10.27.17 Issue #816 info@mckenziemgmt.com 1-877-777-6151 Forward This Newsletter

Grow Your Practice with a Two-Tier Hygiene Salary Structure
By Sally McKenzie, CEO

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Hygienists are producers. The more they produce, the more revenue they bring into the practice – which is why they shouldn’t be compensated with a guaranteed salary like other employees on your payroll.

If hygienists know exactly how much money they’re going to make each month, no matter how much or how little they produce, they have no reason to improve their performance. It really doesn’t matter if they meet their production goals or if they spend time calling patients on the past due list; they earn the same regardless. They even get paid when they attend CE courses or sit in on team meetings, both times when they’re clearly not producing.

When paid a guaranteed wage, your hygienist’s salary will likely start to creep above 33% of his/her production – which is the industry benchmark. That means your overhead goes up while revenues go down.

I know some dentists who opt to pay their hygienists a straight commission. It might seem like a better option, but it really isn’t. Not only do hygienists not care for this model (they don’t like not knowing how much they’ll get paid each month), it entices some to put quantity over quality so they can receive a larger paycheck. While this thankfully doesn’t happen often, it can lead to huge problems when it does and potentially cost your practice patients and damage your reputation.

All this can be avoided if you switch to a two-tier salary structure. Through this system, the hygienist receives a base pay plus commission. This gives hygienists the financial security they crave, along with the opportunity to increase their pay each month. Not only can they add to their base wage with a little hard work, their job becomes more rewarding – which shows in their interactions with patients. It also fosters loyalty to you and your practice.

Not quite convinced it’s time to make the switch? Here are a few more reasons I suggest you consider moving to a two-tier hygiene salary model:

Practice production and revenues will start to rise. When your hygienist knows that more money can be earned if production numbers increase, this will certainly provide motivation to go above and beyond that 33% benchmark. And every time your hygienist does increase production, he/she will get a bigger paycheck while the practice brings in more revenues.

Here’s an example of what this looks like. If Laura your hygienist works 10 days a month and is paid $300 a day, that’s $3000 a month. To meet her goals, she needs to produce $9000 a month. If she produces $10,000 one month, you could consider paying her a commission of 15% up to 33% on the $1000 she produced over her monthly goal. That’s a win/win for both the hygienist and the practice.

Salaries won’t get out of control. Hygienists who are on a two-tiered system are typically happy with their base pay and excited at the opportunity to earn more. They’re satisfied, and their salary won’t become a financial hardship on the practice. If you pay your hygienist a guaranteed salary, however, there’s plenty of opportunity for it to grow above the industry benchmark, including high cancellation and no-show rates, lack of a periodontal therapy program and a less than stellar recall system – sending overhead costs out of control and hurting your bottom line.

Determining raises becomes easier. With the two-tiered system, when your hygienist earns a raise, it’s easy to figure out what that raise should be. How, you ask? You base the bump in pay on a percentage increase on the commission, as long as it’s less than the 33% maximum.

Let’s look at how raises play out if you pay your hygienist a straight commission. With this scenario, your hygienist will get a bump in pay every time you implement a fee increase. This can be especially frustrating if the hygienist is underperforming or struggles to get to work on time. So even though the hygienist hasn’t exactly earned a raise, he/she gets one anyway, leaving no reason to improve performance – all while practice revenues take a hit.

You no longer have to worry about hygienists asking for a higher commission rate. This scenario plays out all the time. The hygienist, who’s paid straight commission and has been with the practice for years, asks the dentist to raise the commission rate, to the point where it exceeds 33%. The dentist ultimately gives in to keep the hygienist happy. Unfortunately, the hygienist stays happy while the business suffers.

With the two-tier system, this isn’t an issue. The structure is clear – the hygienist only gets more money if it’s earned, not simply because it’s been another year.

You want your team members to be successful, and for them to do their part to help the practice meet its full potential. A two-tier hygiene salary structure gives this important team member the opportunity to grow, while also contributing to practice success. Switching to this model will lead to happier, more fulfilled hygienists and a more robust bottom line.

For additional information on this topic and more, visit my blog: The Lighter Side

Interested in speaking to me about your practice concerns? Email sallymck@mckenziemgmt.com
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Nancy Caudill
Senior Consultant
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Are You Running This Critical Report?
By Nancy Caudill, Senior Consultant

Dental Case Study #255

The doctor’s concerns: “The number of new patients coming into my practice has dropped from 37 down to 23 in one month. I’m also having trouble retaining existing patients. My hygiene production numbers are really suffering. I’m ready to find a solution and get my practice back on track.”

Here’s a look at where this practice’s hygiene statistics stood: Front Office Training

The department averaged more than two 50-minute openings per day per hygienist.
Perio production made up only 11% of total hygiene production. That number should be 33%.
Hygiene salary as a percentage of production was 43%. That number also should be 33%.
The doctor relied on pre-appointing, with all hygiene appointments booked 3-6 months in advance.
There was no pre-blocking for new patients or for current patients who needed scaling and root planing.
The practice didn’t send out notices to remind patients of appointments or let them know they were past due for a hygiene exam.  

When this doctor came to McKenzie Management, he had never seen his Past Due Recall Report, which was part of the problem. It’s important for dentists to realize they have access to many critical reports via their dental practice management software. The Past Due Recall Report is among them, and is the one report that can make or break your hygiene department. That’s why we suggested he start referring to this report on a regular basis.

Let’s take a deeper look at the issues holding our doctor back:

Like many practices I’ve worked with, this doctor relied on pre-appointing to keep his schedule full. Even when patients said they didn’t know if they could make an appointment in six months, the Scheduling Coordinator would insist they schedule, telling them they could always call and reschedule if needed. The problem? Many of these patients did, indeed, cancel at the last minute or just didn’t show up at all. The doctor was often left with gaping holes in the schedule that his coordinator would scramble to try and fill, usually without success. 

Pre-appointing six months out also gives the illusion the schedule is full, which leads to other issues. Let’s say a patient calls your practice and is ready to go forward with needed treatment, or wants to schedule a new patient appointment. That’s great, but there isn’t room in the schedule any time soon because it’s full of patients who made appointments six months out. That means either these patients wait a few months to see the doctor, or they find another practice that can fit them in sooner. Unfortunately, many decide to go with the second option, costing you both existing patients and potential new patients.

Statistically, about one-fourth to one-third of patients who pre-schedule will either cancel or not show up. That’s 2-4 patients per day per hygienist, which can be pretty financially damaging to a practice. Our advice to this doctor? Stop scheduling every patient that far in advance, especially if they tell you upfront they likely won’t be able to keep the appointment, or if they have a history of flaking out. Instead, call these patients a month or two before they’re due to get them on the schedule.

The 12-Month Past Due Recall Report
This dentist also wasn’t sending out past due reminder notices of any kind. Once we ran the Past Due Recall Report, he realized that 261 patients were overdue for their recall appointments. So if those patients were ever pre-appointed, which they likely were, they all missed those appointments and were never rescheduled. That works out to about 22 patients a month. Just think about how much potential treatment that represents!

To get these patients back in the chair, we suggested the dentist task a team member with calling 10 overdue patients a day, and arming him or her with a well-thought out script. Those conversations went something like this: 

“Mr. Brown, this is Megan from Hometown Dental. We noticed that we failed to make an appointment for your six-month professional cleaning and exam. The dentist was concerned about your tooth on the lower right side. Do you prefer a morning or an afternoon appointment time?”

It’s important to note Megan didn’t ask if the patient wanted to schedule. Instead, she asked when he wanted to schedule.

The Outcome
Megan soon became the practice’s Hygiene Coordinator, and was accountable for maintaining the hygiene department’s recall system. This has made a huge difference. Now there’s usually only one opening in the hygienist’s schedule every day, making for a much more productive department.

Every month, Past Due Recall Reports for one, two, six and 12 months are generated. Megan then contacts the patients on these reports with a phone call, text, email or snail mail, or a combination of these methods, to schedule their hygiene appointments. Since adding a dedicated Hygiene Coordinator, the practice’s patient retention rate has risen to 90%, which was the doctor’s goal.

If you’re not running your Past Due Recall Report every month, I suggest you make it a priority. When you reach out to patients on the report and get them on the schedule, you’ll notice a big boost to your Hygiene Department’s production numbers – and that will mean good things for your bottom line.

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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