Sally McKenzie, CEO McKenzie Management Printer Friendly Version

"I Deserve a Discount, Doctor"
By Sally McKenzie, CEO

It's a disconcerting sign of the times. I recently had a doctor contact me because a patient was insisting on a 10% discount. More troubling is the fact that a portion of this patient's procedure was covered by insurance. If the doctor were to grant such a discount, he would be in violation of state insurance regulations.

It is a reminder that since 2008, when the world's financial troubles began affecting many dental practices, doctors have felt pressured to make concessions on treatment recommendations, hold the line on fees, abandon established financial policies, and cut corners wherever they could.

Yes, things are slowly improving, but we are seeing too many practices that are routinely disregarding their financial policies. While I understand that practices need a certain measure of flexibility, and the policy should be reviewed annually, it is critical that every member of the team respect and uphold the policy. Moreover, all new patients should be given a copy of the policy along with other office procedures and information. Existing patients should also receive a copy periodically, particularly if changes are made. 

So now the question is, what should be included? It goes without saying that a financial policy should reflect your practice philosophy, but remember, yours is a small business and you simply cannot afford to give no-interest loans or other financial breaks.

I recommend that you consider the following options:

• Offer a 5% discount if the case is over $250, paid in full, and will not be submitted to insurance.
• Divide fees for more involved cases over a specific number of appointments.
• Ask patients to pay 50% at the start and 50% when treatment concludes.
• Establish a relationship with a treatment financing company.
• Allow patients to build a balance on their account before beginning major treatment.
• Make arrangements to bill the patient's credit card on a recurring basis until the dental work has been paid in full. This is ideal for larger cases. Orthodontic practices often do this routinely. This system streamlines payment and posting while eliminating billing for your practice.
• Accept cash, check, and charge.

Remember that if you accept checks, do not accept post-dated checks. This is a practice that had been all but eliminated only to be revived during the recession. In addition, spell out what you expect of your patients. For example, if a patient's insurance will cover 50% of the cost of a crown, and the patient's portion is to be paid in full upfront, they need to know this. Make your financial policy clear. Don't assume that displaying the policy on the wall or showcasing it in your brochure is enough. It is critical that the financial coordinator review the terms of the financial arrangements with each patient for each procedure or treatment plan.

Verifying that everybody's on the same page will go a long way toward improving your practice's collection success. Which brings me to my next point in a practice's overall financial policy, and that is collections.

Practice collections should yield 98% for treatment currently being performed. I do not disregard the fact that you must be sensitive to your local economy. Just understand that each time you make concessions and exceptions, you chisel away at your financial policy and further risk the fiscal solvency of the practice. The exceptions and concessions add up much more quickly than you realize.

Business staff must know the fees for each procedure, and at no time should a business employee say to a patient, “Did the doctor tell you the fee for this procedure?” S/he simply states, “The fee for the crown is $950. Our financial options for payment include the following …” Which brings me to my next point.

Financial policies are only as effective as the person in charge of collections is at upholding them. Certain people just cannot bring themselves to ask for payment from patients, no matter how low the fee. They simply are not cut out for the position. Effective collections require someone who is assertive, tactful, confident, and goal oriented. “Stacy” may be a wonderful member of the team, but entirely too pliable when it comes to collections. If Stacy is your only option, train her. If “Meredith” is better suited for the position, assign the responsibility to Meredith and train her.  

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.

Interested in speaking to Sally about your practice concerns? Email her at sally@thedentistsnetwork.net or call 1.877.777.6151.

Interested in having Sally speak to your dental society or study club? Click here.

Hear Sally's FREE podcasts at The Dentist's Network - HERE

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Dr. Lorne Lavine Dental Technology Consultants Printer Friendly Version

Hard Sensors
By Dr. Lorne Lavine, Dental Technology Consultants

Over the past few columns of The Dentist's Network, we have examined many of the factors that go into upgrading the practice towards a chartless system. While many of these concepts are important in the planning stages, it is apparent that the push towards digital radiography is the driving force at this time. While surveys show that less than 50% of offices currently use digital systems, these same surveys seem to show that many dentists are considering adding digital radiography to the practice in the next 12 months. We looked at phosphor plate systems in my last column, so let's turn our attention toward hard sensors now.

The majority of dentists who currently own digital radiography have sensor-based systems. Since I don't expect this trend to change anytime soon, I would like to review the different criteria that dentists should consider when picking a system that is right for their office. This is simply meant to be a primer; dentists should contemplate working with a consultant since this decision can have far-reaching implications on the practice as a whole.

Resolution
The number that most companies advertise when marketing their systems is line pairs per millimeter (lp/mm). Many sensor based systems will be able to produce an image with at least 15 lp/mm; some are in the 25 lp/mm. The question becomes: Will a sensor with more resolution produce a better image than one with less resolution? Not necessarily. As we’ve discussed in past issues, image quality will be related to many factors, such as the monitor you are using and software that is interpreting the image. It has actually been shown that the human eye cannot reliably distinguish images that have more than 10 lp/mm. The better resolution will only come into play when magnifying the image to a large size either on the screen or when printing. If you enlarge an image further and further, the image with less resolution will begin to degrade and show pixilation earlier than the higher resolution image. As far as printing, the resolution will become important when printing images larger than 8” X 10”. For most offices, the lp/mm issue is not as important as the sensor companies might like us to believe.

Size
One of the goals of the sensor companies is to allow dentists an easy transition from a film-based practice to a digital practice. Most accomplish this by creating sensors that simulate the size of film. The vast majority of companies produce both a #1 and #2 sized sensor. A few also make a size #0 sensor, although few offices use these. On the other side of the coin, a couple of vendors believe that there is no need for separate sensors and they produce a “one size fits all” sensor. While this type of system may reduce costs, offices will find that there are situations where a small sensor is needed. Some examples would be for pedo patients, patients with tori, or constricted mandibles.

Comfort
Most vendors are moving towards a thinner sensor. While a few are still in the 5-6 mm range, the industry standard is around 4 mm right now. However, the thickness of the sensor is usually not crucial in determining comfort. Instead, it is the actual design of the sensor casing and the corners that play a more important role. Some are square, some rounded, some octagonal. Dentists should try the different sensors for comfort if this is an important part of the decision for them. Many companies make holders for sensors that will also have a large affect on the patient and operator experience. Many use a RINN style holder, but there are certainly a number of variations and other systems in use.

Cost
For many dentists, this is probably the most important factor. While the costs of the various systems have continued to decline (in most cases), these are still a significant investment. Not even considering the costs of computers, monitors, networks, and software, the average price of a #2 sensor system is around $5000-7500 right now. There are a few that can be found for under $5000, a bunch priced in the $7000-9000 range, and a couple above that. Dentists should also be aware that most sensors come with only minimal warranties, and extending those warranties will cost $500-$2000 per year per sensor, so this should be factored into the final cost.

There is no perfect digital radiography system. Each dentist must decide which factors are important and base their decision on that. There is no right or wrong; only what is best for you.

Lorne Lavine, DMD is the Founder and President of Dental Technology Consultants. Dr. Lavine holds two prestigious certifications, the A+ Certified Technician designation and the Network+ Certified Professional. These designations demonstrate proficiency in computer repair, operating systems, network design and installation. Dental Technology Consultants provides dentists a full range of services relating to the implementation of technology.

Interested in having Dr. Lavine speak to your dental society or study club? Click here. Dr. Lavine can be reached at drlavine@thedentistsnetwork.net.

Hear Dr. Lavine's FREE podcasts at The Dentist's Network - HERE

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Thomas L. Snyder Director, Practice Transitions The Snyder Group Printer Friendly Version

Increasing Your Income through an Acquisition
By Thomas L. Snyder, DMD, MBA
Director, Practice Transitions
The Snyder Group/Henry Schein Professional Practice Transitions

Many practitioners are still experiencing lower than expected growth due to our sluggish economy. There is a strategy for you to consider which has been growing in popularity, proving to be a win/win proposition for both parties. Have you considered purchasing a practice in your area from a dentist who is not yet ready to retire, but is willing to spend the last few years of his or her professional career with you? Perhaps there is a dentist in your vicinity who practices in a “home office” environment or may be facing a lease expiration in the near future but prefers not to renew. 

Obviously, this strategy works best if your facility is under-utilized. By developing a facility sharing agreement accompanied with a mandatory buy-out, you achieve better use of your facility immediately, as well as create additional income for yourself. In the long term, once the candidate retires you will have a larger patient base, which may prove helpful in recruiting an associate for your own transition plans - not to mention a practice that will command a higher fair market value.

Here is an example of how this strategy works. Let's assume the proposed candidate has a small practice consisting of 400 to 600 patient records. The candidate wants to continue practicing and will retire in two years. The first step will be to form a facility sharing arrangement whereby the candidate retains his/her own business entity, pays you rent as well as perhaps some other facility usage charges, and then sells you the patient list upon retirement. In this scenario, we recommend that a formula for a future purchase price be agreed upon at the onset. One way to calculate a sale price is to use a multiple (percentage) of the last twelve months of the candidate's entire gross collections prior to the sale.

The candidate’s gross collections should also include any revenue that you or other providers in your practice produced in that twelve-month period.  Proper coding of all procedures is a must, especially those services that are referred internally within your practice. You can create unique doctor and/or hygienist codes to track this referred production/revenue. Oftentimes an older practitioner refers many procedures to area specialists. If you so choose, you now have the opportunity to perform some of these previously “referred” services, such as endo and perio, advanced restorative, etc., thus increasing your own clinical production immediately, as well as increasing the future practice value for the retiring doctor. If you already have an associate, some of these services can be provided by him/her.

This approach provides a win-win scenario, boosting your income immediately and giving the retiring doctor a bonus on his/her practice's value, since the revenue generated by your efforts is credited to his/her future value. In fact, it will create an incentive for your candidate to refer procedures to you while he/she is still practicing in your facility! For example, if the candidate generated $300,000, and you or your staff produced an additional $75,000 over the last twelve-month period, you would use a revenue number for valuation purposes of $375,000. However, you have benefitted in the short run from increased income for those additional services. The candidate wins from their referring patients internally and receives a higher sale price. Chances are there is still plenty of incomplete treatment remaining in these patient records as well.

Contracts should be prepared before the candidate actually relocates to your practice, so there are no surprises in your business arrangement on either party's behalf. These agreements would typically be a Facility Sharing Agreement and an Asset Purchase Agreement.

Creating this type of a transition plan becomes “a win” for both parties, because it:

1. Lowers your overhead immediately, by having the candidate reduce your fixed expenses in paying you rent and possibly other usage charges such as computer, staff, etc.
2. Increases your total practice revenue and net profit from those additional services referred to you. This can translate into a higher practice value for you in the future.
3. Provides your associate, if applicable, an opportunity to create more opportunities to be productive.
4. Provides a reasonable practice value for a soon to be retiring doctor.
5. If you are a solo practitioner, this strategy provides you with a solid patient base to initiate or accelerate your transition plans.

If you would like additional help, email Dr. Snyder at drsnyder@thedentistsnetwork.net.

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Hear Dr. Snyder's FREE podcasts at The Dentist's Network - HERE

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