Spring 2000 Newsletter
How Do You Compare? • Staff Hours • Do You Understand Your Practice Numbers?
Change Your Life? • Electronic Statements/Insurance • Cross Training vs. Job Sharing
Is Your Study Club or State Organization
The Morning Meeting- Jumpstart Your Day & Decrease Stress • ALL STARS
Do you measure your practice health by your net income? Many doctors do! The thought, "If I collect well, pay all my bills and have enough left over to meet my personal requirements, then I am successful, have a healthy practice, and further improvement is unnecessary or unlikely," is common in the profession. Many doctors make that statement, but each year they have 50% more W-2’s than they have employees. They operate with a 15%+ rate of failed or canceled appointments. 40% or more of their new patient exams never end up in treatment. Are these the signs of a healthy practice?
I believe the greatest accomplishment a practice can make is to have an impeccable quality of life within their practice. To do so, my experience has been that they must consistently be in statistical "balance." Many practices, for instance, have a great collection rate. Many have low and healthy receivables. Some have very low delinquency. Others have a wonderful rate of case acceptance. Having great results in all of these areas, at the same time, is the level of performance we seek for our clients and is indicative of a truly healthy practice. Here are the numbers we ask our clients to track, followed by the goals we expect our clients to reach.
Production (before discounts). The size of the practice is not important to us but the gross production number, representing total new case/treatment fees posted (before discounts, courtesies, etc.), is an excellent measure of practice performance and trends.
Goal – Whatever our clients want it to be!
Collections As with the production, how much a client collects is not important but the collection rate (%) always says a lot about the health of a practice.
Goal – 95%-96% of gross (before discounts and adjustments) production for orthodontists, 98% for all other practice types
Adjustments We track the discounts, write-offs, etc., because from that number we can often identify problems with excessive discounts, loss, staff errors, embezzlement, etc.
Goal – 4%-5% of gross production for orthodontists, 2% for all other practice types
Accounts Receivable We track the receivables (total money owed the practice) and the ratio of receivables to average production. That number tells us if financial arrangements are appropriate, if too many patients are paying in full, if down payments are too large or too small, and if contract lengths are healthy.
Goal – 5.0 to 6.0 times average gross production for orthodontists, 1.4 to 1.6 for all other practice types.
Open Accounts For our orthodontic practices, we track the number of accounts (people) who owe money (whether due now or not) to the practice. When compared to the size of the practice and the size of the accounts receivable, the number of open accounts tells us a great deal about office procedures, policy, and attitude.
Delinquency What would you rather have, 50 accounts delinquent $100 each or 100 accounts delinquent $50 each? Both result in $5000 in delinquency and if you understand what is behind that question you will understand why tracking dollars delinquent is a virtually useless exercise. We do not track the dollar value of the delinquency. Rather, we track the number of people (accounts) who are delinquent. Dollars do not no show, cancel, have emergencies, or file lawsuits. People who are delinquent do these things, so that is what we track.
Goal – 3% of total open accounts
Aged Receivables We track this number for our general, pediatric and other non-orthodontic clients. Since few of their patients are on long term payment contracts, aging is a valuable factor to determine the health of the receivables.
Goal – 25%-35% of total accounts receivable, no more than 10% of which should be delinquent
New Patient Flow This number is similar in some respects to the Production number. By comparing current performance to historical numbers we can spot trends, marketing failures and successes, etc. We also track the quality of the new patients so we can help to steer our clients to the most appropriate practice marketing.
Goal – Whatever it takes to meet personal production goals
Case Starts and Case Acceptance % This statistic is tracked by our orthodontic offices. By dividing the number of new (Phase II starts do not count as a new start!) case starts (including Limited, Partial, Phase I, and Full starts) for the year by the number of new exams for the year we can come up with a Case Acceptance %. That statistic tells us if a practice has healthy patient flow procedures, good verbal skills, good Suspense and Recall follow-up procedures, etc.
Goal – 70% to 85% of new exams
Average Case Fee By dividing gross monthly production by the number of new case starts we can determine the average case fee. From that, we can determine staffing requirements, poor conversions of Phase II starts, and of course, when it is time to raise fees.
Goal - $4,300+
Production Per Hour This is among the more important measures of the productivity of a general practice. A good statistic here tells us the practice is doing good, aggressive diagnoses, has great case acceptance, and a healthy appointment book. Although we do not make recommendations regarding how large our clients’ practices should be, we do recommend high productivity per hour worked, which allows our clients to generate the income they want while still taking the time off necessary for a high quality of life.
Goal (minimum) – General - $500 per hour
Goal - Pedo and other non-ortho specialists - $800 per hour
Later in this newsletter you will find the "Gold Star" list. This is a list that I started about sixteen years ago as a way of acknowledging the practices that had been consistent in the implementation of the credit management recommendations we had made and who had reached all, or almost all, of the performance goals listed above.
Every year since then, and sometimes twice a year, I have had the pleasure of publishing this list of doctors whose practices have truly reached "state of the art" in the area of credit and collections. "Big deal?" It depends on your point of view, I suppose, but the doctors and staff on this list rate their own performance and their quality of life within the practice as a very big deal.
Does this sound like your office?
You have long term, dedicated, full-time employees that you value and like a lot. They have always done a great job for you and your practice performance has historically been quite good. A few months ago, Suzanne, your Appointment Coordinator, came to you and said that now that her husband has retired, she wants to only work three days a week instead of four. You see patients four days and you know that you must have a four day Appointment Coordinator, but again, you like this person and "don’t want to lose her" so you honored her request. You did not hire additional staff to make up the lost time but assumed the other staff could fill in. Perhaps your Financial Coordinator or your Treatment Coordinator helps out on the day Suzanne is gone. Today, performance is still OK but there is more stress in the office and practice performance is not quite what you think it could be. The schedule is no longer as efficient as it was, or perhaps is even eroding a bit. Could this have something to do with your decisions regarding staffing? Probably!
A more common situation, but one that causes just as severe a problem, is when a key employee asks for a permanent change to their daily working hours, to be able to come in an hour later or go home an hour earlier. When faced with these requests from staff, the doctor should first ask, "Is the position this employee fills a part-time or a full-time position? Can this person do their job in an impeccable manner, even though she will be here fewer hours? Is it realistic that I ask another employee to fill in during the hours?" The final and most important question – "Are my patients and my practice going to be better served if I agree to this requested change?"
You know where I am heading on this issue and I run the risk of alienating the staff members who most often are our greatest allies in the practice. Employees in key, full-time (all patient hours) positions must not be allowed to become part-time unless they move out of the key position and into a position that can be handled well by a part-time employee. The obligation of a business owner is to make staffing decisions that, first and foremost, take the best care of the business and the business’ customers. Such decisions may cause some discomfort and some hard feelings from time to time. On occasion, such decisions may even cost the practice the loss of an excellent employee, but this is short-term discomfort and is discomfort that must be accepted for the long-term well-being of the practice.
Do you understand your practice numbers?
Many orthodontists and dentists either do not look at their performance statistics (their numbers) or they look at them without any understanding of what the numbers tell them. Even doctors who really understand how to interpret what their computer tells them are often at a loss because they do not know which numbers are healthy or how much more healthy they could possibly be.
If you would like to have your practice statistics looked at (analyzed) and have our perspective on your practice performance, call Becky at (800) 845-4766 and tell her you are interested in the Practice Statistical Analysis. She’ll fax you a form to complete. Once the form is completed and returned, we will schedule a 45 minute call to go over your most recent practice performance. We will discuss the collection rate, rate of adjustments, ratio of receivables to your production, rate of delinquency, your new patient flow, rate of case acceptance, your case fees, your staffing level, your discount policies, and any other practice related statistics you would like to discuss.
The fee for this service is $280.
The most personally impactful seminar I have ever attended was the SESI (Self Expression Seminar Intensive) produced by Joan Garbo and Sonny Elliott. No space for details but when I finished the seminar I signed up my children. They feel the same way I do and asked to do the seminar again. Do yourself and your family a great big favor and enroll in this seminar in Scottsdale, AZ. It’s hot there in July but you won’t notice! Call (713) 527-6321 or (775) 851-6149 with your questions or to register.
Electronic Statements/Insurance
Many dental and orthodontic computer systems are offering the electronic filing of insurance and now are also offering the electronic transmission of statements. There have been "bugs" in the past that made these services inappropriate for our clients but times have changed, the bugs are mostly gone, and our clients sending their insurance and their statements electronically are thrilled. Not one would ever go back to the "old" way of sending monthly statements or billing insurance. One additional benefit is that it is actually cheaper to send statements electronically than it is to send them yourself. Call your computer company. If they are set up to offer these two services, sign up! If they are not, ask them to call Envoy at (800) 453-6869 and they can get the process up and running in no time.
Cross Training vs. Job Sharing
Cross-Training is when two or more people know how to do all or part of one person’s job. For instance, an Appointment Coordinator who knows how to make credit decisions, post payments, and handle a collection problem, is cross-trained to the Financial Coordinator’s position. Job-sharing is when two people share responsibilities for one job. For instance, if that Appointment Coordinator routinely made credit decisions, posted payments and handled collection problems, and if the Financial Coordinator was routinely working at the front desk, making appointments, and greeting and dismissing patients, then these two positions are being job-shared. In such a situation, would your Appointment Coordinator be willing to be held accountable for the efficiency of the appointment book? Would the Financial Coordinator be willing to be held accountable for the accuracy of credit decisions she did not make?
The recommendation here is simple. While job-sharing is useful in many situations, the key positions in a health care office should never be job-shared. Cross training is important and is extremely valuable. Job-sharing, on the other hand, when key positions are job-shared, ruins accountability and can make it impossible to reach performance goals.
Is your study club or state organization looking for an exceptional speaker?
Paul has made both full and half-day presentations to dozens of organizations both nationally and internationally. These organizations include the ADA, AADPA, Smart Practice, AAO, Orthotrac and the Australian Orthodontic Study Club, not to mention many study clubs, State, local, and private meetings.
We understand that each organization is unique, which is why Paul has many lecture topics for you to chose from. His topics include but are not limited to:
- Improve Case Acceptance by allowing flexible "in-office" financing
- Create better relationships with your patients by effectively communicating about money
- Install a life long system for delinquency control
- Job descriptions that work
- Have finances in perfect control while promoting practice growth
- Create quality of life within the practice through patient risk identification & receivable control
- Out of control Accounts Receivable? What to do.
- The ABC’s of Credit Granting
Paul is available for both half and full-day lectures. He is a dynamic speaker and brings his material to life in an explicitly informative, entertaining way. If you are looking for an outstanding public speaker who will stimulate, motivate, educate and inspire the members of your organization, please call us at (800) 845-4766 for more information.
The Morning Meeting – Jumpstart Your Day & Decrease Stress
By Sharon F. Tiger, Ph.D.
One of the most effective tools that we have in the dental practice is the "MORNING MEETING." I know that most offices are tired of all their meetings and wonder sometimes if they really accomplish anything at all!
The morning meeting is a MUST! It sets the focus and tone for the day. I challenge you to do this meeting for 90 days to see the amazing, incredible results that can occur.
Let’s first review the simple guidelines:
- The meeting begins 15 minutes before the first patient arrives.
- A different facilitator leads the meeting for an entire month.
- Choose a specific place to hold the meeting – away from the eye view and earshot of arriving patients.
- An office clock must be designated as the official time clock for determining the start time of the meeting.
- All staff and doctors must be present at the designated time.
- All staff and doctors STAND in a huddle during the meeting and each have a copy of today’s schedule in their hand (sitting, drinking coffee, passing donuts, etc. all tend to slow down the meeting and remove the focus).
MEETING FORMAT
- Greet everyone, such as "Good Morning" and then call on someone to read an uplifting, motivational quote. (Don’t panic, these quotes can be taken from those small motivational calendars they sell in stationary stores.)
- Review results of yesterday’s "asking for referrals."
- Review today’s schedule with a copy in everyone’s hands – make notes on the following items:
- Openings that need to be filled
- Yellow lights – where the schedule flow might be difficult
- Red lights – where the schedule flow WILL be difficult and all team members need to be aware to "smooth it over"
- Emergencies – where to place in schedule
- Patient concerns – such as handicapped, premed, difficult, etc.
- Family members not scheduled for hygiene
- Chart Review – staff should review today’s charts the day before. Discuss treatment plans or treatment possibilities
- Inform staff of next available major opening by doctor, so that all team members can support in filling that specific time.
- Choose specific patients to ask for referrals – internal marketing to help build the practice
- HAVE A GREAT DAY!
Zuelke & Associates’ clients tend to be in the top 10% of their field with respect to production, income, delinquency control and, we believe, in the quality of care provided to their patients. The "All Stars" are those whose individual practice statistics (delinquency, for instance) are not necessarily the lowest or "the best," but whose overall practice performance has the most perfect balance. In each of these practices, every statistic we track is in great shape and among the top 10% of all our clients. To be among the top 10% of the top 10% is quite an accomplishment! Congratulations!
Randall K. Bennett, DDS, MS
Sandy I. A. Bigman, DDS
Christopher M. Brieden, DDS, MS
William L. Chambers, DDS, MS
Jerome S.Cohen, DMD & Steven H. Schwartz, DMD
David M. Gobeille, DDS, MS & David G. Niles, DDS, MS
Bailey W. Harrison, DDS
Mark W. Joiner, DDS, MS
William & Fredric Kreul, DDS, MS & Paul R. Ostertag, DDS, MS
Edward M. Matsuishi, DDS
Stanley Michalski, III, DDS & Richard K. Yeager, DDS
Scott T. McPherson, DDS
William J. Scannell, DMD
Roger Schmidt, DDS & Pamela Schmidt, DDS
Chester K. Smyth, DDS & Barney T. Olsen, DDS, MS
Salt Lake City, UT
San Ramon, CA
New Baltimore, MI
Asheville, NC
Budd Lake, NJ
Eugene, OR
McAlester, OK
Santa Cruz, CA
Stevens Point, WI
El Cerrito, CA
Charlotte, NC
Peachtree, GA
Methuen, MA
Rockford, IL
Salt Lake City, UT