The truth about getting new patients on the internet

Getting New Patients from the Internet (continued): In the “old days” of dental advertising, we had the hassles of dealing with decisions regarding which Yellow Pages to be in and Yellow Page ad design, and negotiating rates. Or planning direct mail campaigns (demographics, offers, mail lists). Those mediums could be plenty expensive but they weren’t all that complicated to figure out.

Internet marketing is a whole different ball game. It can be less expensive (or not!), but it certainly is more complex. Every day you and I are getting bombarded by pitches for SEO, SEM, and this or that great new Internet marketing scheme. I know that getting new patients is important to you so you better believe that we at APM are keeping our eyes open as to what is working, what is not and what the industry trends are.

You have limited amounts of time, energy and money to spend on advertising (not to mention doing dentistry and keeping your patients and staff happy), so we understand that dealing with the nuances and sorting through the hype of Internet marketing can be overwhelming. I’m hoping these articles will help.

Souping Up Your Internet Presence: Stage I – Establishing Your Google Places Page & Cleaning Up Directories: When a potential patient searches for a dentist in your area, they are most likely doing a Google search for “dentist in Your City” or “cosmetic dentist in Your City.” Their results will list three to eight dentists’ in the local proximity who best match their search keywords. Clicking on the links for those dentists will take them to their Google Places page, a miniwebsite of sorts listing contact information, office hours, photos, driving directions, areas of specialty and, most of all, credible reviews from actual patients.

An absolutely essential first step is to claim and enhance your Google Places page, complete it with information, photos, videos, if available, and then to collect reviews. Some Doctors have multiple Place Pages, for example, and that does not help you get found and, in fact, can hurt you. There is often inaccurate information on these directories. We’ve seen completely wrong phone numbers, old addresses and many long-established practices that are virtually invisible when you try to find them on the Internet. So the first step is getting your presence in the multiple directories straight. This also includes adding pictures and other content on your “Place Page.” A very important part often is getting patient reviews posted.

Then, we want to submit your practice information to the search engines and directories that are getting traction in your area so that your information is consistent across the board and you have the best chance to be featured in this suggested list of dentists. We correct inaccurate information, eliminate duplicate listings which dilute your presence and help you to establish a consistent and broader footprint across the web. We call this first stage “Cleaning Up The Directories,” a very detailed but absolutely necessary task.

Stage II - Website Enhancements: The footwork of “Stage I” will increase your visibility in the local directories and get you impressions and, hopefully, clicks through to your website. Then, once they get to your website, it’s a matter of engaging the potential patient and moving them to make an initial contact by e-mail or phone.

A lot is involved, whole books have been written about this. Best practices for effective websites include having a call-to-action on the home page, pictures and bios of the doctor(s) and staff, video brochures, patient testimonials, and before and after pictures. This also may include introductory offers such as free or low cost whitening, a low cost complete kid’s check-up, or other type of offer similar to what you would see with direct mail advertising.

Different than the SEO methods that were popular a few years ago to load each page with all of your keywords, effective websites today strategize a purpose for each page and align the keywords, content, tags and descriptive code with that message. As they say, “Content is King.” This is also an important part of Stage II.

Stage III – Widen Your Internet Footprint: Once the housekeeping is in order, you can start expanding your presence on the web by adding content and through blogging and social media (Facebook, Twitter) or through paid advertising (such as Google Adwords Express or Pay -Per-Click) and special advertising promotions (Groupon, Living Social). With a little organization and persistence, your efforts will pay great dividends in expanding your presence on the Internet and attracting potential patients who are looking for a great dentist!

Putting It All Together:

New directories are constantly coming on to the scene and existing directories update and cross check information sometimes sending bad data around like a virus. Most practices need at least some directory work. You should be checking your listings periodically to make sure they are still accurate. You may have paid your website company to help you with directories at one point, but it’s been our experience that they are often like bad painters. They’ll throw some stuff together but not really pay attention to the details and therefore, some potential patient traffic is lost. Or, you may be already getting a decent amount of traffic to your website but the website itself needs work. Perhaps it doesn’t really reflect the nature of the office (i.e., it looks too “cookie cutter” or too “Plain Jane”) and doesn’t really give the patient a reason to e-mail or call you.

The devil is in the details. Just the technical nuances in getting the directories straight, the organization of the website and its pages optimized, pictures uploaded, patient reviews, etc. can be a daunting task. But again, it helps to have your priorities. For example, it doesn’t make sense to have a graphically beautiful website if the directories are haphazard and you get very few impressions. And, it doesn’t make a lot of sense to spend time on Facebook and doing blogs if you don’t have your website in order so that as you get interest, people can learn more about you in such a way that they’ll want to become new patients.

Our clients work with the whole gamut of website providers…everyone from their sister-in-law to the big generic companies like Officite and Prosites. It’s been our experience that website providers are happy to take your money each month and not really do much. That’s why we brought Kelly Larson on board. Her job is to “ride herd” over website companies and to keep us and you absolutely up-to-date on what is really working in Internet marketing.

I’ve met people with more technical knowledge of HTML programming. I’ve met others who are great graphic designers. I’ve certainly heard from others who are great sales people. I’m approached about new Internet marketing schemes almost every week. I have not yet met anyone who really knows as much as Kelly Larson does in terms of the nitty-gritty of all this, focused on getting new patients through your door. Whether you are just getting started or already have a sophisticated Internet presence, she can give you a push and help keep you ahead of the competition.

The Mystery Shopper

Has a mystery shopper called you yet?
We’re getting reports from many clients that they’ve been called by the “Scheduling Institute,” Jay Geier’s group. Mystery Shoppers will call posing as a patient. The patient is usually asking for a fee on a crown, or saying they just moved to town looking for a Doctor, or want to know if the practice takes kids, etc.

This is the Scheduling Institute’s way of finding prospects. The Scheduling Institute has a detailed and extensive program focused on the initial patient phone contact with the office.

Surprise! Almost every office they call earns a 0 on a scale of 0 to 5 for handling calls effectively. Therefore, Dentists are told that they stand much to gain by subscribing to their program… that new patients can go up by 30% or more with thorough staff training.

There is much that the Scheduling Institute recommends that we agree with, but not all. We’ve been doing “Mystery Shoppers” ourselves for over 25 years. We agree with Jay Geier on this…doing things right can add to your new patient flow. Like the Scheduling Institute, we find that most often the initial phone contact with patients is a matter of screening, warning and indoctrination.

For example, there is often way too much focus on insurance and x-rays. Even very competent, well-meaning front desk people can present a bureaucratic and cold presence.

However, before you sign up for a $5,000 program, let me assure you that we can help you and your staff with this. In some cases, we feel that the Scheduling Institute is too aggressive, maybe not “Midwesternly” enough. So, if you got “0 stars” call us and we’ll help. If you don’t know what your rating is and want a “Mystery Shopper,” we’re happy to do it for you. Just call and we’ll make arrangements to ensure patients’ and shoppers’ first contact with your office is first class.

We want the “Mystery Shopper” not to be the Secret Police though. We want to work with your staff… not to catch them doing it wrong but to catch them doing it right!

Trends to watch

Trends: Matt, Shelly, Robyn and myself make over 600 onsite visits per year. Here is an informal list of trends that we are observing:

1) Multiple location group practices (e.g., Midwest,Heartland). See our previous newsletters on this. (They are online at www.AdvancedPracticeManagement.com under “Dental News.”)

2) More GP’s doing ortho. For example, about 22% of offices now offer Invisalign.

I remember my travels to Outstate MN over 20 years ago when lots of GPs did ortho but that faded. It’s coming back now with the new technology and approaches.

3) Technology in the Operatories: Over 60% of Dentists have digital x-rays and in-operatory computer monitors. Add to that Laser Caries Detection (45%), Intra-Oral Cameras (65%), Patient Education Technology and Lasers.

This technology can easily run $14,000+ per operatory and that’s in addition to your clinical delivery equipment (chairs, dental units, etc.). So, you have to get “Result Control.” See the article on this at www.AdvancedPracticeManagement.com.

4) More Delta Participation: In 2004, provider Delta Premier participation was down to about 81%. Nowadays, 87% of area practices are with Delta Premier. With Delta continuing it’s domination of the dental market, it can be quite challenging for Doctors to be outside the network.

Another 31% of Dentists are with a “Delta within a Delta” (Delta PPO). In our opinion, many practices with Delta PPO do not need to be with Delta PPO… and it costs them thousands. Essentially, their Delta write-offs are almost doubled and there isn’t enough gain (in our opinion) to make up for the write-offs. Likewise for Met Life.

Other PPOs such as the Premier Group, Health Partners, etc., pay fees more akin to regular Delta Premier and, if an office is running efficiently, the bottom line can be fine.

5) The Internet as a Source of New Patients: I’ve seen several instances this year where the Internet had overtaken the Yellow Pages and other sources (e.g., Direct Mail) in the number of new patients brought into offices. This is not universal. In some places Yellow Pages are still pulling. Visibility (signage) remains a very major factor. Of course, so are patient referrals which still account for 50+% of most office’s new patients.

6) Treatment Coordinators: A treatment coordinator is usually a hygienist or an assistant who presents treatment all the way from the x-rays through to the financial arrangements. The most ready model for this is orthodontic offices who have had treatment coordinators for years. The Doctor looks at the treatment plan, the treatment coordinator goes through it with the patients, holds their hands and works out the financial arrangements.

It’s easy to hire a hygienist and plug them into your operations. Developing a treatment coordinator is a little more tricky. It is a less defined job description. It takes a unique set of skills (a good dental background with good communication skills) and can be hard to work into your routine if you are not used to it. However, when we see offices with treatment coordinators, they do well.

This is by no means a comprehensive list but the trends mentioned are worth your attention.

Front Desk Collections:— A Statistical Snapshot

	AVG	75%ile	95%ile
Front Desk Collections as a % of Production	33%	38%	59%

It’s not just about the money! Our client base averages 33% front desk collections. Collections at the time of service can reduce billing costs and of course eliminate completely the chance of not collecting! However, the real benefit in increasing front desk collections is in increasing patient commitment. Low front desk collections are a sign that conversations are not happening about treatment costs and insurance at the front desk.

In every office there are situations where the Doctor and hygienist recommend treatment and then are surprised to find out later on that the patient didn’t schedule or cancelled. “I thought they understood completely why they needed to get this stuff done now…” So sometimes the Doctors can feel that the front desk isn’t able to field the treatment they are sending their way.

Of course, the front desk isn’t the only possible culprit here. It’s a matter of getting the patients to the front desk with the right information at the right time so they can do their jobs. If your front desk collections are under 33%, they can be better. We can help! We coach teams on this all the time. As front desk collections go up, watch, your crown and bridge will too!

$25 Million per month in Perspective:
(from the APM Database)
Each month we collect data from offices all over the Upper Midwest. The collective productivity of these offices is over $25,000,000 per month. That’s a lot of data. How do we make it useful? We can look at Hygiene Production per Hour, Doctor Production per hour, Crown and Bridge, New Patients, Down Time, etc. All of these statistics give you a very real perspective on how much you can expect from you and your staff. What is possible and what is a stretch.

Here are some key statistics from the recently compiled 2010 data:

		Metro Area
	Average	75%ile	95%ile
Dr. Production per hour	$589	$665	$825
Hygienist Production per Visit	$138	$148	$167
Collection Percentage	85%	87%
Accounts Receivable Ratio	1.04	1.22
Front Desk Collections	30%	35%
Production per Active Patient per Year	$677

		Outstate Area
	Average	75%ile	95%ile
Dr. Production per hour	$453	$509	$681
Hygienist Prod. per Visit	$117	$130	$138
Collection Percentage	91%	95%
Accounts Receivable Ratio	1.1
Front Desk Collections	36%	40%
Production per Active Patient per Year	$519

Obviously, if you increase your and your hygienists’ production per hour, all things being equal, you’ll make more!

You can increase your production per hour (capacity) by looking at the main factors that go into determining it such as:

1. Staffing, Delegation and Teamwork: Presumably, with more staff working together that you delegate more to, you can do more than with less staff not working well together that you don’t delegate to!

2. Treatment Plans and Procedure Mix: If you’re doing Quadrant Dentistry or higher end procedures, you’ll produce more than if you’re doing patchwork all day. If you went to CE for cosmetic, ortho, implants, etc., use the techniques.

3. Facility, Equipment and Technology: With more rooms, better equipment and more advanced technology, you can get more done than with fewer rooms, less equipment and less technology.

4. Clinical Speed: Not the biggest factor. The “time on tooth” for dental procedures between dentists isn’t all that different. There are exceptions though, for example, with Cerec. Some Dentists (through delegation, training and experience) can complete the whole procedure in 1 hour. Others need 2-1/2 hours.

5. Appointment Book Control/Scheduling: In most offices, the schedule is simply a list of patients coming in. Make your schedule a planning tool and you’ll profit accordingly. If you take care of each day, the months and years will take care of themselves!

This can involve setting a production per day goal. I’m sure that you’ve all heard of this many times. The goal has to be realistic though and really designed to leverage the resources you have. For example, often Doctors have two assistants but don’t make full use of them. For that second assistant, you have to comfortably see at least two more operative visits per day than you would if you only have one. If you don’t, your overhead is going to be above industry standards.

You don’t have to be booked out a long way to increase your hourly production.
Good planning can make sure that every day is more productive. Plan your “Perfect Day” and block it out accordingly. Sure, you’ll rarely attain “perfect” but if you start putting together each day with a plan you’ll end up with more good days!

If you haven’t already worked with us to do so, it’s time to set your statistical targets for the year. Then we can work back to your and your hygienists’ production per day and hourly goals. Let’s give your staff a little direction on how to put those days together the way you want them.

The truth about getting new patients on the internet:

We have a unique advantage because through our work in the field visiting well over 200 dental offices we can really see what’s going on out there. What’s working and what isn’t. We know that getting more new patients is of great interest to most of our clients. So you can bet we keep our eyes and ears open about the sources of new patients.

Over the past two years the Internet has really come on and in many areas is superceding other sources of new patients such as Yellow Pages and direct mail. Clearly this is where the marketplace is going but there is also a lot of hype. Every week we hear of a new scheme involving special promotions*, social media, etc. Usually the bigger the promise, the more the bull. There is no such thing as a sure thing when it comes to increasing new patients. Believe me, if there were, we would know about it. However, it is a sure thing that if you don’t do anything, you won’t see more new patients.

Over 60% of area dentists now have websites. Most dentists go with the major outfits such as Officite, Prosites, PBHS, IDA, Sesame and The Online Practice. All of these companies have their strengths and weaknesses. Many dentists also hire an acquaintance, patient or relative that “knows websites.”

The common denominator is this. When most dentists get their website up, they more or less ignore it. It just sits there. Getting more new patients from the Internet isn’t just about your website. And no, it isn’t all about Facebook either. It’s a combination of factors of which, leading the pack are your presence on the major search engines like Google, Yahoo and Bing. Most importantly, the Google “Place Page.” There are many other directories (such as Yelp & Insider Pages) that attention needs to be paid to also.

Since 70% of all web searches take place through Google, the Google Place Page is the “front porch” of your website. You have to have the lights on and make sure that there are positive reviews to entice people to proceed on to visiting and scheduling on your website. Once they get into your website, they shouldn’t have to wait a while for flash or fancy graphics though. Web searches today want quick access to pertinent information. There should be very concrete information about your practice and appropriate copy and design to lead people to act...that is, make an appointment!

Website enhancements can include a “video brochure”, video testimonials, offers, photos and biographies. If you were looking for a healthcare professional, what would you want to see on a website? You wouldn’t want a lot of filler or platitudes, “Fine quality care, comfortable surroundings, blah, blah, blah.” You want to know about that Doctor, the staff, the hours, the services and what to expect. You want to see that they are a nice looking, clean cut group of people in an atmosphere where you will feel safe.

Further enhancements can include Twitter, Facebook and blogs but most of you can get well ahead of the competition by paying attention to your Google Place Page and having a website that truly reflects you...and that can be done even with one of the generic companies such as Officite or Prosites if you work at it.

How many positive reviews do you have up on Google? Do you know? If you don’t, you probably don’t have as many as you should! Yes, you can use “Demand Force” and other companies to help you in gathering reviews and testimonials (reviews are on the website and testimonials are within your website). However, don’t just rely on those.

We’re all very busy and it’s hard to have a lot of time to putter around with your website. There is also a lot of jive out there. We all probably get just as confused by the web peoples’ jargon as patients get confused by dental jargon. So, on the requests of many of my clients, I have lined up top rate Internet marketing help. We can help you tune up your Web Presence all the way through; Whatever website company you are with, wherever you practice. You see, if you are paying attention to and tune up your website, your presence in the directories, etc., you’ll be ahead of the competition in your area. You’ll have a stronger presence on the Internet and you will get more new patients.

The bottom line is this; getting your website to the top of page one on Google and optimizing it to attract potential patients is like aiming at a moving target. Be leery of anyone who tells you otherwise. What you can count on from my team is that we have our ears to the ground and are staying on top of the ever-changing Internet landscape to keep you on the path and a step ahead. The Internet is increasingly where people go to select a Dentist and we’ll help you make sure they select you.

 

*For example, we have seen some spectacular numbers with Groupon and Groupon Clones but patient retention has been a challenge. We are learning how to improve this.

Cost Control and Result Control, Part Two

As you may recall, the last time I wrote about “Cost Control.” Most of you have, or will be, within the next 2-3 years making investments of $50,000 more in technology; digital x-rays, Diagnodent, lasers, clinical charting software, monitors, patient education software, Cerec, electric handpieces, endo equipment and so on.

This can easily come out to over $12,000 per treatment room. For starters, you want to make sure that you don’t pay too much. That’s where specing out what needs to be done and comparative bidding come in. Many of these items are bought together (especially digital x-rays, monitors, intra-oral cameras and clinical charting software). Get competitive bids. Moreover, and probably more importantly, get expert help in planning your technological upgrades to make sure they work well for you. When your hygienists’ time is worth over $120/hr. and your time is worth over $500/hr. you don’t need glitches. Interrupting your work flow can be very expensive!

Today I’m focusing on “Result Control.”

As an owner you want to get a return on every investment you make. In fact, the whole idea of good management is to get the biggest return on the resources you have; your time, your money and your skills. What organization would spend thousands of dollars without having a clear idea of the outcome they want in return? Upgrading just for the sake of upgrading is insanity. So, as you make these investments what outcomes are you planning on?

My favorite example of this is intra-oral cameras. Over 50% of dentists now have intra-oral cameras and half of those cameras are used fewer than five times per week. Very poor result control. If you purchase intra-oral cameras, you are presumably doing this so you can better inform the patient so the patient will make better choices which results in more case acceptance. Better case acceptance means more production. This should show up in increased crown and bridge (for example). Therefore if you buy intra-oral cameras and your crown and bridge doesn’t go up, you didn’t get result control. It’s a pretty good bet they aren’t being used. So, to get them used!

Four-step plan for your office:

1) Do Clinical Calibration with staff so they know to what end you want this educational tool used. Have a meeting in your practice to talk about when you feel it’s in the patients’ best interest to crown a tooth and when you don’t. When is a composite indicated vs. a crown or vs. an amalgam? Who are good candidates for implants and who aren’t? When are x-rays really needed? How about fluorides? If you haven’t worked through these issues with the staff, they’ll be pointing the intra-oral camera around but only vaguely knowing what they are trying to do. Check out the article on Clinical Calibration posted on our website. www. AdvancedPracticeManagement.com.

2) Be very sure your cameras and monitors are ergonomically set up. And, don’t ask the hygienists to share a camera. You’ll do far better paying for two cameras that are actually used than one shared camera sitting in the hallway or lab.

3) Track how many times your intraoral camera is used per day or per week. If you’re not measuring this, it’s probably not being used enough. When you first get the intra-oral cameras, ask the hygienists to keep a tally of when they’ve used it. Over 2/3 of the adult patients should be shown something. It doesn’t always have to be something bad. Showing patients what’s good is helpful too. You like it when you go to the doctor and hear good things too, right? Anyway, the more the patient knows (and people learn through what they see) the more they appreciate what you can do for them.

4) Put this all together in a set of goals: • As a result of this Patient Education Technology (e.g., intra-oral cameras) we will see an increase in patient acceptance by two crowns per week. Therefore, we believe that there will be $8,000 more per month in production (that’s great result control). • We will use the intra-oral camera on 70% of our adult patients. This will be tracked on the daily schedules by each hygienist. The exceptions would be patients who have other problems that are not easily visualized by the camera, a patient due for full-mouth x-rays, the patient arrives late or there is some other mitigating circumstance. DIGITAL X-RAYS: When digital x-rays are installed in your treatmentroom there will likely also be capability such that your hygienist can set up her own appointments, enter treatment plans, enter progress notes, enter today’s charges, use the intra-oral camera and use patient education software.

In most practices that have paid for these technological capabilities, only two or three of the above are performed regularly. What is the plan for your office?

Entering treatment plans, setting up the next appointment, entering today’s charges, all take your hygienists’ time. However, digital x-rays help save the hygienists’ time. No running to the processor, no mounting, etc. What are the expectations of how the team will use the extra time? Your hygienist simply must have the training so that she is completely comfortable with the software so she can perform these functions. Then it’s likely the patient will arrive at the front desk with all the information already available to your administrative staff. Then the administrative team can do what they do best-work with the patient to make their dentistry as comfortable and affordable as possible (financial options) and commit them to treatment. That should result in more treatment done, right? Measure it!

Hour-long hygiene appointments

A subtle change that’s very expensive: Many offices reserve 45 or 50 minutes for standard adult recall hygiene appointments. Often when all of this new technology is introduced, the hygienist will feel they need more time. It doesn’t seem like a big deal to increase hygiene appointment lengths to 60 minutes, but that results in one fewer patient seen per day on average. Not only does this reduce the hygienists production by over $120 per day—it reduces demand for the doctor’s services by over $300 per day (Many dental offices produce $400+ per exam so any decrease in hygiene flow can really take the wind out of your sails.) Fifteen fewer hygiene visits per month all of a sudden can mean $6,000 less treatment per month. That’s a very negative bang for the buck for your investment in technology!

Another solution is to add more technology! For example, automated or voice activated perio charting. Or, a digital pano. It takes just 8 seconds – even less than digital full-mouth x-rays (in situations where it’s clinically acceptable). These technologies can help your hygienists maintain their visit per day capacity even while increasing their productivity per visit.

However, it’s clear that hour-long hygiene appointments are becoming increasingly common. You may be fighting a losing battle if you keep these lengths so tight that the hygienists won’t buy in to or really employ the technology you paid for. So, what do you do?

In a larger office a possibility is to hire a hygiene assistant so they can keep appointment lengths to 50 minutes. However, I’ve seen offices hire this assistant and still have appointment lengths go to an hour and so the bottom line is hurt. Again, if you add a hygiene coordinator/assistant, you have to have result control.

For many of you the best course of action would be to allow the hygienist the additional time but make sure they use the technology. That’s your quid pro quo. “We now provide digital x-rays to save you time. I really need you to use the intra-oral camera, the Diagnodent, etc.”

Then, since you’ve subtly cut into your hygiene capacity, you have to add additional hygiene time to counteract that. It will all work out if your hygienists are presenting the treatment. Your case acceptance will go up and that will more than counter the reduced patient flow per day per hygienist. If you added hygiene time then you’ll keep your flow up and allow room for growth.

I’ve seen mistakes in the above that cost offices thousands of dollars directly and many thousands more indirectly.

Getting a bang out of your Cerec

CAD/CAM-Cerec: I’ve never been able to talk a client into or out of buying a Cerec machine! I feel that most of the time this decision is made at a gut level. That’s fine. That’s your business. However, it’s my business to make sure that if you buy a Cerec you get bang for your buck.

First of all, before you make this very expensive investment, ask yourself, “Is there somewhere else I can get a bigger return on my dollar?” I’ll argue that there are many smaller investments you should make first as you ramp the practice up such as; Diagnodent, automated endo, intra-oral cameras and perhaps non-technology items such as better signage, advertising, training a treatment coordinator, and getting you and your team significant continuing education.

Before you buy the Cerec, “Count Crowns.” That is, for a month or two keep tally of how many patients for which you feel the Cerec would have been the right solution. Most of my clients tell me that there are some cases that are better suited to Cerec than others. I’m not a clinician, it’s up to you to make your own judgments about that based on discussions with your colleagues or authorities you respect. Then, once you buy the Cerec, make sure that you are employing it as much as you planned on and see that your lab expenses really do decrease.

Another subtle cost of a Cerec machine is that at least initially, it takes longer to do crowns. Many doctors I’ve observed with Cerec will initially have to spend 2 – 2 ½ hours per unit. Obviously, if your time is worth $500 per hour, you don’t save enough on the lab cost to justify that extra hour (or even ½ hr) in getting a crown completed (most doctors take an hour for a conventional prep and a half hour for seating- 1 ½ hour total). So if you do 20 units per month and the Cerec machine takes you an extra half hour, that still “costs” you $5,000 per month in capacity. Now hold on Patterson folks, before you call me, hear me out. The answer here is additional training. There are excellent post purchase sources for training on Cerec to bring the procedure time down. If you buy a Cerec machine and don’t plan on training your staff to help you use it, well, you’re going to have poor result control. With the correct experience and training, I’ve seen many doctors bring their single unit Cerec times down to 1 – 1 ½ hours. I am simply astonished to see that a doctor will spend $100,000+ on a piece of equipment but flinch at the idea of an extra couple thousand dollars in training to really come into song with it.

Training and preparing your staff

Speaking of training, that’s also very true for all the technology that you’re going to put in your and the hygienists’ room. After an initial 3–4 days of training, arrange for follow up training in three months. In a larger clinic, I think it makes sense to have a trainer on board for a day or two as everyone is using the clinical charting and other matters. It really helps that there is someone right in the building who can show you how to do things. Also, just as in paper charting, you have to decide as a group how you are going to chart. There are a lot of choices and you have to pick the configuration for your office. This takes some time and focus.

So, as with so many things, it’s best to begin with the end in mind. What are the outcomes you intend to get? And, how are you going to measure them? Before you go out to purchase the technology, make it absolutely clear to the staff that you need their commitment to use it! Prioritize your expenditures and tackle them in order of where you can get the biggest bang per buck. In this way your practice builds up more and more profits and momentum. Don’t buy technology because “everyone else has it” or even if, “no one else has it”! Buy it because you know the outcome you want for your office. And, by the way, just “an up-to-date image” is not enough if you are serious about your bottom line. It has to be for go, not just show.

In summary, if you spend $$$$ on technology:

1. Define the outcomes you expect (and increased revenues or decreased expenses have to be part of that).
2. Get staff’s understanding and commitment (e.g., clinical calibration).
3. Get additional training. The “built in” amount is not usually enough.
4. Measure activity (e.g., time used per day) and results (dollars brought in or saved).
5. Celebrate your successes. Recognize and reward your staff accordingly.

Cost Control and Result Control Part One

Bringing digital technology to your offices

According to our 2009 survey, as of this year more than 50% of dentists (54%) now have digital x-rays. Bringing computing to the operatories entails considerable expense. Usually as digital x-rays are added, other technologies are added or upgraded too, such as intra-oral cameras, patient education software, and digital record keeping. Financially speaking, this often comes out to over $12,000 per treatment room.

The pace of bringing digital technology to the operatories is increasing. Many of you will be making these investments over the next three to four years.

Since we have and will have many clients who will be investing over $50,000, $100,000 and up in this technology, I have two main suggestions to get more bang for your buck:

1) Get professional help in specs and get bids for the equipment – “cost control”

2) Commit to additional training so you get “result control”

Intra-oral cameras for example

In business, costs are inevitable. A consistent theme of my advice to clients is that you have to have “result control.” That is, if you buy intra-oral cameras, you want to make sure they’re used. Half of intra-oral cameras are used less than five times per week. Almost every office with intra-oral cameras struggles with getting them to be part of the hygienists’ routine (and the hygiene department is where they can have the greatest benefit in helping the patients understand their problems and value your solutions). Lots of offices have the capability to do chartless record keeping but less than 10% are truly chart free. With this technology in the treatment rooms the hygienist (for example) can post charges, set their next appointment, use the intra-oral camera, enter the treatment plan and use the patient education software. However, usually only two or three out of these five things are routinely done.

Professional help because the devil is in the details

Most dentists have neither the inclination or the time to keep up on computer software and hardware. I have seen many installations where there was no competitive bidding whatsoever. Or, once the equipment was installed it was glitchy... the digital x-rays would go down in one room now and then, the intra-oral cameras wouldn’t work well, there would be server problems, wires and cables in the way, poor monitor placement, etc.

With technology the devil is in the details: video cards, cabling, monitors, monitor position, support, warranties, digital x-ray choices, etc.

There are reputable and competent technology installation firms out there, such as Erickson Technologies 651-452- 6758 and Sunset Dental Technologies 612-326-8693. However, many clients have used the local “computer guy” or just bought the hardware from the software vendor or supply company.

I recommend you check out Ted Takahashi with T2 Consulting 952-891- 5177. Ted does not sell anything and makes no commission or “finder fees” on any technology recommendations. What he does is draw up the specs so you can get competitive apple to apple bids. He knows what works and he’ll help you pick the right stuff. And, furthermore, you’ll be assured that the installation will be truly functional from day one.

Don’t let the suppliers take your business for granted!

Whatever route you take, just remember to focus on both cost and result control! Don’t let the suppliers take your business for granted! There almost always is some bargaining room if you go through a bidding process.

Group Practice: Doctors, You Are Sitting on a Gold mine

Step outside, please.

If you can step outside yourself for a moment and look at your labor as a Doctor separately from your role as an owner, you can see what a desirable investment your dental office is. Now let’s look at key points in increasing the profitability of a practice (whether you own just one or 20):

1. Hygiene productivity makes a big difference on the bottom line. Your sweat aside, it’s largely where the profit of ownership comes from!

An approximately $10 per hour (or patient visit) increase in hygiene translates to an almost 10% increase in profits. The average hygiene production per hour is $139 in the Metro Area and $122 for Outstate. Why would any Doctor (owner) in his right mind pay market rates for hygienists that are producing at less than the market?

2. Lower Costs: Some of these group practices have negotiated better prices from the supply houses and labs.

3. Negotiating with PPOs: Because they have a network of practices, they are sometimes able to negotiate better reimbursement.

4. Standardized Systems, training and supervision.

5. Serious Business Ethic: These groups are less tolerant of sub-standard performance than private practitioners often are.

Your Advantage:

You don’t have the group buying or bargaining power that these large groups do but you have one key advantage. You’re an on-site owner! You are totally invested in your practice, both financially and personally. And one more thing, you have the best management team in the upper Midwest (if not the country) eager to support you and add to your success (us). Our depth of experience and perspective in advising and receiving data from over 200 offices gives you a powerful ally in the marketplace.

Our Job:

Group practices aren’t the enemy, but as long as you own your own practice, you are competing with them and their economies. It’s our job to help you continue to thrive in an increasingly competitive marketplace.

So, relish the fact that you own your own business. Be resolved this year to leverage our recommendations and your business systems into greater profits.

Be resolved to let your staff know that you want them to be happy and focused. And, be resolved to hold them accountable for working the systems as planned and be resolved to reward them well for performance.

You and your staff will prosper in direct proportion to how well you follow through on our advice.

The Growth of Multi-Location Group Practices

Like Arby’s?

Years ago we thought the trend would be franchise practices in retail settings. It hasn’t exactly happened that way but there has certainly been a growth of multi-location group practices.

In most cases, the model is less formalized than say an “Arby’s.”

Of course, there are the more “corporate” type of large clinics in multiple locations, such as Metro (37) and Park (23).

But, if you look at the recent activity in the Midwest, what you see are groups such as Midwest Dental and Heartland (word is Heartland is coming to our area). Midwest Dental owns more than 77 upper Midwest practices. Heartland (centered in Illinois) has about 300.

Then there are smaller multiple location groups such as Main Street Dental (5 locations in southern Minnesota) and Family and Cosmetic Gentle Dentistry (12 locations) in the Metro area.

There are other niche-type practices such as The Smile Center (7) and Emergency Dental Care U.S.A. (7 Nationally).

Midwest Dental and others are eager to buy and they’re growing. Heck, Heartland Dental even owns a corporate jet! You have to be making some serious moola to have one of those. Let’s take a look at how some of these groups do it.

The Economics of Multi-Location Group Practice

Purchasing a Practice:

Example:
Practice/Collections/Month	$100,000
Practice Operating Net per month (at 36%)	$ 36,000
Dr. Production per month (2/3 of $100,000)
Non-Owner Dr. Compensation	$ 66,000
(30% after lab and write offs)	$ 19,800
Practice Sale Price (36,000x12x1.75)
Debt Service/Mo. on Practice	$756,000
($756,000 x 8 years x 8%)	$ 10,687
The Pay Off:
Practice “Operating Net” per mo.	$ 36,000
Doctor Compensation	$-19,800
Debt Service	$-10,687
Operating Profit/mo.	$ 5,513
Annualized:
Operating Profit	$ 432,000
Doctor Compensation	$-237,600
Debt Service	$-128,244
Operating Profit Per Year	$ 66,156

The Bottom Line:

For an outlay of $128,000 a year in debt service, the owner(s) receives $194,000, a 50% Return on Investment. Where else can you get that kind of R.O.I?? So what seems to be on the surface a sort of slim net of about 5%-6% on collections per month when leveraged really adds up over the course of the year. Now add to that some solid management for practice profitability and growth and the numbers really pop.

It Starts with Goals:

You hear it from me every year. Now it’s time to reflect on the past year. Note your accomplishments and challenges. Outline your goals for the coming year. Write down what you’d like to see happen. Share them with us and we’ll help you make them happen.

Most of our clients with written goals reach most of their goals. It costs so little and it can be so rewarding. Just take an hour right now and do it.

The Latest Word on Practice Overhead:

KDV* has just released its bi-annual general practice overhead survey. It’s a sample of 70+ full-time, mature practices. As such, it’s the best and most detailed information of its kind available for our area. Some highlights:

• Average Net Income was $259,842. This was down from the $275,302 average in 2008. KDV said this marked the first decrease in 25 years of preparing these statistics.

• Overhead as a percentage of fees received increased a point to 65%. So the average net is now 35%. What is yours? Remember, average is not necessarily your aspiration.

• Staff gross wages are still about 26%-27%. If you can’t clearly compare your statistics to the industry standards and don’t have a clear look at your bottom line, we can help. Get QuickBooks Pro really working for you. No serious business owner would go without clear financial reports. This overhead survey is a very valuable perspective to help you in budgeting. It will be posted online at AdvancedPracticeManagement.com on the “Surveys” page. You’ll also find other useful information there on the current Dental Economy, Technology and Insurance Participation.

Our Fee surveys are also online and were recently updated in October.

* Davich, Wilson and Morrow, who have been doing these overhead surveys for 25 years, merged with KDV (KDV.com).