Dont make a common mistake

Don`t make the common mistake of assuming that once you have purchased practice-management software and some computers to run it, your investment in technology is over. You will have ongoing expenses for which you must plan and budget. If you don`t, the original investment will never pay off as it should.

Larry Emmott, DDS

Don`t make the common mistake of assuming that once you have purchased practice-management software and some computers to run it, your investment in technology is over. You will have ongoing expenses for which you must plan and budget. If you don`t, the original investment will never pay off as it should.

According to an article in Investor`s Daily, the average health-care office - hospitals as well as physicians and dentists - spends 2 percent of revenue on technology. In addition, the article noted that businesses in general spend an average of 10 percent of gross revenue on technology.

Therefore, an average dental office should plan to invest at least 2 percent of gross in technology annually. For a typical solo practitioner with a $450,000 gross, the annual investment should be at least $9,000. A better budget would be 5 to 7 percent, or even more for an aggressive high-tech office. That translates into $22,000 to $32,000 per year.

Ongoing expenses will include training, software upgrades, technical support, additional hardware, and replacement hardware.

One inevitable truth is that anything a dentist spends on the practice is money he or she doesn`t have as take-home income. It is equally true that money invested wisely in practice development pays off with higher profits in the future. Of course, the trick is to know which practice investments are worthwhile and will pay off. Prebudgeting for essential items makes spending easier psychologically, plus the dentist won`t be constantly forced to make spending decisions and be tempted to "go cheap."

Training is one investment that always pays for itself. Don`t be stingy with team education; try to create an atmosphere of continual self-improvement for the staff and the dentist. It is worth investing in staff members who are committed to the practice and using their new skills.

You could buy the world`s best handpiece, but that wouldn`t make you a great dentist. The handpiece only has value in the hands of a master, who must learn how to use it in order to become a master. The same is true of your technology systems. You could buy the world`s best computer-management system, but it would be worthless if you didn`t know how to use it.

In addition to training, dentists need to budget for hardware replacement. Plan on replacing your computer hardware every three to four years. You won`t need to replace the hardware because it has worn out, but because it will no longer have the necessary power to run current software. A good method is to replace one-third to one-fourth of the computers every year. If you have six computers, replace one or two every year. That keeps the office more up-to-date and spreads the cost out over time.

Another continuing cost will be support, software upgrades, and new software. There are many software programs used in dentistry besides basic practice management. These include operating systems, word processing, checkbook and accounting, voice recognition, faxing, back-up, human resources, and utilities, as well as special dental programs like imaging, e-claims, or X-rays.

All of these programs will need to be purchased, installed, supported, and upgraded - and that will cost more money. Don`t be discouraged by the costs; wise technology investments will pay for themselves. Be prepared; plan a technology budget so you won`t be surprised by these ongoing expenses.

The future is coming and it will be amazing!

Dr. Larry Emmott is a practicing general dentist in Phoenix, Ariz. He also is an entertaining, award-winning professional speaker who has addressed hundreds of professional groups. He is a featured speaker at the Las Vegas Institute, and a member of AADPA. He has written many articles for national magazines on dentistry, computer use, and management. He produces a monthly newsletter on management and computer use in the dental office. He has developed and maintains a Web site at www.drlarryemmott.com; his e-mail address is emmott@primenet.com.

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