Monday, June 27, 2016


Big question!  And it deserves a big answer.  At least once a year I feel compelled to tell our readers about the best practice management newsletter on the market.  This Newsletter is published monthly, typically eight pages per issue, packed full of management information, marketing concepts, tax, estate, and retirement planning concepts, practice transition issues, government regulation ins-&-outs, on and on.  Every issue is a treasure trove of solid information to keep you, the owner/manager of your small business/dental practice, current on laws, regulations, realistic goals and numbers for your office, personal and professional challenges and decisions, etc.

A disclaimer---I have no connection whatsoever with the Newsletter.  I have met one of the principals, Roger Hill, who specializes in practice evaluations and transitions.  I respect Roger’s work and have recommended his services to some of my clients.  I mention these facts to emphasize that the only reason I have for recommending this Newsletter to you is the conviction that reading it will greatly benefit you professionally and personally.

Need more convincing before you consider subscribing?  I will add a personal note that may help.  As I write this on the first of May 2016, I am eagerly anticipating my grandson’s graduation from the UNC Chapel Hill School of Dentistry on May 6.  YES!  We are pleased and proud!  And in order to get Will started on the ever-challenging task of learning to run a small business while planning and saving for his family’s future needs and his some-day retirement, one of his graduation gifts will be a subscription to The McGill AdvisoryI believe the scope of information he will gain from reading 

The McGill Advisory over the years will be invaluable to his career and financial future. 

For more information, go to the Advisory newsletter website: or email questions to or call 888-249-7537.  You will thank me, and you are most welcome!

Monday, June 20, 2016


There is undeniable synergism between these three that can make or break the financial success of your practice.  Stick with me through this calculation process; and, I think, you will be amazed at the “meltdown” your practice suffers between dentistry scheduled vs dentistry produced vs fees collected.

The ANNUAL COLLECTION GOAL is the sum of four financial demands your practice bears each year:                                                                               
·         Overhead
·         Dr. compensation
·         Debt service
·         ROI (Return on Investment) – Profit                                                        

The DAILY COLLECTION GOAL is the sum of these four expenses divided by the number of days worked in a year, typically 185 – 195 days.

The ANNUAL PRODUCTION GOAL is the amount of dentistry that must be delivered to assure the COLLECTION GOAL is met.  Divide the ANNUAL PRODUCTION GOAL by the number of days worked to determine a DAILY PODUCTION GOAL.  Since few practices collect 100% of fees, the COLLECTION PERCENTAGE must be calculated; i.e., what percentage of produced fees is collected in your office?  The COLLECTION PERCENTAGE is determined by dividing the collections for a year by the treatment delivered (production) for that same year.  Then adjust the DAILY PRODUCTION GOAL by the collection percentage rate.   

The DAILY SCHEDULING GOAL is based on the DAILY PRODUCTION GOAL.  Since few practices can say that 100% of patients keep appointments as scheduled each day, the SCHEDULING GOAL must be adjusted by your average SHOW RATE (the percentage of patients who keep appointments as scheduled, not counting single visit emergencies or last minute fill-ins).  The average SHOW RATE is calculated by dividing the number of patients seen in a day, week, month, or year by the number scheduled for that same period.  Three months’ patient count will provide adequate data to calculate an average SHOW RATE; a year’s average SHOW RATE is an even better figure to use in calculations.

An example of the calculating the “meltdown” figure using 195 work days/year, an average collection rate of 95%, and an average show rate of 85%:
            $900,000 annual collection goal
            $900,000/190 work days = $4,737/day collection goal
            $4,737/day collections @ 95% average collection rate = $4,986/day production                           goal
            $4,986/day production @ 85% show rate = $5,866/day scheduling goal

            $5,866/day scheduling goal
          - 4,737/day collection goal                          
          $1,129/day meltdown between treatment scheduled vs production vs collections

The WOW! Factor here:  The meltdown in your practice may be one of the main reasons your practice does not meet the financial goals you set.  Calculate your own daily meltdown number to find out.

My disclaimer:  although these calculations focus on money; for example, scheduling $xx per day rather than simply putting names in the schedule with no regard whatsoever for production, my advice is steeped first in SERVICE TO PATIENTS.  Service Beyond Patients’ Expectations is today’s mantra for success in a fee-for-service dental practice.  So please understand that when I write very specifically about money, production, collections, budgeting, financial goals, etc., I do not imply that you should turn your patients into dollars.  Absolute focus on superb care for patients MUST underlie any successful practice and its business systems.  However, my years of work as a practice management consultant have convinced me that with skillful planning a practice can focus on world class service and financial goals simultaneously.

Monday, June 13, 2016


In the “long ago” of the 1990s, an often-quoted marketing study stated that satisfied customers tell an average of three other people about their good experience while dissatisfied customers complain to as many as 21 people.  More recent surveys show different numbers, many fewer compliments compared to complaints, the volume of comments has grown exponentially with the advent of social media.

That fact was driven home to me again this week as I read a five-page printout of online exchanges between a number of people---exchanges that were generated by one negative comment from the father of a young patient.  The dentist who showed me the comments said the father had not been present for the appointment that generated the negative postings. 

His chief complaint concerned two sets of x-rays taken on his daughter.  Untypically, the chairside assistant had not heard complete instructions from the dentist to take bitewings and anterior x-rays on the child, so she took bitewings only.  When the dentist came back to the chair to complete the examination, he again ordered anterior films.  The additional necessary radiographs were made.  The mother who was with the child did not complain, so that all was well when they checked out and making another appointment for treatment to be done.

Then came the surprise!---negative comments posted by the dad who had the opinion that more x-rays were taken just to generate additional fees.  His complaints were forwarded to the dental office.  So the question is---what should a top-notch, conscientious dentist do to overcome such negative publicity? 

First, the dentist and staff must not react with objection, but should consider the incident a golden opportunity to analyze how to avoid such critique in the future.  Bill Gates of Microsoft fame was once quoted, “Your most unhappy customers are your greatest source of learning.”

Think first of precluding such incidents by adherence to two “rules”:

·         Always inform before you perform.  If your patient is an adult, explain necessary procedures as part of the initial case presentation and reiterate each step just before delivering treatment on subsequent appointments.  If your patient is a child, do exactly the same, making certain the accompanying parent/adult understands every procedure you do, even the repetitive ones, and why it is necessary.

·         Educate!  Educate!  Educate!  Educate patients at every appointment---whether precise home care instructions, infant oral health information for parents of newborns, procedures for that patient which may become necessary in the future, presenting a synopsis of your new treatment modalities, on and on.  Fully involve your patients in understanding what and why you do what you do to maintain their oral health.  Do not use excessive clinical detail and jargon so that you actually confuse a patient;  but explain so that you build trust with each patient by making him/her feel in on treatment choices and step by step treatment delivery.                         

When a problem does occur, and it will; talk calmly and non-defensively with the upset patient, eye-to-eye if possible, by phone if necessary.  Listen well. Try to understand exactly what caused the problem; not to place blame, but to avoid such issues in the future.  Take notes---tell the patient you are taking notes if talking by phone.  Apologize, even if it is not your fault, not by agreeing with the patient’s complaint, but by saying you are sorry for the misunderstanding or confusion.  Be responsive.  Explain fully or promise an explanation or rectification by a certain date.  Focus on what will fix the problem, and stay in touch with the patient while issues are being resolved. 

Remember---no one ever won an argument with a customer/patient.  You want to resolve the problem and retain the patient.  That is a WIN/WIN!  The dissatisfied person who becomes impressed with your apology, solution, effort, and skill is your best ambassador for winning new patients.

Just FYI---I will suggest to the dentist in the above scenario that he call the father to understand his perception of his daughter’s appointment.  I will also emphasize that the dentist must stay calm, in control, and polite while talking to the parents.  It would be worth a phone call to diffuse any negative perceptions.  Addressing such critique head-on speaks volumes about the integrity and care with which an office treats each patient.   

Monday, June 6, 2016


In 2014, average practice overhead excluding owners’ salaries was:  
  • $385,000 for general practice
  • $463,050 for specialty practices
  • $400,010 average for both groups combined

At the beginning of World War II in 1941, the minimal requirement for being declared dentally fit for military service was 12 functional teeth.  By late 1943, this requirement was dropped because too few prospective military members met it.  Dentistry has served our population well during the interim so that a majority of the U.S. population now keeps functioning teeth for a lifetime.

The average age of retirement for dentists has risen from 64.8 years in 2001 to 68.7 years in 2013.  The number of practicing dentists in the U.S. is projected to reach 201,834 by 2018, up from 195,202 in 2013.

Average staff salary percentages compared to practice collections in 2015:            
  • General Dentistry – 25%
  • Pediatric Dentistry – 25% - 28%
  • Periodontics – 22%       
  • Orthodontics – 20 –22%  
  • Oral Surgery – 18%                                                                                                                         
  • Endodontics – 16%

Most incorporated private practices have converted from “C” corporations to “S” corporations due to tax advantages.  The less than 10% of remaining C corps are group practices.  The C corps status may mean double taxation on annual profits distributed to owners as income while being taxed to the corporation as profit.  Taxes on the sale of C corps are more complex, and C corps cannot distribute practice profits as dividend distributions, free of payroll taxes, like an S corps can do.  Further, recent tax law changes have reduced the waiting period for selling a recently-converted corporation (from C corp to S corp) from 10 years to 5 years.  If yours is still a “C” corporation, talk to your accountant and attorney about the wisdom of converting to a Subchapter S corporation.

Monday, May 30, 2016


While most of my postings deal with the art and science of dental practice, every once in a while a client will ask me to recommend a book for leisure reading.  And since I am convinced after almost 35 years of working in this profession we all love and respect that life must be about more than just dentistry and its practice, I am pleased to suggest books for down-time reading.  I read and like to recommend books that add significantly to the reader’s knowledge, piquing curiosity about a non-dental topic, often a historical biography or some other non-fiction work.

The book I’m suggesting this time is Thomas Jefferson and the Tripoli Pirates, The Forgotten War That Changed American History by Brian Kilmeade and Don Yaeger, still on the New York Times Non-fiction Bestseller list as I write this post. I’ve just closed the cover on this fascinating story, knowing I may read it again in a few months in order to better recall details I want to remember.

While our nation was still young and newly independent from Great Britain, pirates from four Barbary states on the north coast of Africa, Morocco, Algiers, Tunis, and Tripoli, raided, plundered, and often captured the majority of American merchant ships bound to or from European ports with trade goods.  This fact severely limited our ability to sell to or buy from European countries.  Only through payment of aberrant bribes or ransoms, could safe passage of our ships and their crews be bought.  And, in spite of such payments, the pirates often captured our ships to be converted for their own use and our crew members to become slaves to various viceroys, deys, sultans and bashaws of these countries and city-states.

When years of diplomacy, much of it practiced patiently by Thomas Jefferson from the mid-1780s until he became our third president in 1801, failed to solve the problem; Jefferson sent the newly-created U.S. Navy and a detachment of Marines, a new branch of U.S. Armed Forces, to fight the Muslim’s fire with fire.  And, as Kilmeade and Yaeger put it, “Thus began America’s journey toward future superpower status.”  As the story unfolds we see the U.S. heroes, their battles, their victories, and their defeats through the eyes of the participants.  The birth of the U.S. Navy and the U.S. Marine Corps comes alive in this memorable historical volume.

As 2016 unrolls, we Americans would do well to study many of the principles, beliefs, bravery, and actions of the early heroes of our nation.  Our next leaders need to replicate many of their qualities, talents, and beliefs.  Our national elections in November will have incredibly far-reaching effects.  Whether you relish the ballyhoo leading to November voting or dread the unceasing chatter of pundits’ predictions, take some time to look back at our founding fathers’ incredible wisdom accompanied by bravery as they forecast what would be needed to maintain our constitutional republic.  Thomas Jefferson and the Tripoli Pirates is a great place to start a review of our proud heritage.  And while you’re at it, consider creating a list of the characteristics and principles that our leaders, beginning with the President, need to possess.

Jefferson expressed his views on government in his writings, such as
  •  A government big enough to give you everything you want is strong enough to take everything you have.
  •  I predict future happiness for Americans if they can prevent the government from wasting the labors of the people under the pretense of taking care of them
  •  The strongest reason for the people to retain the right to keep and bear arms is, as a last resort, to protect themselves against tyranny in government. 
  •  It is incumbent on every generation to pay its own debts as it goes. 
  •  My reading of history convinces me that most bad government results from too much government.