by 60 minutes and you end up with a rate of $258/hour.
  4. The amount must equal or exceed the identified goal.

Now you can identify tasks that can be delegated and opportunities for training that will maximize the assistant’s functions. You also should be able to see more clearly how set-up and tasks can be made more efficient. Then you’ll be well on your way to achieving your own production goals, whatever they may be.

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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Belle DuCharme CDPMA
Instructor/Consultant
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Small Fires of Discontent to Raging Infernos of Anger:Complaint Call Strategies

“I personally think we developed language because of our deep inner need to complain.” —Jane Wagner

Who is most likely to bear the burden of patient complaints? The Business Coordinator, Dental Assistant, Dental Hygienist or the Dentist? You’re right if you said the Dentist. With email and cell phones, it is easy for patients to reach the Dentist after hours and pummel him/her with a rant of how they were unfairly treated by one of the team.

Nobody likes to be the recipient of an emotional tirade no matter how important it is to the deliverer. Most dentists apologize and tell the patient that it will be taken care of immediately. A scenario may play out like this: One morning Dr. Smith says to Jane, the Scheduling Coordinator, “I need to talk to you, Jane. I was interrupted at dinner last night by Mrs. Armbuster. She said that you were rude to her and she wants an apology. What do you have to say?”

Now Jane is on the spot to explain why Mrs. Armbuster is so angry. “Dr. Smith, I told Mrs. Armbuster that we no longer extend credit to our patients. She said that she was insulted and that we have always billed her for her services. I told her that was the new policy and she stormed out the door.”

Dr. Smith is now in the middle because he had the financial policy changed but did not see this coming. Embarrassed, Dr. Smith responds, “We need to tell her something. Just make an exception for her and tell her you are sorry and that you didn’t mean to upset her.”

Long-term patient loyalty and retention equals success for the dental practice. It’s imperative that a personal complaint call strategy be developed and scripted for the entire team. Many people do not like change and are suspicious of the person they perceive as the instigator of change. However, any change—including a change in a staff position, adding an associate and changing your hours or patient billing policies—will bring on complaints and resistance from long-time patients. It is common to be caught off guard by a disgruntled patient phone call and it is worse when you have to wing it with an answer. The following is meant to guide you to developing a…

Complaint Call Strategy

Step 1: Be Prepared

  • Understand that any change in the practice can cause complaints.
  • Inform your patients of upcoming changes to the practice.
  • Anticipate which patients will most likely complain and prepare them ahead of time for the change or changes in the practice.
  • Script responses to the complaint without personalizing the response.
  • Be understanding.

Step 2: Listen

  • Be empathetic.
  • Take notes.
  • Provide encouraging feedback.
  • Avoid distractions and hear what is being said.

Step 3: Build Trust

  • Tell the patient that you want to help.
  • Ask questions to clarify key points.
  • State the practice’s commitment to service.

Step 4: Define the Complaint

  • Is it policy?
  • Is it a person?
  • Was there an error committed?

Step 5: Agree on a Solution

  • Within reason, what will satisfy the patient?
  • Consider sending a written confirmation.
  • Assure the patient that you will follow through.
  • Document the exchange in the patient’s chart.

It is very difficult to have a policy in place and then make an exception for certain patients. If patients are informed of changes in the practice they are usually cooperative; it is the surprises that they don’t trust.

To avoid those evening complaint calls to the doctor, remember that the primary responsibility for handling complainers in a professional manner rests with the Business Coordinator or Scheduling Coordinator—the first point of contact to the practice. Think of yourself as a bridge between the patient and the problem. If a patient storms out of the office or threatens to call the doctor, expect the phone call. Don’t ignore this behavior. Be proactive and call the patient using your Complaint Call Strategy steps.

Unfortunately, there is no guaranteed method to prevent patients from calling or emailing the doctor. Consider discussing in advance who will have the authority to handle patient complaints. That way, the dentist can say to calling patients, “Please call the office in the morning and speak to Betty, the Business Coordinator; she will take the complaint and we will address it immediately.”

Put out the small fires of discontent before they become raging infernos of anger by developing a Complaint Call Strategy today.

For more information about McKenzie Management’s Advanced Training courses, email training@mckenziemgmt.com, call 1-877-777-6151 or visit our website at www.mckenziemgmt.com.

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

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Nancy Caudill
Senior Consultant
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Do You Offer Outstanding Customer Service?

Dr. Bruce Brogan—Case Study #154

Dr. Brogan’s Concerns:
Many dentists are concerned about the current profitability of their dental practice. Dr. Brogan wondered, short of “giving away” dentistry to his new and existing patients, what to do to guarantee that he didn’t lose his patient base to “Dr. Freebee” down the street.

Practice Facts:

  • Family practice that accepts a few PPO plans/fee for service
  • 21 new patients a month
  • 13 years in practice at same location
  • 2 full-time front office employees
  • 6 days of hygiene
  • $60,000 a month in production

Observations:

  • Not enough hygiene days! Patients are not staying with Dr. Brogan because they wait too long for an appointment. Here is the math to support this statement:
    • 21 NP/mo x 12 mo/yr x 13 yrs = 3,276 patients
    • Assume that his retention rate is only 50% = 1,638 active patients
    • Patients are seen only 2x a year = 3,276 hygiene appointments needed
    • 6 days/wk of hygiene at 9 patients per day working 48 weeks = 2,592 available appointments.
  • Too many team members working at the front desk! This may initially appear to be good customer service but it drastically affected his current profitability. With efficient systems in place, Dr. Grogan’s business area could be easily managed by one full-time person. He employed 2 full-time employees.
  • Customer service was poor due to the “chit-chat” that was taking place between the two front office employees. Patients were arriving for their scheduled appointments and the employees would be deep in a discussion about American Idol. The patient was not greeted with a smile and, “Good morning, Mrs. Jones. It is so good to see you. Thank you for coming to see us today.” The patient was ignored as she stood at the counter waiting to be recognized. More staff does not equal better customer service.
  • Dr. Brogan was not offering any patient-centered services in the reception area, such as:
    • A complimentary beverage area in the reception area with coffee, tea and water
    • A variety of current magazines (no more than a month old)
    • A flat-screen, wall-mounted TV playing a dental education DVD about the services provided in the practice, with closed captions turned on
    • A “before and after” photo album, preferably of his own patients
    • Reading glasses for patients who may have forgotten theirs
    • Comfortable and relaxing music—not a local radio station playing the Top 40 hits
    • An arrangement of comfortable chairs and/or sofas
    • Natural lighting that is not overwhelmingly “sterile”
  • Dr. Brogan offered no special services in the treatment rooms, such as:
    • Tinted glasses to help patients close their eyes and relax
    • DVD players with headphones or other “audio analgesia”
    • Neck or back pillows for comfort
    • A clean cotton blanket (removed from a plastic bag) to keep the patient warm if requested
    • A non-cluttered treatment room that doesn’t appear to be “dirty”
    • A professionally framed “dental arts” poster promoting dentistry
    • Demonstration Models to assist in educating the patient about a treatment plan
  • It was observed that patients were waiting more than 10 minutes in the reception room with no attention given to them by front office personnel. Patients will leave a dental practice when they feel that they are not being attended to, especially women—and when women leave, so does the entire family!
  • The phone was answered with, “Dr. Brogan’s Office,” instead of, “Thank you for calling Dr. Brogan’s office. This is Barbara. How may I direct your call?” The first question was about whether the patient had insurance coverage—hardly inviting and pleasant.

Recommendations:
Dr. Brogan was encouraged to walk around his office and review what is seen through the eyes of the patients, keeping in mind some the areas that could be improved to make a “wow” impression. You should ask for feedback from your employees regarding what changes they would make if the practice were theirs.

Sit in a treatment room chair and experience what the patient experiences. Is the chair comfortable? Is there silver electrical tape on the arm to cover a tear? Is aluminum foil being used as a barrier? Patients perceive aluminum foil as a form of repair or a way of covering up something that they should not see. Are the lenses over the light bulbs on the chair and overhead clean and void of dead bugs or spatter?

Write specific job descriptions so employees are more efficient with their time and accountable for finishing tasks.

Evaluate the Hygiene Department protocols for profitability. Establish systems to improve patient retention to at least 80%. Dr. Brogan had no idea what kind of recall cards were being sent, or when the patients were being confirmed, or if there was a system at all. A discussion with his hygienists ensued to make sure that they were assessing and diagnosing with the same goals in mind.


Conclusions

Dr. Brogan’s practice was reviewed six months later. After implementing some of the changes that were recommended above, the doctor and team noted that patients were commenting on the “special touches” that they had added to make their visit more comfortable. “Your reception room is so nicely decorated; it is like a home away from home.”

Be conscious of your patients’ environment. Make little changes to show them that you care and want to keep them as valued clients. Tell them that you appreciate them taking the time out of their busy schedule to see you. Without them, you have no practice at all!

If you would like more information on how McKenzie's Practice Enrichment Programs can help you IMPLEMENT proven strategies, email info@mckenziemgmt.com.

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