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Sally McKenzie's

Weekly Management e-Motivator


Issue #55

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e-motivator Article.

March 14, 2003

Sally McKenzie,CMC
McKenzie Management

1-877-777-6151 Ext. 11

Breaking Down the Fee For Service Barrier

Undercharging patients by as little as 7% or 8% each year translates into thousands of dollars lost to the practice. Undercharging by 40-50% and you are talking serious financial hammering. And that is exactly what is happening. Many dentists have fees, seemingly set in stone, that are only in the 50th to 60th percentile for their areas. The resulting cost to the practice is astronomical.

Yet many dentists would rather turn cartwheels across the waiting room than address the issue of fees. The process is laden with anxiety and trepidation. Well, it’s time to take the fear out of fees. Step back and realistically look at your income, your costs, and the dental experience you are providing every patient that walks through your door.

  1. Time and materials are COSTLY. Evaluate the time required for each procedure, the fixed expenses necessary to run the office, variable expenses including supplies and lab fees, income required per hour to compensate you, the dentist.
  2. Look at where your expenses are as compared to where they should be. Examine gross income and establish a goal to rein in expenses so they line up according to the following benchmarks: Laboratory expenses – 10%, dental supplies – 5-7%, Rent -5%, Employees’ salaries – 19-22%, payroll taxes and benefits – 3-5%, miscellaneous - 10%.
  3. Consider your production goal to determine the number of days per week you will see patients and the number of hours you will spend on treatment. If your annual production goal is $850,000, you work 48 weeks a year, 36 hours per week, your hourly production goal is $492.
  4. Establish a solid fee for each service and no waffling.
  5. Increase income even before you increase fees. Overlap patients during the first and last 10 minutes of each appointment or schedule Assistant/Doctor time.
  6. Know your neighbors. Study the fees of other dentists in your area as well as the income demographics of your patients. But remember your fees should reflect the quality of the dental experience you provide. Your standards may be far different than those of the dentist down the street.
  7. Adjust your fees twice a year, 2% then 3% for an annual increase of 5%.
  8. Provide payment options. Establish a relationship with a patient financing company, such as CareCredit™.

You have established a trusting relationship with your patients and few people seek out healthcare providers based on who is the cheapest. Patients want quality dental care and they recognize that care has a price.

"I knew we had great potential to be an exceptional office, but we did not have the know how. Giving us all job descriptions really gave us the direction we needed. I feel we now have direction and our possibilities are endless."
Rhonda, Office Manager

Invest in the people who can make a difference in your practice.

The Center for Dental Career Development
Advanced Business Education for Dental Professionals

For current information

Technology Tool Box

Mark Dilatush, VP of Professional Relations
for McKenzie Management


1-877-777-6151 Ext. 28

A series of short weekly chores designed to keep the return on investment in technology at its highest level.

If you missed any of the previous issues CLICK HERE.

Avoiding A Data Mess

About six months ago, I wrote an article on the importance of keeping your data “clean”. This week I want to focus on how to avoid the mess in the first place. Dirty data causes all kinds of problems in dental practices. The most common are poor customer service, inaccurate reporting, all the way to missing production opportunities. I do not expect dentists to have to maintain the database in your office. The person responsible for the specific business systems (hopefully in their job description) should be responsible for keeping everything as clean as possible.

Where does the data mess come from?

  1. Double entry: Things happen quickly in a dental practice. It is not uncommon to see two patients at the front desk and two phone lines ringing. In a hurried environment, team members tend to “add” data before looking to see if it already exists. The most common double entry mistakes are patients, insurance companies, and insurance plans. This mess wreaks havoc on your system’s ability to process patients properly.
  2. Mistyped dates: Most of the practice management systems will recognize a mistyped date. Some date sensitive records will warn the user if the date “looks” wrong to the program. Others will do nothing. The programming design in general is inconsistent. Therefore, you should take steps to make sure those mistakes don’t show up as dirt at a later point in time. Erroneous dates normally show up in the transactions or ledger. You can run transaction (or ledger) reports with date ranges from 1900 through the month before you started using the system. This will find any erroneous “early dates”. Then, run a transaction (or ledger) report with date ranges from tomorrow through 100 years from now. That will catch the erroneous “later dates”. Fix any entry it finds.
  3. Staff turnover: This is probably the biggest cause for dirty data. It doesn’t really matter if the new employee has experience with your particular practice management system. They may have used it differently in a previous office. Humans are creatures of habit. The new team member will invariably create dirty data somewhere.
  4. Inconsistent abbreviation at data entry point: BCBS or Blue Cross Blue Shield? Prudential or The Prudential? Guardian or The Guardian? In a “lookup” window in your software, these entries will be in two very different places on the list. Most lists are sorted alphabetically when you are viewing them on screen. If you’re searching for “Prudential” visually, and the person entering information typed in “The Prudential”, you won’t find it and will ultimately add another of the same plan or insurance company. Same thing holds true for patient names. MacDonald? or Mac Donald? The point is, the things you are looking for could already be there. You and the person who entered the data just aren’t on the same page with abbreviations.

Consistency Meeting
I know, it sounds kind of elementary doesn’t it? But, I would be willing to bet 99% of the readers have more dirty data than they realize.

Print the data entry screens of your software. Over a working lunch, go field by field with the team. Discuss the following:

  1. Before you add something new, everyone needs to get into the habit of looking to see if it already exists.
  2. Everyone needs to agree and be consistent on abbreviations in your office. Show some examples to the whole team. Come to a uniform and consistent agreement.
  3. The team needs to know that your system’s audit trail will trap who made the mistake when mistakes are made. It’s up to you, but you might want to have the offender held responsible for cleaning up the data.
  4. If you don’t know how to run an audit trail to find out “who” is making all the mistakes, find out NOW!

Dear Sally,
Following your visit to my office in the late 80's, my practice is producing way over 100% from that time with 55% overhead. With some fine tuning, I know we have room for growth. Thanks for all you have done for my practice and my personal life. Your management assistance has allowed me to live a high quality life all these years and spend quality time with my family. I just wanted you to know that you are not just a practice management consultant. What you do for our professional lives ripple affects the quality of our personal lives, as well. Looking forward to working with you again.
Best Wishes,
Scot Mardis, DDS
Terre Haute, Indiana

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The Center for Dental Career Development
Advanced Business Education for Dental Professionals

737 Pearl St. Ste. 201

La Jolla, CA 92037



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