Practice Management

Student Debt Management

• Make budget

• Live like student (take money from loan when needed)

• Avoid deferment or forbearance

• Consolidate loans

• Work in underserved areas for loan forgiveness

• Military service does not give loan forgiveness, but scholarships given for service time

• Make extra principal payments

Student Amortization Accelerated Payoff

Make extra principal payment every month to eliminate interest payment next month

Dental Care compared to Medical Care

Dental Care is:

• Mostly preventable

• Not financially catastrophic

• Generally not life-threatening

• Disease begins in childhood and progresses

• Needs direct intervention

• Care is provided by single dentist at a single site (no hospitalization; outpatient)

• Mostly elective treatment

• Amounts to 3% of total health spending

• Treatment is patient’s decision (not insurance or hospital)

• 80% of dentists are general practitioners

• Dentist have own equipment and operate own office without public subsidy (no central hospital where dentists interact)

• No systemic peer review unless complaint from Dental Board/Society

• 90% “for profit” business model

These differences are because:

• They treat different problems

• Offer different services

Private Insurance, Out of Pocket, and Government Fractions for Dentistry and Medicine

• Private Insurance - 49.2% (D) vs 20% (M)

• Out of Pocket - 47.5% (D) vs 28% (M)

• Government - 4.3% (D) vs 52% (M)

Most Offered Employer Benefits

• Medical Care - 70%

• Prescription Drugs - 68%

• Dental Care - 49% (not top 10 offered benefit; expected to fall because of increasing medical costs)

Benefits are gifts made from employer to employee. All of the above benefits are lesser in prevalence than:

• Unpaid family leave

• Vacation Pay

• Holiday Pay

ADA Sampling Facts

• 108 Million people have no dental benefits (including Medicaid)

• Medicare has no dental benefits

• Only 49% of employers pay premiums for employees

• $64 Billion spent by insurance for Dental Care (Only 4% by government)

Baby Boomers

• 1946-1964 (Age 61-79)

• 24% of population (75.9 million people)

• 70% of wealth

• 50% of spending

• 77% of prescription drugs

• 61% of OTC drugs

• Live to 90+ years and lose dental insurance upon retirement

Formula for Dental Practice Success

S = ((IR+EBS)/(ADA+PC))^(E+L+C)

S = Success

IR = Interpersonal Relationship (leadership)

EBS = Effective Business Systems (SWOT)

ADA = American Dental Association

PC = Professional Competence (leadership)

E = Ethics (leadership)

L = Leadership (leadership, SWOT)

C = Communications (leadership)

Dentistry History Timeline

1859 - ADA established in Niagara NY by 26 dentists as “learned profession based on high educational and scientific standards”. Mission to “maintain standards of profession”

1860-1865 - American Civil War

1866 - Code of Ethics

1867 - Harvard Dental School Established

1869 - First Dental Journal “Dental Cosmos” by SS White

Interpersonal Relationships in Dentistry

• Patients

• Staff

• Community

• Profession

Reasons Dentists Lose Patients

• Doctor or staff’s indifference (68%)

• Recommendation elsewhere from friend or relative (15%)

• Dissatisfied treatment outcome (14%)

• Better pricing elsewhere (9%)

• Move away (3%)

• Pass away (1%)

Factors of Good New Patient Interview

• First impression (You’re only as good as the impression you made on your last patient)

• Show genuine concern

• Open-ended questions

• Communicate expectations

• Remember patient’s desires/goals

• Maintain trust (time + consistency)

Developing Doctor/Staff Relationship

• Hire right

  • Understand needs, goals, and values

  • Provide job expectations

  • Team effort

  • Future opportunities with practice

  • Most dentists hire based on soft skills rather than hard skills

    • Soft skills include communications, relationship building, professional presence, positive image, personality

    • Ideally should balance soft and hard skills

• Communicate

  • Coach, praise, reward

  • Staff meetings with agenda

• Lead by example

• Accountability

  • Inspect what you expect

Community Interaction

• Attend neighborhood events

• Project professionalism (you represent yourself and other dentists)

• Volunteer

• Step up as a leader and connector

Dentistry Business Traits

• Honesty

• Communicator/Leader (weekly staff meetings with an agenda)

  • Agenda lead by dentist or practice manager, includes verbal skills game, mission statement, core values, all team members, motivational statement, and goals of week

• Knowledge of Business Principles

• Trusted Consultants

• Manage with Accountability

• Establish Office and Business Systems

• Business Plan

Pricing Power

• Good business can raise prices without losing to competitors

• Having to pray before raising prices by 10% is terrible business

• Excess cost cutting = Graveyard for business success

Fee Reductions and Increases

• Number of patients needed to maintain profit increase exponentially for fee reductions

• Amount of profit for increasing fee will increase at slower rate

Doctor, COO, and Manager values

Doctor

• Improve patient quality of life

• Go extra mile to provide ultimate dental experience for patients

• Operate from financial strength with sound business decisions

• Staff is source of strength

COO

• Owner

• Vision

• Heart and Head

• Goals

• Long Range Plan

• Practice Brand

• Culture

Manager

• Business Plan

• Systems

• Train Staff

• Demand Accountability

Challenges of Implementing a Successful Practice

• Attention to detail

• Longer appointments

• Exceptional staff

• Knowledgeable and skilled dentist

• Excellence in faculty, technology, materials

• Fees reflect degree of commitment to business plan

Questions for your brand

• Who and what do you serve?

• Ownership type? Solo, partnership, or DSO?

• Single or Multiple Locations?

• Dentist Employee?

Stronger the brand, the less susceptible one is to pricing issues and competition

Practice Culture

Once a brand has a culture, it needs to have uncompromising values to sustain the culture. Based on:

• Leadership

• Shared beliefs and values

• Empowered employees doing what is right

• Accepted behavior patterns

• Hardcore business decision

• Process driven

Practice Income Sources

• Out of pocket

• “Freedom of choice” or “preferred” provider type insurance

• Discount plans

• Dental HMO’s (Capitation, Co-Pay, Discounted Fee Schedule)

• Medicaid

Group 1, 2, and 3 brands

Group 1 (Excellence/Quality; Nordstrom niche)

• Superb Facility

• Strategic Location

• Exceptional Customer Service

• Quality products

• Little/No Advertising

• Destination Business

Group 2 (Muddled Middle)

• Susceptible to economic winds

• Customer loyalty is fleeting

• “Jack of all trades, master of none”

• Identity crisis

• Aggressive promotion to be successful

Group 3 (Value/Convenience; Motel6 niche)

• Minimal Capital Investment

• Convenient Location

• Strategic Location

• Price Sensitive Customers

• Quality Products and Service

• Quick Service

• Destination Business

Best Strategies and When All Else Fails

Best Strategies (Group 1-3)

• Expand Services

• Community Involvement

• Hobbies and Special Interests

• Patient Financing Options

• Referral from MD’s and DDS’s

• Exceed Patient Expectations

• Internal Marketing (Website or Social Media)

• Buy Patient Records from other DDS’s

When All Else Fails (Groups 2 & 3)

• Expand Hours

• Welcome Emergency Patients

• Dental PPO Provider

• Medicaid and CHIP Provider

• Discount Fee Service Provider

• Dental Referral Services

• Practice Promotions with Limited Discounts

• Advertise in Print and Broadcast Media

• Relocate (Groups 1-3)

Referrals

• Ask referrals when patient is complimentary of staff member, doctor, or office

• Ask for referrals at the end of an appointment before dismissal

• Never ask for referral after long difficult appointment

• Follow up with a handwritten “Thank you” note after referred patient’s visit

Can be received by:

• Community involvement

• From hobbies and special interests

• From MD’s and DDS’s

• Exceeding patient expectations

Advertising Pyramid (Large to Small)

• People who see your advertisement

• People who respond

• People who make an appointment

• People who show up

• People who become patients

Five types of practices

• PPO

• HMO

• Discount Coupons

• Medicaid and FQHC

• Fee for Service

First 3 are called “Dental Managed Care Plans”

Attracting New Patients

• Accepting Medicaid, PPOs, HMOs, and Discount Plans

• Purchase an Existing Practice

• Accepting Drop Ins and Emergencies

Group PPO Plans

• Regulated by federal government

• Less expensive for employer than traditional plans

• Patients may change dentists to use benefits

• PPO decides dentist’s fee schedule and co-pay

• Patients select dentists from list of providers approved by dental plan

• Some states prohibit payment to dentists outside PPO Plan

• In Texas, patient pays difference between plan allowance and actual fee for dentists outside PPO plan

HMO Plans

• Doctors are paid a fixed monthly capitation fee for number of patients cared for

• All services require a small copay (incentivizes patients to not overutilize coverage; also for traffic control at practice)

• Treatments are deeply discounted in price

• HMO offices typically have lots of hygienists and are high volume practices

• Considered “future of healthcare” by health insurance and government because doctors do not make as much money for treatments

  • Causes supervised neglect instead of prevention and well-being

FQHC Plans

• Medicaid services, fee for services, and “pro bono” services to justify federal grant money

• Low overhead and high-volume practice

• Underserved, low-income areas with deeply discounted fees

• Medicaid for children and young adults only

• Subject to inspections, drug testing, and audits

Insurance

• Indemnify means to protect someone by promising to pay for possible future damage, loss, or injury

• Dental insurance does not cover anything catastrophic (>$100,000)

Fee for Service

• Doctor determines price

• Combination of patient payment and insurance

• Gives dentist control over pricing power by:

  • Controlling revenue side of business (managing fee schedule)

  • Coordinating patient money portion and insurance benefits

  • Doctor accepts insurance payments directly

  • Develop patients through referrals, marketing, elective or comprehensive care

  • Doctor controls every practice decision

Important Nuances of Dental Benefits

• UCR (usual, customary, reasonable)

• Annual Maximums ($800-1500 with executive plans; up to $5000 with no co-pays)

• Least Expensive Alternative Treatment (ex: removable over fixed partial dentures or extraction over endodontics)

• Less important:

  • Waiting period

  • Orthodontics

  • Replacement restorations

  • PPOs and State of Texas

  • Missing Teeth Clause

SWOT Analysis

• Strengths (Internal) - Resources or positive attributes at a location

• Weaknesses (Internal) - Lack of resources or negative attributes at a location

• Opportunities (External) - Opportunities that can be capitalized from strength

• Threats/Challenges (External) - Hazards or challenges arising from known weakness

ADA Functions

• Maintain Code of Ethics (Principles of Conduct) and Professional Standard

• Accreditation of Dental Schools

• Promote competency (CE credits)

• Peer review and judicial as a service to public

• Public relations

• Public policy

Governor role in dentistry

• Signs legislation affecting dentistry

• Appoints State Board of Dental Examiners (5 dentists, 3 hygienists, 1 citizen) to enforce rules to protect Texas citizens

• Work with Texas Attorney General enforcing violations outside of Dental Practice Act involving licensed personnel

ADA Advocacy in State and Federal Level

State Level

• Dental Practice Act, passed by governor and Texas Legislature, establishes laws for oral healthcare delivery

• State Board of Dental Examiners make rules to protect citizens against substandard care

• Provide medicaid oversight and funding

• Oral healthcare in state penitentiaries

Federal Level

• Dental Public Health Legislation

• Armed Services and VA

• Federal funding for Dental Medicaid and Medicare

• Funding federal penitentiaries

• Underserved areas and Native Reservations

• Funding oral health research and American Institute for Dental Research

Ways to build leaders within dental team

• Establish values and vision

• Holding each other accountable

• Sharing credit and shouldering blame

• Giving others responsibilities and opportunities for success

• Inspiring others to have confidence in ability to accomplish mission

Perks/Incentives offered to dental hygiene staff

• $50 bonus for working during lunch

• 4-day work week

• 10 days paid time off

• Health Insurance and Dental Benefits for immediate family (after 5 years)

• Reimburse CE costs

• Special staff incentive bonus (reaching short term goals)