What would happen to your practice if natural disaster struck? Most doctors don’t know, and their lack of preparedness could prove fatal. Here are 10 steps to include in your practice’s written disaster survival plan.
Natural disasters happen, and your practice could be affected. In the past few years, we’ve heard from doctors struck by hurricanes in Louisiana, Mississippi, Alabama, and Florida, earthquakes in California, floods along the Mississippi River, and tornadoes in the Midwest.
Moreover, the chances of a fire striking your practice are statistically great. Recent studies indicate that a business burns every five minutes in this country, and 90 percent of those never reopen. Statistically speaking, most businesses will not recover from a major disaster unless they have a realistic and tested disaster recovery plan. The odds against a business that is unprepared are simply overwhelming.
Your dental practice may have better odds than a commercial business of recovering from a fire or other natural disaster. Doctors still have their skills and experience, and people still need dental care, even if your office is destroyed. These intangible assets provide a major advantage in surviving a disaster.
Yet, we have seen doctors’ practices suffer, and nearly go under, when disaster strikes. Some were saved mainly because they were able to respond quickly and minimize their downtime. Developing a disaster survival plan before anything goes wrong is essential to recovering swiftly and effectively. In fact, just thinking through what might happen in a disaster improves your ability to cope if it actually does occur.
Here are 10 steps to include in your disaster survival plan ...
1. Be sure to have adequate fire and hazard coverage for your building and equipment. This coverage should be based on “replacement cost” rather than “historical cost” to assure that you can rebuild completely, given the dramatic increase in construction costs.
2. Make sure that your business has adequate business interruption coverage. This coverage insures against loss of income in the event the practice is interrupted by a disaster. Doctors commonly confuse this coverage with “business overhead coverage,” which kicks in to cover practice operating expenses only if the doctor becomes sick or disabled.
3. Maintain photos and preferably videotapes of your office building and equipment. This will help in filing insurance claims and reordering supplies to get your practice back up to speed as quickly as possible.
4. Maintain an up-to-date listing of all dental and office equipment, as well as contact information for related vendors.
5. Make sure that you are storing back-up computer data offsite at least once a week.
6. Check with equipment suppliers, including the computer vendor, about the best way to obtain necessary items, perhaps on a loan or rental basis, within a few days’ notice in the event of a disaster.
7. Investigate where you can see patients, almost on a “next day” basis, if your office is destroyed. Consider arranging to share office space with another practice on a reciprocal basis if yours is destroyed. Knowing where you can see patients will be your greatest relief in the event disaster strikes.
8. Obtain fire-resistant file cabinets for all active records.
9. Plan to write a letter to all active patients and referrers immediately following a disaster to tell them where you are temporarily relocated, and that you will be available for their continued care. You may want to set up a telephone team to call patients you are actively treating, especially if you keep a copy of your office schedule offsite.
10. Place a copy of the written disaster plan offsite. You may want to give a copy to your lawyer or accountant for safekeeping. Being able to pull this out promptly and refer to it, including names and phone numbers of key people to contact, lets you launch into recovery with confidence that you can quickly and efficiently overcome your misfortune.
The above article was reprinted with permission from “The McGill Advisory” newsletter.
John K. McGill, MBA, CPA, JD, is a tax attorney, CPA, and MBA, and the editor of “The McGill Advisory,” a monthly newsletter devoted to tax, financial planning, investment, and practice-management matters exclusively for the dental profession. The newsletter ($209 a year) and consulting information are available from John K. McGill and Company, 2810 Coliseum Centre Drive, Suite 360, Charlotte, NC 28217. Call (704) 424-9780, or visit the Web site at www.bmhgroup.com.