Salvatore J. Durante, DDS, FAGD
It is difficult to imagine that a dentist with profits of $197,000 on $420,000 annual production, and only $22,000 of accounts receivable can be considered to have a problem (see "Management Rx" in the October issue). I only wish I could get my over 90 days receivables down to 0.6 percent of total receivables, as T.J., the doctor mentioned in the article, has. With that accomplishment, T.J. is something of a hero to me.
I have been practicing for 18 years, seven of those computerized and with accurate statistics. I have never had a single 12-month period where overhead exceeded 49 percent. That was when I had two partners and an auxiliary staff of 3.5, including a part-time hygienist and a full-time receptionist.
Then I made a decision to stop managing people as much as possible and to "do dentistry." I automated almost everything possible with today`s technology via computerized recalls, patient scheduling, insurance filing and tracking, billing, digitized radiography, etc. I no longer have partners, or a hygienist, or a full-time receptionist. I see the patient from start to finish. I greet and seat, then treat, and then collect and reschedule. My patients like the attention.The result is I now produce and retain more in my three-and-a-half-day workweek than I ever produced working five or even six days per week.
The industry guideline of 60 percent overhead is ludicrous for a practice like mine, and perhaps for T.J.`s. My overhead is 41 percent.
Obsessive Compulsive Disorder aside, T.J.`s practice is not doing badly if he has made conscious choices to get where he is today. Dentistry is usually a balancing act between managing one`s employees and doing the dentistry. Dentists can set the course of their practices and lives anywhere along the spectrum - with managing at one extreme and doing the dentistry at the other.
From what Sally McKenzie says, it sounds like T.J. might enjoy a really hands-on, not to say compulsive, approach to his practice. For that, he should computerize as much as possible and learn how to use the computer to its full extent. He`ll quickly find that he needs one less staff person. Naturally, his patients will notice that his streamlined practice is different. It`s up to T.J. to show them why it`s also better.
As to the advice that T.J. should start issuing credit, I consider that bad advice for any practice. Many years ago, I issued credit and had a lower dollar amount of unscheduled treatment plans, which Sally McKenzie would probably applaud. You know what? My accounts receivable soared, collection procedures led to few collectible actions, and the patients who probably never intended to pay left my practice in the end anyway. Today, I rarely issue credit. If a patient is offended that you won`t extend credit and never comes back, I say be thankful he left.