Bulletin, December 2009
The Latest in Area Economic and Technical Trends
Exclusively to Clients and Friends of Advanced Practice Management
Leadership and Staff Raises
In our recent economic survey we asked area Dentists if they plan to give staff raises in 2009. 41% of Metro Area and 24% of Outstate offices said, “No”. Only 30% of Metro and 54% of Outstate dentists will give raises in 2009.
Staff wages are the major overhead item, so it certainly makes sense to go slow with raises if your practice isn’t growing. I’ve often said that the staff’s compensation should be linked to how the practice does, not just to the economy or the consumer price index (which by the way was up 1.8% in 2009).
Even if you’re not giving raises, you should at least give your staff recognition, direction and hope. That’s leadership.
“Look, we’ve had a flat year but I want to let you know that I do appreciate your efforts (giving specific recognition to each staff person). And, I do need your help in the coming year because despite the economy we intend to press on and make the practice better all the time. Once we’ve gotten a string of 4 to 6 months that shows growth then we’ll revisit the wage situation and consider raises at that time.”
Wage increases should be based on these three major factors:
- The market rates for wages. (See the Advanced Practice Management Surveys).
- How the practice is doing (practice growth and profitability).
- Individual merit.
Smart Wage Decisions:
I believe it’s best to take a look at staff wages as a percentage of collections at least once per year for the sake of determining how much will be available for wages and raises.
If your total gross wages were running at about 25% of collections, for example, last year and they are 23.5% now (because your collections grew) then you are in a position to give raises.
If staff salaries have crept up to 26% or 27%, then it’s time to hold off until your practice revenue catches up.
Using this very simple method, you can keep the biggest chunk of your overhead (staff wages) under control.
About one third of dental practices have team incentives. When they work they can work beautifully. They can really pull a team together and lead to greater production. Some of you have been burned by incentives or are jaded about them. The key thing is that if you have set up an incentive with the staff for practice growth you have to have a plan for growth.
You, as the leader of the practice, have to quarterback that plan. Incentives are not indicated and will fail if the staff is at each other’s throats, there is no realistic plan to grow the practice and the Doctor doesn’t do his/her part to lead by example.
Goals: What Do You Really Want?
Each month the numbers from over 200 practices land on my desk. For 30 years I’ve been traveling the state in order to help my clients and their staff get what they want out of their work lives.
One core thing I have learned is that goal setting works. As I make my rounds this time of year it’s absolutely uncanny how many Doctors nail their monthly goals. In fact my goal is that 80% of my clients reach at least 80% of their goals. You won’t always get all you want but the presence of goals just greatly helps to focus your efforts. You can’t do everything at once so choose things that you are going to do and stay with them.
Please download my planning outline. Put your feet up, turn off the phone and spend a half hour planning your year. Share your wishes with us. We’ll do everything in our power to help you get what you want.
Goals have to be challenging yet reasonable, something you truly want, and measurable. Even if you just want to maintain practice productivity…that’s a goal! Then the resources have to be marshaled (whether it’s equipment, time or training), your staff directed, trained and recognized for their progress.
Fall 2009 Fee, Wage and Economic Surveys:
We hope you participated in these but if you didn’t you can always visit our website to get the latest on this and other items (like overhead and technology). View the surveys now. Then hit the browser back button to continue reading here.
Make Your Website Different— Gather Testimonials
Over 50% of practices have websites now but many are very generic.
One way to customize yours is to have a video brochure that shows an “infomercial” of your office. Also, patient testimonials on video can be very persuasive.
I’ve brought the videographer Marv Gilbert on board because he can run and gun! That is, he gets video done quickly, does it very well and his fees are very reasonable. When you’re ready, call. We’ll make it happen!
Delta PPOs and Your Fees
This is too complex a subject to write about here. Decisions on participation, fee levels and negotiating with PPO’s all are best handled on a case by case basis. Call or discuss this with your consultant at your next visit.
You Are Going to be Spending $50,000+
So Don’t Blow It!
Part 2—Result Control
As you may recall, the last time I wrote about “Cost Control.” Most of you have, or will be, within the next 2-3 years making investments of $50,000 more in technology, digital x-rays, Diagnodent, lasers, clinical charting software, monitors, patient education software, Cerec, electric hand pieces, endo equipment and so on.
This can easily come out to over $12,000 per treatment room. For starters, you want to make sure that you don’t pay too much. That’s where specking out what needs to be done and competitive bidding come in. Many of these items are bought at the same time (especially digital x-rays, monitors, intra-oral cameras and clinical charting software). We’ve helped clinics save $10,000s of dollars by getting competitive bids. Moreover, and probably more importantly, getting expert help in planning your technological upgrades can make sure that they actually work well for you.
When your hygienists’ time is worth over $120/hr. and your time is worth over $500/hr. you don’t need glitches. Interrupting your work flow can be very expensive!
Today I’m focusing on “Result Control.” As an owner you want to get a return on every investment you make. In fact, the whole idea of good management is to get the biggest return on the resources you have: your time, your money and your skills. What organization would spend thousands of dollars without having a clear idea of the outcome they want in return?Upgrading just for the sake of upgrading is insanity. So, as you make these investments what outcomes are you planning on?
My favorite example of this is intra-oral cameras. Over 50% of dentists now have intra-oral cameras and half of those cameras are used fewer than five times per week. Very poor result control. If you purchase intra-oral cameras, you are presumably doing this so you can better inform the patient so the patient will make better choices which results in more case acceptance. Better case acceptance means more production. This should show up in increased crown and bridge (for example). Therefore, if you buy intra-oral cameras and your crown and bridge doesn’t go up, you didn’t get result control. It’s a pretty good bet they aren’t being used. So, to get them used, do the following:
Do Clinical Calibration with staff so they know to what end you want this educational tool used. Have a meeting in your practice to talk about when you feel it’s in the patients’ best interest to crown a tooth and when you don’t. When is a composite indicated vs. a crown or vs. an amalgam? Who are good candidates for implants and who aren’t? When are x-rays really needed? How about fluorides? If you haven’t worked through these issues with the staff, they’ll be pointing the intra-oral camera around but only vaguely knowing what they are trying to do. Check out the article on Clinical Calibration posted on the Dental Economics Magazine website.
Be very sure your cameras and monitors are ergonomically set up. And, don’t ask the hygienists to share a camera. You’ll do far better paying for two cameras that are actually used than one shared camera sitting in the hallway or lab.
Track how many times your intra-oral camera is used per day or per week. If you’re not measuring this, it’s probably not being used enough. When you first get the intra-oral cameras, ask the hygienists to keep a tally of when they’ve used it. Over 2/3 of the adult patients should be shown something. It doesn’t always have to be something bad. Showing patients what’s good is helpful too. You like it when you go to the Doctor and hear good things too, right? Anyway, the more the patient knows (and people learn through what they see) the more they appreciate what you can do for them.
Put this all together in a set of goals:
- As a result of this Patient Education Technology (e.g., intra-oral cameras) we will see an increase in patient acceptance by two crowns per week. Therefore, we believe that there will be $8,000 more per month in production (that’s great result control).
- We will use the intra-oral camera on 70% or our adult patients. This will be tracked on the daily schedules by each hygienist. The exceptions would be patients who have other problems that are not easily visualized by the camera, a patient due for full-mouth x-rays, the patient arrives late or there is some other mitigating circumstance.
Digital X-rays: When digital x-rays are installed in your treatment room, there will likely also be capabilities such that your hygienist can set up her own appointments, enter treatment plans, enter progress notes, enter today’s charges, use the intra-oral camera and use patient education software.
In most practices that have paid for these technological capabilities, only two or three of the above are performed regularly. What is the plan for your office?
Entering treatment plans, setting up the next appointment, entering today’s charges, all take your hygienists’ time. However, digital x-rays help save the hygienists’ time. No running to the processor, no mounting, etc.
What are the expectations of how the team will use the extra time? Your hygienist simply must have the training so that she is completely comfortable with the software so she can perform these functions. Then, it’s likely the patient will arrive at the front desk with all the information already available to your administrative staff.
Then the administrative team can do what they do best—work with the patient to make their dentistry as comfortable and affordable as possible (financial options) and commit them to treatment. That should result in more treatment done, right? Measure it!
A Subtle Change That’s Very Expensive:
Many offices reserve 50 minutes for standard adult recall hygiene appointments. Often when all of this new technology is introduced, the hygienist will feel they need more time. It doesn’t seem like a big deal to increase hygiene appointment lengths to 60 minutes but that results in one fewer patient seen per day on average. Not only does this reduce the hygienist’s production by over $120 per day— it reduces demand for the Doctor’s services by over $300 per day (Many dental offices produce $400+ per exam so any decrease in hygiene flow can really take the wind out of your sails.) Fifteen fewer hygiene visits per month all of a sudden can mean $6,000 less treatment per month. That’s a very negative bang for the buck for your investment in technology!
Another solution is to add more technology! For example, automated or voice activated perio charting. Or, a digital pano. It takes just 8 seconds—even less than digital full-mouth x-rays (in situations where it’s clinically acceptable).
These technologies can help your hygienists maintain their visits per day capacity even while increasing their productivity per visit. However, it’s clear that hour long hygiene appointment lengths are becoming increasingly common. You may be fighting a losing battle if you keep these lengths so tight that the hygienists won’t buy into or really employ the technology you paid for.
So, what do you do? In a larger office a possibility is to hire a hygiene assistant so they can keep appointment lengths at 50 minutes. However, I’ve seen offices hire this assistant and still have appointment lengths go to an hour and so the bottom line is hurt. Again, if you add a hygiene coordinator/assistant, you have to have result control.
For many of you the best course of action would be to allow the hygienist the additional time but make sure they use the technology. That’s your quid pro quo. “We now provide digital x-rays to save you time. I really need you to use the intra-oral camera, the Diagnodent, etc.”
Then, since you’ve subtly cut into your hygiene capacity, you have to add additional hygiene time to counteract that.
It will all work out if your hygienists are presenting the treatment. Your case acceptance will go up and that will more than counter the reduced patient flow per day per hygienist. If you added hygiene time then you’ll keep your flow up and allow room for growth.
I’ve seen mistakes in the above cost offices thousands of dollars directly and many thousands more indirectly.
I’ve never been able to talk a client into or out of a Cerec machine! I feel that most of the time this decision is made at a gut level. That’s fine. That’s your business. However, it’s my business to make sure that if you buy a Cerec you get bang for your buck.
First of all, before you make this very expensive investment, ask yourself, “Is there somewhere else I can get a bigger return on my dollar?” I’ll argue that there are many smaller investments you should make first as you ramp the practice up such as: Diagnodent, automated endo, intra-oral cameras and perhaps non-technology items such as better signage, advertising, training a treatment coordinator, and getting you and your team significant continuing education.
Before you buy the Cerec, “Count Crowns.” That is, for a month or two keep tally of how many patients for which you feel the Cerec would have been the right solution.
Most of my clients tell me that there are some cases that are better suited to Cerec than others. I’m not a clinician, it’s up to you to make your own judgments about that based on discussions with your colleagues or authorities you respect. Then, once you buy the Cerec, make sure that you are employing it as much as you planned on and see that your lab expenses really do decrease.
Another subtle cost of a Cerec machine is that, at least initially, it takes longer to do crowns.
Many Doctors I’ve observed with Cerec will initially have to spend 2–2 1/2 hours per unit. Obviously, if your time is worth $500 per hour, you don’t save enough on the lab to cost justify that extra hour (or even 1/2 hr) in getting a crown completed (most Doctors take an hour for a conventional prep and a half hour for seating— 1 1/2 hour total).
So if you do 20 units per month and the Cerec machine takes you an extra half hour, that still “costs” you $5,000 per month in capacity. Now hold on Patterson folks, before you call me, hear me out. The answer here is additional training. There are excellent post purchase sources for training on Cerec to bring the procedure time down. If you buy a Cerec machine and don’t plan on training your staff to help you use it, well, you’re going to have poor result control. With the correct experience and training, I’ve seen many Doctors bring their single unit Cerec times down to 1–1 1/2 hours.
I am simply astonished to see that a Doctor will spend $100,000+ on a piece of equipment but flinch at the idea of an extra couple thousand dollars in training to really come into song with it.
Speaking of training, that’s also very true for all the technology that you’re going to put in your and the hygienists’ room. After an initial 3–4 days of training, arrange for follow up training in three months. In a larger clinic, I think it makes sense to have a trainer on board for a day or two as everyone is using the clinical charting and other matters. It really helps that there is someone right in the building who can show you how to do things. Then, given you have adequate demand, this can be a very good business investment. Also, just as in paper charting you have to decide as a group how you are going to chart. There are a lot of choices and you have to pick the configuration for your office. This takes some time and training support.
So, as with so many things, it’s best to begin with the end in mind. What are the outcomes you intend to get? And, how are you going to measure them? Before you go out to purchase the technology, make it absolutely clear to the staff that you need their commitment to use it! Prioritize your expenditures and tackle them in order of where you can get the biggest bang per buck. In this way your practice builds up more and more profits and momentum.
Don’t buy technology because “everyone else has it” or even if, “no one else has it”! Buy it because you know the outcome you want for your office. And by the way, just “an up-to-date image” is not enough if you are serious about your bottom line. It has to be for go, not just show.
In Summary, If You Spend $$$$ on Technology:
- Define the outcomes you expect (and increased revenues or decreased expenses have to be part of that).
- Get staff’s understanding and commitment (e.g., clinical calibration).
- Get additional training. The “built in” amount is not usually enough.
- Measure activity (e.g., time used per day) and results (Dollars brought in or saved).
- Celebrate your successes. Recognize and reward your staff accordingly.
Happy New Year! Let’s make 2010 your best year ever!