Dental Practice Operations & Management

In dentistry we are constantly bombarded by marketing and sales information. Most if not all of that material relates to the holy grail of new patients. The reason for this is that the business of dentistry is a bit complex for many people so they apply the easy rule of more new patients or clients is good and there for more is better and the more you get the better this is.  Most dentists think that they need more new patients. But do they ? New patients are necessary to replace those that leave the practice and to build the practice. As a rule of thumb for each day that you work you should see and try to retain a good referred new patient. This reflects the reality that you will not achieve this every day but to build a practice you need to aim for this to continue some sustainable growth.  Sure, you can see a couple of yellow pages referred emergencies or second opinions, but you really want to see a good referred new patient – typically someone who asks for you by name and has been referred by a patient of record that you like. That is a very different criteria than that suggested by many others. It’s worth repeating – one patient a day who asks for you by name and is referred by a patient of record that you like. You probably need to set aside a one hour visit for these patients three to four slots a week. If they do not fill, then you might need to do something about it. Try for two a week to start. There is a principle in business called the Efficient Relationship Paradox, first promoted by Lior Arussy in 2005 in his book “Passionate and Profitable”. Arussy suggests that so much effort is spent in business (and dentistry) in acquiring new patients or clients that we continue to build their expectations. Then once we have them in our business we treat them less and less well until they leave and are unhappy and tell the famed eleven people how unhappy they are – the exponential ‘bad-mouth effect’. The paradox in fact is that maintaining relationships with patients and customers takes time and effort and that concept that there is an ‘efficient relationship’ is the paradox. Focusing on keeping costs low with patients – being efficient - means that the relationship will by and large deteriorate. How can we apply this knowledge and concept in dentistry ? Try typing your patients. Practices are full of patients new and old. But if you have patients that you don’t like to treat do you want more of them ? The secret to happiness in a dental practice is doing procedures you like on patients you like. If you can identify patients that you like and that like you and that are easy to treat then you can focus on these patients. If you do this, they will refer more patients and you will not have to worry about new patients. Like refers like as a rule. There are plenty of practices out there who are happy to treat patients who shop on  price and then try to bait and switch and sell them up. Is that easy or relaxing ? I seeing a patient who comes to you because of your yellow pages ad a good way to start a relationship.   A good new patient calls and says – “ I’d like to have an examination and cleaning please. I have no problems, but I have shifted and my workmates tell me that Dr X is very good and it’s a good practice” That’s the patients you want with a higher dental IQ and some connection already. Contrast that with “ I want to get some xrays and a clean. My last dentist did this for rebate only. Are you a preferred provider ? I can only come in after 6 pm. I tried the other people in town. But they could not fit me in” Both could be wonderful patients, but you have to go with the odds. So once you identify those ideal patients in your practice, you will find that you can start to treat them better. Like always fitting them in, always seeing the patients they refer before anyone else. Usually they are happy to trust you and have whatever you want to do… done. That means you can take more time and create a stronger relationship. All patients are not created euqally If one of these A patients (someone who comes for recall, accepts your reasonable treatment plans and pays their bills and that you like) calls up with a problem, they get seen that morning no questions asked. If they ask about sending a friend in, you come in early to see them. You call or write to them and thank them. Then you start to think about the criteria for new patients and maybe you don’t accept every one. The key for practice growth is a core of reliable loyal patients who feel cared for in the practice, This does not have to be some saccharine statement, it is just by doing and treating people that you like - well. It’s that simple.

5. Also, particularly for reactivations, there is an element of the best solution needing to be tailored for individual practice. There are a number of variables which differ from practice to practice, and while the general principal of personal contact by phone applies, the actual program method can vary. Solutions sought to individual problems in this regard are more likely best addressed through an individual consultative approach rather than a generic presentation.

The single most important aspect of ensuring profitability in a dental practice is sufficient collected income to cover expenses, and to allow for a return on investment, provide income as needed for the proprietor, provide a decent level of superannuation and make allowances for payment of taxes. That is worth repeating - cover expenses (including loan redemption), allow for a return on investment, pay the proprietor and superannuation, and pay taxes. It might come as surprise to you that many do not set fees with a view to doing all of that. Unfortunately many of us operate a practice as a magical cash flow machine (and they can seem that way) and instead never give much thought to the bigger picture and the accrual position ( or the accounting bigger picture) . The single largest barrier to charging what you need to is your and your team's preconceptions and an incorrect understanding (to be frank) of how and why people buy from dental practitioners. How much should the proprietor be paid ? As a bare minimum, 40% of fees billed, plus a return on investment (capital invested that would otherwise be available for investment in simple terms) of perhaps 10%, plus 15% super and some administration compensation. That is the minimum. Now, it is worth looking at last years draft profit and loss which you should be getting back soon and seeing if you add up all of that and see if you are getting that as a return. Are you ? Even better is to calculate what you individually need to earn from the practice and then make the practice produce that for you. It can be done. Even if that is too much trouble, once you know how much you have to nett (because it is better to take lab costs out of the equation and project and establish targets nett of lab fees), all you have to do is work out how many hours you are going to need to work and at what rate. ' So lets assume you want six weeks off and work a four day week, and another week off for continuing education, we have 45 weeks of 4 x 8 hour days ( it really is easier if you just use the spreadsheet!) and a total of 45 x 32 hours = 1440 hours. That is actual working hours. So if you need to gross say $1 million dollars, then you need to nett (charge and receipt after lab bills) $694.40 each hour you work. Now take it from me that if you want to charge $1 million dollars at $700 an hour, your productive hourly target needs to be $800 per hour as a minimum, to make up for examinations, emergencies and no fee work on occasion, or for the times things just don't go to plan. Once you know this amount - $800 per hour - then you start setting your fees - and not before. Now the easy way to do this is to take a deep breath - a very deep breath for many of us - and treatment plan everything at $800 an hour. If a crown takes 60 minutes to prepare and 30 minutes to insert, then the fee should be $1200 plus lab bill. Now, if the lab bill is likely to be $450, then the charge for a normal crown is to be $1650. Did the distributed list of what someone else charges get considered at all ? No. Why ? Because - and this is important- dental fees are inelastic, and you should be able to charge what you need to - not what a distorted set of statistics might suggest. Now, you can then set similar fees for restorative, endo, implants and all of your productive procedures, working with treatment times and fees until you can meet these targets. Two large difficult restorations that might take an hour - remember that $800 is the target. Quality of course has to be maintained, but you can either reduce treatment time or increase fees (or both). You will be surprised how much can be done for no real effort, beyond thinking about how you use your time effectively and managing the actual work flow and systematising it. Of course, in a single page we cannot cover all eventualities but this does give you a different way to think about fee setting. If you actually work out what you need personally, then bring that into the profitability for the practice, you will really be in control and need not fear early July and August ever again. And that, is a nice feeling.

https://www.adansw.com.au/News/Public/First-Dental-Practice-in-NSW-to-achieve-accreditat.aspx

Presentation by Australian Dental Association delegate Matt Conor

Strategy The Australian Dental Association Inc is a national association of dentists committed to promoting the art, science and ethical practice of dentistry, improving the oral health of the community and enhancing the professional lives of its members.

The National Association was formed in 1991 and the Council meets bi-annually to address issues relating to the uniformity of practice and training throughout Australia, and to plan for the continuing growth and application of the profession.