Is Your Practice a Target for Employee Theft?
by Sally McKenzie CEO
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The stories read like fascinating and gripping fiction. Unfortunately, they are true. The outwardly stable, unquestionably loyal employee commits a crime that no one would have expected, least of all her/his employer. More puzzling is the fact that often this member of the team doesn’t have a criminal record.
But what is perhaps most disconcerting is that many of the characteristics that make up this person’s profile would also be the sketch for your “ideal” team member. Dedicated, takes very little time off, first in the office and last to leave, will even take work home, is very particular about how things get done. Some say she/he is controlling; others contend it’s commitment. Working her/his fingers to the bone, this devoted employee is quietly robbing you blind.
According the Association of Certified Fraud Examiners (ACFE), “U.S. organizations lose an estimated 5% of annual revenues to fraud. This percentage indicates a staggering estimate of losses around $638 billion among organizations, despite increased emphasis on anti-fraud controls and recent legislation to combat fraud.” If that weren’t troubling enough, the U.S. Chamber of Commerce attributes 30% of all business failures to employee theft.
Staggering losses indeed and it’s the small employers, like dentists, that are getting pounded. The average loss per fraud case among small businesses is $190,000. But how are employees accessing that kind of money? They’re fraudulently writing company checks, skimming revenues, and processing fraudulent invoices. In small operations, like dental practices, internal controls tend to be lax and accountability slim providing the ideal environment for employee theft.
One recently reported case involved an employee who routinely crossed out the employer’s name on checks written from customers and inserted his own. No white out, or fancy chemical concoction to erase the ink, just strike through the name on the check and make it payable to himself/herself. And you probably thought the bank would catch something so blatant. But banks process more than 35,000 checks per minute.
Checks present a veritable smorgasbord of opportunities for the small business embezzler. As another thief discovered, it was a relatively simple exercise to write company checks to her/him and then destroy the cancelled checks. Countless fraudsters have discovered the ease of ordering new checks in the business’ name and making them out to themselves. They can steal insurance checks or sign checks using a signature stamp. In a multitude of other cases, the trusted employee accepts payment from the patient or customer, deletes the transaction on the computer, and keeps the payment. Many patients no longer get their cancelled checks, let alone actually look at them.
Then there are the fraudulent billing schemes. These take a bit more effort than your typical check fraud. One small employer was building a new office only to discover by accident that a trusted employee, who just happens to be in charge of paying the bills, had set up a fictitious painting business and was billing the employer for work never done.
But what is it that makes the otherwise stellar employee turn to crime? Research has indicated that there are several inducements that can influence someone’s decision to steal, but three factors must be present. It’s known as the “fraud triangle.” The employee must have the incentive, the opportunity and the rationalization.
The incentive may be a gambling problem, or alcohol or drug addiction. The person may be disgruntled or is stretched beyond their financial means. They may be experiencing personal crisis such as a divorce, serious illness or a death in the family. They become desperate, angry or disillusioned, all of which provide incentive to commit the crime.
The opportunity typically comes in the form of lax internal controls. One person has total control of practice revenues. There are few if any checks and balances and a near total lack of supervision over that highly trusted employee who seemingly can do no wrong.
Then there’s rationalization: The employee tells her/himself that they’ll just take a little loan and will pay it back. Then they take a little more the next time. Or the employee hasn’t received a raise and contends she/he works harder than anyone, so she/he deserves the money. Or perhaps their addiction is taking over their life; their medical bills have skyrocketed; their spouse lost his/her job; the dentist makes so much money that she/he will never notice. Whatever forms the rationalization takes, oftentimes in the employee’s mind; he/she is simply correcting a perceived wrong.
Next week, protect your practice from fraud.
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Specialists and the General Practice = A Special Relationship
In the course of comprehensive phase treatment, it is possible that a patient may require the services of several dental professionals. A General Dentist may need to use the services of an Oral Surgeon, Periodontist, Endodontist and an Orthodontist to complete one patient. In order to place any dental prosthetics, whether it is for esthetics or function, it must be on a healthy and stable foundation.
For a General Dentist, crowns, three unit fixed bridges, removable partial dentures and full dentures are forms of treatment usually accepted by patients, because they have been the standard of care for many years and insurance companies pay for these services more often.
When a patient decides to move up to implant supported prosthetics or cosmetic full mouth reconstruction, the environment changes. If the general dentist has not had advanced training in surgical placement of implants, the patient is referred to an Oral Surgeon or a Periodontist for the surgical stage of the treatment. Sometimes, depending upon the complexity of the case, a Prosthodontist may also be added to the team, either as a consultant or as part of the reconstructive team. Another important member of the treatment team is the lab technician. The lab technician, often overlooked, but is critical for the success of any prosthetic case. Giving the lab technician as much advanced notice as possible for upcoming cases ensures that the case will be back on time for the next phase or delivery.
The trust that the General Dentist has worked hard to develop can be shattered if the patient’s experience at the specialist’s office is negative. It is important to establish a protocol before sending a patient to the specialist’s office. The patient is naturally hesitant to go to see a specialist because of fear of the unknown. Fearing what the specialist will say or want to do keeps many patients from making that important step. Explaining to the patient what will happen at the appointment and that you and your team are there for support every step of the way is not only correct but kind.
It is vitally important that the General Dentist have a close working relationship with the team of specialists. A visit to the specialist’s facility, to observe treatment and to ask questions as to how his/her patients will be received and treated, should be accomplished prior to sending patients there for consultation or treatment. Getting to know the personalities of each specialist and their teams will help to prepare the patient for his/her appointment.
Some specialists may be better equipped to deal with the “high maintenance” type patient than others would be. Some doctors are skilled clinicians but may not have the “chairside manner” the patient is accustomed to in the General Dentist’s office. Patients may or may not tell you of a bad experience for fear of being labeled a “troublemaker.” Always contact referred patients to see if they are satisfied with the outcome of their visit to the specialist.
Patients like to know that they are being sent to someone that their dentist trusts to do good work. It is wise to tell patients that they will have to ask the specialist’s Business Coordinator about insurance or financial policies as they may be different from the referring dentist. The specialist’s Business Coordinator should be given information from the referring dentist as to how this patient would best be communicated with regard to these matters.
After the patient is sent to the specialist, the general Dentist and/ or the Treatment Coordinator monitors each phase of treatment and keeps in contact with the specialist and the patient. Reserving time for the next phase of restorative is recommended to prevent scheduling glitches.
The Treatment Coordinator is important in this process as patients often stop in the middle of a phase, due to an unforeseen event or a miscommunication, and do not call to reschedule. This is common after a trip to the Endodontist. Once the pain is gone, the patient may postpone the next step in the necessary treatment sequence. The specialist office should inform the General Dentist when this happens but it is up to the General Dentist to keep in contact with the patient through each stage to completion.
Being a patient advocate is usually the responsibility of the Treatment Coordinator. If the patient calls in with any questions regarding treatment, the call would be transferred to the Treatment Coordinator. Having one person in charge of answering the patient’s questions and concerns builds cohesiveness and trust.
Getting together over lunch is a great way for the General Dentist team and the Specialist’s team to get to know each other better and to discuss the best methods of patient care.
Why not improve your performance in 2008 by increasing your treatment acceptance: Email firstname.lastname@example.org or call 877.777.6151
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Does One Bad Apple Spoil the Whole Basket?
Dr. Jennifer Small – Case Study #113
“Why can’t I find a good employee? They come and they go. It is so disrupting to the team and my patients!”
Dr. Small was again experiencing employee turnover in her practice. The following is an analysis of the problem and possible solution.
Why does an employee stay?
- The salary is so high that they can’t afford to go anywhere else!
- They enjoy working with the other team members.
- The benefits are exceptional.
- It’s close to home.
- The work is not demanding.
- The salary is adequate.
- They’re afraid that they can’t find employment elsewhere.
Why does an employee leave?
- The salary is so low that they can’t afford to stay!
- They don’t enjoy working with one or more of the team.
- There are no benefits.
- It is too far to drive.
- The work is too demanding.
- The salary is not adequate.
- They can easily find employment elsewhere for more money and they do!
Although all of these issues are worth exploring, this article will address the concern in Dr. Small’s office. The individual team members communicated the following lament: They don’t enjoy one or more members of the team that they work with and this affects their performance.
Though this is a common thread in many offices, it is also common to see systems lacking in these offices that directly affect these problems. As with Dr. Small, there is a breakdown in communication due to lack of job descriptions for the team. Susie isn’t going to confirm patients because she perceives that it is not her job…she perceives that Judy is supposed to be confirming patients.
Typically this scenario starts the day a new person is trained by the person that is leaving. Whatever is shown to this new person is perceived as the only job duties to be performed. The reality is that no one is sure who is responsible for what and that includes the doctor.
The label of “bad apple” may be premature. This is especially true if the team member is a new addition to the team. When there aren’t training protocols or written job descriptions in place, it is difficult for the new team member to assimilate into the working environment. The following systems are recommended for orienting and training a new team member.
Systems necessary for a successful new team member:
- A summarized employment checklist signed by the doctor and the new employee that outlines salary, review date, benefits, grievance pay, jury duty compensation, etc. It is recommended that there be a formal Employee Policy Manual to clarify these issues along with starting date, starting pay, when holidays are paid, when vacation starts, etc. This signed form is kept in the new employee’s employment file.
- A systemized training program! Many dentists think that if they are hiring an “experienced” assistant or business person, there is no training required. EVERY practice is different. The dental software system, processing new patients system and the recall system are just examples of systems that change from practice to practice. The new employee should be teamed up with an experienced employee in the practice so they can learn to duplicate the every day tasks. Make sure that the person who is doing the training is a stellar example of the performance and attitude standards of the practice.
- A scheduled performance review to give constructive feedback by the doctor. New employees are always wondering how they are doing and the doctor is always wondering why they are doing what they do...communication!
- A specific Job Description and clearly defined areas of accountability. All the team members need to know what each person’s responsibilities are to the practice. This does not mean that only certain people perform certain tasks. Everyone is capable of doing another’s tasks but only one person is held accountable for the completion or performance of that task.
An unhappy employee will leave due to lack of training. Other team members will justify this with “we don’t like her/him” because she/he is too slow, she/he isn’t a team player, she/he doesn’t talk, etc. Before you lose a potentially great employee, make sure that you have the tools in place to help the new hire to be successful.
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