Monday, January 15, 2018

GET A GRIP!

Is 2018 the year you are determined to get better control of your practice, improving organization and overall management? If so, you might begin by departmentalizing the office. Managing the systems of a dental practice as departments can improve the entire entity, including the bottom line (profit). Each department can be monitored and analyzed to be certain maximum efficiency and specific goals are reached and maintained.
Think of a dental practice as six departments:
  • Personnel
  • Financial
  • Scheduling
  • Restorative
  • Hygiene
  • Marketing and Physical Facility
Customize the outline below to fit particular details of your practice. Senior staff members in the business and clinical areas can report monthly on the current status of each department, supplying details of operation. The dentist or practice administrator should review reports regularly, trace progress or problems in each department, and plan for changes necessary to meet annual goals. With this method of constant pulse-taking accompanied by immediate adjustments, your practice will be better managed, more enjoyable, and more profitable.
Business Monitor by Departments
Personnel Department
  • Staffing needs—plan ahead
  • Training—new team members, OSHA, HIPPA, emergency system, material safety, CE courses, certification, etc.
  • Work schedule, holidays, vacation, personal leave, etc.
  • Teamwork—status, needs, activities, charitable projects
  • Compensation packages—wages, benefits, bonus system, reviewed by Dr. and practice administrator only
  • Personnel costs (wages, bonus, and benefits) = ____% of total overhead costs
  • Individual team member’s successes, concerns, events, etc.
Financial Department
  • Income comparison by actual dollars and by percentage increase or decrease over last month and Year-To-Date (YTD) to last YTD
    • Production this month to last month; YTD to last YTD
    • Collections this month to last month; YTD to last YTD
  • Collection percentage rate (collections divided by production)
  • Sources of payments
    • Cash, checks, debit cards—over the counter
    • Credit cards (monitor credit card use and merchant rate charges)
    • Insurance
      • Number of claims filed
      • Amount filed; amount paid; percentage of total collections
      • Employers providing insurance or managed care plans, including new carriers; direct reimbursement
      • Problems collecting claims
      • Patient feedback: compliments, complaints, comments
    • Managed care, government assistance—production of each; percentage write-off from regular fees; percentage of total office production; total collections, collection percentage rate
  • Write-offs—monitored in actual dollars and percentage of production
    • Managed care, government assistance
    • Professional courtesy discounts
    • Pro-bono (charity) dentistry
    • Bad debt
  • Billing dates; number of statements; comparison to previous months
  • Accounts receivable: total and aged categories: 30, 60, 90, 120 days and in collections
  • Accounts payable—current; any overdue?
  • Budget reconciliation and update; analyses of overages; necessary quarterly modifications; capital expenditures
Scheduling Department
  • Number of days worked; number of hours worked—YTD compared with last YTD
  • Number of appointments scheduled; number of patients seen
  • Show rate (patients seen divided by patients appointed)
  • Number of broken appointments; number rescheduled
  • Daily production goal; actual average daily production
  • Daily collection goal; actual average daily collection
  • Patient audit— number of active patients; number deactivated, and reasons
Restorative Department
  • Number of restorative appointments scheduled; number seen as scheduled
  • Show rate (patients seen divided by patients appointed)
  • Total fees for diagnosed treatment; total dollars of treatment accepted/scheduled (treatment scheduled divided by treatment diagnosed and presented)
  • Production—$_____; restorative care is ___% of total office production; compare YTD with last YTD
  • Top five fee-producing procedures
  • Lab cases—successes; problems
  • Supply inventory—control? problems? costs?
Hygiene Department
  • Number of recare appointments; number needed to meet minimum goal of 75% to 80% of active patients recalled regularly.
  • Show rate (recare patients seen as appointed divided by the total number appointed)
  • Analysis of appointments—6 months or less, perio, home care, prenatal, etc.
  • Production—$_____; hygiene is ___% of total office production; compare YTD with last YTD
Marketing Department and Physical Facility
  • Number of new patients this month compared to the same month last year; YTD compared to last YTD
  • Number of patients deactivated—reasons
  • Computer system—updates/changes needed; charts (count of active patients); website; social media postings; IT out-sourcing; security, etc.)
  • Office equipment—phone, business machines, etc., projected needs and costs
  • Number and type of community contacts; method of thanks to referral sources; other contacts
  • Report on past and future marketing activities, costs, dates, successes, failures
  • Analysis of compliments and complaints from patients; concerns about suppliers, service providers, etc.
  • Office facility, d├ęcor, furniture, equipment, general appearance, signage, cleanliness; future plans, projected costs, timeline, etc.

Monday, January 8, 2018

YOUR WEBSITE AND AMERICANS WITH DISABILITIES ACT REGULATIONS

As far-fetched as it may seem, regulations of the Americans with Disabilities Act (ADA), signed into law in 1990, now affect your practice website. The demand that public websites meet ADA standards came in summer 2017 via a U.S. District Court ruling in southern Florida that Winn Dixie Grocery Company violated the ADA by having a website which was not usable by a visually impaired customer. The court ruled in favor of the plaintiff.

The court's decision stated that inaccessibility of its website denied the customer "full and equal enjoyment of […] the services, facilities, privileges, advantages, or accommodations that Winn Dixie offers its sighted customers." Included in such services were ordering groceries online to be picked up at the store, ordering prescriptions from the store pharmacy, downloading store coupons, etc. Now—substitute the name of your dental practice for "Winn Dixie" in the statement above, and you'll understand the message this ruling sends concerning dental practice websites.

Title III of the ADA forbids discrimination based on disability in places of public accommodation that are generally open to the public, including dental and medical offices, restaurants, theaters, schools, recreation facilities, etc. The court ruling names a business website as a place of public accommodation because the website is a gateway to the business's physical location, office, store, school, theater, gym, etc.

What should you do to reduce the risk of a claim by a disabled patient or potential patient?
  1. Educate yourself. The American Dental Association's Division of Legal Affairs has sent information, a white paper, to all state dental societies describing website compliance to ADA regulations. Obtain a copy from your state dental society to understand all steps necessary to decrease the risk of a claim.
  2. Check with your website designer or administrator to determine if your site is fully accessible to disabled people under the conditions demanded in the ADA.
  3. Disable your practice website if it cannot be re-designed immediately to accommodate the disabled, including installation of screen reader software for the visually impaired and an accessibility link directing the disabled to a webpage instructing them of action to take if some facet of your website is inaccessible. Reactivate your website only after it is made fully accessible under ADA guidelines.
For more information, the American Dental Association has published an excellent resource, A Dentist's Guide to the Law: 228 Things Every Dentist Should Know, which includes a section on the American with Disabilities Act's requirements on website development. Order online or call 1-800-947-4746.

Monday, January 1, 2018

HOW COULD THE EQUIFAX BREACH AFFECT YOU?

In September 2017, Equifax, one of three nationwide credit reporting agencies that track and rate the financial history of consumers, reported a data breach affecting approximately 143 million people. The breach occurred between mid-May and July 2017. Cyber criminals accessed names, Social Security numbers, and birth dates for about 44% of the U.S. population, plus credit card numbers for about 201,000 U.S. customers.

Credit card fraud and identity theft are the obvious increased risks resulting from this breach. Coping with either is a nightmare of wasted time and money; however, keep in mind that identity theft is a more extensive, difficult problem than credit card fraud alone. Years ago I worked with a dentist whose identity was stolen by an IRS employee to allow her boyfriend whose name was the same as the dentist to run wild using a new identity with an excellent credit rating. Three years and thousands of dollars paid to attorneys later, the dentist was finally free of the ramifications of this theft. While credit card fraud allows purchases in your name by the thief, identity theft may involve the opening of bank or credit card accounts, a fake driver’s license, a replacement Social Security card, stolen income tax refunds, burglarizing retirement accounts, rental or leases of real estate, etc. In 2016, experts estimate that over $16 billion was stolen via identity theft from over 15 million Americans.

What should you do about the Equifax breach? First, visit equifaxsecurity2017.com and click on the Am I Impacted button. If you were caught in the breach, a message will inform you. If the message indicates that you may have been affected by the breach, enroll in Equifax’s free one-year fraud monitoring program, Trusted ID Premier Credit Protection. Next, get a free credit report from the three national credit monitoring agencies: Equifax, Experian, and TransUnion. Check these reports at least quarterly for one year to catch any surreptitious or suspicious activity. For added protection and convenience, consider getting Credit Karma, a free financial app which is highly rated for tracking personal credit history and scores.

If you detect a problem, seek professional advice immediately. Contact your credit card carrier, your bank, your accountant, your mortgage holder, your investment counselor, and your attorney. Identity theft is an enormous problem, a stressful challenge, best handled by preventive measures:
  • Never lend your credit card to another person
  • Never allow your office credit card to be misused
  • Use caution in giving your Social Security number to any person or agency
  • Check your credit score regularly at one or all three of the reporting agencies
  • Be aware of an approximate date tax refunds should be received and investigate if they are not received
  • Do the same with Social Security payments
In other words, take immediate defensive action as soon as a problem is discovered.

Monday, December 25, 2017

MINUTE MUSINGS

The practice of dentistry is science combined with art. It is stressful one minute and pleasurable the next. It is positive and upbeat one day and regarded as a negative life force the next. On a regular basis, dentists and team members need food for the spirit and psyche just like they need nourishment for the body. Hence, I occasionally share some quotations and meditations from my years-in-the-making collection of "notable quotables" in the hope that these bits of wisdom and humor will inspire, cheer, and cultivate positive feelings of teamwork among dental teams. Use these adages to begin daily morning huddles, enrich staff meetings, or close practice planning retreats, or post some of them on your practice social media sites.
Think about it...

On Life
Live so you leave the woodpile higher than you found it.
Dr. Heber Simmons

On Imagination
A mind once stretched to a new idea never goes back to its original dimension.
Oliver Wendell Holmes

On Today
Finish every day and be done with it. You have done what you could; some blunders and absurdities have crept in; forget them as soon as you can. Tomorrow is a new day; you shall begin it serenely and with too high a spirit to be encumbered with your old nonsense.
Ralph Waldo Emerson

On Belief
Our deeds become our creeds.
Eugene Peterson

On actions
What you’re doing shouts so loudly, I can’t hear what you’re saying.
Ralph Waldo Emerson

Seven Stages to Stagnation
We’ve never done it that way.
We’re not ready for that yet.
We’re doing all right without it.
We tried it once and it didn’t work.
It costs too much.
That’s not my responsibility.
It won’t work.
Edwin M. Soukup

Monday, December 18, 2017

MONEY MATTERS FOR 2018

Production is one key to a thriving practice; collections, however, is the do-or-die indicator of profitability. After all, one can only spend or take as profit the fees collected.

The New Year is a perfect time to calculate new production and collection goals. Set realistic numbers based on your own needs and the potential of your practice using the model described below.

Sound fiscal planning begins with the dentist setting personal, lifelong financial goals based on how much money you will need to earn each year to maintain your chosen lifestyle, meet family needs, fund retirement, and so on. Additionally, you must know the annual cost (overhead) of operating your practice.

To establish a one-year collection goal for your practice, project these totals:
  • Overhead—the cost of operating your practice, not including dentist's compensation
  • Dentist's compensation—wages, taxes, and benefits
  • Debt service
  • ROI (Return on Investment)—profit
Divide the sum of these four items by the number of days to be worked that year. 185 to 195 days per year is typical. The quotient is the daily goal for collections.

Next, adjust the collection figure by the average collection percentage rate to determine the daily production goal. The collection percentage rate is calculated by dividing the collections for any period of time by the production for that same period. An ideal collection rate is 97% or better of production.

A scheduling goal allows the production goal to be met. One other adjustment is necessary to establish a reasonably accurate scheduling goal; that is, the dollars that must be scheduled daily to assure production and, therefore, collection numbers are reached. That adjustment is the show rate. The show rate is the percentage of patients who keep appointments as made. It is calculated by dividing the number of patients seen, not including single visit emergencies or last minute fill-ins, by the number of patients scheduled during a certain period of time (day, week, or month).

Example of show rate calculation:
  • 88 appointments (hygiene and treatment) were scheduled for one week
  • 79 appointments were kept as appointed
  • Show rate = 79/88 = 90%
Every office should calculate the average show rate, one of the most important management statistics for managing scheduling and production goals. Three months will provide adequate data to calculate an average show rate. The year's average show rate, monitored from year to year to note any decline, will alert the dentist to problems in scheduling, confirming appointments, etc.

The following example demonstrates the meltdown between dollars scheduled vs. dollars produced vs. dollars collected. The differences are surprising.
  • $900,000 annual collection goal
  • 190 work days/year = $4,737/day collection goal
  • $4,737/day collection goal @ 95% collection rate = $4,986/day production goal
  • $4,986/day production goal @ 90% show rate = $5,540/day scheduling goal
  • Meltdown:
    • $5,540/day scheduling goal
    • $4,986/day production goal
    • $4,737/day collection goal
    • $803/day meltdown between treatment scheduled vs. dentistry produced vs. fees collected
Caveat: These production and collection goal calculations focus on money rather than real-world day-to-day patient scheduling, so please note that my advice in this area is based entirely on providing service to patients. Service beyond patients' expectations is today's mantra for success in a fee-for-service dental practice. When I write specifically about money, production, collections, budgeting, and financial goals, I do not suggest turning your patients' care into dollars. Absolute commitment to superb care for patients must come first for any successful practice and its business systems.