Buying a Dental Practice? Here’s What You Need To Know First. (Part 2: Business Viability)

This is part 2 of my 2-part series that details the need-to-know data you should consider before you buy a dental practice. If you haven’t read the equally important Part 1, click here.
In this part, we’ll talk about the practice information that has to do with business administration and the metrics that aren’t advertised features of the practice (in fact, most patients will never even give them a single thought). But that doesn’t mean they aren’t unequivocally important to you, the potential buyer.

 

TOTAL PROFITABILITY

The single most important factor in determining the future success of the buyer is the Profitability of the practice. Too often, Gross Production and Net Collections receive the most attention when evaluating a practice, even though these numbers do little to define the financial risk a buyer must undertake. It’s critical to accurately calculate the true net profit of the practice. The Net Profit is Collections minus all practice expenses. To calculate the true Profitability, you must add back all doctor “perks” which are provided by the practice. When you divide the Profitability by the Collections, you will get the true profitability percentage of the practice. The closer to 50%, the better. Steer clear of practices with profitability below 35%.

 

Keep in mind that with your new practice debt service, you will need to produce more in order to maintain the same profitability level of the selling doctor.

 

PPO PARTICIPATION

A purchaser must know the “saturation” of discounted dental care in the practice. For each plan that the practice participates, you should have a breakdown showing the number of patients enrolled, the total dollar volume collected during the previous 12-months, the total fee discount given, the average % discount, and the most recent date the fees were updated. Also, total the entire PPO volume for the practice, including the total fee discount given. Understand how much you must charge out for each $100 of net production. Keep in mind that if a practice has 50% of its patients on reduced fee dental insurance plans, and the total insurance discount is 20% for all patient treatment, then the average PPO discount for the insured patients is 40%. Be extra cautious when the total PPO yearly discount is greater than 15%. The greater the total PPO discount, the harder you will have to work to maintain profitability.

 

PROCEDURE MIX

A very important financial report to review before buying a dental practice is the “Production by Procedure Report.” This report lists all dental procedures with their corresponding CDT codes, along with the number of these procedures performed and the total fee derived from each. Printing two copies of this report can be very helpful. The first copy should be sequenced by procedure code for quick reference. The second copy should have procedures listed in descending sequence, meaning the first listed dental procedure will be the one that derived the greatest revenue for the period of time you requested.

 

This report, at a glance, summarizes which procedures are producing the most revenue. If 70 root canals were performed last year, and you’re not proficient in endo, how will you replace that income next year? Conversely, if lots of endodontic procedures are currently being referred out, and you are proficient in performing that endo, you can expect to add substantial revenue based on this alone.

COLLECTIONS

I was going to call this section “Production and Collections,” but having fantastic production is less important if the collections are not also fantastic. Plus, it’s impossible to have great collections if you don’t also have great production.

 

A critical ratio is the Collections divided by Net Production. Net Production represents the amount of production from which you expect to collect 100%. From the Gross Production, you would subtract PPO adjustments, and all miscellaneous discounts given, such as cash discounts, staff and family discounts, etc. Be aware that the greater the PPO discount, the harder you’ll have to work to maintain profitability.

 

For the most recent twelve-month period, a Collections Ratio of 98% or greater is excellent. A ratio of 96% to 97% is acceptable, and a lower ratio is worrisome. A low collections ratio indicates a problem with collection systems, collection execution, or both. When this is the case, you must be willing to correct the problem in order to eliminate the collections shortfall. This will have to occur as soon as you take over the practice.

 

 

NEW PATIENTS

Everyone knows how important new patient flow is to a dental practice. When evaluating a dental practice, I count a “new patient” as any patient who has a first-time 0150 New Patient Comprehensive Examination or a 0180 Comprehensive Periodontal Examination. I’m not downplaying the importance of new patient emergency examinations (0140), but if these patients don’t become long-term patients for the practice, they have very limited value.

 

A healthy number of new patients is twenty to thirty plus per month. Keep in mind that the more procedures being referred out of the practice, the higher the number of new patients required for continued practice growth.

 

It’s also important to look at specific details about the new patients. Are there both children and adults? Are the new patients mostly fee-for-service patients or patients coming to you because they will receive a large insurance discount? Beware of a new patient monthly count below 20, unless the practice does lots of long appointment, comprehensive dentistry cases.

 

PRACTICE TRENDS

Make certain that you review the practice statistics for the most recent three-year period. You want to assure that the practice is not in a downward spiral. With the economy the way it has been for the last decade or so, a practice simply maintaining its productivity is acceptable. While on the subject, be certain to review practice statistics for the most recent period, including the previous month.

 

Always verify that the management software financial reports coincide with the information on the tax returns. More specifically, the total revenue collected should be reflected on the tax return, as well as the expenses that make up the practice overhead. If you cannot correlate this data, you must explore the reasons for the differences.

 

Does this list cover every possible aspect that might come up when buying a dental practice? Unfortunately, no; it’s impossible to spell out every intricacy you might encounter. Rather, let this guide serve as the foundation for helping make strong negotiations and a smart end decision about purchasing a practice. Just like having a marriage or a child, a business requires constant attention and a fair amount of planning. Buying a new practice is complex, but that doesn’t mean it has to be complicated.

 

If you’re struggling to navigate the “information overflow” of buying a dental practice and need help weighing your options, click here and get my help. I’d love to help you make a smart, profitable decision.

  

To your success,

Dr. Mike Goldstein
Atlanta, Georgia Dental Consultant

Buying a Dental Practice? Here’s What You Need to Know First. (Part 1: Appealing to Patients)

When buying a dental practice, especially if you’re fresh out of dental school or haven’t bought a practice before, it’s dangerously easy to caught up in information overload. When you meet with the current owner or practice broker, you’re typically given a thick, wordy notebook full of stats, charts, receipts, and every detail about the practice compiled into one overwhelming mess.

You’re a dentist, not a real estate agent or due diligence expert. How are you supposed to know if the practice is a good deal, or if the practice will suit your needs as a dental professional? This article is about how to cut right through all the irrelevant info and make an informed decision.

It’s deceptively easy to get tunnel vision and only focus on the one number that seems relevant: the asking price of the practice. Too often, a potential buyer will lose sleep over this one big round cash figure and lose sight of the bigger picture. Don’t fall into this short-sighted trap. In reality, the big question is this:

 

Will I be able to match or exceed the current profitability of the practice?

 

As a dental consultant working with dentists in Georgia and beyond, I’ve had the opportunity to help many young dentists discover not only how to buy a dental practice, but also how to do it seamlessly and affordably. Performing due diligence for these practices is rewarding for me, as I’m always pleased when I can advise a dentist to happily move forward with his or her dream of practice ownership. Likewise, I’m also pleased when I can prevent a young dentist from making a huge mistake by purchasing a practice that’s not a good fit.

This isn’t only actionable advice for the prospective buyer, but also for any selling dentists looking to make their for-sale practice all the more attractive to dentists looking to buy.

This article is Part 1 of a 2-part series and will focus on the overall appeal of the practice.

 

LOCATION

What are the demographics of the practice location? Is the practice in a very visible building with great signage and lots of passerby traffic, or is it buried in the bowels of a commercial complex? When you drive around the area, do you see Starbucks, Ruth’s Chris Steak House, and thriving shopping areas, or do you see deserted storefronts, Payday Loans and Bail Bonds? What about the curb appeal? The local property value? These things may seem like details to you, but are huge considerations for your future patients.

There are a few sneaky litmus tests that can clue you in to the affluence level of an area:

  • Research the local schools. If 90% of the students are on government subsidized free lunch programs (and often breakfast too), this is a bad sign.
  • Peek at the residential real estate market. Are the prices of homes rising, falling, or remaining flat? Are young families moving in, or are they leaving?
  • What’s the average income and education level in the area? It’s not only important to understand what the location demographics tell you now; you must project what the area will be like in five, ten, and fifteen plus years into the future.

 

FACILITY AND EQUIPMENT

During the two years following buying a dental practice, how much will you have to be spend on remodeling, redecorating, or equipment upgrading?  It’s not critical that the practice meets your every functional, esthetic and technological requirement immediately, but the hidden costs that will be incurred just to bring your practice up to speed will linger for long after you get the keys to the front door. It’s probably obvious when a practice needs new chairs or lights. But new computer systems? Updated software? Fresh Dentrix licenses? You’ll have to do some digging to find out if these are things you have to buy.

The office should meet your minimal needs and should be expandable to at least five operatories. If you can’t tolerate for one day the 1970’s wood paneling in the reception room, you should add the cost of changing this to the sales price of the practice. Immediately after the sale, a new dentist should make only the changes that will directly improve the productivity of the practice.

 

STAFFING

Make certain that the practice owner provides you with a detailed list showing all staff members, their dates-of-hire, salaries, benefits, last pay raises, plus short bios highlighting their performance level and value to the practice. You want to know who the superstars are and who your “marginal” employees are. When team members have been with the practice for a long time, there is a greater likelihood that they will provide an equivocal level of service and dedication after the practice changes hands.

Be certain to calculate the total percentage being paid for all staff salaries and benefits. A healthy ratio will be below 30%. In offices with long-term employees of 10, 15, and 20 plus years, you will frequently encounter salaries that are above the value to the practice. Because you want to do everything possible to maintain the goodwill of the team members, you should avoid making adjustments to their salaries when you first take over the practice.

I also sometimes find hygienists that are under producing and overpaid. An efficient hygienist

should have a Net Production (Gross Production minus all adjustments) of around three times her salary and benefits.  I have seen situations where the hygienists are being paid most of the profits from their production.

 

FEE SCHEDULE

You must know if the practice fees are low, high, or average for the area when assessing whether buying a dental practice is the right choice. I’ve encountered situations where the practice fees were below some PPO fee schedules. In these cases, the practice receives less reimbursement than it is entitled. No insurance company will reimburse a dentist for more than he or she asks. When evaluating the impact of raising fees, focus on the top twenty procedures which produce the greatest income. For this analysis, you will need the Production by Procedure Report (sequenced by total revenue).

A low fee profile can produce both challenges and opportunities. Increasing fees can often be the quickest way to increase practice profitability. Unfortunately, the period of time immediately after purchasing the practice is the worst possible time to raise fees. Depending on how much the fees need to be increased, the adjustments may occur over a one-year period or greater. Keep in mind that increasing the prophylaxis fee (1110) will have a greater impact on patient perception than increasing your porcelain crown fee (2740).

 

Be on the lookout my next cautionary blog post about buying a dental practice, that one focusing on the overall profitability of a practice and the drivers behind it (coming next month).

Considering buying a practice, and still feeling a little overwhelmed? Let’s talk about your options – no obligation.

I’m here to help.

 

All the best,

Dr. Mike Goldstein
Dental Consultant
Atlanta, Georgia

The Dilemma of Free Dental Care

No matter where your employees work, they’ll expect some kind of “insider” deal as part of employment. Even the bag boy at the grocery store gets a free donut every once in a while.

A dental office is a little more complicated. You’re offering a very professional, time-consuming, expensive service.

Some offices have no written policy at all on who gets discounted and/or free dental work. Others have written policies that are very vague or generous – sometimes to the point of being dangerous.

Here’s my hard-and-fast rule on the subject:

“Promise on paper the minimum benefits you are comfortable giving to staff and their families.”

You can always go above and beyond the written rule and be the bighearted professional who treats employees like family…. and people will love you for it. But scaling back a written promise will make you look unfair and cheap, and as someone who maintains a leadership role, this just isn’t an option.

Consider this:

Mary has been working your front desk for a little over 3 months. She has proven herself to be what we call a “marginal” employee and you don’t anticipate that she’ll be with the practice long-term. At lunch one day, one of Mary’s friends suggests to her that since she works in a dental office, she should get some dentistry done to improve her smile. When Mary returns to the office, she consults the Policy Manual you gave her when she started with you and she sees it states that after three months of full-time employment, she is entitled to free dentistry.

She asks to speak with you at the end of the workday, and when seated in your private office, she states, “Dr. Generous, I’ve been here for more than three months, and I know that I’m entitled to free dentistry. So, I’m ready to get some porcelain veneers to improve my smile.”

You have no choice but to do the necessary dentistry for free.

Let’s look at a slightly different scenario, same employee, and same desire to have cosmetic dentistry done. This time, however, your office manual states,

“After one year of full-time, continuous employment, a team member is entitled to $1,000 per year of free dentistry.”

 Now, you have a choice whether or not to do this treatment for free. Further, if Mary were a superstar, wouldn’t it be a wonderful thing to sit Mary down and explain:

“Mary, I know you’ve only been here for three-months, and our policy states you have to be here for one year to receive free dentistry, but you’re such a great employee, and we know you will be with us a long time. For that reason, I would love to help you out by doing your veneers for free.”

 Instead of Mary feeling entitled that you owe her the dentistry, she is grateful for whatever benefit you offer her beyond the stated and expected policy. This shifts the work culture from “what can I get out of working here?” to “I’m so glad I work with such a great team.”

You can edit your own handbook any way you like. Maybe you’ll have employees only pay the nominal laboratory free. Maybe you’ll offer free dentistry, but only when there are vacant gaps in your schedule. It’s up to you to choose how generous you are, just make sure the rulebook doesn’t make promises that will weigh heavily on you later.

Dr. Mike Goldstein
Goldstein Management

How Dentists Waste Their Educations

“If you’re not moving forward,” says the old adage, “you’re moving backward.”

This is true in every industry and field, especially in dentistry. You have to constantly be learning if you want to stay competitive as a business owner and healthcare professional.

Usually, this means taking courses to learn new technology, skills and procedures in order to offer new services to your patients (and therefore make more money).But usually, things don’t go as planned.

The good news: As a consultant, I see other dentists embarking on this journey of self-improvement often. Lots of dentists make a point to integrate skill-building seminars and classes into their yearly schedules.

The bad news: These efforts don’t pay off as they should. At least not immediately. There’s a fiscally unhealthy trend I’d like to address that is really taking a bite out of dentists’ profitability.

More often than not, I see a time delay from when one of my clients takes a course and when he or she finally applies (and is able to bill for) the new knowledge. In fact, there have been occasions where the time delay was so great, the dentist found it necessary to take a refresher course prior to scheduling the first treatment case.

The reasoning for this delay varies from dentist to dentist. Sometimes they aren’t confident in their skills. Sometimes they get caught up with other work. And some even forget to tell their team and their patients that they offer the new service!

For procedures such as Lumineers, Six Month Smiles, and Invisilign it’s critical to have interested patients “ready-to-go” as soon as the training is completed.  I suggest that the appointments be scheduled prior to the course dates. There are numerous advantages for this:

  • By minimizing the time delay between training and providing treatment, there isn’t time to forget any of the techniques, or nuances that were learned during the initial training.
  • It’s easier to gauge the interest of your patients. If patients are not interested in scheduling prior to you taking the training, they won’t be interested three months after.
  • Having new procedures scheduled assures you that the tuition will be worth it, and reassures you of its worth.
  • Lastly, by marketing the new procedure in advance, you’re assured that the entire team is skilled and comfortable at presenting the patient benefits for the treatment.

A great way to gauge which trainings will deliver the greatest ROI to your practice is to track the procedures that (a) your patients need, and (b) you aren’t currently offering. You’re probably referring many of these patents to various specialists for care – maybe without even realizing it – and it could be costing your practice heavily.

Dr. Michael Goldstein

Goldstein Management

Befriend Your Patients and They’ll Never Leave You

Nothing is more important than giving your patient an exceptional experience every time he or she visits your dental office.  At each patient visit, you must confirm that you are the best dentist he or she has ever seen, and that selecting your office was a great decision.  In addition to providing comfortable, functional, and aesthetic dental care, you must communicate positively with your patient throughout every stage of the dental appointment.

Sound taxing? Like too big of a task? Honestly, it seems that way, but it’s not. You can build rapport with a patient the same way you’d run a marathon: one step at a time.

The process begins prior to reclining the patient in the dental chair to begin treatment. You should position eye-to-eye with the patient, and in layman language, review the treatment to be performed that day. Never assume that your patient remembers the details of what you may have discussed at an earlier time. Summarize the details about the condition, the danger if the treatment is postponed, and the benefits when the treatment is completed.  Additionally, you should assure the patient of your commitment to keep the treatment as comfortable as possible. Finally, offer to answer any questions your patient may have.

During the procedure, periodically touch the patient gently on the shoulder and ask how she is doing. Frequently compliment her on her cooperation, and assure her that everything is “going great.” Ask if he or she needs a break, or if there is anything you or your team can do to make the visit more pleasant.

The most critical communication occurs at the conclusion of the dental visit. I call this the Appointment Conclusion Conversation. This is a wonderful opportunity to inform your patient how well the procedure went, and to remind him or her about the benefits of the treatment.  You are reinforcing the patient’s excellent decision to have the treatment, and for selecting you to do it. Praising the patient for her cooperation during the procedure shows your empathy and appreciation for the effort.

Before dismissing your patient, hand him or her your business card with your personal telephone number listed. Rather that implying that she should call if she has an “emergency or pain,” I suggest you ask her to call you if she has “any questions or concerns. This communication also includes discussing benefits and adding value for the very next dental appointment.

Maybe you’ve recognized a theme here. All of the above steps are meant to position you less as a stodgy clinician and more as a person they trust with their problems – it just so happens that today’s problems are all in their mouths. When your patient thinks back later about how they felt about you and your office, they might remember the oral discomfort or the bright lights, but those can’t be avoided. But when that’s all said and done, they’ll definitely remember how you treated them as an individual and what kind of person you came across as. Friendly? Funny? Honest? Easygoing? All the qualities of a good friend are also present in a good dentist.

How a Simple Phrase Can Turn Your Customer Service from Good to Ugly

The other day, I accompanied my parents to my mom’s medical appointment in Atlanta. She had a pressing issue that required her doctor’s attention and was thankfully able to schedule an appointment only two days out.

Unfortunately, the less-than-stellar receptionist who scheduled the visit simply told my mother that her appointment was at 10:30 AM on Thursday. There was no mention of the doctor’s already busy schedule, nor of the fact that she was going to be “worked in” to an ad hoc open timeslot.

We checked in at 10:15, fifteen minutes early. As her appointment time came and went, my mom got increasingly agitated. By 10:45, she became resentful of patients entering the office before her, many of which showed up after we had sat down.

When I explained to my mother that she was obviously being worked into the doctor’s already busy schedule, she insisted that she was given a firm appointment time and that she was not being treated fairly. As a result of the poor scripting and even worse communication by the scheduling receptionist, the front desk team had to endure an understandably upset patient.

Most dental offices handle numerous “emergency” patients every day. Consider the following scripting for EVERY patient who is being worked into your schedule:

“Mrs. Patient, Dr. BusyDentist’s schedule is completely full tomorrow, but since you’re having a problem, let me have you come in tomorrow at 1:00 PM and I’ll find a way to work you into the doctor’s busy schedule as close to 1:00 as I possibly can.”

The key words here are “work-in appointment.” This differentiates it from a firm, scheduled appointment and helps to minimize any hurt feelings or perception of unfairness before it arises. Patients understand this language, and instead of being irate about waiting twenty or thirty minutes to be seen, they will thank you for accommodating them into your admittedly busy schedule.

Had this simple scripting been used when my mother scheduled her “work-in appointment,” I know that she would not have been upset about waiting to be seen.

This goes to show that simply employing a “use your best judgment” philosophy while playing up the importance of politeness and warmth simply isn’t enough. The devil’s in the details, and the more you can set a clean standard of specific scripting practices for your office, the better off you’ll be.

Dr. Mike Goldstein

What Keeps Patients Punctual: A Psychological Perspective

Wouldn’t you speed less often if the police pulled you over and handed you cash for going the speed limit every once in a while??

Psychological research shows that giving rewards for good behavior is a much stronger way to mold the way people act than just punishing wrongdoings… yet almost every aspect of society is built around trying to make people avoid certain actions (ie, crimes) rather than to try to encourage good ones (like philanthropy, charity, or being a good person).

Take a look at how you handle patients with this fact in mind. For example, many dental practices chastise patients who show up late for their appointments, but few praise the ones promptly stick to their time slots. A simple “thank you for being on time, we really appreciate it!” will really make your visitors feel noticed and valued while also encouraging their punctuality.

But you don’t have to stop there, you could make your encouragement even more gratifying and memorable for your patients. Say a patient has been on time every time since she first started seeing you a few years ago. What if she was thanked and congratulated on her next reminder postcard in a warm, handwritten message? The cost is zero, she feel extra-valued, and the chance she’ll be late or cancel unexpectedly in the future drops from slim to nil.

Are you giving your patients rewards and praise when they do things right, or are you dumping on them with negativity and threats when they owe money or miss appointments?

As the old adage goes, you really do catch more flies with honey than vinegar.

How Receptive is Your Reception Area? 4 Fixes That Will Spruce Up the Place

 

It’s fascinating how the human brain works. We tend to form opinions on new things, places and people in fractions of a second, relying on emotional, unconscious cues, and then backwards rationalize with facts.

Yes, we like to say we look at the evidence first. Mull everything over. Then come to rational, even-handed conclusions. Unfortunately, a landslide of psychological research shows that this just isn’t the case.

If you’ve ever read the book “Blink: The Power of Thinking Without Thinking” by Malcolm Gladwell, you know exactly what I’m talking about (and if you haven’t check it out – it’s a fascinating tour of just this type of psychology).

So then… in what place are your new patients are forming these split-second, biased, and enduring opinions? You guessed it: your reception area.

Now, this “blink” effect can work for you or against you. Maintain an inviting, clean, memorable reception area, and you’ve given yourself a huge boost toward being loved by everyone who comes through your doors. But if the first room your patients see is a low priority, or you and your staff haven’t updated it since the Clinton Administration, a revamp is more than likely due.

Here are some places to assess and improve as needed:

1. Furniture. Do your places for visitors to sit feel “sterile?” Always go for cozy over cold. There shouldn’t be a bleached, medical vibe until the patient is in the chair receiving treatment. I’m also a big proponent of mixing up the types of seating because everyone has different preferences. Some people want to sink into something cushy and soft. Others want firm chairs with arms that are easy to get in and out of. Your living room isn’t just row after row of identical steel chairs… your reception area shouldn’t be, either.

2. Entertainment. There are plenty of ways to keep your visitors occupied besides leaving out a dog-eared stack of generic lifestyle magazines. A fish tank or terrarium with a turtle or lizard can add some variety and liveliness to the office while being soothing for both adults and kids.  Additionally, if you have a TV, don’t just let it run mindless daytime shows in the background. Instead, show short, educational videos that detail the state-of-the-art procedures you offer. The ADA offers a great video called Toothflix 2.0 that fits the bill – check it out here.

3. Validation of your practice. Marketing materials should be prevalent, but not annoyingly promotional. For the waiting room, this means showcasing the efficacy and talent of your team and brand to a captive audience.  Have reading materials that detail how you and your team treat your patients as well as how you give back to the community. I think the most striking way to do this is with a wall-mounted collage board that has the picture, name and a short bio for each person on the team, doctor(s) included.

4. A personal greeting. Don’t let your patients wander in unattended and confused. Your office is not a bus stop! Train your reception team to greet people with smiles, eye contact and handshakes every time. The goal is to make those who enter feel like friends, not paychecks. Patients will notice and remember the congeniality, and take this warm reception with them all the way through their visits.

Having a high-quality, informative, inviting reception area can’t be understated in importance. Have any thoughts to add? Think I missed something big? Let me know in the comments.

 

 

Keep Your Back Door Closed

I began working with a young dentist several years ago who seemed to be doing very well. He had a busy Hygiene Department, with two dental hygienists working 32-hours per week each. They were very busy. During the previous 12-month period, his practice added 1,100 new patients. All of these patients had a Code 0150 Comprehensive Exam, and entered the office recall system. Based on this increase, how many extra days of hygiene do you think he added for the following year? The answer is zero!

The implication here is that while he celebrated 1,100 patients entering in the front door of his practice, he quietly ignored the 1,100 patients who exited out the “back door.” With it getting more challenging to recruit quality new patients, it’s more important than ever to close the “back door” to your dental practice.

Five Steps to Closing Your Backdoor:

  • Monitor your active patients. How many have future appointments on the book? How many don’t?
  • Use positive scripting and benefit statements to reinforce the reasons for a patient to return for recare visits. Give specific “areas of concern” that will be closely rechecked at his/her return visit.
  • Have a continuous patient reactivation process in place. Consider hiring a P.R.O., or “Patient Retention Officer,” who will continually work to keep current patients active, and to reactivate older patients.
  • Keep in contact with your patients between visits. Use social media, such as regular emails, blogs, newsletters, etc. to keep in touch.
  • Monitor again.

Dr. Mike Goldstein
Goldstein Management

Measuring Performance Critical for Success

Most of us understand how important it is to set goals in every aspect of our life. I would like to get more specific about measuring performance on the way to reaching our goals.
Let’s discuss the simple example of wanting to set a goal to be able to do a greater number of pushups. Since this was one of my own goals, I can share a very effective technique that worked for me. The first important step was to measure how many pushups I could do. Rather than just drop and start counting pushups, I decided to make it interesting by measuring the number of perfect-form pushups I could accomplish in a three-minute period. Over the next few months, this measurement tool actually became a training tool to help me significantly increase my number. It is amazing how much additional exhaustive effort I was able to exert when I was only a few pushups shy of a personal record. Without measuring and tracking my performance, I would not have been as motivated.In your dental practice, it is very important to measure your performance in many difference areas, in order to help you gauge your progress as you strive towards your goals. There are many important calculations, in addition to production and collection. For instance, if your goal is to be more efficient at chairside, you should calculate your production per hour, each month. I also like doing this calculation for the hygiene department, as a group, and each hygienist individually. Additional critical measurements, include new patient exams performed (0150), percentage case acceptance on new treatment plans, and appointment cancellation rates.

An office in which I was recently working had a cancellation rate in their hygiene department of 12% one quarter. This was the percentage of time that went unused on the schedule, due to last minute appointment changes. During the following month, the dentist frantically called me, very upset that things were getting “out of control” in his hygiene department due to “way more” patient cancellations than normal. Upon calculating the actual percentage, we found that the rate had slightly improved. Had we not been diligent about measuring and tracking this information, we never would have been able to put the problem in the proper perspective.

There are dozens of measurements that can be tracked to help an office successfully reach their financial goals. Measurements should be taken every month; however, I suggest that a detailed study of the measurements be made once per quarter. The quarterly trends can then help you chose an alternate course of action that may be needed. Reacting to monthly fluctuations in performance may cause premature course changes that could prove to be detrimental.

Very long-term goals can also be effective motivators. It’s not too early to set a retirement goal, which is 25 or 30 years away. Many, many years ago, I made a goal to log enough total miles running to equal the distance around the planet Earth at the Equator. If you’re curious, that number is 24, 901 miles. Twenty-three thousand miles later, I’m still motivated to reach this milestone. At the end of each year, when I add my annual total to my Excel Spreadsheet, I reaffirm my desire to stay healthy and injury-free long enough to continue my quest. I’ll let you know if I eventually make it.

Well, gotta run…

Dr. Mike Goldstein
Goldstein Management