Sally McKenzie, CMC
Case Profile: With a splendid view of the river, this Manhattan general practice used to be a trendy office that saw a fair number of area yuppies and business people year after year. But these days, something`s keeping them from coming back. I was called in to determine what and why.
Symptoms: Thirty-two patients a month are falling by the wayside, and only nine new ones are coming in. What`s more, there`s $75,000 in unscheduled treatment plans.
Observations/Discussion: Parting with my usual protocol for this column, I`m about to get very personal. Before I do, though, I want to thank the doctor (we`ll call him T.J.) for allowing me to tell his story.
As I got into T.J.`s car at the airport, I immediately sensed that something was not right with him. We`d met before, when he had attended one of my all-day seminars. Now, he appeared nervous and anxious, becoming confused about how to get out of the airport. As he drove, his arms and legs occasionally jerked. When I asked how his day went at the office, he replied that he was on some new medication and felt really tired and out of it all day. Sadly, my impression was correct ... something was not right.
The next day, I determined the following stats:
Overhead: 53 percent
Salaries: 18 percent
Collection ratio: 105 percent
Accounts receivable: .64 x monthly production
Over 90 days: $128.45 of $22,437 in receivables
Strange numbers indeed. Money is the obvious focal point here, wherever you turn. Failed appointments are charged at $50 for 1/2 hour and $100 for an hour. When patients check in, they are greeted by these signs: "Payment is required at time of treatment" and "The patient - not the insurance company - is responsible for payment of fees." When patients are dismissed, they are confronted by yet another ultimatum, "Forgot your checkbook? We accept cash and most major credit cards." The business assistant is expected to make it clear that no credit is extended and no payment plans are available. This inflexible financial policy easily explains the $75,000 in unscheduled treatment plans and why patients are not coming back.
Money had caused some internal problems as well. T.J. had been in practice for 24 years and didn`t have a hygienist. Although his two employees were loyal, dedicated, and had strong work ethics, his assistant couldn`t handle all the tasks that he required. To compensate, he`d often pull his business coordinator away from her job responsibilities to take X-rays and seat patients.
Treatment Plan: The recommendations I`d make were immediately apparent: to create a more patient-friendly financial policy; to drop the missed appointment charge; to work on the recall system; and to create an environment in which patients would want to schedule their treatment plans.
When the situation improves, T.J. should start investing in his practice as follows:
x Purchase new equipment
x Update office décor
x Develop marketing materials
x Bring in a hygienist
x Hire additional staff as needed
As far as being so obsessive about getting paid, T.J. would simply have to cool it.
What T.J. admitted at that point was that, two days before, he had been diagnosed with Obsessive Compulsive Disorder (OCD). He went on to disclose that he hadn`t spent much time with his family for the last few years because, every night, he would spend hours on the computer, looking at stock prices. If any of his stocks dropped ever so slightly, he would panic and sell off too early. Then, he would get depressed, be even more anxious about getting paid, and more adamant about keeping a tight lid on spending. To T.J.`s credit, he saw the merit of my recommendations and had the courage to seek professional help to manage his OCD.
Sally Says: While this was the first of my clients to admit to OCD, I knew there were others - like the doctor who had to wash off the milk carton when he brought it home from the grocery store. If you would like to learn more about OCD, read "Brain Lock: Free Yourself from Obsessive-Compulsive Behavior," by Jeffrey M. Schwartz, M.D.
Sally McKenzie is a Certified Management Consultant, nationally known lecturer, and author with more than 32 years in the dental profession. Her sole proprietorship, McKenzie Management and Associates, provides in-office systems` analysis of the business, clinical, and hygiene department; staff training; and offers a full line of educational-management books, audiotapes, and videos. McKenzie`s dental clients span 40 states over 20 years. She is a consultant to the Council on Dental Practice of the ADA. Call Sally at (877) 777-6151, e-mail to firstname.lastname@example.org or check out her Web site at www.mckenziemgmt.com.