Published in the Winter, 2018 issue of Dental Entrepreneur Woman
When your child’s sick, you take their temperature and get a number. When your car tire is running low on air, you check the number on the tire gauge. When you are working to lose or gain weight, you step on a scale and get a number.
Where do you look when your practice is not performing as well as you’d like? The numbers! Most likely the first place you look is your bank account balance. Is there enough to cover the overhead? You may also look at production, treatment acceptance, unfilled hours in doctor and hygiene schedules, new patients—numbers, numbers, numbers.
While we can take a measure of health through the number on a thermometer, your car’s tire effectiveness through a number on a tire gauge and how close you are to your weight goal by a number on a scale, the number we use many times in dentistry has a dollar sign in front of it. And that’s where the trouble begins for many.
“We are health care providers, it’s not about the money”, “We shouldn’t be focused on money”, “All you want to do is make money”, and on and on.
Here’s my recommendation to get yourself fully focused on what is most important…Look Behind The Dollars.
Whenever I look at my client’s monthly metrics, many of those numbers have dollar signs in front of them. It’s the method by which we measure things such as production, collection, and treatment acceptance. Don’t get stuck on that dollar sign, because once you look behind it, this is what you’ll see: the measure of greater dental health for your patients. Yes, when you look behind the dollars, you’ll see less dental disease, greater confidence, enhanced function, happier patients.
For example, let’s look at production. That number has a dollar sign in front of it. What’s behind that dollar sign is the representation of the total team effort it takes to help a patient make the best decision about their oral health. From the time of diagnosis, to discussing and negotiating payment arrangements to getting the patient scheduled, it’s the consistent focus of the team toward the patient’s health that creates success.
We see the same outcome behind the dollars of treatment acceptance. The calculation to determine the percentage of treatment acceptance starts with the dollar amount of treatment presented divided by the dollar amount of treatment accepted. Once again, look behind the dollars and what you’ll find is:
Treatment presented = identified disease, poor function and/or dissatisfaction with esthetics.
Treatment accepted = disease eradicated, function restored and/or greater esthetics. The outcome is healthier, more comfortable and confident patients.
The subject of how we look at the success of a dental practice has always made for interesting conversation. While many times the measure of success is “I produced ‘X’ amount last year”, or “We collected over ‘name the BIG number’ in 3 months”, the truth of the matter is behind the dollars.
Practice success can be measured in many ways—patient satisfaction, employees that truly work together as a team, the ability to pay all the bills on time, providing the clinical best—are also able to look behind the dollars to see their defined success.’
Here’s an example:
Several years ago I had the wonderful opportunity to work with a Doctor who embodied, “look behind the dollars”. She had what most would deem a successful practice; achieved production and collection goals, had a solid new patient flow, she truly enjoyed working with her team and also enjoyed the varied aspects of providing patient care.
When we sat down to work on her annual plan, I had a big question for her. In my preparation, I had analyzed her metrics and found that she had a production adjustment amount of 12% over the past 12 months. Only 4% was due to adjustments related to insurance contracts. The answer; every month she chose patients that she would provide treatment at no cost to the patient.
As you can imagine, this amounted to a substantial amount of production that had expenses attached to it, however, no revenue. Not sure she was seeing the ramifications of this decision, I calculated what the production total was for the charitable giving of her dentistry…$96,000 a year!
What a lesson I learned when the Doctor said to me, “You know, there are a lot of ways that I could use and spend that $96,000. This is the best way that I could think of and it makes me feel so good to be able to help people who may not otherwise have the chance for better health and the confidence that a healthy smile can give a person. I’m not going to change that number.”
This Doctor had looked behind the dollars and found what was important to her. She knew that the dollar signs of her production, collection, adjustments, expenses were the numbers used to measure the health of her practice so that she could provide the charitable giving that was important to her. Without a healthy bottom line, the charitable giving was going to be difficult to provide.
What happens when you don’t measure your practice health through the dollar signs? Unfortunately, I could provide countless stories of practices that felt setting production and collection goals were “crass”, “unprofessional”, “what would my team think?” In those situations, it becomes a “fly by the seat of your pants” and “cross your fingers” approach to your dental business. I’ve never seen those approaches work well in airplanes or dental offices.
Instead, have an open conversation with your team about what it takes to run a successful practice. The biggest expense category in any practice is personnel. For a team to continue to have the best compensation and benefits possible, those dollar amounts must be attained. Utilizing the finest in materials, labs, equipment is dependent upon hitting those dollar amount goals. Help the “naysayers” in your life to better understand why meeting those dollar sign goals is so important and take them behind the dollars.
As with most things, once you are able to see behind the surface, you gain a much deeper appreciation of what things represent. I’ll always remember the first time I spent the couple of dollars to rent a headset and recording for a stroll through a world-famous museum. While I had toured that museum years before, it was more like a race to see how much ground I could cover. When I had the insights, background and explanations that came from the recording, my experience was completely different; richer, more vibrant and thoughtful.
Bring a greater practice success and vibrancy to your life and “look behind the dollars”…you’ll be glad you did!