download_pdf_buttonBulletin, January 2013

The Latest in Area Economic and Technical Trends
Exclusively to Clients and Friend of Advanced Practice Management

The Dental Dow Jones 2012 Wrap-Up:

In 2012 the 36 mature area practices sampled increased production by 3.3% and collections by 3.5%. Patient flow was down about .5%. New patients were down 2%. Crown and bridge was up 6.3%. Doctor hourly production was up 2.6%. About 2/3 of the practices sampled showed gains this year and 1/3 declines.

2012   2011   2010   2009
Production Increase   3.3%   2.5%   1.4%   0.5%
Collections Increase   3.5%   1.6%   0.4%   0.4%

You can see that the yearly trends are improving albeit very slowly. In fact, the first quarter of this year we were up about 5% over the first quarter of last year but things faded a bit the last two quarters of 2012.

How Does Your Income Compare?

We’ve just posted the results of KDV’s ( 2012 bi-annual overhead survey on our website.*
In their last biannual survey of General Dentists (2010), incomes were down for the first time from $275,302 in 2008 to $259,842 in 2010 (-2.8%).

The recent survey shows things improving. Average income increased from $259,842 in 2010 to $271,842 in 2012…up about 4.6%. Still, this represents a pretty modest increase in income of about 2.3% per year.

The average participant in the survey collected about $64,265 per month.

Staff gross wages as a percentage of collections averaged 26.5%. If you include staff retirement plans and other perks, total staff compensation averaged about 31%, illustrating what you already know: that staff costs are almost half the typical GP’s overhead. You’ll get the biggest bang for your buck if your team is happy, focused, trained and accountable for results. That’s “result control” and it pays off in profits! By the way, I’ve written several articles on “result control” and you can see a couple of them on our website under the “Articles” page.

In most dental offices it’s a lot easier to expand revenues than compress costs, but it’s best to do both. For a better bottom line in 2013:

Set goals for the coming year. Have a Strategy for getting meaningful results.

Get a handle on your overhead. If you don’t have “Management-friendly” financial statements—that is, where you can see the bottom line clearly and easily compare your expenses to industry averages—call us and we can refer you to help.

Establish a budget. The process of doing this will help you clarify your strategies and priorities.

Just ask and we will help you Get it done!

KDV is an area accounting firm that has many Dental clients and does excellent dental practice overhead surveys biannually.

What’s The Plan Stan?

I define Management as “The process by which you set and reach goals.” If you haven’t already done so, ask our help in establishing goals and a strategy for the coming year. We find that the clients who take this seriously and have written goals consistently do better. Think about it…you’re much more likely to do better if you have a plan to grow than just a wish to grow!
Many of our clients have found our guide helpful. Take 5-10 minutes now to greatly increase your chance of success this year. Download The Advanced Practice Management Goal Setting And Year Planning Guide.

Are You Collecting from Slow- or No-Payers?

Sheila-KadrlikEvery dollar gathered is pure profit.Of course it’s best to make arrangements to collect at the time of service or, otherwise, have the method of each patient’s payments nailed down.

Still, no matter how hard you try, some patients will slip through and you’ll have “slow payers” and “no payers.” These people need to be contacted.

Do you know how many collection calls your office administration made last month? How many collection letters went out? If you don’t know, chances are, not enough!

Collections work isn’t pleasant or easy for most staff, so credit follow-up efforts are often the last thing done. That costs you.

That’s why we have Sheila, “The Credit Follow-up Lady” on board. Sheila is not a collection agency. There is no percentage taken. She basically works as a stringer with your office for a flat monthly fee ($300-$650/month). She collects very well, but more importantly, she “kills them with kindness.” She can actually make collecting money a PR event! Sheila will squeeze those extra $’s out of your Accounts Receivable.

You’ll still send some accounts to collections, but you’ll have the peace of mind knowing that they were treated kindly and had “due process.”

If your administrative staff is unable to consistently do this, free up their mind and time. Just call today to get things rolling. 952-921-3360.

“We have had Sheila working our delinquent accounts for several years. We have been very satisfied with the results she obtains…”
— Zenda, Associated Dentists of River Falls, River Falls, WI

“Sheila has made collecting past due accounts easy!…She treats the people with respect but yet gets the job done!…”
— Tami, Albert Lea Dental. Albert Lea, MN

“…Sheila has a great step by step process that she uses for our collection process. I know she is very friendly with our patients as being a gentle reminder of their outstanding accounts. We have noticed great progress with her and she is wonderful to work with.”
— DeAnne, Central Park Dentistry, Mason City, IA

Staging Your Practice for Sale:

Bill-Rossi-thumbMany of you will have a practice transition in the not-too-distant future. The average age of a MDA member in Minnesota is about 56.

Just like staging a house for sale, taking a few sensible steps can help you get a good price in a reasonable time when you go to market.

Your Last Three or Four Laps: I checked with Kevin Shea and Ryan Brengman at Shea Practice Transitions. They say that it’s a strong market for practice sales in the Upper Midwest now. Even practices in Outstate Minnesota are selling relatively well. Currently there are more buyers than sellers. Mr. Shea reports that there is a “multiplier effect” on profitability. That is, if your profit increases by 5%, it could have a 10%-20% positive effect on your practice value (and vice versa). Declining revenues and profits are looked upon quite unfavorably by bankers also. Obviously any buyer has to have enough profit around so that after they pay the debt service, they are making a decent living.

Most of the things you can do to make your practice more attractive give you a double bounce: more income now and more income when you sell.

I wrote about this in my August, 2010 Bulletin, “Your last Three or Four Laps”.

It’s not just about the money. You want to make sure that your patients and staff are well taken care of and that right up to the day of your retirement you can be proud of the service your patients receive. Fortunately in dentistry, profitability and service go hand in hand.

If you are contemplating transition within the next five years, these are key issues which you want to be sure to keep on top of:

  1. A productive Hygiene Department delivering a wide range and depth of services. There is wide variation in hygiene performance and this greatly affects patient care, practice profitability and practice values.
  2. A strong (but not too strong) fee schedule (price around the 75th percentile as shown on our surveys).
  3. At least moderate practice growth—a declining practice can spook potential buyers (and bankers too).
  4. Reasonable Overhead: This mostly means not being overstaffed or staffed with people who are underachievers. As I mentioned before, it is not uncommon to see a practitioner in the later stages of practice have “deadwood” around the office. Right up to the end your team needs to be focused, productive and happy.
  5. Not too much PPO activity. “Par” nowadays for collections is around 85%-88%. If an office participates in too many PPO’s and/or has too much M.A. and/or discounts too much, the collection percentage can be below 80%. (I’ve seen as low as 65%). Any sane buyer is going to think twice about paying the banker after writing off almost a third of their work.
  6. Reasonable, physical curb appeal. Clean furniture and carpet. Updated décor. Good exterior visibility when relevant…reasonably up-to-date technology. However, if you’re a couple of years or less from retirement, it probably won’t pay to invest a lot in topend technology—digital, Cerec, etc. if you haven’t already done so.

The good news is almost all of these steps can be taken without a lot of extra work or energy on the Doctor’s part. It’s just a matter of setting priorities and leadership. We can help provide the training and direction. Most of these gains can be done by “working around you!” That is, they’re mostly through the efforts of your team and don’t require you to turn yourself inside out or double up on the energy you expend.

We have the Upper Midwest’s largest client base and with that comes a depth of experience that can really help you:

  1. Increase practice marketability and value.
  2. Select and manage practice brokers and other transition resources.
  3. Help ensure associate success and profitability.

KellyLarsonCan Patients On The Move Find You?

By Kelly Larson

More web searches will be done this year on phones and tablets than on home computers. Do you know what your website looks like on a mobile screen?

People have grown accustomed to fast loading websites. They expect to see the results they are looking for quickly. They have little patience for websites that they need to pinch and stretch. If they don’t like what they see, they will move on in a matter of seconds. We recommend having simple navigation with a few basic components.


Your current web company most likely offers a mobile package that you can add. There are also a number of vendors who can offer that service for you independently. At our next marketing visit, we can take a quick look into what your options are. The best option may be for us to set you up ourselves with a mobile site through Google. I can take care of that right away onsite, if you would like.

If you would like to quickly see what your site might look like on a mobile device, feel free to contact me at (612) 584-9811 or e-mail me I will send you a before and after snapshot.

Before and After
Before and After

* NAP means “Name, Address, Phone” and it’s important that all your web listings are consistent.

How To Use The New Fluoride Codes:

Mat-LahnBy Matt Lahn, RDH

In an attempt to simplify the fluoride codes, CDT13 has made the following changes.

Codes 1203 and 1204 have been eliminated in favor of 1208 and 1206.

1208 reports any fluoride application using prescription strength trays, swish, isolate or paint-on technique. The delivery technique and/or formulation is not specified in the code.

1206 remains for application of fluoride varnishes specifically but has eliminated the age and caries risk.

For all practical purposes and tracking, 1208 should be used when applying fluoride to children regardless of fluoride formulation.

Adults who receive fluoride varnish should be coded as a 1206 unless they get something other than varnish.

Happy New Year!


Bill Rossi, Robyn Kain, Shelly Ryan, Kelly Larson and Matt Lahn
Bill Rossi , Robyn Kain, Shelly Ryan, Kelly Larson and Matt Lahn