When it comes to building a more profitable dental practice, cutting corners will often cost you a lot more than investing in the processes and procedures that really drive business growth.
Finding and trimming fat is a necessary part of running any small business. Make no mistake; your dental office is a service-based small business.
But reducing costs can only get you so far. Cutting back on something like staff hours you’re likely to see costs spike – because an understaffed operation cannot run at peak levels when employees, who deal with patients, are miserable and stressed out.
If you think your patients won’t notice, you’re kidding yourself. The team members in any dental office are even more important than the dentist. That’s because team members have the most one on one interaction with patients – from answering phones, to booking appointments to greeting people as they walk in the door. So if they are not happy, it’s going to show. And that will, in turn, result in less referrals and even the loss of clients as patients move to practices where the levels of service are higher.
Over the course of my career, I built not one, but 14 very successful dental practices that are lean and profitable – without being cheap and miserable.
We did this by putting in place processes and procedures that increased efficiencies in the operation while increasing customer service and satisfaction. Best of all, we were able to replicate this success multiple times.
At the core of this system is a very simple acronym that will help you make your practice SPECIAL.
P production improvements
E employee or team member management
C collections improvements
I internal controls
A associates and accounts receivables as a tool for growth
L liabilities and asset management
What is your patient’s chief complaint? How immediate is the need to get it fixed? Obviously if there is a chronic pain issue, it must be addressed. But if you can “triage” patients and determine how long your procedures will take, then you can schedule treatments more effectively and have less downtime throughout the day. This will allow you to schedule more patients throughout the day, which in turn leads to increased profitability! In the end, your scheduling coordinator must know two very important things.
1. Is your patient a 1, 2, 3, 4 or 5?
2. Is your patient prior approved through a soft credit check?
The first thing I do with any patient is to assign them an administrative number between 1 and 5.
1. Patients with no insurance. These patients are great because it cuts out all the middlemen. Their credit card to your balance sheet!
2. Patients over the age of 65. Most patients in this cohort are retired and are now in a position to take care of themselves. The house is paid for and the children are out of college and on their own. More importantly, you can schedule them at off peak times such as 9-11am and 2-4pm. I suggest you try to discourage weekends, because this group in most cases have very flexible hours.
3. Patients with insurance. These are only slightly less valuable than those without insurance who are paying you directly. But you know the bill is going to be paid. With this group of patients you can balance bill their dental insurance.
4. Patients are on State health insurance or Medicaid.
These patients will reduce your fees by 60-75% and only certain treatments are covered in most cases – only fillings and extractions and hygiene appointments.
However, if scheduled and managed correctly, they may be able to help your practice.
5. Patients with insurance, but who’s insurance only pays to a certain fee schedule, meaning many times you cannot balance bill or only balance bill to what the patient’s dental insurance allows and this will reduce the value of your billable work.
After determining if the patient is 1, 2, 3, 4, 5 and determined the nature of the complaint, you should have an excellent idea on how long the appointment should be and with whom the appointment should be scheduled with.
You should be looking for who in your practice does the treatment best and quickest with least number of issues. In most cases the senior doctor will meet this criteria, but not always.
Your front desk coordinator should accurately determine the estimated production of each appointment to make sure it coincides with your hourly, daily and weekly and monthly goals. For non-group practices I often see less productive appointments filling the schedule and more productive appointments waiting to be seen.
Employees are the lynch pin to any successful practice. I’ve even started using the work TEAM as an acronym in my training programs to mean “Together Employees Achieve Mastership.” Don’t hire just anyone. Your brand and your business is on the line, Background checks, personality profiles and experience will determine the likelihood any employee will succeed and stay with you or not. Look for signs and be smart about who you hire and how they fit in with your existing team.
The best patient is the one who puts down a credit card at the end of their treatment. No fuss, no muss. But it’s always good to know if a new patient has had a soft credit check by Care Credit. If they have and are already approved you know you’re going to get paid for your services. However, if the soft credit check, which should be done before scheduling, indicates the patient is not pre-approved you can be pretty certain there are other financial issues at play and maintaining a 100% collection standard may be in jeopardy.
Run your practice based on information to find out where your strengths lie and what improvements must be made in order to become more profitable. Things you need to know include:
• How many new patients are you getting per month and where are they coming from?
• How many patients are leaving your practice each month and why?
• How many procedures are you doing every month in the following categories: root canals, extractions, periodontal surgeries, root planing, orthodontic band and brackets or MTM or Invisalign, crowns, bridges, implants, dentures and partials, biopsy, night guards, sleep appliances or MAD mandibular advancement devices.
This will determine where your strength and weaknesses are. Next evaluate your AR’s or accounts receivables. Who has not made a payment for 60 days or more? These patients have a clinical issue, service issue or insurance issue. Whatever the issue is, it must be addressed.
Associates are needed when you are thinking of retiring or slowing down, or when you want to jump start your business. In most cases large overhead expenses such as rent, mortgage and wages are fixed costs. So Think about your associates as potential revenue center rather than and expenditure. If managed correctly your associates will not only increase your money-in potential, but also allow you to enjoy more time away from a very profitable practice!
Keep your overhead below 65% only purchase what you know will give you a return on investment. Understand the difference between internal business liabilities and personal liabilities.
Liabilities such as rent, mortgage and salaries are generally fixed. So it’s best to extract as much value from each. One suggestion is to offer expanded hours and better scheduling. Consider split shifts such as 7:30am to 1pm and 1pm to 8pm. The fixed costs stay the same but your practice has more time to see patients – and may even be more convenient for most patients. In essence your monetizing more hours and reducing your bricks and mortar liability.
As you can see, there is nothing here that can’t be implemented in every dental practice. With improvements in place you are positioning your business to be more competitive, productive and ultimately more profitable without affecting client care or customer service levels.
For more information on this topic and many others visit AscentDental-Solutions.com. Kevin Coughlin DMD, MBA, MAGD has been practicing General Dentistry since 1983; he owns 14 dental practices in MA. He teaches practice management at Tufts School of Dental Medicine. He has written three books on the business of dentistry and has been lecturing on MSO’s and DSO’s Friend or Foe? He also has over 60 podcast and webinars available on his website. Dr. Coughlin can be reached at 800-983-4126.