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The many HATS of dentistry — Part 2 of 4

June 1, 2003
Tracking your practice numbers is the key to unleashing incredible practice growth.

by James R. Pride, DDS, Randy Allain, DDS, and Amy Morgan

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You may be running a successful practice, but have you ever had a month that just didn't feel right? Have you ever seen a decrease in your production or cash flow with no idea of how or why the drop occurred or what can be done to reverse it? Conversely, have you ever had a huge success and felt uncertain about what caused it or how to maintain it? Has this prevented you from celebrating successes with your team?

The number one stress-producer for dental teams is the perception that their efforts are "never enough." The number one stressor for many dentists is the fear that they cannot capture the recipe for continued, certain success. This holds dentists back from celebrating the good with their teams because they believe that the staff's efforts must always be better. What is the solution to this dissatisfaction, uncertainty, and stress? It lies in knowing the "numbers," i.e., the statistical parameters that measure practice success.

Many dentists shy away from statistics because they feel the numbers separate them from patient service and care. We have a different approach. Consider this quote from Ichek Adizes in Ken Blanchard's book The Heart of a Leader: "Managing only for profit is like playing tennis with your eye on the scoreboard and not on the ball." Our approach to having a good financial score is to keep your eye on the ball and to play a good game. In this article, we will explain how the statistics help you to master your performance on the field. We will show how knowing your numbers gives you the viable, secure practice that relieves stress and allows you to focus on what you love—dentistry and the patient's experience.

To illustrate our points, we're introducing a dentist who has done a fine job of knowing his numbers and of using them in an ethical, values-driven way to improve his practice dramatically. He is Pride dentist Dr. Randy Allain, a general practitioner in Highland, Mich. We'll see what lessons we can learn from his experience.

Lesson No. 1: Know your numbers — Daily, weekly, monthly, and yearly

Through a software program that he designed, Dr. Allain tracks the set of practice statistics developed by Pride called the Annual Plan, the Trend Indicators®, and the Operating Statement.

The annual plan is a forecasting and strategic planning tool that establishes production and collection goals for the entire office that are based on ideal, forecasted expenses and schedules. Currently, Dr. Allain's practice has three providers — himself and two hygienists. He plans to add more providers at a new facility he is building. He accounts for these expansion costs in his annual plan, which gives him the assurance that he can reach the production level necessary to cover these new expenses. The annual plan breaks down the yearly goal for total office production into meaningful daily goals for each provider. This structure creates freedom for the doctor and team because accomplishing the goals outlined in the plan brings viability, balance, and growth.

The trend indicators track practice performance through the efficiency of its operating systems: scheduling, financial arrangements, collections, insurance, marketing, treatment presentation, and continuing care. These statistics are an excellent measure of the behaviors of doctor and staff. Each trend indicator has a goal that reflects its performance set by the annual plan. The indicators are used as benchmarks — both monthly and year-to-date — to measure progress toward achieving the goals. They focus the doctor and the team on celebrating their successes and on taking action to correct any shortcomings. (Later in this article we will introduce you to some of the specific trend indicators.)

The operating statement shows practice expenses and cash flow. This tool compares each figure to a goal and a "range norm" that reflects a healthy level for the expense. The operating statement indicates whether any expense is too high or too low, and if the practice is on track with its annual plan. This gives the doctor and team the security to control their financial future. Improvements, such as salary increases, additional staff, a new facility, and new technology, stem from knowing production levels and the collections needed to make those expenses affordable.

The front-desk staff and other team members enter numbers daily into the software program so that they are available up-to-the minute. Dr. Allain also tracks certain numbers himself to stay on top of any fluctuations. Appointment coordinator Kathryn Allie comments, "The system is set up so that entering the numbers isn't time-consuming or hard to manage. The numbers help me a lot in doing my job. I can tell on any day whether we're meeting our goals, so I know what procedures to schedule where."

Lesson No. 2: Once you are monitoring the numbers, use them to reinforce success

"The numbers have given me the opportunity to empower my team and the ability to set a course of action and know we can achieve it!" says Dr. Allain. The following are some of the many ways he and his staff use the numbers to improve the practice continuously.

• The team has minute-by-minute awareness of goals and open time in the schedule. Every workstation and treatment room has a computer that can access the numbers program. Hygienist Brenda Lale explains, "If the front desk gets a cancellation on my schedule, I can immediately see that on the computer screen, and I can see what effect it has on my daily and monthly production. If I'm seeing patients who need bleaching or sealants, I'll try to get those procedures in that day to fill the open time and save the patient a trip back." Constant awareness of whether she is meeting her monthly goals allows Lale to evaluate her progress and make adjustments as needed.

In the past five years, the production in Dr. Allain's practice has almost tripled. The numbers are a daily help to the team in achieving these increases.

• Improved quality of care. What is good for the practice is good for the patient. Typical of most dental practices, Dr. Allain has some patients with diagnosed conditions who have not returned for treatment. Therefore, increasing production means encouraging patients to accept needed treatment to improve their oral health. Says Lale, "What I love about this office is that we have the freedom to treat our patients appropriately. There is no supervised neglect occurring here. I see the difference in oral health between our patients of record and the new patients who haven't been receiving the kind of quality care we give."

But wouldn't the quest to meet production goals cause her to shorten her appointments in order to see more patients? "Absolutely not," states Lale. "An average adult hygiene exam takes 60 minutes. And since we schedule our own appointments, I have the flexibility to give a patient more time, if that's needed." Achieving production goals goes hand-in-hand with what Lale calls "talking to the patients, educating them, and building value, so that we give people a goal to reach and a reason to return for the next visit."

"Tracking my numbers has made me more aware of what I'm diagnosing and more comfortable in advocating what's best for the patient," says Dr. Allain. "I think more for the long haul now. For example, instead of replacing a failing posterior composite with another one, I'll advocate a porcelain onlay. That's what I'd want for myself, and I know that if I'm going to reach my goal, I can't do time-consuming procedures that don't do justice to the patient or to the practice. So, reaching the goal means giving quality care to stabilize the patient and targeting those new patients who need the kind of care that I want to provide."

• Problem solving. The numbers play a key role in quickly spotting problems and solving them. For example, Dr. Allain tracks open hours per provider. A recent monthly report indicated that there were 15 open hygiene hours for one provider, amounting to two days of lost hygiene production. This unfavorable number begins the process to find the cause. Further analysis shows that the appointments were scheduled but some were cancelled at the last minute. Dr. Allain and his staff ask and answer a series of questions: Is there a strong commitment from the patient? Does the practice give the patient a compelling reason to return? Does the hygienist need to explain to the patient in more detail the areas of concern? Are post- cards sent out and confirmation calls made? When the patient calls to cancel, are the proper verbal skills being used to show concern? This leads to a review of their job-design manuals on continuing care and training plans to cover at their next staff meeting. The discussion at the staff meeting leads to an action plan of how they will reduce the open time.

The monthly reports tell them how successful their efforts have been. Here we see how a falling statistic triggers an entire review of the hygiene visit and the scheduling process, with improvements made as needed. This is one of many examples that illustrate how tracking the numbers allows Dr. Allain and his team to target problems as they arise, pinpoint their causes, take corrective action, and measure the results.

• Security in making large purchases. "Knowing the numbers has allowed me to move forward and build a new facility. There will be a big cash flow differential in the new office, so I know I'll have to produce more. The numbers have taught me that I need to delegate. I can forecast what will happen when I save 10 minutes of doctor-time on a procedure by being efficient, save another 10 minutes by delegating, and then make this happen multiple times a day. I know that by timing and measuring our performance, I can fit in another production block every day. This can make a difference of $1,000 a day for my production. Multiply this figure by the 180 days a year that I work, and it's almost a $200,000 a year differential."

Dr. Allain is practicing now to meet the new production goals. Part of the plan is to have his hygienists certified to administer anesthesia (which is legal in his state) and to expand the duties of his assistants. Another advantage from knowing his numbers became evident when Dr. Allain took his operating statements to the bank, along with his detailed forecasts for the next few years. Needless to say, he readily obtained financing for the new facility. The bank rightly judged Dr. Allain as an entrepreneur in control of his business.

• Staff compensation. Dr. Allain offers each hygienist an incentive for exceeding her monthly goal. The rest of the staff receives annual wage increases based upon an increase in collections over the prior year. Fifteen percent of collections in excess of the goal is placed in a salary pool and distributed to the staff as raises, based on a Pride formula for measuring how well each staff member has met job expectations. "The whole team works to reach the same goals," says Dr. Allain. "The staff is more attuned to achieving the goals since they're economically tied to the system."

Lale comments, "It's neat that Dr. Allain shares the numbers with us. And the compensation program motivates us to do more." Adds appointment coordinator Kathryn Allie, "We all try to meet that goal because it's a benefit to all of us.

"The patients here really appreciate the high level of care. Being aware of the numbers makes me more apt to encourage my patients to have the treatment they need. I love my job. I love my boss. And I love the program."

• Focus on continuous growth by taking risks and trying new things. With the focus on continuous growth, open time in the schedule is ideal for Dr. Allain and his staff to market the practice to new patients. They recently raised their goal of 15 new patients per month to 20. They currently are at 18. Tracking their internal and external referrals helps target their efforts and measure their results. Dr. Allain has also begun a Frequent Referral Program that rewards patients who refer others with small gifts and acknowledgements. Having systems in place to track numbers has made such programs possible.

Lesson No. 3: The numbers will set you free — If you use them

"Knowing the numbers has allowed me to go ahead with my new facility with the confidence that I can pay for it, rather than just shooting from the hip and possibly losing my shirt," says Dr. Allain. "Freedom comes from the fact that I can make much better decisions based on the facts. The numbers give me the facts I need."

Are you ready to wear the entrepreneurial hat? These three simple lessons can make a great difference in the success of your practice. Knowing your numbers will help you to spot trends within weeks — instead of years — and will allow you to pinpoint their causes. Which of your numbers are up? Which are down? Are you working fewer days? Is your treatment acceptance rate up? Are your new patient counts steady? Are your collections running low? Do you have open time in the schedule? Are there excessive cancellations? Knowing these statistics will give you certainty in uncertain times. In short, the numbers will set you free.

As an entrepreneur, statistics and trends are the diagnostics you need to determine the health of your practice. They are the dentition exams, perio probes, and radiographs of the business side of dentistry. Once you begin using them, like Dr. Allain and so many other dentists, you will be unable to practice without them. Your staff also will gain a deeper understanding of their jobs and a sense of accomplishment from meeting and exceeding goals. To enjoy practicing dentistry to the fullest, to provide the best quality of care, to nurture a highly professional, motivated staff, and to work in a pleasant, organized, non-stressful office environment, our advice is: Have the courage to keep your eye on both the ball and the scoreboard to create a highly motivating environment for your team, your patients, and you.

For more information on Pride's popular course, "Practice Strategies: Numbers, Staff & Systems," which has taught thousands of dentists how to know their numbers and how to implement the management systems described in this article, call Pride Institute at (800) 925-2600.

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