SHOULD YOU ADD ANOTHER OPERATORY?

How Much More Production Do You Need To Justify Equipping Another Room? — Less Than You Think!

As you all know, I am big on “Result Control” as contrasted with Cost Control. As Peter Drucker says, “In business, costs are inevitable. A smart manager focuses on where to put your resources (capital, labor, time, etc.) where you get the best return. That’s ‘Result Control’”.

So what’s the answer?

“10 more Doctor Visits per month – 2-½ per week or 35 Hygiene Visits per month will make adding that room a far better return than anything on the Stock Market!”

Plus the Intangible Benefits of adding another room:

  • Can accommodate more patients during peak times
  • Flexibility
  • Less stress – give you some growth momentum
  • Back up

In Summary: It’s a lot easier to cost justify an additional room than you think it is. Take the money out of the Stock Market and put it into your own business and you’ll get a much better rate of return and better days to boot.

Cost Benefit Decisions in General

We can help you run the numbers on almost anything. Just call.

Open Time? Fear Not!

One of the biggest barriers to practice growth is the Doctor’s fear and loathing of “Open Time” in his/her and the hygienists’ schedule. It causes Doctors to go slow in adding rooms, adding hygiene capacity and taking other measures to ensure practice growth.

Every practice is going to have open time. As long as you schedule humans, it’s inevitable! If you wait to get open time down to less than 7% of your work hours, you’ll never expand capacity to grow!

HOW DOES YOUR OVERHEAD COMPARE?

BerganKDV just released their bi-annual overhead survey. This is best of its kind. It samples privately owned mature area practices. This is the overhead yardstick that you’ll want to use to compare your expenses.

Dental Office Overhead remains around 64% of collections. The typical Dentist netted 36%. The big expense – Gross Wages – is 25.9%. That is very close to the same percentage of two years ago.

Doctors’ average income went from $291,432 to $309,090, a $17,658 increase per year…an annualized change of just under 3% per year. In this two year period, Lab Fees decreased from 6.6% to about 6.0%., probably due to more Cerec, E4D, etc. Supplies decreased from 7.5% to about 6.9%.

The typical practice is spending 2.1% of its revenues on Advertising. Up from 1.7%.

So the average office in the survey spends $18,000 per year in Advertising vs. $14,000 per year in 2014.

It’s interesting to note that according to APM data, the typical practice writes off more than 10 times that amount in a typical year due to PPO discounts. As big a hassle and expense that advertising is, we feel that practices would be better off taking fewer write offs and investing more in practice independence. Investing in Continuing Education and staff training pays off too.

This Overhead survey along with Technology, Fee surveys and much other good stuff is on our website at: AdvancedPracticeManagement.com Our thanks to BerganKDV (www.BerganKDV.com) for this excellent survey.

Tactfully Turning Away Medical Assistance Patients

Many of you are currently not taking new Medical Assistance patients. Still, we all know it can be difficult for these patients to find care and you want to help them.

Call us at APM (952-921-3360) for a list of clinics that are accepting new Medical Assistance patients. There are at least a dozen options for Metro Area Dentists to refer M.A. patients to.

Unfortunately, after extensive calling, we found that for the Outstate Areas, there are not as many options. We did find a few (less than 10 for the entire Outstate Area).

We suggest that your front desk tactfully turn away patients. Instead of saying, “We don’t take M.A., call the customer service number on the back of your card…” (which can really frustrate people). They can instead say,

“Thank you so much for calling. We are not currently able to take on more new patients with your insurance but we can refer you to some nearby clinics. Would you like us to do that?”

We all know that people on Medical Assistance may not be on it the rest of their lives. Also, they may have relatives or friends, so this helps keep things on a positive note for everyone.

Goal Setting

Goal Setting works. Put what you want in writing and see what happens! I’ve enclosed our popular annual format. Share your goals with us. It’s our job to help you reach them.

ECONOMIC TRENDS

GDP growth in the United States was 1.6% last year. Wages in the U.S. were up 2.6%.

Dental Office Wages in Outstate Minnesota were up about 4% for experienced staff in all positions. However, wages for the Metro Area (experienced staff of 8+ years) were virtually flat. Although starting wages for CRDAs were up 7%.

Metro Area fees were up 3.3%. Outstate Area fees were up 5%. The gap between Metro and Outstate fees is gradually closing.

Dentists’ major concern by far is “PPO/Insurance Discounts and Involvement” yet only 5% had dropped a PPO in the last year and only 4% plan on dropping a PPO in the coming year. To me, that doesn’t add up.

51% of Metro Area practices reported being up with 30% being down. 67% of Outstate Minnesota practices were up with 15% being down.

42% of Metro Area practices and 55% of Outstate practices said their new patient numbers were up.

60% of Dentists still charge at the prep despite Delta’s push to have crowns charged at the seating.

Nationally, households are carrying low debt levels relative to their incomes. Household debt is at its lowest point in 50 years, proportionally.

50% of area practices use Digital Communication Software with Lighthouse, RevenueWell and Solution Reach being the leaders.

50% of respondents said they are or have used a Management Consultant. Advanced Practice Management had the highest satisfaction rate (8.7 out of 10) and a greater market share than all other cited firms combined. We are proud of that!

Pre-Election Effect?

I had more than one client tell me that their October was less busy than usual. In fact, one client told me that he looked at the election data going back three Presidential elections and in each of those cases, the fall schedule was lighter but the winter was busy. We’ll see!

THE DENTAL DOW—2016 WRAP-UP

The first half of 2016 was off to a brisk start with a nearly 6% increase in production. The second half wasn’t as strong. For the year, the Production was up 4.1% and Collections were up 3.3%. There was a 2.3% increase in patient traffic. New patients were up just .9%.

Production Increase Percentages

Collection Increase Percentages

 

 

STATE PLANS

If you are confused, you are not alone!

This is a flow chart that Shelly Ryan and Heidi Benson put together to help us and our clients understand the plethora of state-related plans. Call or email if you’d like the more legible “Full sized” version.

SURVEY RESULTS

Area Economic Dental Trends:

“Knowledge is Power” and we are on a mission to make sure you survive and thrive in a marketplace increasingly encroached upon by insurance/PPOs and large scale competition.

Our recent survey shows that PPOs are once again at the top of the list as far as issues you and your colleagues are facing. Yet in the last year, fewer than 5% of area offices actually dropped a PPO.

We are not purists. We feel that every office should have the right balance of PPOs for their area. We often see, though, that doctors are much deeper into PPO participation than they need to be. If you haven’t negotiated with your PPOs, you may be leaving money on the table. If you’re collecting less than 80%, you should seriously look into peeling back PPO participation. We can show you how you can lose the discounts and keep the patients!

Other Trends:

  • Metro Wages remain pretty much the same this year compared to last year. Outstate Wages are up 4%.
  • Digital Communications are now in 50% of the marketplace practices. We’ve seen this to be very handy. Patients like text confirmations. Email blasts help get the word out about the services you provide and help you keep on top of seasonal opportunities (back-to-school, yearend insurance/flex plan notices, etc.).

    The leaders in our area are (in descending order of market share): Lighthouse (33%), RevenueWell (21%) and Solution Reach (12%).

  • Despite the fact that Delta pushes hard on dentists charging at the seat, not the prep appointment, 59% of dentists in our area charge at the prep, 41% at the seat.

ADMINISTRATIVE TOOLS CHECK UP

Save Money! Run Smoothly!

When Heidi does her “Administrative Tools” check-up, she’ll look into things like:

  • Claims Processing (typically saving practices $150 – $300/mo.).
  • Credit Card Expenses: Many offices are spending more than they should on bank charges – banks make it complicated so you can’t really see what they are costing you.
  • Third Party Financing: Some options are better than others. Kinder to the patients and less expensive to you – think alternatives to Care Credit.
  • Answering Services. This is an old idea that is coming back again. We think it will help bring in more new patients.
  • Everything and every way to make your administrative staff’s job easier and save (or make) you money.

Just call (952-921-3360) Heidi to “Get it done!”

GETTING MORE FOR A DIFFICULT PROPHY

Right now, we can utilize regular prophies as a preventive procedure and codes 4341 and 4342 for more therapeutic procedures. A new code (D4346) potentially can close that gap and allow clinicians to report a therapeutic treatment of patients with generalized, moderate to severe gingival inflammation but without exhibiting pockets and bone loss. A “Difficult Prophy” code if you will.

Code D4346: Scaling in the presence of generalized moderate or severe gingival inflammation/full-mouth after oral evaluation. The exact description is the removal of plaque, calculus and stains from the supra and subgingival tooth surfaces when there is generalized moderate or severe gingival inflammation in the absence of periodontitis. It is indicated for patients who have swollen, inflamed gingiva, generalized supra bony pockets and moderate to severe bleeding on probing should not be reported in conjunction with prophylaxis, scaling and root planing or debridement procedures.

It sounds like the code will be effective January 1, 2017. Suggested fee: $230 Metro/$190 Outstate.

It is possible this code could close a CDT gap that presently exists. Stay tuned to see what insurance reimbursements are.

OPERA DDS

For Secure Communications Outside* the office and Effective Communications Inside the Office Intra-office communication is the most undervalued way to increase production and elevate quality of care.

Patients’ lives are busier than ever. Therefore, patients are looking for efficiency in their treatments. Practices which have incorporated “same day dentistry” – the concept of having extra capacity and doing what it takes to get treatment done the same day – have been shown to have an increase in office production of more than 30%.

To illustrate this workflow and how it successfully incorporates “same day dentistry,” imagine a patient, Doug, in for his routine prophylaxis. Doug broke tooth #3 a week ago and requires a crown for predictable restoration. Mary, the hygienist of 25 years, clearly recognizes this will most likely be the recommended treatment plan. Mary can, in one single message:

  1. Obtain necessary financial arrangements from the front desk.
  2. Inform the dentist that pulp testing and a crown is likely going to be their recommendation.
  3. Inform the team the patient would like to stay if there is an opening in the schedule.
  4. Alert an assistant to get a room ready for the same day crown.

The simple messaging continues with other members of the team, as:

  1. The dentist, who is currently in a meeting, can
    respond to the team immediately.
  2. The dentist can then page the assistant whom they
    would like to assist them in the procedure.

Communicating an anticipated treatment checklist by auxiliaries to the dentist prior to them engaging the patient can act like rocket fuel to “same day dentistry” and case acceptance. By having immediate and organized communication, staff can control the flow within the practice and increase the patient’s value of our services. Using custom checklist messaging, the practitioner can receive vital, pertinent information in a consistent order every time they are preparing to see a patient. Therefore, the dentist can enter the room already having a solution to the patient’s problem.

It sounds like a simple change because it really is that simple. But the impact on treatment planning and case acceptance is phenomenal.

Patients are happier because their needs are met immediately and concisely; Staff are happier because they are able to work without interruption, messaging only when ready and needed; Dentists are happier because they know everything happening in the office without having to check on people. For more about OperaDDS go to www.OperaDDS.com.

* “Opera Chorus” has fully HIPAA compliant email