Message Boards
Today's Active Topics Today's Active Cases Browse Forum Categories My Recent Activity My Messages Private Groups My Marked Threads My Subscriptions
Today's Active Images Today's Active Polls Most Active Topics Global Townie Map Advanced Message Board Search Message Board Terms of Use

3’s a Charm by Dr. John A. Wilde

View Comments (2) More by this author (3)
Categories: Practice Management, HR and Accounting;
3’s a Charm 

Amplifying and diversifying your dental practice can lead to great results for your entire team

by Dr. John A. Wilde

Allow me to offer a trilogy of ideas that help me increase profitability while simultaneously making my professional and personal life more rewarding. I’m eager to share these concepts with motivated younger dentists who aspire to develop extraordinary offices, as well as those nearing career ends who wish to reduce chair time while avoiding income decline. But I’d especially like to communicate with midcareer dentists who take pleasure in their chosen profession but grow weary of giving injections and cutting teeth and desire to amplify and diversify their careers and lives without suffering financial loss.

Having been a wet-fingered dentist for 40 years, I have little interest in generalizations or abstract theory, but great enthusiasm for candid lessons shared by those who regularly treat patients and have walked their talk. But information not acted upon is mere entertainment, and for these concepts to meaningfully improve their quality of life, readers must believe my assertions. To increase the likelihood of that transfer of trust occurring, I’ve interpolated factual data from my office to demonstrate and enumerate concepts.

1. Associates

Having employed five associates over a 25-year span, I know the pros and cons of small group practice are complex and multifaceted. For our purposes, I’ll limit the scope of our discussion to how such relationships can permit owner-dentists to reduce hours while increasing profit.

Because of steadily increasing overhead, unrelenting third-party pressure to reduce fees, unmanageable student debt and escalating supply, equipment and labor costs, few offices can continue the egotistical and inefficient luxury of treating patients 32 hours a week for 48 weeks a year. No Walmart or McDonald’s restricts itself to such limited hours, tolerates lost weeks or closes over lunch, evenings and weekends, which are peak consumer convenience hours.

In light of these considerations, contemplate the following scenarios: In my final year as a solo practitioner, the office collected $400,000 with a 65% overhead to yield a net of $140,000. (As a steadfast net-profit guy, I focus on collections, not production, because I can’t spend uncollected money.)

During my first complete year working with one full-time associate, we collected $700,000 with 45% overhead for a shared net of $385,000. I was able to double my past net, while a first-year dentist earned a salary almost as high as mine had been the previous year. (I’d suggest doubling both sets of figures to adjust to today’s dollars.) Other factors being equal, which situation would you prefer?

How did we reduce overhead from 65% to 45%? Because many expenses are fixed, multiple doctors treating patients within the same facility significantly reduce overhead percent (but not total dollars). For example, our rent and facility insurance remained unchanged, while salary and utilities increased only 25% as collections nearly doubled.

Two providers working split schedules allowed us to schedule patients over lunchtime, plus work 10-hour days Monday through Friday and Saturday from 8 a.m. until noon. This increased availability attracted additional new patients. Expensive high-tech items are more affordable when used 54 hours per week, 52 weeks a year, providing a significant additional group advantage. (In addition to two providers, total hours increased from 1,536 [32 hours a week for 48 weeks] to 2,808 [54 hours a week for 52 weeks].)

Two caveats: Because I enjoyed a tremendously busy practice, my associate was fully booked from his first day. In addition, especially in multiple-provider offices, excellent teamwork and communication fostered by frequent staff meetings became paramount. We held a two-hour whole team meeting once a month, plus three one-hour monthly meetings involving only hygiene, chairside and front-office personnel, respectively. An annual all-day session with catered lunch was held in a hotel conference room to avoid phone calls and door-knock disruptions. Having an entire uninterrupted day available allowed us to deal with not only the urgent but also the important—to not just put out fires but also focus on long-term planning and value clarification projects in a continuous effort to become our best selves.

Pragmatically, if one desires to reduce chair hours, having an associate is essential to provide staff with full employment and to allow patients to obtain routine care conveniently while receiving emergency treatment in a timeous manner. Expanded hours are also imperative to enable the 40-hour week of very lucrative hygiene our office enjoyed. This topic forms the second leg of our less-work, more-joy, greater-net triumvirate.

2. Expanded hygiene

Days when dental offices could tolerate unprofitable hygiene, if such times ever existed, are no longer extant. Our office benefitted from expanded hygiene—featuring two fully equipped treatment rooms and a full-time chairside assistant dedicated entirely to hygiene—for 30 years. Two rooms and another employee? Why bother? Because treating 12 patients a day versus the customary eight created an instant 50% productivity boost.

Renumerations for our hygienist, her assistant and one front-office employee primarily dedicated to hygiene scheduling were commission-based, so the harder they worked, the higher their income—just like me. There’s quite a motivational difference between whiling away an hour of open time at full pay and wasting 60 minutes while making nothing. Also, the liberating awareness that our hygiene team could control their incomes mean unfilled time became an anachronism.

The first month we implemented this reimbursement method, productivity increased by 25% on top of the 50% already achieved through expanded hygiene. It never declined.

We determined the percent of production paid as salary by dividing last year’s W-2 wages by total hygiene productivity. A hypothetical $60,000 take-home pay from $180,000 produced means ($60,000 ÷ $180,000 =) 33% of future hygiene productivity will be paid as salary. I used production in fairness because hygiene cannot influence collections.

The frequent contention between hygienists and dentists is unprofessional, unpleasant and unprofitable. Cutting through cross-accusations and heated rhetoric, I believe the source of much distress is meager profits, because too many practices lose money on hygiene, while hygienists often feel underpaid and underappreciated. A viable solution must involve enhancing revenue for both parties, as expanded hygiene does.

3. Business focus

Early in my career, when I saw patients 40 or more hours a week, my sporadic business involvement consisted of reacting to disasters such as collections dipping into the 80% range or frequent openings appearing in providers’ schedules.

Correcting significant problems in the breach wastes time and effort, and vital productivity is forfeited during the interlude required to return to previous norms. Associates freed me from the shackles of long chairside hours, allowing unswerving focus on leadership and office profitability that allowed me to identify and swiftly react to issues—or, forewarned by an early tendency, avoid them altogether.

I doubt anyone matriculated to dental school because they loved math, but many modern dentists, disconcerted by excessive numbers, choose to ignore them all. (In computers’ early days, this abundance of data seemed a blessing, but one soon discovered there could be too much of a good thing.) In addition to my accountant’s profit-and-loss statement, my staff reformats the overwhelming amount of raw data available into a streamlined document I created to monitor progress proficiently. Unlike P&L statements, which I received near month’s end, I insist our honed statistics be available on the first working day of each month. Promptly disclosed, such undesirable trends as declining productivity or diminished new-patient flow are confronted quickly and efficiently, thus minimizing damage.

Measured behavior improves. If any area is performing poorly, devising and implementing monitors to measure the activity of each individual involved will swiftly enhance results. We collect separate information on the business department, hygiene and each doctor, then review all data in detail with every person involved during the appropriate staff meeting.

Every team member must understand that the fortunes of all staff are inextricably linked to overall office success. For this awareness to occur, everyone must be mindful of the facts behind the dentist’s concerns, because precisely informed members are more action-prone. Stating “collections are down” is much less motivating than revealing current lower numbers and comparing them to historic office norms. (For example: “Last year we collected an excellent 99%, but March was down to 91%, a decrease of $6,700. Any ideas on how we can quickly improve this number?” Having collections monitored by 30, 60, 90 and longer days overdue helped pinpoint the leak’s location in the dam.)

Conclusion

This skeletal view of dentistry’s preferred future highlights like-minded groups of teammates led by proactive dentists whose unwavering focus on sound business principles increases efficiency, reduces overhead and enhances profitability.

Too many skilled professionals believe they must tolerate pain at work to purchase joy outside the office. I’ve illustrated proven effective superior choices to this defeatist victim’s mindset. In an efficient, profitable office, money serves—not controls— while enhancing one’s ability to make decisions based not out of stark necessity but for the creation of bliss. And if something has already been accomplished, you know it’s possible

Author Bio
John Wilde After working through eight years of higher education, paying 100% of all costs, Dr. John A. Wilde spent his next two years in the U.S. Army Dental Corps before beginning a practice from scratch in Keokuk, Iowa. He was debt-free at 30 years old, owning his home and the practice he’d designed and built outright. He was financially able to retire at 40 and fully retired when he was 53. He has published six books and written more than 200 articles. Contact: 309-333-2865 or jwdentist@hotmail.com

 

Support these advertisers included in the February 2022 print edition of Dentaltown magazine.

Click here for an entire list of supporters.

 
More In Practice Management, HR and Accounting
Professional Courtesy: Too Many Trade Shows
Professional Courtesy: Too Many Trade Shows
by Dr. Thomas Giacobbi
April 2022
Stop Cancellations!
Stop Cancellations!
Steven Anderson
CE Credits: 1.5
The Coachable, Capable, Unstoppable Dental Team
The Coachable, Capable, Unstoppable Dental Team
Ms. Penny Reed
CE Credits: 2.25
Two Years Down, A Lifetime to Go
Two Years Down, A Lifetime to Go
by Dr. Anum Ali
New Grad Edition 2020
Dentaltown Magazine
September 2023
Dentaltown Magazine September 2023 Read Current Issue Read Archived Issues
Sponsors
Townie Perks
Townie® Poll
How many labs do you use on a regular basis?
  
Related Articles
Reviews and Raises
Reviews and Raises
by Sandie Baillargeon
February 2022
The Hardest Part of Dentistry
The Hardest Part of Dentistry
by Dr. Sanjukta Mohanta
October 2021
Two Years Down, A Lifetime to Go
Two Years Down, A Lifetime to Go
by Dr. Anum Ali
New Grad Edition 2020
Site Menu
Message Boards Magazine Continuing Education Podcasts Blogs Classifieds News Events Townie® Poll Ebooks Townie Choice Awards
Company Info
Contact Us Advertise With Us Howard Farran DDS, MBA Policies and Agreements
Site Help
Sally Gross, Member Services Specialist
Phone: +1-480-445-9710
Email: sally@farranmedia.com
©2023 Dentaltown, a division of Farran Media • All Rights Reserved
9633 S. 48th Street Suite 200 • Phoenix, AZ 85044 • Phone:+1-480-598-0001 • Fax:+1-480-598-3450