Is “Quality Employee” an Oxymoron in Your Practice?
I’d like you to take a moment and think about each person on your team. How would you rate them in terms of being a “quality employee?” First, let’s consider what makes a “quality employee.” While your criteria may vary from the list below, consider the following:
You might consider assigning a certain number of points to each, and see how your team stacks up. Is your hiring process effective? Your ranks are probably lined with good employees and the result of quality hires.
However, if you look at the suggested criteria above and shudder at how your crew stacks up, it’s likely a reflection of the hiring process. I would be willing to bet that when the time comes to fill a position, your focus is on doing so expeditiously rather than effectively. In addition to having a specific hiring procedure in place, which I discussed last week, I suggest you consider a few other points.
Skills, Personality, and More
Testing tools available in the dental marketplace provide a statistically valid and scientifically based hiring assessment tool for dentists. The computerized assessment measures job applicants against a profile of the “ideal” dental practice employee for each position. The procedure is simple: applicants answer a list of questions online. Just minutes later, the dentist receives a statistically reliable report enabling him/her to clearly determine if the candidate under consideration would be a good match for the position being filled. It’s straightforward and accurate. What’s more, this carefully tested and thoroughly researched hiring tool is fully compliant with legal requirements associated with employee testing.
Beyond “You’re Hired”
In addition, provide routine, ongoing and direct feedback. This is constructive direction that helps the employee learn the ropes. Finally, schedule performance reviews to assess the new hire’s performance at least twice and preferably three times during the first 90 days.
If you take specific steps before, during, and after the hiring process, you are far more likely to ensure that “quality hires” make up your quality team.
Should My Dental Practice Be Incorporated?
Many factors go into determining whether or not you should operate your dental practice as a corporation. If the right factors are present, it could be a very wise decision for you to incorporate. Most dentists tell me “it’s no longer advantageous to be incorporated.” They feel this way mainly because of three changes that occurred back in the 1980’s:
These changes make incorporating no longer as beneficial as it used to be. However, it still may be very beneficial for you to be a corporation and many factors need to be considered.
These last two factors cannot be quantified in terms of dollar amounts. However, the potential benefits from either one of these could easily greatly outweigh the costs of incorporating your practice. As always, I recommend you seek competent professional assistance to help you make the proper decision given your particular set of circumstances.
Reduced IRS Audit Risk
IRS audits can be extremely expensive and stressful, even if the final end result is no increase in taxes. Several years ago I represented (and successfully defended) about 30 dentists across the nation that were being audited by the IRS for claiming a tax credit (better than a deduction) for their intra-oral camera purchases. Guess what - none of the dentists being audited were incorporated!
Other Corporate Fringe Benefits
Payroll Tax Savings
In analyzing whether to be a dental corporation today, many factors must be addressed - and as always be sure to seek competent professional help.
Know Your Facts Before You Buy a Practice
Case Study #587 – Dr. Stan Marone
Dr. Marone was a previous client of McKenzie Management. He contacted us inquiring about generalized questions regarding the purchase of an existing dental practice that was struggling financially. He wanted to know and understand if this practice had revenue potential to bring to his existing practice in order to consider this important decision. Practice transition specialists provide the value of the practice in equipment, good will, etc. But Dr. Marone wanted to know more than the purchase price of the practice. He wanted to know if there was increased revenue opportunity that he could capture to bring to his existing practice. In other words, how long would it take him to begin seeing a profit? In order for us to help him with this analysis, informational reports needed to be requested.
1. Accounts Receivable (Aging) Report – This report should be generated in two forms: one that does not include the credit balances and one that is only the credit balances. Why? You need to determine if you want to “inherit” these accounts in the purchase of this practice. Many of the debit balances may be uncollectible and all the credit balances should be refunded to the patient/insurance company.
2. Outstanding Insurance Claims Report – Look for claims that are older than one year. Chances are that you will not collect on these claims. Otherwise, this is a possible revenue stream for you. (Do not include pre-estimates.)
3. Production Report by Procedure Code – This is a very important report, as it will illustrate what types of procedures are performed more often than others. For example, if you see hundreds of fillings and not near as many veneers/crowns/inlays/onlays/bridges, this may indicate that either the doctor is not comfortable “selling” higher dollar treatment, there is not a need (especially if the restorative procedures are primarily 1-2 surfaces opposed to 3-4 surfaces) OR there is the opportunity to convert these patients to more applicable treatment options relevant to their needs.
This report also provides the number of New Comprehensive Exams the practice is seeing. Remember that all those paper charts that are on the shelves are NOT active in most cases! Even though emergency new patients produce income and may convert to comprehensive exams, they are not contributing to the growth of the practice through hygiene until they are converted. Standard in the industry would be 25 New Comprehensive Exams being seen in hygiene to support one full-time dentist.
Periodontal production should be 33% of the total hygiene production for a typical general practice. This report will also reflect the number of periodontal procedures that are being performed by the practice. If it appears that periodontal procedures are limited, this practice does not have an active periodontal therapy program. This is an indication again of another revenue stream after the patients are educated.
4. Past Due Recall Report - Many doctors are looking to sell their practice because it is not producing enough to support the practice overhead and/or the financial obligations of the practice owner. McKenzie Management has found, over our 30 year history of consulting with dentists, that the Hygiene Department will make or break a practice.
Generate this report for the past 12 months. These are patients that were seen within the previous 12-24 months and never returned, usually because there was no follow-up. Sending a computer-generated “cutesy” postcard does not qualify as a legitimate effort to retrieve these patients. A systematic 5-step process must be instituted to keep a practice’s recall retention at a minimum of 90%.
This report is important to a buyer because these patients are NOT active! Until they are seen again in hygiene, they remain inactive so be careful when the selling dentist indicates that his practice management software says that he has 3,279 “active” patients and he has one lonely hygienist working 3 days a week to maintain all these “active” patients!
5. Recall Report for Patients with and without Appointments – This report should be generated for the next 12 upcoming months. If the practice has several “types” of recalls, be sure to include all the types. THESE are your active patients! All 600 of them…because that is all a hygienist working 3 days a week can support!
6. Fee Schedule Report – What are the selling dentist’s patients accustomed to paying? Are there PPOs involved and if so, how are you going to handle the change? If he hasn’t increased his fees in 3 years, take this into consideration when negotiating your purchase.
7. Unscheduled Treatment Plans Report – Are there tens of thousands of dollars “sitting” out there waiting to be picked by you? Maybe the report shows no treatment because the treatment plans weren’t entered into the computer unless the insurance coordinator needed to submit a pre-authorization claim. Be careful that if there is treatment, that it is accurate. Many times appointments are made and not scheduled from the treatment plan. If there were changes made to the treatment, the software will leave the existing treatment in the report as incomplete.
If you are interested in working with a McKenzie Management consultant during your “due diligence” period andwould like more information on how McKenzie's Consulting Coaching Programs can help you IMPLEMENT proven strategies, email firstname.lastname@example.org.
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