The path to multipractice ownership Part 4: Getting lean
Today, many dentists are choosing to capitalize on efficiencies of scale by building their own small group practices.
Eric Nuss, MBA
Sami Bahri, DDS
Editor's note: This is the final article in a four-part series on expanding your practice to multiple locations.
Today, many dentists are choosing to capitalize on efficiencies of scale by building their own small group practices. Last month, we took a look at how dentists can be effective leaders of multiple practices. Now we will review how to streamline and refine operations to run lean practices.
"Lean" is a term that describes a well-known manufacturing philosophy first developed in Japan in the 1980s. Although lean has been thoroughly described over the years, misconceptions still exist. One of the most common misconceptions is that lean forces employees to do more with less and at the expense of quality. If this is true, why would lean principles ever be applied to a dental office, which relies on quality service and quality care to retain patients?
This misconception of lean could not be further from the truth. Lean principles, as they apply to management, are designed to improve productivity by improving quality. While increasing productivity and improving quality may seem at odds, creating efficiencies in areas that do not add value to the patient experience actually leads to more time that can be dedicated to quality patient care. When applied correctly, lean principles allow productivity and quality to improve together.
A lean management approach goes beyond systems creation and implementation. It continuously evaluates opportunities to maximize customer value and minimize waste. Simply stated, lean means creating more value for customers using fewer resources. The goal of lean is to spend more time on true work, activities your customers (patients) are willing to pay for, and less time on waste, activities that don't add value for your customers.
Lean management starts with a study of how your employees currently use their time, i.e., how much is spent on true work and how much time is spent on "wasteful" activities. In a dental office, examples of wasteful activities include cleaning treatment rooms, organizing supplies, and processing insurance paperwork. While these activities are obviously necessary to the operation of the practice, they should be optimized to be completed effectively but using the fewest resources.
When studying lean management, Sami Bahri, DDS, found that a focus on cost reduction would allow his practice to be profitable while simultaneously increasing productivity. For example, although the practice had invested in communication systems, assistants and hygienists would spend idle time waiting for Dr. Bahri to complete other patient exams or tooth preparations, turning his income-generating employees into a cost. Over time, the practice made adjustments that reduced waiting time. This reduced the hidden expense of idle employees, while also adding value for patients by reducing the lengths of their appointments.
To implement lean practices, Dr. Bahri and his team now use two types of goals. The first, a "true north" goal, represents an ideal state toward which the practice strives. This goal steers employees to appropriate processes they need to work on. One of Dr. Bahri's true north goals is to create a "one-patient flow." This means that once you begin working on a patient, you should not stop or have any delays in treatment between different providers until the patient's mouth is healthy and ready to enter the hygiene recall cycle. The second type of goal, a "target condition" goal, creates reachable, concrete steps to move the practice toward true north. Being capable of cleaning teeth and treating cavities on the exam day are target conditions that lead to the true north goal of one-patient flow.
Through implementation of these goals, Dr. Bahri's practice experienced improvements in cash flow, waiting time, and appointment numbers, all without a reduction in production. During this time, the practice also had a 40% reduction in the number of assistant hours, 33% reduction in the number of hygienist hours, and 20% reduction in the number of chairs necessary to perform the same amount of work.
Lean management, which originated in manufacturing, has now expanded to service industries, including health care. If you're interested in further exploring the power of lean to improve administrative efficiencies and increase value for patients, visit HenryScheinDental.com/DentalBusinessInstitute to learn more about related courses.
Eric Nuss, MBA, leads the Business Solutions department of Henry Schein Dental. He developed and now leads the department's Dental Business Institute, an educational program for dentists. You can contact him at (414) 290-2542 or firstname.lastname@example.org.
Sami Bahri, DDS, received his dental degree from Saint Joseph Jesuit University in Lebanon. In 1990, he moved to Jacksonville, Florida, and cofounded Bahri Dental Group. Dr. Bahri has been at the forefront of incorporating lean management techniques to continuously improve the quality of dental care.