9.27.13 Issue #603 info@mckenziemgmt.com 1-877-777-6151 Forward This Newsletter
 

Technology: Bells, Whistles, and Waste
By Sally McKenzie, CEO

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What if members of your team put forth a mere 10%-30% effort daily? What if your handpieces operated at 20% power? Or the lighting in your operatory was reduced to just 10%? Would you tolerate that? Of course not, yet when it comes to the productivity of practice technology, doctors and their teams will tolerate inefficiencies, poor performance, and very low return on investment. And it’s not because the technology can’t deliver what is promised. Rather, it’s because too often dentists like to feel as though they are getting a good deal. Let me explain.

When dentists make major technology purchases for their practices, many will convince themselves that they don’t need to “waste time and money” on the training program that can be purchased as part of the package. After all, the doctors may reason that the new gadget, software or hardware should be intuitive enough that anyone could figure it out. So the doctor passes on the training options and plans to teach himself and his team. It’s a great idea that almost never works.

As dentists, you are expert clinicians and superior problem solvers. Unfortunately, because you are so effective in these areas, you often convince yourselves that you can figure out how to use just about any product or device. You further persuade yourselves that you will create time in your nonstop schedules to teach the staff and make them experts as well. However, as the primary producer in the practice, the chief executive officer, and in some cases the human resources director, you don’t have time to serve as vice president of information/practice technologies and corporate trainer too.

Consequently, dentist after dentist will invest tens of thousands of dollars in new technology, gadgets, devices, hardware and software, only to benefit from a mere sliver of what the device is capable of delivering because they habitually fail to spend money on training. The result: Neither you nor anyone on your team really knows how to use the technology – hardware or software – to its full potential. Consequently, that wonderful new state-of-the-art tool delivers a fraction of what it’s capable of.

Typically, doctor and team will certainly try to make it work, at least for a while. After all, the practice spent a LOT of money on this thing. But the process is frustrating. You and your team are in a hurry; who has time to figure this stuff out. Precisely. In the case of practice management software, it’s not uncommon for staff to claim it won’t do what they need it to do, so they find ways of working around it because they just don’t know how to make it work effectively for them.

Before long, that expensive new equipment or software is pushed aside - but you continue to promise yourself that this is just a temporary delay. In a few weeks, you’ll have a little time to figure out how to use it correctly. Then you will most certainly get you monies’ worth out of it. And that simply never happens.

Rather than overextending your technology budget to the point where you can’t afford training, develop a plan that will allow the office to truly maximize this major investment. Without a plan, it is easy to be seduced by the latest model of this and the greatest model of that, only to end up with a mishmash of excellent equipment that is, together, an inefficient jumble of bells, whistles, and big bucks. Rather, take a step-by-step approach to determine how to most effectively integrate technology into the practice.

1. Start with a technology vision for the practice. How do you want the practice to use technology? How do you want patients to benefit from technology?
2. Identify which system your technology purchase will enhance and improve, such as scheduling, treatment presentation and acceptance, treatment financing, reduction in broken or failed appointments, etc.
3. Conduct your technology inventory. Examine what you have in hardware, software, and networking capabilities.
4. Don’t try to do it all at once. Plan to integrate technology in stages.
5. Train staff.
6. Budget for technology on an ongoing basis.

Finally, pay attention to best practices for team training. Depending on the technology or software that you are integrating into your practice, in some cases training dollars are better spent if the instruction enables staff to master one element of a system before moving on to the next.

Next week, what’s your return on that technology investment?

For more information on this topic, visit my blog: The Lighter Side

Interested in speaking to me about your practice concerns? Email sallymck@mckenziemgmt.com
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Gene St. Louis
VP Practice Solutions
McKenzie Management
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Are You Settling for Merely Average?
By Gene St. Louis

You can pay your bills. You aren’t struggling to get by. But you sense that your financial situation should be better. You believe that more patients should be coming through the doors. You are convinced that production, while adequate, is nowhere near what you are diagnosing. Sure, everything is “fine” - but if there were more patients and more were pursuing treatment, profits would be soaring. Your practice could certainly be far better than average; it could be great. So why isn’t it?

A multitude of factors could come in to play here, but I recommend you start with your schedule. When was the last time you inventoried no-shows and cancellations? Practice revenues pour out through the holes in the schedule, virtually eliminating financial growth. But that’s not the only thing rendering those treatment rooms idle. There are likely not enough new patients per month, and quite possibly diagnostic procedures are weak. There may well be a lack of established production goals or unclear scheduling objectives. It’s likely that there are no protocols for getting overdue patients back in the practice, and treatment financing options may be ineffective.

Consider the situation that Drs. “Tom and Carole” faced. This husband and wife team practicing in the southeast was successful by many standards, but the pair kept falling short of key financial objectives. The practice had a lot going for it in terms of long-term staff, good location, etc., but achieving the level of success that the couple believed was possible would require digging into the details.

First, although the office did consistently block time in the schedule for new patients, it was an arbitrary figure that wasn’t based on actual new patient numbers. What’s more, during practice marketing campaigns, the number of new patient appointments available was not increased. Plenty of new patients were calling, but they couldn’t be seen for several weeks. Thus, the other practices in the neighborhood benefitted as much or more from the doctors’ advertising efforts.

Wedging a further divide between prospective patients and the practice were the new patient protocols – or lack thereof. One of the first questions new patients were asked upon calling for an appointment was “Do you have insurance?” followed up with a firm, “Payment is requested at the time of service.” Although it was unintentional, staff often came across as negative to callers, and the insurance and payment points served only to solidify that impression.

As for Dr. Tom and Dr. Carole, they were excellent clinicians. Both took an evidenced-based approach to dentistry and subscribed to the belief that patients should receive their complete treatment recommendations at the very first visit. To more than a few patients, however, this was an overwhelming and intimidating approach. Consider the scenario from the new patients' standpoint. They meet the doctor for the first time and have not established a relationship with the practice. While the doctor may be friendly enough, no rapport has been established with the doctor or the team. Then the doctor tells the patients that based on today’s exam they have a litany of oral health issues that warrant attention. Not surprisingly, the patients were looking for the quickest way out, and it’s clear that a fair number didn’t return.

Dr. Tom and Dr. Carole needed to curb their diagnostic enthusiasm and focus on what the patients’ immediate needs and wants were. They needed to focus first on establishing the practice/patient relationship and creating a rock solid new patient experience that left patients saying “Wow!” rather than “Not now.”

Next, the pair turned their attention to patients with whom the practice had a longstanding relationship, specifically those listed in the unscheduled treatment plan report. This details the treatment that has been diagnosed but not delivered. Although the doctors had discussed the importance of following up with these patients, the business staff were uncomfortable. They felt like they were “selling” dentistry. They needed training and scripts to guide them in making follow-up phone calls. Handled correctly, these calls enable the practice to provide a valuable service and most patients appreciate that the doctor is genuinely concerned about their oral health. From there, the doctor and team could develop daily production goals.

Creating a high performing practice involves careful and continuous monitoring and measuring of key practice systems, and if your gut tells you that your practice isn’t achieving what it could or should be, listen up. I can virtually guarantee that the numbers will confirm your suspicions.

If you would like a thorough look at your numbers, go to this link on your Internet browser and receive a complimentary Optimization Report: http://www.mckenziemgmt.com/optimize_practice_potential.php

Interested in speaking to Gene about your practice concerns? Email gene@mckenziemgmt.com

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Belle DuCharme, CDPMA
Instructor/Consultant
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Over Your Head with Overhead?
By Belle DuCharme, CDPMA

Dear Belle, I have been with my present employer for a year now but find myself crying at the end of the day. Every two weeks she says she needs $8,000 to make payroll. I collect from everyone but the accounts receivable is past due, mostly with her friends and family who don’t pay their bills at all. Where is the money going? Shouldn’t there be enough for payroll? Perplexed Patsy

Dear Perplexed,
If you have more than 10% in 90 days aging accounts receivable, this is a sign that collections need attention. A high accounts receivable will definitely affect the cash flow and the practice’s ability to pay expenses. If you have isolated problematic accounts and asked the doctor what to do about friends and family, you have done your job. If the amounts for family and friends are not collectable, they should be adjusted off to give you a realistic accounting. There are several things to consider when looking at shortage of cash. Ask yourself the following questions before looking for other places the money could be going:

- Are all insurance claims going out electronically on the day of service? Paper claims can take as long as 30 days to pay, whereas electronic claims are paid in one to two weeks.
- Are you following up on unpaid claims that have aged to 30 days?
- Are you sending statements daily after receipt of insurance payments?
- Are you sending e-statements?
- Do you include a self-addressed payment envelope?
- Are you consistently following up on past due accounts with phone calls instead of more statements?
- Are broken appointments killing your production/collection stats? Is your system for communicating with non-compliant patients working?
- Are your fees fair and have they been updated regularly?
- Is the practice retaining or losing patients? Check patients with and without recall appointments for the last year.
- Are you getting new patients regularly? Are you able to appoint them within a week of the call?
- Are you connected with social media and have a marketing plan both external and internal to generate patient referrals? How are your online reviews?

All of these points, plus much more, affect cash flow. The practice should be collecting enough to cover its overhead. Overhead consists of the following expenses:
1. Facility - lease, rent or purchase of the practice location: 5%
2. Staff Payroll (not doctor) and benefits: 22-27%
3. Dental Supplies: 5%
4. Dental Lab Fees: 10%
5. Miscellaneous: 10%

Controlling these costs will achieve an industry ideal of 55% overhead, leaving enough for the doctor’s salary and money to invest into the practice and/or reward those that have contributed to the practice success.

The doctor(s) and hygienist(s) are producers. They are the only staff involved in diagnosing and recommending treatment. If the numbers are down in diagnosing treatment, consequently the schedule will reflect that with open time. If diagnosing is not the problem, perhaps support of the doctor’s diagnosis is not happening by the Financial Coordinator. Financing options must include services such as CareCredit offered to patients who cannot pay in cash and who have maxed out other credit lines. It is enticing to be able to pay monthly payments without interest for 12 months. You will increase treatment acceptance by offering CareCredit in the beginning of the presentation. This option must be offered to every patient who has a treatment plan applicable to this financing option. CareCredit will even coach you on how to present their product to your patients.

The amount of financial responsibility you have in the practice will determine whether you will be able to examine the profit and loss report. Someone should be looking at the practice overhead numbers to determine whether expenses meet or exceed industry norms for a healthy dental practice.

An overall collection rate of 98% of net production is necessary for a healthy cash flow. If you are achieving this, then you are doing your job. If you said yes to all the above bullet points, you are also doing your job. When your employer tells you that $8,000 is needed to make payroll again, it is time to sit down for a discussion of what you are responsible for and what is out of your control.

For professional training in dental practice management, call McKenzie Management today and schedule training customized to your practice issues, or visit the website HERE.

If you would like more information on McKenzie Management’sTraining Programs  to improve the performance of your team, email training@mckenziemgmt.com

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