4.13.12 Issue #527 info@mckenziemgmt.com 1-877-777-6151 Forward This Newsletter

Is THIS What's Driving Your Overhead Up?
By Sally McKenzie, CEO

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It creeps up on you slowly, silently - much like termites, quietly chewing away at the infrastructure. You don’t quite comprehend the extent of the problem until it’s a crisis. It all begins innocently enough.  A few extra bucks for a “helper” at the front desk for those busy times, “occasional” holes in the schedule that just don’t get filled, raises based on another year of service rather than improved productivity. And before long, you are wondering if you’ll have enough to make the payments on the new diagnostic equipment you had planned to purchase. You’re asking yourself if there will be enough money to cover all of the continuing education that you and your team are required to complete in coming months. And you are trying to convince yourself that it’s okay to defer saving for retirement yet again.

This is when you start to realize that the tables have turned. You can’t plan for the future. You are no longer in charge. Overhead is now dictating how you run your business. No longer are you making decisions based on what’s best for the practice. Rather, choices are made based on how much it costs - whatever “it” is. How much longer can you do without it, and is it absolutely necessary. This, doctor, is no way to run a practice. Worst of all, there are few things as stressful as monetary stress. The good news is you can get out from under overhead - but it won’t come without commitment to clean up inefficiencies and a clear understanding of those systems that have the greatest impact on cash flow.

Let’s consider the benchmarks. The industry standard for overhead is 55% of collections. If you are currently at 60-65%, you are comfortably within reach. If yours is higher, you need to take action. Some doctors report their overhead as high as 85%, which means they are making just 15 cents on the dollar! And you definitely don’t want to be a member of the “15 Cent Club” for any length of time.

The first step in controlling overhead is to establish the following budget targets: 

Supplies - 5%
Rent - 5%     
Laboratory - 10%
Payroll - 19-22%
Payroll taxes and benefits - 3%
Miscellaneous - 10%

Do you want me to review yours? Just click HERE to send me your figures.

Certainly, all of the areas can be a drain on profits, but payroll is typically the biggest expense. Problems arise when payroll, including taxes and benefits, exceeds 23-25% of gross income. If yours is higher, profits are taking a pounding. Most often, high payroll costs are caused by one or more of the following situations:

You Have Too Many Employees
Too often during busy times, staff will think they need a “helper.” There’s no effort to objectively evaluate whether the practice needs or can financially support a helper. The attitude is that more bodies would ease the burden. Helpers do little to improve efficiency and a lot to bust the budget. More staff does not guarantee an improvement in efficiency or production - unless you are hiring a patient coordinator who is going to make sure the schedule is full and production goals can be met.

Raises Based on Longevity Rather than Productivity/Performance
Even during the recession of the last few years, we have seen practices giving raises based on another year in the office. That is a horribly ineffective compensation model in the best of times, and potentially disastrous in difficult economic times. If production is going down and overhead is going up, payroll cannot be increased. In other words, if the practice is losing money, employees DO NOT get to make more. Establish a compensation policy stating that raises will be given based upon employee performance - provided the practice is making a profit.

Hygiene is Not Meeting the Industry Standard for Production
The industry standard for the hygiene department is 33% of total practice production. If the doctor steps back to take a closer look at what is happening, s/he will find that the hygienist has far more down time than s/he should. Patient retention is seriously lacking, and periodontal treatment is minimal at best. The recall system, if there even is one, needs immediate attention to ensure that (a) the hygiene schedule is full, (b) the hygienist is scheduled to produce 3x his/her salary, and (c) cancellations are filled.

Next week, plugging the holes and tracking the systems.

For more information on this topic and for additional Dental Practice Management info, visit my blog: The Lighter Side.

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

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Nancy Caudill
Senior Consultant
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Empowering Your Hygienist
By Nancy Caudill

How many times during the day do you feel that you are paddling your canoe alone?  How many times do you say to yourself: “If only my team cared as much about my practice as I do.” Well - maybe you have never given them the “okay” to do so. Have you taken the time at your monthly business meeting to discuss how they can help you with promoting dentistry in the practice? Below are some ideas to get you started on empowering your team to always be looking for ways to increase production, while at the same time providing the ultimate customer service for your patients by ensuring that they are obtaining the dentistry they want and deserve.

Before I start, we must assume that the treatment plans are entered into your computer.  This not only includes treatment recommended for new patients, but also treatment that is recommended to existing patients. This is a MUST in order to implement the concepts below.  Start this step today if it's not already in place!

Review the Routing Slips for Incomplete Treatment at the Morning Meeting
Each patient being seen for the day should have a routing slip. If you are chartless, this is even more imperative. The routing slip is used to move information around the office in an expeditious manner to confirm that all involved team members are on the same page with each patient.

On the routing slip, there should be a list of Unscheduled and Incomplete Treatment.  During the prior day, the clinical team should review the routing slips to confirm that the list is accurate. It is possible that the treatment was completed and never removed from the treatment plan or was rejected by the patient at a previous appointment.

Hygienists' Roles in Re-Introducing Incomplete Treatment
For hygiene patients with incomplete treatment, the hygienist (or hygiene assistant) should have an intra-oral image or x-ray on the monitor relative to the treatment. Once the patient is seated, medical history is reviewed and other initial tasks are complete, the necessity of the recommended treatment should be reviewed again with the patient using the images on the monitor (the clinical need should be noted in the clinical notes) and the patient should be encouraged to schedule the appointment.

Recommendation:  Have a standing order with your hygienist(s) that any incomplete treatment must have some type of image on the monitor before entering the treatment room for the exam.

Hygienists’ Roles for “Pre-Assessing” New Treatment Recommendations
During the initial evaluation, the hygienist always asks the patients if there are teeth that are uncomfortable or any other concerns that they may have. A visual exam by the hygienist would also be useful prior to the doctor’s exam so this information can be relayed to the doctor.

It is also important for the hygienist to continue to monitor the patient’s teeth and gums for any other indications of potential problems. These areas of concern can be shared with the patient without indicating that a diagnosis is being made.  “Mrs. Jones, I am concerned about this tooth on the upper left side. It is possible that due to the large cavity under your old filling, the doctor may be thinking a crown is in order. Let’s talk to him/her about that when s/he comes in, okay?”

The bottom line is that the hygienist needs to take an active role in pre-assessing treatment needs of the patient, in order to assist the doctor with the exam.

Dialogue When the Dentist Enters the Treatment Room with the Hygienist
In order to be more expeditious, it is recommended that the hygienist indicate to the doctor/assistant when their initial evaluation has been completed, as well as the completion of x-rays (when applicable). At this point, the doctor can now enter the hygiene room at any time that it is convenient for him/her to complete the exam opposed to waiting until the end of the hygiene appointment.  Waiting until the end of the appointment does not always correspond with when the doctor can leave their patient, resulting in a delay getting into the hygiene room. I have not seen a hygienist yet that is irritated by the doctor conducting the exam prior to the completion of the appointment if it expedites the exam time.

When the doctor enters the hygiene room, the hygienist would stop the procedure and introduce the doctor, giving up the hygiene chair to allow for the doctor to sit down. The hygienist would then share with the doctor the findings that were made earlier in the appointment, as well as assist with the review of x-rays, enter clinical notes, etc.

“Susan, Dr. Jones is here and ready for your exam. Dr. Jones, Susan and I were discussing an area on the upper left side that we are concerned about. I shared some information with her about the value of crowns just in case you feel that this is an option for her. At this point, she has no other concerns.”

Please note that the patient's name was used twice during this introduction. Doctor, how many times do you walk into the hygiene room and have no idea what the patient's name is? It is the assistant or hygienist's goal to make sure that you know the patient's name in the chair by using it as much as possible until they hear you repeat it, confirming that you are aware.

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

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Belle DuCharme, CDPMA
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The Difference between a Confirmation and a Reminder
By Belle DuCharme, CDPMA

Dear Belle,

Front Office Training What annoys me is when a patient doesn’t show or cancels an appointment at the last minute, and to top it off my boss comes up to the desk and asks me, “Was the patient confirmed?”  What should I do to help with this problem?   

Bee Concerned, Scheduling Coordinator

Dear Bee,

Dentistry is a people business and dealing with people who break the rules can be challenging and upsetting.  Most people who work in dental offices are “feeling” personality types and when a patient does not show up or cancels without a reasonable excuse they may take it personally. Don’t dwell on the negative emotion, but take a look at the message you are sending before criticizing the patient too much.

Technology today offers many ways to confirm dental appointments: email, text, calls to cell phones, home phones and work phones, cards and letters. We can inundate with reminders to the point that the patient may tune us out altogether! There is a distinct difference between a reminder call and a confirmation call.  When the clinical message is clear that the patient must keep the appointment, it is up to the scheduling coordinator to explain to the patient about appointment policies.

Use the following script:  “Mrs. Brown, your time with us is reserved only for you. It is considered confirmed. We will be calling (or email/texting) two business days prior to your appointment as a courtesy reminder only.”

If the patient calls to cancel and reschedule the day before or day of the appointment, say:

“Mrs. Brown, I hope everything is okay and we were looking forward to caring for you today (or tomorrow). As you know, the time is reserved just for you and I don’t have enough time to find someone to take your place. Is there anything that you can do to change your schedule so that you can keep your appointment with us today?”

A reminder contact is a courtesy for a confirmed appointment.  A confirmation call requires a call or contact back to personally acknowledge the appointment. If there are “left message” indicators on the computer schedule, this is a red flag that the patient did not get the message or is waffling about committing to being there. Patients who receive text or email messages must opt in by pressing the confirm button on the message, otherwise it is an unconfirmed appointment.   

Be very clear to patients whether you require a call back confirmation on the appointment, so they know what is expected of them. If you don't receive their confirmation, you either remove the appointment and schedule someone else in that time slot, or double book with something you could do without throwing the schedule off too much. Repeat offenders can be asked to pre-pay for their appointment to secure the reserved space or asked to take times on the schedule that are difficult to fill such as 10:00am - 12:00pm or 1:00 - 3:00 pm.

Charging patients for broken appointments is controversial. It can cause negative feelings with patients who are normally compliant and make them vigilant to your office being on time. They may call you ahead of time and ask “Are you on time today?” The charge for the broken appointment is usually well below the amount generated by the actual appointment so some patients will pay it and then continue to break appointments thinking it is okay if they pay the broken appointment fee. Having a conversation in private with the patient about finding ways to help them keep their appointment is recommended instead of the punitive “broken appointment fee.”

The pre-booked hygiene appointment that was made with the patient six months ago should always require a call back confirmation or a confirmation by text or email. If you are sending recall cards two weeks prior to the scheduled appointment, the card should say: “This appointment is considered confirmed for this date unless you respond to this notice at receipt.” This is explained to the patient at the time the appointment is scheduled.

The human factor of the unexpected or the patient lament “I just completely forgot” will always be part of the dental office scheduling challenge. Keeping those numbers to a minimum by creating and communicating appointment policies to your patients has been proven to be highly effective in reducing broken and cancelled appointments.

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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