09.18.09 Issue #393 Forward This Newsletter To A Colleague

Nancy Caudill
Senior Consultant
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Help Your Patients Say YES to Treatment

Case Study #211
Dr. Robert Mahoney

Dr. Mahoney’s practice is a very “typical” dental practice. He has two Business Employees, two Clinical Assistants and two Hygienists. What sets practices apart from one another is the ability to be profitable, productive and sustain continued growth. Dr. Mahoney’s practice was suffering in all three departments.

His practice overhead was averaging 69% over the past 12 months. The industry standard is 55-60% for a healthy practice. His employee gross wage percentage was 26% of net collections for the past 12 months. Healthy would be 22% or less.

It is safe to say, based on our experience, that many dental practices do not have daily production goals established for the practice - but production goals are essential in order to know where you are going and when you arrive! Dr. Mahoney’s monthly team gross wages were averaging $11,000 a month.  His net collections were averaging $42,308. Wages / collections = 26%. In order for the wages to be within normal limits, he needs to be collecting at least $50,000. He is adjusting about 5% of his gross production for senior, professional, cash, staff and other courtesies. His fees are already adjusted for his PPO plans.  Therefore, in order to collect $50,000 at a 98% collection rate, he needs to be producing $53,763.  ($50,000 / 100% - 5% for adjustments – 2% for non-collected fees OR 93% = $53,763.)

Therefore, based on working 16 days a month on average, the daily objective to obtain this production for the doctor and hygienist should be $3,360.  The hygienist should be producing about $900 per day and his production should be $2,460.  Daily production goals should always be established individually for each producer, instead of a total practice goal.

Practice Growth
Dr. Mahoney’s practice is almost 10 years old in the same location. He is averaging 22 new patients a month. Theoretically, 10 years x 22 patients per month = 2,640 active patients if his retention rate was 100%, however it is impossible to retain 100% of your hygiene patients.  A practice that is managing their recall system should be able to retain 85-90% of their patients, depending on the demographics of the area.

One hygienist working 16 days a month and seeing 9 patients a day is capable of seeing about 144 patients a month.  If all the patients were on a 6-month recall interval, she is only capable of maintaining 864 active patients (144 x 6). He has seen over 2,640 patients over the past 10 years.  Where are the other 1,776 patients?  

The good news is that once the recall system is repaired and the bleeding is stopped, the need for additional hygiene days will happen automatically. 22 new comprehensive exams per month and a retention rate of 90% is enough to grow a practice. The need for additional hygiene days will become evident when the reports are reviewed.

As the hygiene department grows, the practice production and collections will automatically increase. However, keep in mind that there are 2 distinct departments – the doctor and the hygienist. The hygienist’s production has increased due to improved recall systems and the ability to schedule a daily goal. Now Dr. Mahoney must step up his production to carry his portion of the necessary production. 

Increasing the doctor’s daily production
For three months, a survey was taken to determine the percentage of patients that were and were not scheduling treatment with the doctor, as well as what type of treatment was recommended. The survey listed:

Patient Name   Susie Smith
C&B   X
Removable Pros         
Scheduled?  No
If not, why? Wants to think about it

What was discovered was that 90% of patients scheduled restorative and extraction appointments, but only 50% of patients were scheduling for C&B and removable prosthetics. Why was this the case? Based on the reasons that were given, the primary reasons were financial and “wants to think about it.” I have always thought that “thinking about it” is interesting. I just can’t imagine patients going home, sitting in their easy chair, and contemplating whether or not they are going to have a crown placed on Tooth #31!

Help Patients Say Yes to Recommended Treatment
When you shop at your favorite clothing store, can you imagine what it would be like if you couldn’t touch anything?  We make decisions based on touch, smell and sight.  Patients are no different. Dr. Maloney had no presentation models or other educational tools in his office to assist his patients in “buying” their dental needs.

As the hygienist is expressing to Mrs. Jones about the need for a crown to replace an old silver filling that has a cavity in it, Mrs. Jones has no idea what a crown is, what it looks like, what it is made of, or how much it is going to cost.  When she is presented to Judy at the front desk and Judy explains that her “investment” is going to be $550, Mrs. Jones is shocked!  There was no value placed on the necessary crown by the hygienist. The hygienist only gave her words with no pictures. Mrs. Jones wasn’t able to touch, see or smell what a crown is or how it will help her to chew all the foods that she enjoys, improve her appearance, and last for years and years. 

By using something as simple as another patient’s model with a crown already prepared by the lab, added value is placed on the word “crown.” Mrs. Jones can hold it in her hand, she can see how her tooth will be prepared, she is told how the crown is custom-made just to fit her tooth, and if it is made from porcelain, it could last as long as her grandmother’s china!

Don’t allow your patients to “think about it”. This means that they don’t have enough information to make an informed decision. Get them excited about their recommended treatment by knowing what to say to activate their senses, so they can say yes!

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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