02.20.09 Issue #363 Forward This Newsletter To A Colleague
Current Economy
Consultant Case Study
Front Office Accountability

Current Economy Calls For Different Approach
by Sally McKenzie CEO
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I don’t know about you, but I am getting to the point where I would rather leave the newspaper out on the doorstep than bring it into the house and read page after page of bad news.

I would much rather go about my routine as if none of it were happening. Unfortunately, I can’t and neither can you. Your patients are living those headlines. They are facing the fear of job loss, the stress of the mortgage crisis and the worry of shrinking retirement funds. For some offices, such stress on the patients is translating into stress on the practice. The ripple effect is appearing as some of those tried and true methods that worked so well during prosperous times aren’t yielding the same results.

For example, I recently heard from a practice that has had tremendous success in following up with patients who had diagnosed but unscheduled treatment. Until recently, the practice’s approach worked very well. However, they have had a couple of incidents in which their proven strategy hit the skids—and hard.

Stopping System Collapse

The most recent episode involved a patient who was in for a hygiene appointment during which the doctor diagnosed a cracked tooth. A few weeks later, a member of the business team called the patient to ask about scheduling an appointment for a crown. The patient reacted very negatively and, not only did the patient refuse to schedule a crown appointment because of being “pressured,” he also cancelled his next hygiene appointment. Ouch. Needless to say, the situation was very troubling. Moreover, the practice has been encountering sporadic negative reactions to their follow-up approach.

Understandably, it would be easy to hit the panic button and issue an edict to staff that the office is hereby suspending all treatment follow-up phone calls to patients. But that would be a mistake. So what should this practice do? Documentation and communications are critical as there are some unanswered questions.

When the patient was told at his recall appointment that he had a cracked tooth that needed a crown, how did he react? Was the patient told specifically that he would need treatment right away? Or was the patient told something vague, such as, “Mr. Jones, we’re going to need to keep an eye on that tooth”? If the patient was told specifically that he needed a crown, how did the patient react? Did he say, “It’s not a good time right now; is there something else we can do?” Did he say, “I really can’t move forward on any treatment right now”? Or did he say nothing when the doctor told him? Documenting exactly what transpires in a situation like this is essential so that the person responsible for follow-up knows exactly what comments are exchanged and can better assess how the patient should be approached.

If the exchange had been fully documented, the business employee might have read the notes and realized that Mr. Jones was going through a difficult time, was not going to schedule an appointment and a phone call was probably not going to be the best approach. Instead, she might have opted for a reassuring letter to the patient to tell him that the doctor understands this is not a good time for the patient to proceed with recommended treatment and, when Mr. Jones is ready, the practice will do everything it can to help him with financial arrangements and ensure that he receives the care he needs. The letter could further urge the patient to keep the practice apprised of how the tooth is doing and to call the office right away if he experiences any pain or discomfort. This approach conveys understanding and compassion.

In addition, if Mr. Jones has been a long-term dedicated patient who has consistently kept his appointments, pursued recommended treatment and paid his bills it is essential to let him know that he is appreciated. This may be a difficult time for him and his negative reaction could have been triggered by any number of reasons, but it is crucial that he feel valued as a patient and as a person and not just as practice production.

Next week: Is your practice passive or responsive to patient worries?

Interested in speaking to Sally about your practice concerns? Email her at sallymck@mckenziemgmt.com.

Interested in having Sally speak to your dental society or study club? Click here.

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Free Overhead Assessment

Nancy Caudill
Senior Consultant
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Bonus Or Bust?

Dr. Jill Gordon—Case Study #426

As more and more dentists are scrutinizing their practices in the areas of expenditures versus income, there is one area that seems to be at the top of the list during this economic downturn: bonuses. Let's take a look at a scenario that you may find relevant.

Dr. Gordon requested consulting assistance for her practice:

Dr. Gordon’s Practice Statistics:

  • 1 doctor, 2 assistants, 1 full-time hygienist and 2 business employees
  • 5-year-old start-up practice
  • 18–22 new patients a month
  • $60,000 a month in net production in 2008
  • Collecting 99% of net production

Dr. Gordon was managing the practice by the seat of her pants, allowing her team to make many management decisions for her based on their past experiences in other practices. She also brought with her from her previous associateship some protocols that she felt were applicable in her practice. Unfortunately, she didn’t know what she didn't know!

As the months went by, Dr. Gordon witnessed a decrease in the number of new patients as well as a reduction in hygiene production because of openings in the hygiene schedule. As a result of fewer patients being seen in hygiene, this also reduced the number of opportunities she had to diagnose and recommend treatment. This was affecting her production and manifested itself in more openings on her schedule.

She is now concerned about the future of her practice and how long she can carry on. The practice is only five years old and she is still carrying a substantial debt load from school loans, equipment and facility overhead.


  • Dr. Gordon was over-staffed. Not only was her gross wage overhead for her team hovering around 25%, her benefits overhead was almost 7%.
  • Initially, it appeared that her collection to production percentage of 99% was excellent. Upon further investigation, it was discovered that 6% of her total net production was being written off due to uncollectible balances of patients… no financial systems. 2% is acceptable in the industry. The bad debt write-offs were keeping the A/R low and reflecting a false indicator.
  • Her overall overhead for the practice from a management view point was almost 80%.

The Most Shocking News:
Dr. Gordon brought into her new practice a bonus plan that was being used in her previous practice where she worked as an associate. It seemed reasonable to her so she implemented it in her own practice. The bonus plan was based on the ratio of Accounts Receivable to Collections.

What was shocking about this bonus plan was not the way the bonus plan was structured, even though it wasn't a good plan. What WAS shocking was the fact that she was still offering it to her employees! As poorly as the practice was performing over the past two months, the overhead at 80%, the employee gross wages and benefits too high, she was still paying a bonus.

When questioned about this, after showing her the statistical facts, her response was, "I don't know how to take it away from them…they expect it."

Keeping The Doors Open
When any practice has down turns, and it happens in healthy economic times as well as when what is being experienced now is happening, there are times when any practice is not as profitable as it needs to be. A true "bonus" plan is just what it implies—a bonus when the practice performs above and beyond what is considered normal for the practice.

If a practice has instituted a bonus plan, and it does seem that this is common even though McKenzie Management recommends that alternative methods of rewarding your team be utilized, it should be made VERY clear to the employees that when the practice is not performing, there is NO bonus paid out. It is more important for the practice to remain as profitable as possible to meet monthly obligations to keep the door open to provide employees with a place to work—not to pay out bonuses that the practice can't afford.

Just Say "No"!
Dr. Gordon was paying out team bonuses from her own pocket, not from profits from the practice. No wonder she was struggling financially. She was instructed to stop all bonuses. She was given other options to show her team how much she appreciated them when the practice shows signs of profitability again. One way was a simple but sincere "thank you" at the end of the day. It is amazing how many dentists don't utter these two little words to their teams even though their teams yearn to hear it.


  • If your practice overhead is unhealthy—stop the bonuses.
  • If your staff gross wages are high—stop the bonuses.
  • If your staff benefits are high—stop the bonuses.
  • Most important, know what your practice overhead percentages are so you can make educated business decisions about your practice.

Serious times make for serious business decisions. It is not the time to be a "buddy" to your team but a time to be a leader. If you are unsure about the health of your practice, contact McKenzie Management today.

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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Belle DuCharme CDPMA
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Accountability At The Front Desk

Case Study: Dr. R. Peters’s Front Office Team—Business Training

  • Jane: Front Desk, Part-Time
  • Mildred: Front Desk, Full-Time
  • Delores: Front Desk, Full-Time
  • Siva: Front Desk, Part-Time

Jane, Mildred, Delores and Siva attended the Front Office Business Training at McKenzie Management. Dr. Peters had indicated that he wanted to see more definitive job duties and accountability from his team. Jane and Siva were hired to help at the front desk and would also be helping in the clinical area as dental assistants. Two days a week there were three dental hygienists appointed full days resulting in approximately thirty-four to forty patients (including Dr. Peters’s patients) checking in and out in the eight-hour work day. However, on the other three days a week there were about twenty-two patients checking in and out at the desk. Mildred and Delores had been with Dr. Peters for about six years and were happy with their jobs; “We aren’t certain why we are here and we don’t know what to expect from this training course but we are open to learning new skills or new ideas,” they said. Jane and Siva did not have any experience at the front desk but were being trained by Mildred and Delores when they had time.

Upon questioning the team about office systems and reviewing the reports they brought in, it was apparent that there were several broken systems affecting the success of the business area of this practice. Dr. Peters is a fine dentist and has a loyal patient following but is distressed that his payroll overhead is becoming increasing difficult to pay. “We are obviously busy but every time there is a complaint about the stress from being too busy, I hire another person. However, the efficiency does not improve. What is to be done?”

New Dentist Enrichment

The first discussion was job descriptions and who was doing what in the practice. Mildred and Delores were both doing scheduling, processing insurance, financial arrangements, answering the phone, entering data, sending out recall cards and other patient correspondence. The Accounts Receivable report indicated a 26% in the “90 Day Plus” overdue category. This should be 10–12% to be healthy. When asked who was in charge of the collection system, the response was, “We call people when we have time.” When asked when the last time anyone was called, no one knew. The same question was asked about the recall system. We send out cards and that is it,” was the response from Delores and Mildred.

The assignment was for each employee to write their job descriptions, including every task that they performed in the day. The purpose was to see what tasks were being duplicated and what was left off, and to assign areas that each person would be accountable for. Breaking the tasks into definitive areas resulted in Mildred being designated as the Scheduling Coordinator and Delores as the Financial/Insurance Coordinator. McKenzie Management’s time and motion studies at the front desk reveal that one full-time Business Coordinator working efficiently can process 20–22 patients per day without feeling stressed. Because there were 34 plus patients 2 days a week it was necessary to have 2 full-time business area employees. The days when there were only 24 patients, there would be time for collection calls, calling unscheduled treatment and recall, insurance follow-up and other outgoing calls. Mildred would be first to answer the phones and greet all patients upon arrival and check them in. Even though she was not the only person scheduling she was responsible for the final result and making sure the schedule met practice goal. She was also responsible for tracking new patient numbers, and patient retention and the recall system.

Delores was second to answer the phones and responsible for patient check-out, collecting over-the-counter monies, the accuracy of insurance data, eligibility and claim process and follow-up. She also presented treatment plans and secured financial arrangements prior to scheduling patients’ follow-up visits. Both Delores and Mildred were enthused about their new titles and responsibilities. “I now have direction and goals and don’t feel like I am flying by the seat of my pants at work,” Delores happily chimed.

It was determined that Jane and Siva were not needed at the front desk, but there was need for a part-time dental assistant two days a week to help with the patient volume, particularly in the hygiene area.

On the days where there were three hygienists it was decided that the hygienists would appoint patients that did not need restorative care or need to pay at dismissal. By having the hygienist appoint some of the patients, it helped to prevent a back-up at the front desk when people were leaving and arriving at the same time. This change created more time for Delores to discuss treatment plans with patients and securing patient acceptance.

Siva agreed to work part-time as a dental assistant and Jane was given an opportunity to secure a position elsewhere with an excellent recommendation. Dr. Peters wanted an assistant with him at all times so it worked out well with two full-time assistants and one part-time. Dr. Peters was very pleased when the staff overhead came down and his team became more efficient and happy with their work.

Need help organizing and prioritizing your front desk? Call today and sign up for McKenzie’s Advanced Business Courses designed to meet your front office needs.

For more information about McKenzie Management’s Advanced Training courses, email training@mckenziemgmt.com, call 1-877-777-6151 or visit our website at www.mckenziemgmt.com.

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