Regression to the mean

Nov. 1, 2000
Most dentists - young or old, new or seasoned - have experienced wide swings in their monthly production and times when the practice performs below its previous level of productivity. Economists call these cycles "regression to the mean."

Why dental practices - like all businesses - experience cycles of high and low perfomance.

James R. Pride, DDS

Most dentists - young or old, new or seasoned - have experienced wide swings in their monthly production and times when the practice performs below its previous level of productivity. Economists call these cycles "regression to the mean."

Regression to the mean describes the classic case of a business progressing splendidly, until suddenly its performance reverts to a mediocre level. Virtually every dentist has experienced this process. Good months follow poor months, poor years follow good years. What is this process? And why does it operate so continuously and pervasively?

Regression to the mean is best compared to the bell curve, a model many of us recall from school. The top or high point of the bell curve is the mean, where most people or entities in a group reside. Those lower down and to the right of the mean are called "outliers to the right" and are considered successful; those to the left of the mean are "outliers to the left" and are considered problem performers. The factors pulling an exceptional dental practice back to its average are always at work. The dentist, the staff, the economy, third-party programs, and rigid attitudes of the people we contact can all in some way undermine our achievements. Let`s look at some of these powerful forces.

We are unprepared for the future

I met a dentist who was shocked when an employee I had for 14 years quit. I laughed and said, "People leave, so what`s the problem?" Often we expect the future to be the same as the present, so we`re unprepared for change. A staff member resigns, and we haven`t trained others - including ourselves - to operate the computer. Efficiency decreases and production declines until a replacement arrives. Or we ignore trends and warning signs, such as the evidence that practice values are declining, because we hope things will continue as usual. Holding unrealistic expectations of the future can cause one to fall far short of goals and leave the bank account empty.

We become bored

We take seminars to train the staff, improve customer service, sell dentistry, and update clinical skills. Trying new things and the resulting improvements they bring to the practice are exciting. But after awhile, the progress tapers off. We plateau and then regress to the mean. The novelty of the staff meeting fades. Reviewing practice statistics becomes dull. Complacency sets in, and we stop doing the things that made us successful because they become boring.

We fail to invest in human capital

Dentists are in the difficult position of not only being the producer, but also the leader, chief financial officer, and marketing director. Technology greatly simplifies these tasks; it is tempting to consider these tools as the solution to all problems. However, research shows that 70 percent of our increase in material wealth results from the investment in human capital, rather than in hard technology. Investing in human capital means providing employees with education, training, motivation, and experience. Technology is welcome and needed, but we must also invest in human capital to utilize it to its fullest potential.

We ease up after making progress

Dentistry is like dieting: We diligently work to lose weight, then revert to eating the wrong food. Letting our guard down is a classic illustration of regression to the mean. Confrontation is frequently an area we`re tempted to avoid. We must tell Sally that she needs to improve her verbal skills with patients; we perceive this as a negative task - like eating spinach instead of chocolate.

Confrontation can actually be very positive if viewed as a means of facing an issue in a nonhostile way. Confrontation is central to staff meetings, reviews of practice statistics, discussions of customer service, and all efforts to improve business performance.

We relapse into old habits

After making successful inroads, we lapse into old habits and lose ground. One dentist raised her production per hour through careful appointment scheduling. She organized morning huddles where the staff pinpointed openings in the schedule and formed strategies for filling them. This diligence paid off: production per hour increased, and the cash flow to the practice correspondingly rose. As the office improved, however, the urgency disappeared. The dentist discontinued the morning huddles. The staff, in turn, paid less attention to openings in the schedule, and hourly production soon dropped. Success can be our nemesis when it removes the urgency to improve.

We stop setting expectations

Expectations are the pathway to the future. Failing to set expectations is like easing your foot off the accelerator - the practice engine stalls. Most expectations can be precisely calibrated: a 98 percent collection rate, a $3,000 daily production goal, an 85 percent case acceptance rate, or a $65,000 production month.

Goals give the staff a target, or purpose, at which to aim. (Incidentally, dentists should never set expectations arbitrarily, but only after careful consideration to ensure that the goals are challenging and achievable.) If the team is unable to find the goal line, it drifts, loses its spirit, and stops making touchdowns. Motivating the drifting team becomes impossible - we cannot discuss or confront the staff`s performance unless we establish the goal lines. That which is measured is accomplished.

We stop inspecting the details

We`ve all heard the expression, "God is in the details." Ignoring the details can frequently result in a regression to the mean. These details include our goals for: production per hour, collection percentage, accounts receivable over 60 and 90 days, case acceptance rate, allowable amount of managed care or write-offs, number of cancellations or no-shows, and on-time starts and finishes. As the old adage goes, "That which gets rewarded gets done;" it is impossible to reward something unseen. After we set our expectations in each critical practice area, we need to inspect the performance - the details. When our leadership skills are weak, we fail to inspect what we expect, and consequently fail to spot the early warning signs.

One dentist lost ground when the receptionist left the practice before her replacement was trained. Because the schedule was no longer properly controlled, production slid from $58,000 per month to $52,000. The dentist was busy chairside and told the new employee, "We`ll train you later." Production continued to slide to $48,000, then $46,000, because needed skills were not transferred to the new employee. Ultimately, the dentist lost over $40,000 in production, due to procrastination and failing to recognize the early signs of regression.

We fix the wrong thing

Frequently we miss the real issue. In the case cited above, the dentist concluded that his production was dropping because of inefficiencies in the examination process. His solution? Buying a new high-tech X-ray machine. The cost of this purchase only contributed to the declining profits without solving the real issue. With so many things happening in a practice, the real source of a problem can often be obscured, especially when we are not attuned to how our employees are performing their tasks.

We stop holding meetings

When the practice achieves established goals, we often discontinue semi-monthly staff meetings, weekly training sessions, and daily morning meetings. Employees need the continuous sustenance that on-going training, communication, and planning provide.

Sometimes sessions continue, but without their previous effectiveness. For example, if you hold a session, but fail to address issues such as holes in the schedule, production will slide. If we stop leading the team in preparing a carefull agenda, and stop following up on action items from staff meetings, these sessions lose their punch. We must decide how to change the behavior, assign the task, establish the time frame, and inspect the results.

We let our leadership skills slide

We stop rehearsing our confrontations, and we stop motivating, thanking, and rewarding our staff. We start taking them for granted and start rationalizing poor behavior. I know a dentist who had an excuse for every season: The weather got warm, so people didn`t want to be indoors at the dentist. Then the weather got cold, so people didn`t want to travel to the dentist.

Accepting poor performance invites regression to the mean. The pilot must land the airplane on the runway every time, regardless of any inhibiting factor. Although the landing can fall short of perfection, it must be on the runway - not in the cornfield! Dentistry`s runway becomes the goals we set as expressed in the practice statistics. Getting production in the books, despite bad weather or other excuses, is how we "land."

We stop conversing with the staff

We also stop taking the time simply to converse with our staff. We must show the staff their importance to us by taking an interest in them and expressing it through a reasonable degree of personal conversation. People excel if they feel cared for.

We fail to emphasize customer service

Customer service, of course, is critical to any successful dental practice. Patients invest in dental care based on their relationship with the dentist and staff. In my decades of teaching, I have found that this is one of the most difficult concepts for our profession to grasp. When a dentist encounters an objection to a treatment plan, more than 90 percent try to counter the objection by giving more technical details.

Most dentists feel that they and their staffs communicate well with their patients and build wonderful relationships. However, audiotaped conversations between the doctor or staff member and the patient reveal that in the majority of cases, the conversation is technical, rather than supportive and nurturing. There is a great misunderstanding in the profession about what true customer service is. It goes beyond the comfy pillows (which are wonderful) to reaching the patient`s heart. Patients reject treatment not because they fail to understand it, but because they do not feel comfortable with the process. With great belief and trust in the staff and admiration for the dentist, over 85 percent of patients will accept needed treatment.

Customer service primarily entails building strong relationships. Poor collection percentages also result from a failure to establish a relationship with the patient. Another truism: If they like you, they`ll pay you.

We stop increasing our fees

We fear patients will object to a fee increase. Of course, there are some practices that are popular with patients because they are inexpensive. However, those practices that are committed to building stronger relationships with patients, and spend ample time making their patients feel cared for, can raise fees moderately without backlash.

We can avoid bumps in the road

To stay to the right of the bell curve of success requires intervention. Successful businesspeople must be proactive leaders; they must make an effort to counteract the forces pulling them to the middle. Dentists must resist the temptation to rationalize their slippage. When the dentist says, "My hands are tied," "I`m locked in," or "The insurance companies won`t let me," regression to the mean is inevitable. We must shift our mind-set to: "It`s a problem, and I can do something about it." Dentists must recognize the first signs of regression to the mean, pinpoint the real problem, and take corrective action.

Must we be proactive for the rest of our careers? The answer is yes! A business moves forward only by direct intervention from its leader. The dentist is the leader and cannot abdicate that title to a staff member. Once a practice is in shape, keeping trim need not be daunting. Vigilance in spotting and correcting backslides is the simplest way to keep our practices lean and healthy.

Dentists who avert regression to the mean and sustain their success are those who continually seek new ways to improve, new growth opportunities for themselves and the staff, and new ways to make the job fun. These dentists look forward to monitoring the practice statistics, reinforcing the management systems, and maintaining the staff`s performance standards. They recognize the early warning signs of trouble and correct them. They know that they cannot put the practice on cruise control. And they accept this, not as a grim necessity to endure, but as an exciting challenge that keeps them at the forefront of their profession. As any seasoned championship team knows, getting to the top is only half the job - the challenge is to stay there.

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