This article originally appeared on DentalEconomics.com – September 22, 2016
Every day I speak with doctors like Dr. Andrew, who has 20 years experience; a large, thriving, and lucrative rural practice; and a gorgeous second wife and three attractive, capable kids.
At one time, Dr. Andrew was in trouble. He felt that he should be on Cloud Nine, but instead, the only numbers that swarmed through his mind were 9-1-1. His life felt like an ongoing emergency with no one there to answer his call.
Why was this the case? Dr. Andrew was like many dentists I work with: he generated a huge income in his highly successful practice, but his expenses at home and at work were even greater. I work with some dentists who have been practicing for decades and have nothing to show for it but six- and even seven-figure levels of debt.
These dentists are happiest chairside, yet find themselves performing the management and office tasks they believe their team should handle. After all, that’s what they’re getting paid for, isn’t it? Or maybe their time is spent working on fixing problems they feel are not their fault.
These are the career dentists who are in need of a major paradigm shift in the way they approach their teams and the way they do business. In place of an informal methodology of “controlled chaos,” which these dentists have followed for most of their careers, I prescribe a new mind shift.
You cannot shrink your way to growth
Instead of disincentivizing or firing under- producing team members who lack a sense of coherent direction, dentists need to shift their view of their teams from that of a major “cost center” to a potential “wellspring of revenue.”
There is a defined process. You can reorganize your office to maximize income, job satisfaction for every member of the team, and amount of time that you get to spend chairside to perform the types of dentistry you most enjoy.
I want to introduce one salient point: Highly successful dentists stop viewing the salaries they pay their team members as an expense. Instead, they view salary and merit rewards as an investment in their own financial future and time affluence.
Most practices are busy, but they will struggle if their focus becomes internal discipline rather than investing more time and money to leverage the effectiveness of their chief existing asset and internal customer-The Team. The difference you will create in the office dynamic is the difference between simple motion (one action equals one result) and sustained forward momentum (one strategy yields exponential results).
The key here is to shift from being merely a “busy practice” to being an “outcome-based practice,” operating according to the rules of what we call the “Daily Primary Outcome” (DPO). The DPO is based on the productivity of incentives provided to each team position, as each member’s work benefits the practice as a whole.
The Pareto Principle is at work here: Often, 20% of team members are responsible for 80% of the team’s productivity.
It is also true that the members of a team will at first resist the idea of tracking individual productivity. But press forward. The DPO system helps free a dentist from micromanaging forever. This will shift the focus from you as the enabler to you as a respected leader who empowers the entire team. After all, a dentist’s team is trained and should be competent to complete the tasks the dentist needs to let go of responsibly while still maintaining control. This is a source of unstoppable power!
When everyone is responsible for everything
On a baseball team, everybody has a specific role to play. The pitcher pitches, the shortstop plays short, and they don’t suddenly switch positions in the middle of a game. Your front desk should be the same way.
In most dentists’ offices, the front desk has no accountability whatsoever. Oh, they all have jobs to do-they mind the appointment book, manage patient charts, call patients to confirm upcoming appointments (if you’re old school), greet patients, and call insurance companies. Treatment planning is usually a distraction in the busyness of a practice.
But the reality is that when everyone is responsible for everything, no one is truly responsible for anything.
Begin a reorganization by moving your front desk team into two specific positions: an appointment coordinator to manage your time, and a treatment coordinator to manage your finances. Ultimately, you want these individuals to spend 80% of their time on these tasks. Otherwise, they will simply do the easiest, least confrontational things in the world, such as confirming appointments. Meanwhile, if they don’t fill the appointment book properly, your precious time and your team’s time is lost forever. If they don’t coordinate treatment with good agreements, you’ll be back to where you were, with lots of accounts receivable.
Also, you don’t want to be working on a patient while worrying about whether someone is on the phone at the front desk finding someone to fill the suddenly vacant four o’clock slot. You want to keep your energies focused on practicing dentistry.
What is the intention for the new appointment coordinator and treatment coordinator positions? The appointment coordinator has the responsibility of maximizing the effectiveness of your time. You want to set up a game with your appointment coordinator. Let’s say you are a two-doctor, two-hygienist office. Perhaps you’d like to have the office gross $2 million a year, while you only work 16 days a month. Sound good so far? Two million dollars a year breaks down to roughly $166,000 a month. If you want to work only 16 days, your office has to generate $10,000 a day for each of those 16 days. This means that each doctor should do $4,000 worth of dentistry a day, and each of your hygienists should do $1,000 worth of work as well. Two doctors, each grossing $4,000, plus two hygienists, each grossing $1,000, equals $10,000 a day.
Compensate your appointment coordinator based on her ability to reach that financial goal. As an example, give her a bonus of $10 per provider per day when she books $4,000 worth of dentistry for each of the doctors and $1,000 worth of services for each hygienist. Your maximum exposure equals four providers a day times $10 a day times 16 working days a month. That’s a maximum possible $640 a month, and in exchange you’ll be hitting your goal of approximately $2 million. This is a great investment!
Calculate bonuses daily through the day sheet, and staff members will get paid at month’s end if the practice achieves the Bare-Butt Minimum, or “BBM.” BBM includes practice overhead, debt reduction, retirement, and cash-flow cushion. Hit the BBM, and it’s a true triple-win! The patients win, because they get all the care they need; the team members win, because they grow financially in direct proportion to practice growth; and the doctor wins, because profits are flowing in with a team focused on outcomes on a daily basis.
Not a bad return on investment, wouldn’t you agree?
Here is your “cheat sheet”:
1. Shift from being busy to being outcome-focused on a daily basis, by position, by giving each team member a DPO.
2. Calculate your DPO per team member by reverse-engineering how much you want to make and in the amount of time you want to do it. In our example, we used $2,000,000 working 16 days a month.
Here are DPO examples for illustration purposes. Your numbers may vary.
– Appointment coordinator’s DPO $4,000 per doctor and $1,000 per hygienist
– Treatment coordinator’s DPO at least $4,000 per doctor in cases closed per day
– Assistant’s DPO $4,000 for the doctor he or she is assisting
– Hygienist’s DPO $1,000 in production per day
3. Turn your payroll into a profit center by setting the BBM that the team needs to collect on a monthly basis before getting the daily bonus paid out. For our illustration, it is $140,000. This one strategy creates momentum, instead of a lot of wasted motion.
This will take a bit of planning on the front end. Your team members may squirm, scream, or kick. Running your practice this way will separate the responsible and accountable from those who are just looking for a paycheck.
In the more than 2,020 practices we have coached over the years, we have installed this system. You can count on it! There will be a short-term rise in tension, but on the other side, you will have an appreciative group of “A-Teamers.” You can then plan on taking more vacation time and spending more precious days with your family, without worrying that the practice is running off the rails in your absence.