Articles By Fred

Appearing in the July 2002 issues of "Inscriptions", the journal of the Arizona Dental Association:

What has changed in the dental industry since September 11th?

My advantage is that I was able to witness the effect 9/11 and the downturn in the economy had on the 35 practices I have worked with from September 2001 through the end of May 2002. Each experienced some repercussion from the events of last fall. Granted, my world is small in comparison to the total number of dentists in Arizona; but it is large enough to gather some generalities.

What changed was the realization that regardless of how great each dental practice operated, nothing could be taken for granted any longer. Whatever level of patient services a practice strived to achieve prior to September 11th, 2001, those levels are being tested. Practices realized they needed to put forth even more of an effort to secure the trust and confidence patients had in them.

In the practices I worked with, new patient volume dropped a bit. Some patients weren't readily accepting recommended treatment as witnessed by a decline in case acceptance. The occurrence of failed and broken appointments rose a bit. These factors were present in all offices, although some felt the effect more than others.

What was different in the offices that witnessed less of a change than those that experienced more?

I observed that the offices which encountered less of an impact, had previously worked hard on customer service and building relationships with their patients. The trust and confidence of the patients was well established through exceptional service by the doctor and staff. This resulted in steady case acceptance and kept appointment rates. The offices that took their success and patients for granted productivity slip. These consequences forced them to re-focus on what is important in sustaining patient relationships.

What is important in surviving downturns in the economy?

In my experience, it's relationships. And in order to ensure one has loyal patients in a practice, it is vital to have a solid foundation of fundamentals in dental practice management: A well thought out business plan, a fantastic staff, effective marketing, and superior patient services. I've seen predictable and measurable growth and prosperity in dental offices after 9/11 when attention is focused on the details surrounding the entire patient process. Each step of the process must be perfected so that patients comply with treatment recommendations, keep their appointments, pay for services, and are so happy with the office that they refer friends and family to the practice. Walt Disney said, "Do what you do so well so that people cannot resist telling others about you."

These details are difficult to master; it takes hard work. Education is a large part of the process. One has to realize that learning is ongoing. Not only the doctor but also the entire staff must consider the value of reading books on how to deal with people, attend courses on negotiation, sales, and/or interpersonal skills. More importantly, consider talking about these issues as a team and discuss how to handle them in the practice on a day-to-day basis.

Speaking of staff, were there any issues regarding staff that jumped out, and what were they?

During the morning of September 11th, the entire staff of a client of mine was so distracted from the television coverage that patients were being seated late for their appointment, and staff was not focusing on the treatment. He immediately assembled the team in the staff lounge and acknowledged that a catastrophic event was unfolding and as horrible as it was they had an obligation to serve the patient. He encouraged the team to focus on the task at hand: take care of patients! One slip during a procedure because of inattention in the operatory could cause irreparable consequences for the patient and the practice.

Unfortunately, I discovered staff didn't fully comprehend the impact 9/11 had on the dental industry right away. By and large, they didn't perceive that people had changed. The staff realized how serious the impact of 9/11 was when a number of patients called canceling their appointments because they were second-guessing if their jobs were stable, if they would still have dental insurance, and if they would have enough discretionary income for dental care. Initially, some patients kept appointments because they were being laid off and they wanted to complete recommended treatment in time to use up their insurance and while they still had the money. But after that, reality set in and patients no longer were scheduling at dismissal because of all the uncertainty about employment and finances.

Overall, there was not a sense of urgency to raise the standards of how we served the patient.

How does a practice guard against future downturns in their productivity?

The first step is to employ a great staff made up of people who have the following characteristics: honesty, autonomy, integrity, responsibility, self-discipline, enthusiasm, strong work ethic, and accountability. Next, lead them in using principles that are well grounded in ethics and doing what's professionally and morally right. Finally, train them to do the job so well that the patient receives the highest level of patient service and professional dental care. The end result is a strong relationship of trust and confidence that patients have in the doctor, the staff, and the entire practice. There's an old adage that I truly enjoy, "Ideas are a dime a dozen. People who put them into action are priceless."

Due to the downturn in the economy, are people more hesitant to comply with treatment recommendations?

To some degree, my answer goes back to the previous discussion on how well the office built relationships, and how people were faced with a high degree of uncertainty. What I found in the practices I work with is that we saw a slight decline in case acceptance. Once we acknowledged that patient's had changed, we moved quickly into corrective action. We went back to fundamentals and reviewed what we were doing, and more importantly WHY we were doing it. Why were we talking so much about diagnosis, treatment, etc., when we could be asking questions and listening carefully to the patient to learn about their desires, motivations, and possible resistance to treatment recommendations? Why weren't we embracing change and raising the standards on how we take care of people? Sometimes it takes a wake-up call like 9/11 to help us realize that nothing can be taken for granted, and it's up to us to improve ourselves and make even more of a commitment to a higher standard of patient service. Raise the bar on all that you do. Make a contribution. Make a difference.

As dentists view their practices more as a business, the question arises, "How do I know if my practice is really financially healthy?"

To know this, consider the following standards that are being used by dental offices in Arizona and across the country to measure their proficiency in this area. And, be sure that these criteria are met simultaneously; it's not enough to achieve one or two and slip on another.As dentists view their practices more as a business, the question arises, "How do I know if my practice is really financially healthy?"

1. Collect 99% or better of Net Production, after adjustments that is. Divide net collections by net production to find out this percentage. Because of the up and down nature of cash flow in the traditional dental office, this number should be tracked over a rolling 12 months, if at all possible.
2. Accounts Receivable Ratio at 1 to 1¼ . Compare the total accounts receivable, including insurance receivables, to a rolling four month average of net production. That is, divide total accounts receivable by the last four months average monthly production.
3. No more than 20% of total accounts receivable should be aged more than 60 days from date of last payment. Run the aged accounts receivable report that shows the date of last payment. Total the over 60 day aged accounts that have not made a payment in 60 days. Divide this number by the total of all accounts receivable for this statistic.

Compose a quick report for the practice that shows the levels of performance in all three of these areas simultaneously. If one or more of the areas are not within the recommended range, there may be a fault in the payment systems that may need attention. If the report shows a financially health practice, carry on!

Reprinted with permission from the AzDA Journal Inscriptions, volume 11, number 2, August 1997

Dental patients across the country are becoming more service savvy. They want to be sure their investment in healthcare provides them with the benefits of good oral health: looking good, feeling good, having strong teeth and gums, and enjoying their natural teeth for a lifetime.

To meet these demands, practitioners continue to educate themselves on the new techniques which are constantly becoming available in modern dentistry, and which enable them to deliver the highest quality of care to their patients. Often overlooked, however, is the need to keep up with the changing marketplace regarding payment.

Managed care plans are available but should be analyzed thoroughly regarding the financial impact and practice characteristics they represent. Yet, according to the Health Care Finance Administration, dental consumers continue to pay for approximately one half of all dental treatment out of their own pockets.

Three simple ground rules will help your practice cope with these changing times. Follow these rules diligently; make them the foundation upon which you build your payment systems. In this way, you can experience payment success in your practice.

Ground Rule #1: "We will inform before we perform. " Patients should be informed of all fees, and specific arrangements should be made for payment before any treatment begins.
Ground Rule #2: "Our dental office will not loan money." When patients are allowed to pay for their care over an extended period of time, you are actually loaning them money!
Ground Rule #3: "We will provide flexible-but firm-payment options. " It is a reality that, while people generally want the best possible care, they often need some form of financing. The best way to solve this problem, without breaking Ground Rule #2, is to provide a variety of payment options for your patients.

What kinds of firm yet flexible payment methods are available? Here are some suggestions. Offer a cash discount (or as I would prefer to say, a cash courtesy) for treatment paid for in advance. This is a great way for patients to save money, and a way for the practice to secure payment. An added benefit to the practice is patients tend to keep appointments for which they have already paid!

Make better use of major credit cards as a payment option. One approach which could be used more is the process of spreading payments out over time using signature on file for credit cards. There are forms available which provide structure to this system. In all cases, it is important to make sure your patients know you accept payment by credit card. Display signs at the front desk, include a notice on your billing statement that you accept payment by credit card, and tell each and every patient, "We have made arrangements to accept payment by credit card, would you like to use VISA or MasterCard?"

Use a dedicated healthcare credit card for patients in need of financing. Here, you receive payment up front, and the patient can make low monthly payments. A definite win-win for the patient and the practice.

But what if patients are not able to pay for services using the previously mentioned payment options? Most dental offices offer a "payment plan" that usually results in the patient paying whatever they want, whenever they want. There is, however, a fourth payment option that is more firm, yet still provides flexibility for patients. It is called Pre-Authorized Checking. Here, the financial coordinator and patient arrange to deduct payments directly from the patient's checking account. This payment option is a great way to make structured financing available to patients who don't qualify for the ideal payment methods mentioned above.

Although the principle objective is to be paid without loaning money, be aware of indications from the patient that they may need financing. At that point, use a simple, straightforward, one page written financial policy which explains the various payment methods you have elected to accept in the practice. With this tool, move through the various payment methods, making sure you establish well structured financial arrangements. In other words, don't leave the payment schedule up to the patient.

Use these recommendations to build payment systems which work for your patients. In the final analysis, patients deserve the very best care you can deliver, and you deserve to be paid!

In business management, dentists seem to have a commonality; they are reactive in their management style. This reactive approach occurs because dentists must focus the majority of their energy on treating patients rather than concentrating on running a business.

While consulting with and lecturing to countless dental offices across the United States since 1983, I have found a similarity between all; dentists tend to be reactive in their management style.

For instance, if the checkbook is low on funds, dentists wonder why collections haven't been keeping up with production. The battle cry then becomes: "Susan, why aren't you collecting more money?!? Get after those patients and make them pay their bills!" Or, "Why didn't the parent pay for their child's emergency treatment?!?", "How long have we been waiting for them to pay? That long? Send 'em to collections!"

If there are few patients scheduled in the appointment book, panic sets in. Followed by the edict: "I wonder why parents aren't scheduling their children for treatment? We send a pre-determination to the insurance company so treatment coverage is known. Why aren't they interested when we call five weeks later? Maybe the solution is to get a bigger ad in the Yellow Pages. I'd rather pay more for an ad than to take a cut in my fee by joining a reduced-fee insurance program, just to get new patients."

More often than not, the supposition to why people don't pursue treatment is that they can't afford it. Typically, parents indicate to the dental team in some way that they don't have the money to move ahead with treatment. Unfortunately, the reactive approach is, "We need the production; let's just do the treatment now, we'll worry about the money later!"

Another catalyst for reactive behavior in a dentist occurs when employees of the office cause stress in the workplace. Imagine the perception given to the other team members when the marching order from the dentist is: "I won't put up with this. You're Fired!"

Rather than having to deal with the events described here, dentists and their team can prevent negative occurrences from happening by developing systems and coaching employees to create a more proactive approach to dental practice management. The results are worthwhile!

There are many different ways to accomplish proactive approaches to dental office issues, and in the following paragraphs, I will entertain a few ideas on how business systems can be restructured. The end result will ward off problems before they occur.

The first example is handling patients who are in need of emergency treatment. In my experience, dentists create accounts receivable problems in these instances because they begin treatment before a discussion about finances occurs. According to popular rationale, payment arrangements are best created in a private place away from the front desk and the operatory. But in this situation, an exception to the rule by asking for payment during the treatment process would be in the best interest of the patient and the practice.

Here's one solution that works very well. Once the dentist has exercised pain control and the patient is now comfortable, call a brief "time out" and have a key member of the staff present the fee for treatment and make payment arrangements before any long lasting treatment is rendered.

This proactive solution makes sense because patients are informed and have agreed to how they will handle payment before treatment begins. The end result is that patients follow through on their payment arrangements because the expectation for payment was created from the beginning.

The second example entails how to deal with sustaining practice growth by attracting an appropriate number of new patients. Through continuing education and practice, dentists become knowledgeable and skilled in the healing arts, but dedicate much less time to learn how to market their services. Without a well thought out and executed marketing plan, new patient flow is unpredictable and may be too low to sustain practice growth.

In order to create a consistent flow of new patients, proactively market the practice by following these simple guidelines:

1. Set Goals. Clearly define the number of new patients you wish to acquire each month. Dental practices across the country lose 20% of their patient base annually. Patients move, change jobs, pass on, or elect to seek services from another dentist. Set your practice goals first to replace the 20% attrition, and decide how much of an increase in the patient base you desire. As an example, if the practice has 2000 active patients and seeks to grow 10%, it must acquire 600 new patients. Mathematically: 2000 multiplied by 20% equals 400 (for attrition), plus 2000 multiplied by 10% equals 200 (for growth).
2. Create a Mission or Vision statement. Articulate the direction of the practice in a few sentences. Utilize the office's team members' input to create a sense of unity.
3. Create a Budget. Practices which desire accelerated growth may wish to designate 5% of the previous year's revenue to marketing; mature practices who wish to only maintain current patient flow may allocate up to 2% of the previous year's revenue.
4. Decide on Methodology. Determine what appropriate marketing tactics will be used that fall in line with the practice's vision statement. Internal and external means of marketing may provide a suitable mix. Ensure these methods are within the budget and can be measured.
5. Delineate Limitations. Some dentists are steadfastly opposed to certain forms of marketing. This element of the plan entails deciding what the practice will not do to market.
6. Implement Tracking Mechanisms. Make sure you follow the business axiom, "When performance is measured, performance improves. When performance is reported back, the rate of improvement accelerates." Track the results of the program and meet regularly to discuss your findings.

The third and final example deals with the attitude children today have towards orthodontics. In contrast, a generation ago children with braces were viewed as anomalies; labeled as "tin-grin", they were routinely made fun of by their classmates for reflecting brightly from the flash bulb in the class picture. Not to mention the headgear worn by some that seemed so foreign, it was easy to tease.

As with eyeglasses, orthodontics seem to be an easier sell to kids lately compared to twenty-five years ago. Kids these days seem to have everything. For instance, they have a plastic bin full of Matchbox cars instead of a collection of ten to twenty. Instead of one Barbie and one Ken, the playroom is now a small city of dolls. The mentality of children today is that they want everything, including "the cool things" others in their age group have today: braces. It's not uncommon for kids to even play guessing games via e-mail for what color braces they will choose, "Wait until you see me tomorrow."

And, as precocious as some children are today, they will notice adults with crooked teeth. They are becoming more and more exposed to and aware of advertisements and television shows with people (models, actors) who exhibit beautiful white, healthy smiles. They observe adults' teeth that aren't straight, almost in horror and may not even fear to comment, "How come you never got braces before?"

The continued challenge, it seems, is to be proactive and sell the parents.

In order to address this element of business management, offices must remain keen to what drives the family's desires and strive to connect it with the quality of services offices deliver.

Certainly people today are more educated about health and well-being, but the fact remains that dental offices today must hone communication skills so that parents are provided information on services in such a way that they choose what is right for themselves and their children.

And, lest we forget, financial obstacles exist today in some parents' minds because of the fee for orthodontics. Parents may not be aware of the variety of payment methods available to them. Offering discounts for payment in advance, budgeted payment arrangements locked into a contract over time, and outside financing are part and parcel of a great payment system that won't get in the way of case acceptance, and won't cause the practice financial problems down the road due to non-payment.

Bear in mind, these are just three examples of issues confronting dental offices today, and ways in which to become proactive in their approach to achieving a practice's goals. Each system within a dental practice can be refined in order to ward off problems before they occur. A proactively managed practice will deliver many benefits to patients and the community will be well served. Dentists, and their team members, will be rewarded with a more profitable and gratifying workplace.