Current Economy Calls For Different Approach
Dr. Jill Gordon—Case Study #426
As more and more dentists are scrutinizing their practices in the areas of expenditures versus income, there is one area that seems to be at the top of the list during this economic downturn: bonuses. Let's take a look at a scenario that you may find relevant.
Dr. Gordon requested consulting assistance for her practice:
Dr. Gordon’s Practice Statistics:
Dr. Gordon was managing the practice by the seat of her pants, allowing her team to make many management decisions for her based on their past experiences in other practices. She also brought with her from her previous associateship some protocols that she felt were applicable in her practice. Unfortunately, she didn’t know what she didn't know!
As the months went by, Dr. Gordon witnessed a decrease in the number of new patients as well as a reduction in hygiene production because of openings in the hygiene schedule. As a result of fewer patients being seen in hygiene, this also reduced the number of opportunities she had to diagnose and recommend treatment. This was affecting her production and manifested itself in more openings on her schedule.
She is now concerned about the future of her practice and how long she can carry on. The practice is only five years old and she is still carrying a substantial debt load from school loans, equipment and facility overhead.
The Most Shocking News:
Dr. Gordon brought into her new practice a bonus plan that was being used in her previous practice where she worked as an associate. It seemed reasonable to her so she implemented it in her own practice. The bonus plan was based on the ratio of Accounts Receivable to Collections.
What was shocking about this bonus plan was not the way the bonus plan was structured, even though it wasn't a good plan. What WAS shocking was the fact that she was still offering it to her employees! As poorly as the practice was performing over the past two months, the overhead at 80%, the employee gross wages and benefits too high, she was still paying a bonus.
When questioned about this, after showing her the statistical facts, her response was, "I don't know how to take it away from them…they expect it."
Keeping The Doors Open
When any practice has down turns, and it happens in healthy economic times as well as when what is being experienced now is happening, there are times when any practice is not as profitable as it needs to be. A true "bonus" plan is just what it implies—a bonus when the practice performs above and beyond what is considered normal for the practice.
If a practice has instituted a bonus plan, and it does seem that this is common even though McKenzie Management recommends that alternative methods of rewarding your team be utilized, it should be made VERY clear to the employees that when the practice is not performing, there is NO bonus paid out. It is more important for the practice to remain as profitable as possible to meet monthly obligations to keep the door open to provide employees with a place to work—not to pay out bonuses that the practice can't afford.
Just Say "No"!
Dr. Gordon was paying out team bonuses from her own pocket, not from profits from the practice. No wonder she was struggling financially. She was instructed to stop all bonuses. She was given other options to show her team how much she appreciated them when the practice shows signs of profitability again. One way was a simple but sincere "thank you" at the end of the day. It is amazing how many dentists don't utter these two little words to their teams even though their teams yearn to hear it.
Serious times make for serious business decisions. It is not the time to be a "buddy" to your team but a time to be a leader. If you are unsure about the health of your practice, contact McKenzie Management today.
Case Study: Dr. R. Peters’s Front Office Team—Business Training
Jane, Mildred, Delores and Siva attended the Front Office Business Training at McKenzie Management. Dr. Peters had indicated that he wanted to see more definitive job duties and accountability from his team. Jane and Siva were hired to help at the front desk and would also be helping in the clinical area as dental assistants. Two days a week there were three dental hygienists appointed full days resulting in approximately thirty-four to forty patients (including Dr. Peters’s patients) checking in and out in the eight-hour work day. However, on the other three days a week there were about twenty-two patients checking in and out at the desk. Mildred and Delores had been with Dr. Peters for about six years and were happy with their jobs; “We aren’t certain why we are here and we don’t know what to expect from this training course but we are open to learning new skills or new ideas,” they said. Jane and Siva did not have any experience at the front desk but were being trained by Mildred and Delores when they had time.
Upon questioning the team about office systems and reviewing the reports they brought in, it was apparent that there were several broken systems affecting the success of the business area of this practice. Dr. Peters is a fine dentist and has a loyal patient following but is distressed that his payroll overhead is becoming increasing difficult to pay. “We are obviously busy but every time there is a complaint about the stress from being too busy, I hire another person. However, the efficiency does not improve. What is to be done?”
The first discussion was job descriptions and who was doing what in the practice. Mildred and Delores were both doing scheduling, processing insurance, financial arrangements, answering the phone, entering data, sending out recall cards and other patient correspondence. The Accounts Receivable report indicated a 26% in the “90 Day Plus” overdue category. This should be 10–12% to be healthy. When asked who was in charge of the collection system, the response was, “We call people when we have time.” When asked when the last time anyone was called, no one knew. The same question was asked about the recall system. “We send out cards and that is it,” was the response from Delores and Mildred.
The assignment was for each employee to write their job descriptions, including every task that they performed in the day. The purpose was to see what tasks were being duplicated and what was left off, and to assign areas that each person would be accountable for. Breaking the tasks into definitive areas resulted in Mildred being designated as the Scheduling Coordinator and Delores as the Financial/Insurance Coordinator. McKenzie Management’s time and motion studies at the front desk reveal that one full-time Business Coordinator working efficiently can process 20–22 patients per day without feeling stressed. Because there were 34 plus patients 2 days a week it was necessary to have 2 full-time business area employees. The days when there were only 24 patients, there would be time for collection calls, calling unscheduled treatment and recall, insurance follow-up and other outgoing calls. Mildred would be first to answer the phones and greet all patients upon arrival and check them in. Even though she was not the only person scheduling she was responsible for the final result and making sure the schedule met practice goal. She was also responsible for tracking new patient numbers, and patient retention and the recall system.
Delores was second to answer the phones and responsible for patient check-out, collecting over-the-counter monies, the accuracy of insurance data, eligibility and claim process and follow-up. She also presented treatment plans and secured financial arrangements prior to scheduling patients’ follow-up visits. Both Delores and Mildred were enthused about their new titles and responsibilities. “I now have direction and goals and don’t feel like I am flying by the seat of my pants at work,” Delores happily chimed.
It was determined that Jane and Siva were not needed at the front desk, but there was need for a part-time dental assistant two days a week to help with the patient volume, particularly in the hygiene area.
On the days where there were three hygienists it was decided that the hygienists would appoint patients that did not need restorative care or need to pay at dismissal. By having the hygienist appoint some of the patients, it helped to prevent a back-up at the front desk when people were leaving and arriving at the same time. This change created more time for Delores to discuss treatment plans with patients and securing patient acceptance.
Siva agreed to work part-time as a dental assistant and Jane was given an opportunity to secure a position elsewhere with an excellent recommendation. Dr. Peters wanted an assistant with him at all times so it worked out well with two full-time assistants and one part-time. Dr. Peters was very pleased when the staff overhead came down and his team became more efficient and happy with their work.
Need help organizing and prioritizing your front desk? Call today and sign up for McKenzie’s Advanced Business Courses designed to meet your front office needs.
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