Turn your payroll into a profit center

by Gary Kadi

Highly successful dentists have stopped viewing the salaries they pay their team members as an expense. Instead, they view salaries as an investment in their own financial futures.

This psychological shift is subtle and extremely important. Nobody likes expenses. In theory, if we could reduce our expenses, we believe our income would increase. Yet it’s much more profitable to view the salaries you pay your team as an investment in your practice than as an expense.

What is an investment? An investment is where we place part of our money or time in a situation from which we expect a decent - or even a substantial - return. Dentists should no longer begrudge the salaries they pay their team members, because there’s nothing in the stock market or in real estate (or even at the racetrack) that could possibly match the return on investment you can receive from properly compensating your team members.

I’m not suggesting lavishing huge salaries on your team in order to motivate them. Rather, I am suggesting that you pay appropriate salaries combined with extremely reasonable bonuses. This combination of appropriate salaries plus bonuses creates a team highly motivated to make you money, bring in new patients and return current ones, and close, insert, and arrange payment for the maximum amount of dentistry your patients truly need. That’s what happens when you view salary as an investment rather than an expense. You invest in your own financial freedom when you set proper salary and bonus levels for every member of your team.

Caught in the Game

Think of going to work as a game, not only for the dentist but every member of his or her team - freeing them from the mindset of “I owe, I owe, it’s off to work I go.” In every game, each player has a specific position, a specific responsibility at that position, and certain accountabilities. The same thing ought to be going on in your office. You want to place people in situations where they are playing a game, where they have specific positions, where they have specific responsibilities and accountabilities, and where it’s possible to win. When your team members win, your patients, your team, and you are all happy.

Begin by looking at each position in your office as a separate business with accountability for managing its process, and with specific results to be attained; each position must justify the investment you make in it. The amount of money you pay your team is now tied precisely to performance. This means you no longer have two or three people manning the front desk, handling situations and crises as they arise. Instead, you schedule your team members to specific positions, ensuring that whenever the normal team member in that position isn’t available, someone else is playing that position. For example, if a baseball team’s shortstop can’t play due to injury, they bring in someone else to play shortstop. They don’t leave a massive hole between second and third base. You need to do the same thing.

For example, if Debbie is your appointment coordinator and there are practice hours when Debbie is not in the office, make sure that other people are trained to serve as appointment coordinator while she is out. You want to have no gaps on this team, because your patients can always exploit those gaps. Think about it this way: If there’s no appointment coordinator, then no one’s in charge of managing your office’s time, and patients will break appointments or come late. If there’s no treatment coordinator, there are no agreements about treatment and payment, which means you end up with receivables instead of income.

On a sports team, the manager or coach and the general manager have specific expectations for a player in each position. Your office should be run the same way. Let’s review examples of what those targets should be for team members.

Re-care coordinator

The re-care coordinator is accountable for securing at least five patients who need to get back into the re-care system during each session on the phone. This person is also accountable for quality assurance, by tracking the reasons patients are not returning to the practice. If this person encounters former patients who do not want to come back, it is his or her responsibility to ask why and inform you of the reasons. This is the least expensive and most effective way of maintaining quality control at your office. It’s the re-care coordinator’s job to ask the questions, and it’s your job to listen to any hard truths presented to you. It’s also your job to fix those problems. The re-care coordinator receives an hourly salary plus a bonus of one dollar per individual he or she gets back into the re-care system and who shows up for his or her new appointment.

Appointment coordinator

The appointment coordinator is accountable for meeting or exceeding the daily goals you set for each of the providers in your office - the dentists and hygienists. It also is this person’s responsibility to minimize schedule changes and assure that patients show up on time. The bonus - like the bonus structures of everyone in the office - must be rooted in what this person does on a day-to-day basis. Most doctors’ incentive plans don’t work, because the goals cover too much time. It’s impossible to measure how an individual performs over an entire quarter, much less an entire year. But we can certainly see and measure whether a team member is getting assigned tasks done on an hourly or daily basis. So we want to reward our appointment coordinator by making sure this individual knows he or she is responsible on an hour-by-hour and day-by-day basis for making sure patients show up for their appointments - and show up on time.

I performed a study on the reasons why patients change appointments. In this study, only 15 percent of changes were legitimate: illness, child care, car trouble, etc. In 85 percent of the cases, the reasons were not legitimate. They were based on the convenience of the patient, or the patient’s desire to minimize contact with the dental office. Frankly, they’d rather be anywhere else. You cannot and should not stay in business to meet the whims of your patients. You don’t have to make it easy for them to change their appointments, and you can train them to keep their appointments, except for those 15 percent who have legitimate reasons.

In summary, the appointment coordinator has a very clear job, and should be compensated in direct proportion to the manner in which he or she fulfills assigned responsibilities.

Treatment coordinator

The treatment coordinator is responsible for knowing the patient’s insurance coverage, offering treatment explanations in lay person’s terms, listening to the concerns of the patients - and also listening for the unspoken concerns patients have, and successfully addressing them. In addition, the treatment coordinator is responsible for knowing how to use third-party financing and obtaining agreements for treatment. The treatment coordinator essentially serves as the liaison or case manager between the practice and the patient. The treatment coordinator receives as a bonus one percent of all cases totaling more than $500 that are presented, closed, and paid for. Most dentists think this concept will not work - that people won’t prepay.

But then they discover it does work, because it’s a natural incentive for the treatment coordinator to receive a bonus for prepayment of services. As he or she works to achieve that bonus, this person also works to achieve additional financial success for you. Many dentists are extremely surprised by the number of patients who accept the idea of prepayment. The only reason these patients never accepted it before is because it was never offered to them.

The dental assistant

The dental assistant is responsible for serving the doctor beyond expectation. The dental assistant must understand the verbal, assumed, and foreshadowed needs and wants of the dentist, his or her colleagues, and patients. The dental assistant also is in charge of ensuring “time integrity” for the clinical team; that is, ensuring the dentist’s time is never wasted. Top offices actually have assistants directing the doctor during patient hours.

As an analogy, think of a great restaurant. If you order a peppercorn steak, not only will the waiter bring a steak knife, which is an assumed need, but also an extra glass of water - a foreshadowed need - because peppercorn steak is hot. That simple foreshadowing of the typical expectations of the dinner represents the difference between good service and great service. Your assistant should be providing you, your team, and your patients that same thoughtful service. You become more productive, and your assistant makes more money as well.

The hygienist

The hygienist is a catalyst for maintaining the practice standard for care. In other words, the hygienist is responsible for making sure that every patient has the opportunity to have the highest level of soft- and hard-tissue care, and is the primary patient educator in those areas. He or she must be excellent at following the agreed-upon hygiene process, which includes using the intraoral camera on every patient. The dentist might slide; you’re busy, and you’ve got a lot on your plate between practicing dentistry, running the office, and maintaining your home life. So the hygienist - not you - has the responsibility for holding you to the high standards you have set for your office.

Your associate

Your associate is accountable for the long-term growth of the office, assuming the lion’s share of evening and weekend hours, that is, if you continue to offer those hours. Let’s discuss the idea of closing your doors nights and weekends. This idea terrifies many dentists at first, because they can’t imagine their patients will stay with the practice if they no longer offer evening and weekend hours. In reality, few leave. You are seeking to create a practice that makes your life easier and, in so doing, allows you to serve your patients in an atmosphere of confidence and calm. Most of the patients you want to retain can and will readjust their schedules to see you on weekdays. Just about anyone you would like to serve can take off from work to go to the dentist. You are no longer running your practice just for the convenience of your patients. This is now a mutually beneficial relationship.

You’re running your practice to share with patients the responsibility to maximize their dental health. So you don’t have to stay open evenings and weekends if you don’t want to. Incidentally, world-class team members are harder to attract to practices with night and evening hours. They’re so good they don’t have to work those hours. Again, it’s about catering to the needs of your team members - putting them first - so that you, and they, can offer your patients the highest and most professional standard of care.

Additionally, newer associates will be on call - not you. They also will be responsible for treating children who come to your office for basic treatment. It’s your job to do the highly productive cases, but you want to ensure that your associate gets some good cases as well. This will enhance your associate’s growth and job satisfaction. As the associate grows with the practice, he or she will be integrated into more complex parts of the practice, such as treatment planning of bigger cases and managing the office. His or her focus should be on building a reputation of excellence and marketing, such as running the Web site and attending community events.

Keep in mind that your sales system is built around your associate and not just you. So be sure to integrate your associate into the new selling process you’ve established for your office. That way, you will maximize the efficiency and time use of your associate.

Office Manager

The office manager is accountable for the morale of the team, practice efficiency, and statistical management. Keep in mind that every single process we have discussed can and must be measured statistically, and your office manager should devote 10 percent of his or her time to statistical management, team morale issues, and upholding agreements with patients with regard to appointments, payment, and other matters. This includes making sure that everyone is getting the proper bonuses.

The remaining 90 percent of the office manager’s time should be devoted to patient relations. The main statistic you want your office manager to observe is whether treatment presented is accepted at least 80 percent of the time. As we discussed earlier, this means your office is managed by results, not emotions - not your emotions or the emotions of your office manager. To assist your office manager in statistical management, establish tracking forms by position for every day your practice is open. You must give your office manager the tools - and the time - to perform this basic statistical analysis, without which you cannot measure the progress of your office.

Keep in mind that everyone in your office - like everyone on the planet - craves certainty. People don’t want to wonder if they’re doing their jobs properly. When you put statistical measurements into place, you and your team no longer have to worry if they are doing their jobs well. The numbers speak for themselves. In addition, everyone leverages one another’s efforts, because everyone knows how each member of the team fits into the success of the office - and the bonus structure each member will enjoy. This leads to “productive” office gossip: everybody will know who is pulling his or her weight and who is not. The system is self-policing, and office politics are minimized. Again, people would rather play a game instead of simply getting through the day. When you provide each team member with responsibilities, accountabilities, and rewards, everyone knows their positions, what they are responsible for, and what they will get if they do their jobs especially well.

The team wins

This leads to situations where the entire team is saying, “We won! Mrs. Smith accepted her treatment!” Don’t laugh - that really does happen in some dental offices.

Try offering an annual team trip. Pick a number that you’d like the office to achieve that is above the number in their incentive program. When it is hit, send everybody to Las Vegas, the Bahamas, or somewhere else that’s fun. You can also tie in this trip with a fun continuing-education program. Your team will love it, and this will be a massive boost to your bottom line, especially if you pick a target 30 to 40 percent above what you are used to making. Also, have a charity team and a community team for events in your neighborhood. People in the community will notice that you have a happy, together team, and they’ll want to see what makes your office so special.

Don’t forget to play the acknowledgment game. Catch people doing things right. You can put up Post-it notes that say, “Great job!” with the person’s name, when the situation warrants. Read the acknowledgments that were distributed at the morning team meeting, and the person who gets the most acknowledgments over a month should win a day at a spa or some other incentive.

Don’t be afraid to post your statistics in the office for all your team to see. Accountability to each other is the easiest way to make sure everybody is pulling his or her weight. Have a different team member be responsible for each team meeting; this increases a sense of involvement and importance, and costs you nothing. You can also pick a different team member each quarter to send on a shopping spree. The possibilities are endless. The main point is simply to make sure your team members share in the success of your office, which provides more incentive to increase that success.

Gary Kadi is president of Next Level Practice and author of the best-selling book “Million Dollar Dentistry.” He helps turn dentists’ offices into multimillion dollar businesses. For more information, visit www.nextlevelpractice.com.

Taking it to the Next Level:

1. View salaries as an investment, not an expense.
2. Look at each position in your office as a separate business with accountability for managing its process, and specific results to be attained.
3. Your team members crave certainty. They don’t want to have to wonder if they’re doing their jobs properly. When you track performance statistics, your team members know exactly how well they’re performing … and they also know who is letting the team down.