If you missed the hour in dental school when they taught entrepreneurship, leadership, management, accounting, marketing and patient enrollment, you are probably working hard in your practice trying to get ahead or as an associate and living in FOMO as a practice owner. 🙂
If you need a good ol’ kick in the pants and a roadmap to financial, professional and personal success, and you are overwhelmed with options, allow me to simplify it for you. If you want a career-management plan to balance your work-life schedule, pay off your loans fast and still be able to retire financially free … before 40, here is your GPS.
Meet Kristen and Nick, they are a hygienist and a dentist, respectively, a married couple that graduated from school together with a hefty student debt, and who took out a loan to purchase a private practice. With little business acumen — which certainly wasn’t taught at their dental school — the two purchased a practice last year doing $600,000 and in one year grew it an additional $1.1 million. They had challenges of a typical practice — they had a challenge connecting with their overworked, stressed and disillusioned team belonging to the founding doctor thinking they are young and what do they know. There were consistently patients who cancelled appointments and didn’t pay on time and an untenable practice that operated on an antiquated business plan.
They followed the 2.0 plan here, paid off the purchase of the practice and just signed the contract to build their dream 11-op practice. The secret to their success is no secret at all. I am confident you can do it too as long as you follow the proven system built on the foundation of integrity, meaningful purpose and passion. Buy it right and build it right, and you too can have it all, now. You’ve got this. #liveyourbestlife
That antiquated business plan they were deploying, in general, has been in place for the better part of the last century, and we jokingly call it “drilling, filling, billing and definitely not chillin’.” It consists of examining and ASKING the patient what brings them in or what is bothering them … merely to see if they have a cavity or need a crown, doing the patchwork job, and ignoring any of the issues that may arise in the future. But these two young providers know — and you do too — that we’ve moved into a new phase of oral care: Complete Health Dentistry™. We recognize that preventive care is better than reactive care and that the mouth is the gateway to the entire health system. But how can our protagonists transform their practice into a 21st-century operation? How did they resist the allure of corporate dentistry, which is tempting to so many young grads with promises of big money, but fundamentally a crown mill run by suits with spreadsheets? And how can our stalwart heroes (and you!) grow their reputations and financial success while also achieving a genuine work-life balance, practicing caring dentistry and making time for their social needs and personal lives?
The new-school approach is, in fact, the personification of a four-pronged approach for revitalizing and modernizing a practice: Gamification, Accountability, Behavior Dashboarding and Engaged Learning (GABE).
This model gets the team and doctors on the same page and has a sophisticated, but easy-to-use, computer interface to automate practice management.
Focusing on getting the patient’s complete health allows you to focus on three ways to build a practice versus the old-school way of the new-patient treadmill. Using the CARE system — Case Acceptance, Retention, patient Experience — will allow you to figure out the total capacity of your practice: how much you’d be able to make if patients accepted treatment at the benchmark average amount of work and the practice retained an average rate of patients per year.
From there, the dentists can reverse engineer a blue-sky vision of what their ideal practice would look like, in terms of how much money they would make and how many days they would work. Moving backwards, they can then figure out what the Daily Primary Outcomes (DPO’s) of each team member should be to achieve that outcome.
Please take out a pen and paper and follow along with me. We are going to do simple math and calculate your upside that you can realize in a short period of time. This also allows you to understand if you are buying a practice at a great price like Nick and Kristin did. If the capacity of the practice is at least double what the selling doctor is selling at, you got a good deal. If it is three-times sale price, call me and we will buy it if you don’t!
Here we go: add up the average fees for a prophy, exam and radiographs (let’s say the number is $150). Double this number, because when you focus on complete health and creating known value in the patients’ minds, they will return knowing it’s not just for a cleaning. Therefore, the total revenue in hygiene for an adult is $300 annually. When you properly train your hygienist and assistant to ethically educate the patient, using intraoral cameras and speaking directly to something called a Personal Motivator (which taps into the patient’s inherent emotional drive to invest), employ a Healthy Mouth Baseline tool that establishes your benchmarks for soft- and hard-tissue health in your practice, and then train a treatment coordinator who learns how not to place her own money issues on the patient and remove barrier to treatment. You just got a crash course in doubling your practice! So – back to the math for the average annual value of a patient.
Annual Hygiene Revenue: $300
Annual Restorative: The value of one crown and a buildup. This doesn’t mean every single person walks out with a crown – it is the average case-acceptance dollar amount when you deploy the strategies I’ve discussed in this article. We’re saying an average of: $1,000.
Let’s add the hygiene revenue of $300, plus the restorative $1,000 = $1,300. Now take the average number of adult patients who came to your practice for any reason during the last 12 months (let’s say 2,000 patients).
Take the average annual value of a patient at $1,300, times number of patients at 2,000, for a grand total of $2,600,000. The average annual revenue of this type of practice is under $1,000,000. And the selling doctor will get anywhere between $700,000. to $1,200,000 as a sale price. So as a buying dentist, knowing what you now know, you can now have the possibility to buy and pay for your practice in a year or two, because you can go to work on what you can control versus trying to market and hope.
What should excite you is knowing that you already have this growth potential under your roof, with patients who trust the practice, but whom the selling doctor was unable to convert to twice-a-year hygiene patients, allowing for increased hygiene revenue and allowing your hygienist to educate them and to close more cases. To ally your concern that you will be called out on supervised neglect or overtreating, the patient actually has an experience of appreciation and gratitude and your team feels like the shackles are ripped off and that they can make a difference.
Focus internally on case acceptance and patient retention by building a high-performing hygiene department, one that is patient-focused on overall health and not just oral health, and you will have a priceless value proposition in which everyone wins. The patient gets healthier, your practice gets healthier and your team is fired up every day, knowing that on a good day they save a smile, and on a great day they save lives.
Gamification is the idea of setting personal goals for dental teams that helps all members have fun while working to reach the practice’s benchmarks of service, care and profitability. All of these team members are more important than they (or you) realize. They begin to fulfill responsibilities, not just tasks, as we reimagine what their titles and roles ought to be:
• Assistants are NINJA’s (No, I’m Not Just an Assistant): Able to not only prepare treatment rooms, they become healthcare advocates using intraoral cameras and proactively looking at patient charts, while being honored as the highest level of trust with the patient.
• Hygienists are Hygenius’: Healthcare advocates who spend two hours a year with individual patients and are most equipped to stand against future illness and disease.
• Treatment Coordinators are Financial Freedom Fighters: Able to fit a payment plan into a patient’s lifestyle by properly positioning and maximizing insurance while using third party financing like CareCredit to make doable monthly payments.
• Appointment Coordinators are DOFI’s (Directors of First Impressions): Filling the practice with an inviting serenity, the DOFI makes patients feel welcome and ensures their return.
•Office Managers are Team Leaders: 20 Fall 2018 Dental Entrepreneur DentalEntrepreneur.com These organizational mavens map out strategies for their teams and ensure that they stay focused and driven.
Each of these team members and doctors have a high purpose and are financially incentivized to meet and exceed their benchmarks. Using the automated, “gamified,” system, everybody can watch their own metrics, personally and willingly holding themselves accountable, and enjoy friendly competition with colleagues and their own past performances.
Here is how you create daily accountabilities by position. Let’s say you want to collect $2 million and write off 10 percent, so you need to produce $2,200,000.
You want at least four weeks off, which is 48 weeks working four days a week. This is 192 days. You should have at least two hygienists with 192 days x 2 = 384. Each Hygienist has a benchmark of $1,200
day which equals $460,800. When you take $2,200,000 less $460,800 hygiene revenue then, the doctor is responsible for $1,739,200 in gross production. Take this number and divide by 192 days and the doctors needs to do at least $9,058 per day. Try this with your own numbers.
Ok, now you have your game board. Next, educate your team on their daily responsibility. Your appointment coordinator is responsible for filling the schedule to $1,200 for each hygienist and $9,100 per day for the doctor. When they hit that number each day, they get a daily bonus of $10 per column per day or $30 total per day times 16 days a month or $480 per month. This bonus is calculated daily and only paid when the practice also collects the BBM (aka bare-butt minimum), which has ALL of your expenses plus retirement, debt and the bonus cost included. This is a true performance bonus on the individual accountability by person and not shared by the group. This does not create separation, rather it creates interdependency and has the team member focus on the outcome by position. It also turns your biggest expense, your payroll, into a profit center.
Each position has what we call a DPO (daily primary outcome) to get the benchmarks and bonus for the other positions. To find those, get my book, Million Dollar Dentistry in paperback, electronic or audio by emailing firstname.lastname@example.org or calling 212-388-1712.
You must get yourself an accountability coach, an offsite advisor
champion who tracks all of the metrics and sends real-time notifications to the team leader when things go awry. All of the metrics are crunched and quantified in an interactive dashboard that is used to assess and amend best practices. Every statistic pertaining to the practice (e.g., case acceptance and pre-appointments) is monitored in the “Behavior Dashboard” by the accountability coach and team leader, and any problems are rectified by troubleshooting and changing behavior.
Live conferencing and teaching are also responsibilities of the accountability coach. The accountability coach holds bi-monthly team meetings and trainings with the team. The dashboard also connects you statistically with other users so that you can compare your metrics against not only your own past performances but also the stats of other practices.
Finally, creating your own or using a proven engaged learning platform for hosting easy tutorials and key information about the practice’s vision, values and goals for both existing team members and new hires. With a large vault of videos – we call ours DentFlix and Chill – covering everything from customer service to boosting case acceptance and establishing trust, this makes learning easy, fun and consistent with the rest of the practice’s philosophy.
OK, so you got your GPS. Get to work immediately to right your ship financially when you are young, giving yourself and your team members the confidence and autonomy needed to meet their DPOs and making the ultimate blue-sky number and your graduation dreams a reality.