5.23.14 Issue #637 info@mckenziemgmt.com 1-877-777-6151 Forward This Newsletter
 

The Alarms Bells Are Ringing, But You Can’t Hear A Thing
By Sally McKenzie, CEO

Printer Friendly Version

“Dr. Tami’s” favorite patient is the one sitting in the chair. Spoken like a true politician, but she’s sincere. Her practice has come a long way in terms of its patient numbers, but a little over a year ago it was a different story. It goes without saying that patients are the lifeblood of a growing practice, and this practice was anemic - but Dr. Tami was blissfully unaware. 

Her crowded schedule belied the reality; patient numbers were falling off. She sort of had mailto:info@mckenziemgmt.coma feeling that something was off, but she was pretty busy. So what did she have to worry about? Plenty. On any given day, there would be at least two no-shows or cancellations in her schedule and likely one or more in the hygiene schedule. But she dismissed it as a temporary situation and figured it would resolve in time.

Shortly thereafter she was chatting with friends at a dinner party when one of them joked about how lucky she must be not to need new patients. Dr. Tami was puzzled. She learned that her friend had tried to schedule a new patient appointment with the hygienist, but was told that the schedule was full for several months. Her friend apologized that he just couldn’t wait months for an appointment. Dr. Tami was disappointed and embarrassed. She couldn’t help but think about the no-shows and cancellations, yet new patients couldn’t get in?

Something was off here. Something didn’t add up. The signals were present, but there weren’t any blaring alarms - until they were deafening. Dr. Tami got the ultimate wake-up call. She was forced to cut her own pay. The practice was losing money. How could she be losing money if the schedule was full and she had hundreds of patient records in her system? Yet again, the illusion of busy was the shrieking alarm of inefficiency. The “hundreds of records” are merely that - data on a computer system. The records don’t pay the bills. And that was just the beginning. 

It was a classic case of practice erosion. Little breakdowns in system infrastructure here or there, inefficiencies virtually everywhere, and very quickly the practice is sliding off the financial cliff. Before she realized it, Dr. Tami’s management systems - if you can call them that - had sustained a series of damaging blows.

What happened? She didn’t care for the business of dentistry. Her passion, like so many of her counterparts, is the art and science of the profession. She wanted to help patients. Consequently, she didn’t pay much attention to “the numbers” until she was forced to.

Dr. Tami was at a crossroads. Her attitude toward the business side of her practice spelled disaster unless she took action. If she wanted to remain in practice for herself, she had a couple of choices:
1. Accept her role as CEO and learn what needed to be done to be effective.
2. Hire a trusted office manager who would be treated as an equal and trained to handle these responsibilities.

Dr. Tami chose to become CEO of her practice. It didn’t happen overnight, and she didn’t do it alone. She had to embrace what she believed she didn’t care for - the “business” of dentistry. She came to understand profit and loss, marketing, human resources, hiring and firing. She learned how to efficiently monitor the 22 business systems that directly affected her profitability.

Most importantly, she realized that running a profitable business and serving her patients as a caring dentist weren’t mutually exclusive. She now had the financial means to improve patient care. She could afford more than the required continuing education units. She could offer more advanced patient services. She could train her team to provide the very best customer service. All of which made her a more effective practitioner and a highly successful business owner.

She recognized that each patient, new and existing, brought opportunities that went well beyond the treatment chair. They enabled the practice to consider how well the marketing and patient education efforts are working, measure the efficiency of the scheduling system, and consistently fine-tune patient protocols, treatment presentation procedures, and financing options - systems that she once disregarded as being distractions to her “real work.”

Practice systems don’t break down overnight. It is a gradual process that can be caught before significant damage occurs, if you pay attention. Sign up today for the Dentist CEO Business Training and take the first step in getting your practice back on track.

Next week, can you count on your staff to uphold your systems?

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
Interested in having McKenzie Management Seminars speak to your dental society or study club? Click here.
Don't miss this month's featured product special on our Facebook page! Facebook Page

Forward this article to a friend.



Nancy Caudill
Senior Consultant
Printer Friendly Version

Your Adjustments Can Break Your Bank!
By Nancy Caudill, Senior Consultant

Your first question may be: “what is an adjustment?” And a reasonable question it is! Let’s briefly review production and collection adjustments that may take place in your office every day.

Collection Adjustments
There are only three types of collection adjustments; refunds to patients or insurance companies, a returned check, or an incorrectly posted payment. Why are these “collection” adjustments?  Because they affect the monies that have already been placed in your bank account and now the monies are being adjusted. An example of a collection adjustment would be as follows: A patient makes a payment on their account for $100.  The insurance company payment pays more than anticipated on the patient’s account and now the account has a $100 credit balance that is owed back to the patient. When the initial payment was made by the patient, your bank account balance was increased by $100. Now you are sending a refund to the patient, so your bank account is lowered by the $100 check that you wrote from the account. The two transactions are a wash, more or less.  Your “net” income from the patient payment is $0.

Production Adjustments
The majority of adjustments that are posted to the patients’ accounts are production adjustments. These adjustments affect the original fee that was charged to the patient.  Some examples of production adjustments would be senior, cash, professional, employee and family discounts - or “courtesies” as I would prefer to call them. These adjustments reduce the original charge that was made on the patients’ accounts (unless the original transaction charge for the treatment was reduced initially by overriding the default charge from your practice management software). This is not recommended for several reasons - it is important for the patient to see the original fee along with the reduction, as well as for the practice to monitor the courtesies that are being provided by the practice to the patients.

There is also the dreaded but accepted “PPO” adjustment, but I won’t go into detail about that one here. Other production adjustments come in the form of a “bad debt” write-off, “small balance” write-off, “uncollectible” write-off, etc. I would like to focus on the “bad debt” and “uncollectible” adjustments below.

Net Production
Net production is the amount remaining that the patient owes after an adjustment has been posted. You collect on the “net” amount that is adjusted and not on the “gross” amount  before adjustments except in the case of the “bad debt and uncollectible” adjustments. These adjustments are posted when an account is not collectible and may be turned over to a collection agency. Industry Standards indicate than an acceptable “net collections to net production” percentage would be 98% or higher. I would propose that after the uncollectible adjustments, it should be 100%! 

Examples
Without proper training as well as the “rights” from the practice management software, production adjustments will have a major impact on how much your practice is collecting. Remember that you collect on adjusted production! What does this mean to you? A simple example follows:

You just hired Susie, who has never worked in a dental office before. She is unfamiliar with how PPO adjustments are handled, besides being told that the patient doesn’t pay the difference between the practice fee and the allowable fee. Your fee for a service was $100, and the PPO allowable fee was $80 and covered at 80%. Susie, not knowing any better due to lack of proper training, receives the insurance check for $64 (80% of the $80 PPO fee). She proceeds to adjust the remaining balance of $36, leaving the patient with either a $0 balance or a credit balance of $16, which was the 20% patient portion of the reduced fee of $80 IF it had been collected at the time of service. You are given a request for a refund for $16, at which time you send a refund check.

Another example is an inexperienced business coordinator, having not been taught how to make collection calls to delinquent accounts, sees an adjustment code called “uncollectible” and feels that it’s appropriate to write this balance off. She has sent five monthly statements with no response so it must be “uncollectible” at this point. In this scenario, the posts could add up to thousands of dollars a year.

Solution
Every month, sit down with your business coordinator and review the production adjustments that are posted to the accounts. There should be a report that is generated daily with the charges, payments and adjustments posted. Review these daily for accuracy. Question large adjustments and encourage your business coordinator to post “notes” with explanations regarding the adjustments.

It is also suggested that if your practice management allows, set up an adjustment code that more accurately describes the adjustment that is being posted. Examples would be:  10% Cash Courtesy, Employee Family, Employee, Posted in Error (Credit), Posted in Error (Debit), Small Credit Balance Adjustment, ABC Insurance Adjustment, Small Uncollectible Adjustment, Finance Charge Adjustment, Old Balance over 1 Year Adjustment, etc. The more categories there are, the easier it is to review the adjustments for accuracy.

Keep your production adjustments to a minimum. Monitor the percentage of adjustments compared to your gross production monthly. It should not vary much from month-to-month if properly posted.

For more information about receiving an analysis of your Business Operational Systems, contact McKenzie Management today.

If you would like more information on how McKenzie's Consulting Coaching Programs can help you implement proven strategies, email info@mckenziemgmt.com

Forward this article to a friend



Belle DuCharme, CDPMA
Instructor/Consultant
Printer Friendly Version

How to Sell Dentistry When No One Wants It
By Belle DuCharme, CDPMA

Selling a beautiful piece of jewelry or a vacation in Hawaii is a lot easier than selling an implant supported bridge, right? The jewelry makes you feel beautiful and rich. The Hawaiian vacation is an opportunity to get away to an amazing place with great weather, wonderful food, flower scented trade winds and breathtaking beaches backed by the greenest of tropical mountains. How can a dental bridge top that? It can’t - at least not at the same positive emotional level.

When there is need for dentistry or a  perceived value of the service, the ease of patient acceptance is much higher. Need is triggered by pain, a broken tooth in an unsightly location, or an uncomfortable feeling that something unhealthy is imminent because of bad breath or bleeding gums. Once need is established, the patient must accept the fact that there will be a process to go through to get rid of the pain or other problem. There is emotion attached to this process and it is usually not positive. This is where selling dentistry is challenging - because no one wants the process of delivering care, no matter how good it is going to look in the end.

Fear of more pain, needles and other sharp instruments in a very sensitive mouth all create emotions not akin to a nice piece of jewelry or a tropical vacation. If the Hawaiian vacation was contingent upon you rowing to Hawaii in a small boat, it would not have the same positive emotion connected to it. Presenting treatment to patients with the thought of planting a seed for when there is need is more realistic than trying to create a need where, at this point in time, there is no want or desire for procedures that the patient thinks they can have a normal life without.

Focus on the emotion attached to the purchase of dental care. Think of the patient’s emotional state when  thinking of the process, not the outcome. Sooner or later everyone needs a dentist and that is when you become a want or a dire necessity. If you have communicated positive information in a caring way to your patient, they will want you.

So how do you market to them prior to that triggering event? How do you ensure that when the dental event occurs or they decide it’s time to get that implant supported bridge, they know about your practice and your services, and you are on their short list of potential dentists?

Marketing is everything you do. Your knowledge, experience, empathy, fairness, professionally trained staff, dedication to customer service, track record of satisfied patients who have received the same type of treatment proposed, excellent media reviews, patient centered hours and financial options are just a few of the components of your brand. Be someone who is hard to forget because of the extra kindness and concern demonstrated. In other words, create a positive emotional connection to your patients. Envision how you will help your patient get over the very thing they’re afraid of. This means truly understanding the psychology of your patients at the time of presenting treatment.

Sit down with your team and focus on how you deliver dental care. Discuss what each of you can do to make the process more comfortable, emotionally calming and positive for the patient. Everyone has their own ways of achieving relaxation and comfort, and these ways can be shared to create a standard of care for patients that is offered at the time the treatment options are being discussed.   

Years ago I worked in a practice for a very kind and thoughtful dentist. Many patients would literally fall asleep in the dental chair during procedures because they were so at ease. When it came to wanting the dental care there was no hesitation based on the process, as they knew they were in good hands.

If you want to explore better ways of presenting treatment to patients and learn what you can do to gain more treatment acceptance, sign up for the Treatment Acceptance Course or the Front Office Business Training Course.

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

Forward this article to a friend

McKenzie Newsletter Information:
To unsubscribe:
To discontinue receiving the Sally McKenzie management newsletter,
click on the link at the very bottom of this page for instant removal,
To report technical problems with this newsletter or to request technical help,
please send a descriptive email to: webmaster@mckenziemgmt.com
To request services, products or general inquires about The McKenzie Company activities
please send a descriptive email to: info@mckenziemgmt.com
If you would like to have any of your dental practice concerns answered personally by Sally McKenzie,
please send a descriptive email to her at: sallymck@mckenziemgmt.com
Copyrights 1980-Present The McKenzie Company - All Rights Reserved.