First, let’s admit that reading survey results about your profession and comparing how you are doing relative to others has a certain allure. Your first temptation may be to scan the tables, see how your income compares, then move on to the next article. But the fact is, surveys and their analyses, carefully considered, can enlighten, validate, and motivate you. As doctors, you are immersed in delivering excellent patient care and running your practice, with little time left over to monitor your progress much less the state of dentistry. Here is your chance to catch up quickly. Go ahead and turn the page to get some insight in your practice’s standing and the dental industry as a whole over the past 12 months.
Wait! Before you flip the page, it is important to understand a few things about the survey’s methodology and analysis that follows. This year’s Annual Practice Survey was done as a partnership between DE® and Levin Group. For more than 22 years, Levin Group has worked with thousands of general dentists and specialists to enhance their practice through a range of practice management and marketing consulting programs. DE and Levin Group are excited to draw on each other’s depth of knowledge and experience in synthesizing and analyzing data compiled from more than 1,100 survey respondents representing doctors all over the U.S.
This year as in years past, practices were analyzed based on city size. (Major Metro = 500,000+, Large City = 100,000-500,000, Medium-sized Town = 10,000-100,000, Small Town = less than 10,000). Therefore, you can easily reference the survey findings to analyze your unique situation. The median (50th percentile) was used as the data point for analysis to minimize the impact of responses on the extreme ends of the scale and to allow us to compare this year’s data with that collected previously.
If you are interested in reviewing the averages for the responses to each question, visit www.dentaleconomics.com,go to “Resource Center,” click on “Download Center,” and look for 2007 Dental Economics/Levin Group Practice Survey.
The analysis addresses four main practice areas:
- Practice production
- Collections and billings
- Doctor satisfaction
- Overhead, wages, and benefits
In this issue, we will review the first three areas and next month we will look at the important topics of practice overhead, staff wages, and fringe benefits.
It is important to keep in mind that while the survey is conducted every year, the number of responses varies, and different doctors respond to the survey each time. Consider this survey as a useful benchmark and a snapshot of what is happening in dental practices all over the country - from solo practitioners to large group practices, from rural areas to big cities. Some of the numbers may surprise you. Some may fall right where you think they should, and some may be quite thought-provoking. Take some time to explore the next few pages to learn more about yourself and your peers. Thanks to everyone who participated in this year’s survey.
The bottom line
We hope that this information will allow you to see how you stack up and get you thinking about your practice and your potential. One overriding message came through loud and clear - dentistry as a profession is thriving. It continues to be a desirable career that offers opportunities for personal and professional growth. New technologies, innovative continuing education options, and heightened awareness of the importance of oral health are all contributing factors in making dentistry a profession on the rise.
The survey results show many positive signs regarding practice production. Median gross practice production this year was $800,000, and median gross production per doctor was $560,000. Keep in mind that the practice production number factors in all of the doctors in a practice. More than one quarter of responding practices had two or more doctors in the practice. The increase in practice production for all practices over the past year stands at 7 percent. Practices in major metro areas saw the largest percent increase at 8 percent, with practices in small towns reporting 5 percent increases. Daily production per doctor was $3,200. Dentists in all four of the population categories experienced double-digit growth in daily practice production over the past three years.
While doctor production was a bright spot, hygienist production was decidedly more mixed. Even though median daily hygiene production has increased each year for the past three years, gross production per hygienist fell slightly. One possible explanation for the drop in gross hygiene production could be the continued loss of manufacturing jobs, which typically provide health and dental benefits, combined with the growing uninsured population. Daily hygiene production may be increasing in spite of lower gross hygiene production if hygienists are working fewer days per week.
Another positive common thread among all four of the population categories was the rise in the average number of new patients per month per doctor. Practices are reporting that each doctor in the practice saw about 20 new patients per month last year, well above the numbers reported in all of the previous three years. Now that you got them coming in the door, your skill as a clinician, effective business systems and exceptional customer service should help make them loyal patients who will in turn refer others.
Collections and billings
In exploring exactly what services made up the highest percentages of practice production, we found that four service offerings accounted for the majority of the production - diagnostic (10 percent), preventative (15 percent), restorative non-implant (20 percent), and crown and bridge (20 percent). In other services, implant placement and restoration accounted for 6 percent of total production, with periodontics at 5 percent, endodontics at 6 percent, and orthodontics at 4 percent. According to the data, the percentage of cosmetic services such as veneers, inlays, and whitening as well as the number of implant placements and restorations was relatively low.
In terms of collections, the news is good! Practices are collecting 98 percent of monies owed. This figure is consistent with the past few years and the percentage that Levin Group recommends to its clients. The data show that practices have done an outstanding job of controlling the amount of accounts receivable in the over-60-day category at a level of roughly 10 percent. While this figure still represents an area of concern, it has gone down over the past three years, which is an exceedingly positive trend. “The longer a bill is outstanding, the harder it will be to collect,” says Dr. Roger Levin, CEO of Levin Group. “We recommend practices collect fees, including insurance co-pays, at the time of service.”
Now that you know that the majority of you are being paid what you are owed, which payment options are being used the most? Most practices offer a full range of financial options, a strategy that in Levin Group’s observation greatly increases case acceptance. As one might expect, 97 percent of practices responding offer credit cards as a form of payment. Eighty-three percent offer third party financing; and 76 percent offer a courtesy for full payment upfront. Unfortunately, too many practices (54 percent) still invoice patients after treatment, which results in increased collection costs, aging accounts receivable, and uncollected fees.
This year’s survey features a new category that focuses on the issue of quality of life. It is just as important to look at your overall satisfaction with your practice and your life as it is to look at production, compensation and overhead. If a doctor’s level of satisfaction with his or her practice is low or declining, then he or she cannot truly enjoy the level of success achieved. According to Levin Group, many dentists struggle with frustration, disappointment, and stress because they do not have the proper documented business systems in place to keep their practices running smoothly. While dentists have the opportunity to learn clinical excellence in dental school, the majority do not have enough exposure to the management and marketing side of running a practice. Areas such as scheduling, team building, leadership, case presentation and acceptance, conflict resolution, and development of vision and goals can create challenges for dentists. This lack of business training often leads to feeling less satisfied with how things are going.
The 2007 Practice Survey examined some of the critical factors that affect a dentist’s satisfaction with his or her practice. Having a vision is one of the keys to practice success, yet surprisingly only half of responding doctors had a vision statement. Without a vision statement, it can be difficult to see the big picture and lead the team to long-term success. More than 61 percent of dentists had mission statements, which guides the day-to-day operations of the practice. Although this figure is not terribly low, it should be higher, according to Dr. Levin. “Every dentist should have both a vision statement and a mission statement. These are essential tools for setting the foundation for long-term success.”
The lack of those tools could play a role in the next statistic - one out of every four responding dentists said they were experiencing high stress. At times, any profession can be stressful, but experiencing high stress for weeks and months is no way for a dentist to practice. Dentists need to realize that high stress does not just go away on its own - it must be addressed, or the situation will continue to build and lead to more stress.
One solution to practice stress is seeking help from outside advisors. Most dentists (89.8 percent) hire accountants to handle some aspect of practice finances and more than half (52.4 percent) use the services of a lawyer. About one-third of respondents sought expertise from these advisors in practice matters - insurance professional (36 percent), practice management consultant (35 percent), and certified financial planner (33 percent). “The use of the right advisors can save dentists time, money, and headaches over the course of their careers,” says Dr. Levin.
Next month: Find out how you rank against other practices in the important areas of practice overhead, staff wages, and fringe benefits
Survey development, implementation and analysis by Levin Group with special assistance from Michael Anthony, Consulting Project Manager. Levin Group, a 22-year-old dental consulting firm founded by Dr. Roger P. Levin, is one of the country’s most experienced practice management resources. Headquartered in Baltimore, the company opened an office and second Levin Advanced Learning Institute in Phoenix in December 2006. The company has nine consulting divisions including: general dentistry, orthodontics, endodontics, periodontics, oral and maxillofacial surgery, prosthodontics, implants, pediatric dentistry and large group practice. In addition to practice management consulting, Levin Group offers financial planning, doctor and staff recruitment and practice transition services geared specifically for dentists. Since the company’s founding in 1985, it has embraced a single mission: to improve the lives of dentists.
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