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The dental management p y r a m i d

April 1, 2000
John Wooden coached the UCLA basketball team to seven consecutive NCAA championships. According to some sports experts, this record may never be broken. This remarkable feat was accomplished using a dedicated, hard working approach that focused mostly on basketball fundamentals. John Wooden`s teams never did anything fancy, unusual, or tricky. They simply outperformed other teams on a regular basis by performing the basics better than anyone else.

Without solid management systems, productivity and profitability will suffer.

Roger P. Levin, DDS, MBA

John Wooden coached the UCLA basketball team to seven consecutive NCAA championships. According to some sports experts, this record may never be broken. This remarkable feat was accomplished using a dedicated, hard working approach that focused mostly on basketball fundamentals. John Wooden`s teams never did anything fancy, unusual, or tricky. They simply outperformed other teams on a regular basis by performing the basics better than anyone else.

Your team`s playbook

The management of a dental practice is very similar to that of a basketball team. We have a leader and a series of team members who all participate to create the best organization that can be achieved. Unfortunately, there is no true "coach" in a dental practice, because the coach also is a player or producer. Dentists have very little time to focus on designing management systems and modifying them on a daily and weekly basis to meet the changing needs of the practice, services, and patients.

Because the pace is so fast, most practices have inappropriate systems that they have outgrown. As the practice continues to expand, systems begin to break down, resulting in stress, staff turnover, and a significant decline in customer service. When you realize that the goal of a dental practice is to wow every patient and that most practices are not at that level, it becomes evident that the patient or customer quickly will notice a downturn in customer service.

The problem is that dentists continue to expand their clinical skills on a regular basis. Dental assistants, hygienists, and front-desk staff have no choice but to keep up with the ancillary factors of providing these services or the practice would come to a screeching halt. However, when management systems are not addressed, productivity and profitability decrease, and stress levels increase. Crisis management becomes more of a norm than an exception, and, in the long run, this very hard-working practice will not have anywhere near the profitability level it should have achieved. This means that the dentist will work anywhere from seven to eight extra years to achieve financial independence while facing many stressful days.

Another factor contributing to complexity, confusion, and stress is the amount of knowledge that our staff must have today. When you compare the role of a dental assistant 20 years ago to the vast array of services, policies, and requirements (such as OSHA) that she has to handle today, it is a completely different job. The modern dental assistant has to be aware of 15-25 different procedures using 100-150 different materials. On top of this, she is often responsible for sterilization, inventory, and a host of other job duties. It truly is a challenge since most assistants today have very little training for dentistry.

The same is true for the front-desk coordinator. This individual has to deal with the complexity of computer software upgrades, multiple payment methods, insurance companies, collection responsibilities, etc. Even if you have different individuals dedicated to varying management tasks, you will still face a much more complex world with all of the different requirements of every software company, insurance company, collection agency, etc.

Our staff members need to know much more than ever before. In most instances, they have not been highly trained or educated. They don`t come to the practice with a high-level baseline of information. Most receive on-the-job training and experience retraining every time they transition to a new office. I personally have tremendous respect for the challenges faced by the staff and know that the dentist`s happiness and profitability will be directly tied to how well these individuals are trained. Unfortunately, dental practices are usually not in a position to provide training programs for new staff. We desperately need them to start working the minute they come in the door.

All of this contributes to my belief that most practices today have significant gaps in the basic management systems. The graphic above, the Levin Group Management Pyramid (Figure 1), helps evaluate the status of practices.

The pyramid

This practice-management pyramid is an internal tool that I have used for many years to quickly evaluate practice management. Practices range across all levels of the pyramid. Just like Abraham Maslow`s hierarchy, a practice cannot move to Level II, III, or IV without mastering Level I. One key factor that contributing to decreased profitability and increased stress is that a practice will have excellent management systems, but will not address the second level, leadership skills/team development. A practice that may have excellent management systems and leadership skills at one point in the cycle may later find that it has outgrown its management systems. Inevitably, when practice-management systems are inadequate, leadership skills also begin to falter. Any time one level is not appropriately addressed, all levels on the pyramid will suffer.

Level One: Basic management systems

The first level is that of basic management systems. All practices have management systems. The question is whether they are good or bad, effective or ineffective. Early in the life of most practices - whether you open from scratch or purchase a practice - the basic management systems are in place. Frequently, those systems hold the practice together, but they do not necessarily help the practice achieve high levels of fee-for-service profitability, more effective third-party reimbursement controls, efficiency, and lower stress. Many dentists feel very pressured and stressed. What they fail to understand is that these pressures are usually not attributable to patients, but rather to systems that are no longer suitable for those practices.

The key system in any practice from a stress/efficiency standpoint is that of scheduling. My experience is that most practices can immediately increase productivity and profitability by reorganizing their scheduling systems.

Scheduling is nothing more than time management. It is a puzzle that begins with determining the number of hours that a dentist wants to work each day. Once this is established, it is then a question of the best way to organize, delegate, and manage time.

Unfortunately, most scheduling systems are based more on habit than on analysis. I continually see practices that will have a desire to achieve a certain annual gross revenue, but when you look at the production scheduled on a daily basis, it is apparent that this goal will never materialize.

Every goal must have a series of action steps that are measurable - to the point of acknowledging whether the goal can be achieved. For example, I frequently visit practices that do not manage new patients properly. The number of new patients and the average production per new patient will have a direct effect on overall revenue. As the average production per new patient increases, the practice will not need to see as many new patients, yet overall production will increase. Since 40-45 percent of production should come from new patients, you can work easier and with less stress. All of this can be calculated mathematically, and the number of new patients per month can be pre-blocked.

For example, the practice that sees 60 or 70 new patients a month cannot perform a comprehensive examination and treatment presentation. These patients are examined in a more superficial manner, and many services are not evaluated or offered to that patient due to time constraints. This results in lower average production per new patient and a much higher practice volume. Once again, we see practice stress increase and profitability decline due to the increased volume, which typically increases variable overhead in the practice.

Although many people believe that seeing more patients is better, this is certainly not the case. By scheduling longer patient appointments and templating the entire schedule, you begin to build the puzzle. You do this by establishing ideal day structure and ideal day revenue goals based on your annual revenue goal. You also need to factor in the average production per new patient and per hygiene patient, hygiene patients with diagnosed dental treatment, and emergency revenue.

All of these areas contribute to the scheduling component of level one. While every management system must be equally addressed, scheduling is certainly where it all begins.

When you examine the management pyramid, you will notice a number of other systems. Each system must be appropriately addressed once the ideal scheduling system has been established. My suggestion is to analyze each system, establish step-by-step policies for how those systems are to function, and then document this material in separate system manuals. In addition to establishing documented systems, you also must evaluate how these systems integrate.

For example, a scheduling system that overloads the hygiene department is inefficient. Such a system results in decreased patient punctuality, decreased customer service, and a much lower potential for the hygiene patient to learn about ancillary services.

Another example is a practice with outstanding customer service that is unable to properly present cases. The average production per patient will continue to be low, despite the fact that efforts are being made on the customer-service side and new patient referrals are increasing.

As you can see, all of these systems work together to build an outstanding business. Start with a fresh approach to each system and an open mind as to what truly makes a difference. Then, begin to apply analysis and statistics to each of your systems. You quickly will find out what is working and what needs further modification.

Evaluate your office first in terms of the efficiency and effectiveness of your business systems. Then, document each system in manual format. These steps are necessary in order for you to go "up pyramid." Many dentists try to improve their offices by focusing on team-building, new clinical training, new services, etc., but they quickly find that the improvements they are expecting do not materialize.

In some cases, the blame is placed on staff, patients, dental laboratories, and other areas. However, in most cases, the real problem is that you have skipped a rung on the pyramid, which is holding you back from ever reaching higher levels.

Level Two - Leadership skills /team development

Once your business systems are in order, it is now possible to train and lead your team. Attempting to ask staff to reach their highest potential without clear systems is like asking an athlete to perform at the highest levels without knowing the best way to hit, run, or move. In the end, it is a flawed approach that will result in high levels of frustration for both the dentist and team - inevitably, leading to staff turnover.

Practices that retain their staff for the longest periods of time have a combination of both excellent leadership and good business systems. In some cases, dentists who have retained their teams for long periods of time have done so through salary raises, bonuses, and pleasant personalities. Unfortunately, these practices also can be significantly below production potential.But team members are happy because their jobs change very little and not as much is expected of them. Because of this "comfort" factor, they often resist change.

Team-building begins with leadership. There is no question that the dentist must be the leader. This attribute cannot be delegated. Leadership is a skill that can be mastered by almost anyone if time and attention are paid to it. The team looks to the dentist as a role model in every area, including attitude, quality care, customer service, ethics, honesty, and desire for change. The dentist sets the tone for the practice, whether by choice or not. Inevitably, the staff will reflect the morals, attitude, and personality of the dentist. Fortunately, most dentists have fairly pleasant personalities and merely need to add a skill set to their leadership arsenal.

The fact that team-building requires leadership also indicates that the leader needs to have both a vision and a mission. The vision has to come first. A vision statement is a very clear statement, usually short, about how you want your dental practice to look in the future. Although a vision statement usually is less than one page in length, it can require significant thinking time for a leader to determine the direction for the future. Vision statements are broad and open-ended. They have no deadlines, but act as a directional statement that the team clearly can understand.

Once the vision has established, a mission statement comes next. If vision represents where you are going, then mission represents what you are. As an example, a vision statement would not be shown to patients, but your patients could see your mission statement, serving as an outstanding public relations tool. A mission statement also is a relatively short statement that indicates what the practice is all about. It can include philosophy, quality, customer service, satisfaction, and other issues. Mission statements usually are are extremely positive. They can be used as a guide for the daily activities, goals, and behavior of the dental team.

Level Three: case presentation

Once the first two levels have been mastered, case presentation can be tackled. Case presentation is both art and science. There is no step-by-step, cookbook method to ensure that patients will accept the care you present (despite what you may have heard). Unfortunately, even a well-managed practice with outstanding basic management systems and leadership skills will falter if patients are not accepting care.

Most practices are still filling 80 percent of their schedules with one-tooth-at-a-time appointments. These practices also focus 93 percent of their monthly services on basic patient needs, such as broken teeth, decay, fractured porcelain, etc. Only 7 percent of most practices` monthly production is in the area of elective dentistry, such as cosmetic, implant, or other services.

My suggestion is that you begin to measure on a monthly basis the percentage that each service represents in your practice. A reasonable mix in your quest to continue fee-for-service dentistry and to secure a productive and profitable future would be for 80 percent of your services to needs-based and 20 percent to be in the realm of elective dentistry.

This would be followed by a continuing shift where eventually a model of 65 percent needs-based dentistry and 35 percent elective dentistry (comprehensive, cosmetic, implant, etc.) would be maintained. This balance represents the proper mix of services offered by the most successful dental practices in the future.

Patients always will have a base of "needs-oriented" services that act as the core foundation of any dental practice. However, huge opportunities exist in the areas of comprehensive dentistry, cosmetic dentistry, implant dentistry, breath control, and occlusion. It is essential that practices recognize the potential of these new services.

Case presentation does require a system. However, there is a great deal of variability within the system. The first step is to develop outstanding verbal-communication skills. There is a strong interest in individuals improving their verbal skills. It reflects a tremendous need to improve how we explain everything from scheduling an appointment to closing a multi-thousand-dollar case. In speaking with patients, you should communicate enthusiasm, energy, benefit statements, understanding of buying signals, and the opportunity to build ultra strong relationships. Keep in mind that case presentation is just as much about education as it is about the relationship between the patient and the doctor.

At the third level of the pyramid, you also need to focus heavily on your selling skills. If you understand that the concept of selling means educating and motivating patients, it becomes a very positive aspect of dental practice. We all want to educate our patients to have them more aware of their dental needs and we would like them to be motivated. The problem is that patients usually don`t become motivated on their own. To grow past the single-tooth appointment type practice, develop a case-presentation style that has the effect of motivating patients.

Motivation is a major factor in all businesses, whether you are motivating staff or patients. Any practice that attempts to improve its basic systems without improving case presentation will find the results far below those expected. When you examine the top practices in the country, as Levin Group and Dental Economics do each year in our "Dental Practice of the Year Award" program, you quickly will find that these doctors do motivate patients and have high levels of case acceptance.

Another factor in case presentation is new patient acquisition. Proper diagnosis and comprehensive examination of a new patient is essential. Far too many practices provide quick exams and focus only on the more obvious needs of a patient. Most practices leave somewhere between $500,000 and $1 million of potential dental treatment in the mouths of hygiene patients.

Great potential exists in your practice should you choose to address it. Hygiene visits represent a tremendous opportunity to educate and motivate patients. Practices that understand the role of the hygienist and her ability to motivate patients toward elective services are flourishing.

Patients like their hygienists and trust them. The hygienist has much more time than a doctor to discuss potential services and comprehensive opportunities for a specific patient. In many cases, the patient is interested in specific treatment prior to the doctor exam. Rapid communication between the hygienist and the doctor before the hygiene exam frequently will result in a higher level of interest or immediate case acceptance.

Excelling in case presentation is a function of both time and experience. Acquiring the selling skills (education and motivation) is based on understanding the psychology of the patient, developing strong relationships, and building significant value. By becoming more aware of the cases you present and the factors that influence patients, you will have a tremendous ability to help patients accept treatment plans. It is no longer a matter of simply telling patients what they need, but a combination of need, want, and value.

In an era where 80 percent of all dental treatment is still one tooth at a time, we have not yet fully addressed the services of comprehensive dentistry, esthetic dentistry, dental implants, and a host of other areas. These truly are Level III issues that only can be addressed once the basic management services and team leadership/team-building skills have been developed.

Level 4: Strategic planning

Very few practices ever achieve Level IV, strategic planning. Level IV involves the ability to look toward the future and determine the direction of the practice. Strategic planning does not end simply with the plan, but includes implementation of the plan. It is a true master who understands the importance of strategic planning and is able to follow through with implementation. Many people feel that they are "idea" people and that, therefore, they are strategic planners. Unfortunately, strategic planning is a step-by-step process and not merely a set of ideas. It deals with five areas, including: situation, objectives, strategy, tactics, and control.

The situation is the state of the practice today. This would include statistical analysis, budgeting, staff analysis, service analysis, and quality control. Next, the practice needs to set objectives - 6-10 key goals to be achieved that are written down, along with specific quantitative measurements and deadlines.

Objectives are reviewed weekly by the dentist to assess progress.

Strategy is the broad direction the practice will be taking for the future. It is the ability to define vision in more detail to develop a very specific strategic plan about how the vision will be achieved.

Tactics are the day-to-day activities that move you closer to your strategy within the deadlines of each goal over time.

Finally, the area of control is the ability to measure all of the activities taking place in the strategic plan to access the future direction that you hope to achieve.

Strategic planning is the quintessential management skill for dentists who want highly productive and highly profitable practices. Most successful businesses use a strategic planning mechanism to help them identify future opportunities and how to capitalize on them. As you can see from the Levin Group Management Pyramid, strategic planning cannot be addressed until the basic infrastructure is in place.

Keep in mind that you cannot move from one level to the next until you have addressed all aspects of the level you are in. In many cases, dentists attempt to move up the pyramid without completing each level, leaving incomplete management in other areas. This will ultimately result in stress, overhead, staff turnover, and the other issues that keep us from achieving our ultimate goals.

For more information about this article, contact the author by phone at (410) 654-1234. A biography of the author appears on page 12.

Visit Dr. Roger Levin online at

Click here to enlarge image

Figure 1: Dental Management Pyramid

Building asuperior team

To build a superior team, try the following:

* Provide daily motivation

Team members need motivation, just like all of us. One way to create motivation is to continually tell people they are doing a great job. As a rule of thumb, I encourage doctors to give a minimum of 3-5 compliments to each team member every day. These compliments should be sincere and well intended.

If you have a team member who you feel does not deserve at least three compliments on a daily basis, you may want to ask yourself why you are working with that person. If your entire dental team does not deserve compliments, you may want to take a good look at the leadership.

* Provide and encourage continuing education

Continually keep your staff excited and growing in knowledge through continuing education. You can attend seminars on virtually any subject.

Manufacturer sales representatives are also excellent individuals who help enhance the knowledge of your team. Most sales representatives have some seminar module information on their products that they can present to your team in your office.

You should also consider having an annual continuing education calendar for your practice that lets people know in advance what seminars you or they will be attending.This keeps them motivated and excited about their work.

* Give performance reviews

Performance reviews should be pre-set and highly structured. Having a clear agenda and measurement process can help people know where they stand and how they can improve. Performance reviews should not be only outline weaknesses, but also highlight the strength of each individual. They should be generally positive in nature.

* Schedule out-of-office activities

Periodically, the doctor and team should participate in an activity outside of the office other than continuing education. Whether this is a dinner at a nice restaurant, half-day strategic planning meetings, or some other activity, it gives everyone a chance to relax and see each other as people.

In the tension of the normal day in the dental office, we sometimes begin to see other team members as our enemies because we have to do anything they do not get done. We often fail to realize that people are either undertrained or overwhelmed. A lack of documented business systems is the cause for breakdown. We mistake an individual`s skill level with their attitude or desire to do their jobs to the best of their ability. Gradually, we begin to blame the individual rather than the systems, and this creates interpersonal tension in the practice.

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