Bullseye And Money

7 signs your dental practice is busy, but not productive

May 2, 2014
Sometimes a super busy dental office does not translater to a profitable office

Reprinted with permission from Sally McKenzie and McKenzie Management.

So what’s your definition of “busy”? A patient reception area that’s full to the brim? A schedule that has you and your energized staff doing hallway sprints from 8 a.m. to 5 p.m.? A day that keeps you and your team at the top of your game and on track with your goals?

The definition of “busy” means different things to different people. For some it’s synonymous with stress. For others it means excitement and challenge. Then there are those who see busy as the precise balance between a fully engaged team and profitable practice. They, however, are the exception.

In far too many practices, “busy” means frantic, but far from financially sound. Why? Because team members are doing precisely what the doctor has told them to do – keep him or herself, well, busy. Yet in spite of the persistent pace, production continues to lag and profits don’t measure up. The doctor is at a loss to figure out why. After all, just look at the schedule. There’s barely an opening to be found.

Naturally, dentists will assert with utmost conviction that the “full” schedule is an obvious indication they are running successful practices. The “keep the doctor busy scheduling strategy” seems to be working, so why don’t the numbers back it up? In the dental practice, busy is often an illusion that doesn’t necessarily translate to productive.

A busy-but-not-productive practice often has a number of telltale signs:
1. The doctor is booked more than three weeks out, and patients have to wait several weeks for even the most routine procedures.
2. There is little if any consistency in the time scheduled for procedures – 30, 60, 90, minutes.
3. The objective is simply to keep the schedule full.
4. The hygiene schedule is booked for months.
5. “Lunch hour” is a nice euphemism for 10-minute lunch breaks for the team to catch their breath and grab their protein bars.
6. Patient retention is weak.
7. Revenues are flat.

I recommend you take your focus off of merely “busy,” and pay attention to what it means to be truly productive. First, define goals, objectives, and priorities. The doctor must develop a clear picture of the practice’s financial demands and desires. It is the first and most critical step in understanding the importance of scheduling to meet daily production goals.

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You need to consider the fundamentals, including: How much are your bills? How much do you need/want to pay your staff and yourself? How many hours per day and days per week do you want to work? How much vacation time do you want to take? What about costs for bonuses, retirement, continuing education, equipment and computer upgrades and maintenance, and more? All of these financial needs and desires play a role in determining the practice’s revenue goals.

Next, set production objectives. Rule No. 1 in building a profitable dental practice is to ensure that the scheduling coordinator is scheduling to meet production objectives, versus scheduling and then hoping at the end of the day that the goal was met. Set scheduling goals based on your overhead expense.

Setting a production objective requires the practice to know its overhead expense. How much money does it take to pay the bills and payroll? For example, say that expenses and payroll total $46,500 per month and your objective is to have overhead be no more than 62% of your monthly collections. Sixty-two percent of $75,000 is $46,500 in collections per month (46,000 ÷ .62). If you are collecting at a 98% collection ratio (collection divided by net production) you will need to produce $76,531 per month (75,000 ÷ .98). If you work 48 weeks a year, which is four working weeks a month, and see patients four days a week, that equals $4,783.19 per day in net production.

The industry standard for hygiene is 33% of the practice production, which equates to hygiene producing $1,578 per day, and the doctor producing the difference of $3,205 and working an eight-hour day, which equals $401 per hour. If you are seeing patients on 10-minute units and there are six units in an hour, the doctor must have net production scheduled at $67 per 10 minutes.

Sally McKenzie is CEO of McKenzie Management, a nationwide dental management, practice development and educational consulting firm. Working on-site with dentists since 1980, McKenzie Management provides knowledge, guidance, and personalized solutions that have propelled thousands of general and specialty practices to realize their potential. She can be reached at 877-777-6151 or [email protected].