The Dentist's Network #69


	Scheduling Challenges New Data Back-up Strategies Corporation Entities

Louis Malcmacher
DDS MAGD
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Make The Most Of Every Day!

For many dentists, 2008 was quite a challenging year. There is no question that there is a new reality out there economically and in order to survive and even to thrive, dentists are going to have to rethink their procedure mix as well as the focus of their practices.

Scheduling is among the most challenging jobs in the dental office and it is even more challenging today as there have been reports of increases in cancellations and patients putting off elective work and even trying to push off needed treatment for as long as possible.

In our office, we have never used any kind of block scheduling system. We have one philosophy – get the schedule filled to make the day as productive as possible. The key to a productive schedule is being flexible – while you may want to keep some time open for a bigger case, at some point you may need to realize that it is more important to have any kind of patient in your chair than have dental chairs sitting empty because you believe in block scheduling.

The dental office schedule on a day-to-day basis is very dynamic – there are additions, cancellations and it needs to be constantly managed. It must almost be managed by everyone in the office. While the front office manager is the quarterback of the schedule, the dental assistants, the dental hygienists, and especially the dentist needs to be cognizant where they are in the schedule at any given time.

There are so many instances where we may be running ahead of schedule and can then pull over a patient from hygiene who needs some operative dentistry or an endo or a crown. This has been called the “stay today” philosophy and it is certainly a healthy addition to every schedule.

Don’t resign yourself to cancellations in your schedule. If something opens up in hygiene, we will ask the patients in our chairs if they are due for a prophylaxis and if they would like to stay. If there is some time in the doctor’s schedule that all of a sudden appears, we will offer the appointments to the hygiene patients if they need treatment or call patients in early and try to fill that spot.

When you are in the office, you need to be staying as productive as possible. Emergency patients should be told to come in right away. If you want to conduct an interesting experiment, anonymously call ten dental offices in your area and tell them that you have a dental emergency. I will bet that seven out of ten cannot get you in for an appointment for at least a day. I have personally made these calls and I have heard offices tell me I had to wait two weeks for an appointment. I am always amazed that the most productive dental offices that I know can get a new patient or an emergency patient in today while many low producing dental offices cannot get a patient in for a week or two.

In this day and age, we can learn a lot from services like 1-800-DENTIST who are professionals at doing this – if someone calls with a dental emergency, tell them to come in right now. Dentists always wonder why patients call 1-800 DENTIST and the answer is really simple – they don’t get a busy signal, they don’t get a voice mail, they get to a live, caring person who is going to take care of their needs promptly and efficiently. If you would like to know how they do it, go to www.goaskfred.com , a free website where you can even ask your own questions on marketing, and read through some of the material. I think it should be mandatory reading for the entire dental team so we can all learn to manage the schedule efficiently.

2009 will be a challenging year that is for sure. We need to meet that challenge head on with changing the way we look at our offices and especially at our schedules. Downtime is no longer an option and everyone in the office is responsible to make sure that we all stay as productive as possible.

Dr. Louis Malcmacher is a practicing general dentist in Bay Village, Ohio, an internationally known lecturer, dental consultant and author, and consultant to the Council on Dental Practice of the ADA. Interested in knowing more about how to truly enjoy dentistry? Click here.

Interested in having Dr. Malcmacher speak to your dental society or study club? Click here.
To reach Dr. Malcmacher, email him at DrMalcmacher@thedentistsnetwork.net or call 1.800.952.0521.

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Dr. Lorne Lavine
Dental Technology Consultants
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Don't Back Up Your Data!

I know, I know…..has Dr. Lavine lost his mind? Hasn’t he been preaching data backup as loud as he possibly could for year after year? Doesn’t he spend at least 30 minutes in his all-day lectures discussing backup strategy?

Well, don’t worry…I haven’t lost my marbles (yet!). I’ve just developed a complete paradigm shift in how I approach data backup and protection. Let’s look at a typical scenario. An office has a dedicated server and perhaps 8-10 computers throughout. The office backs up nightly to an external hard drive or tape and that device is removed from the office every evening and taken offsite. So, if anything ever happens to the office server, you’re protected, right? As I’ve found out over the past few years, the answer is usually no. The problem isn’t that your data is offsite and protected. The problem is how long it takes to recover from a disaster. If someone accidentally deletes a file or your practice management data becomes corrupted, that’s easy…just restore the missing or corrupted file from your backup. You’re still able to run the practice with no downtime. But, what if something happens to your server or main computer to make it non-operational? Motherboards can get destroyed by power surges. Servers can be stolen or ruined by fire or flood. If you don’t have a server that is running, what do you do with the backup? That’s the real problem that had me worried for a long time…how long would it take for a support technician to get an office back up and running if the server was gone?

Unfortunately, I found out the hard way with a few of our clients that the answer is: too long. The fastest we were able to get an office up and running was 24 hours and that was because they were able to go out and purchase a brand new server locally. The other offices averaged 48-72 hours, and a few were longer than that. That’s the real problem that has been overlooked by many dental offices when it comes to their backup system: not if the data is protected, but how much downtime will the practice suffer if something goes wrong. Consider that if your server is down, you are completely down.

What if there was a way to be back up and running within 30-60 minutes even if your server was destroyed? What if you could combine this system with automatic backup to an offsite location that required no input from you or your staff? Wouldn’t a system like this be valuable for any dental practice?

Systems like this have been available for a few years for large corporations as they really couldn’t recover from a disaster without it. The concept is called “business continuity” and that seems to be a proper description: being able to continue to run your business even in the face of a disaster to your technology systems. The main deterrent for a dental practice to incorporate something like this was cost, but the costs have now dropped enough to make it a very viable option for dental offices. For most practices, they are looking at a startup cost of around $1500 and then a monthly fee to back up the data of around $50-100.

We’ve been installing these types of systems for a few months now and have been very pleased with the results. The system has two components: a device that sits in the office with a copy of the data, and online backup to secure servers that are spread around the country. The unique aspect of the in-office device is its ability to provide “virtualization”: if your server goes down, you can tell the device to act as a virtual server. As far as your computers are concerned, the real server is still up and running. Even if the entire office burned down, within a short period of time, you could access your data from a home computer or laptop and function normally. This is the concept behind business continuity, that no matter what happens, the office will be able to function normally with little to no downtime.

In a down economy, every practice worries about their spending, and that’s no different when it comes to technology purchases like backup and business continuity. The question to ask, though, is what would it cost to the practice to NOT have business continuity, and what is it worth to be able to sleep well at night knowing your office will recover from a disaster?

Feel free to contact my company, Dental Technology Consultants, to get more info about the business continuity systems we now recommend.

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.

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Bruce Bryen, CPA.
Managing Partner
The Snyder Group, LLC
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The "S" Corporation, the LLC or LLP. Which is the Better Entity Format?

Where do I go for advice?
There are substantial differences between the “S” corporation and the LLC and the LLP. Because questions arise concerning critical business consequences such as income tax issues, potential payroll tax problems, liability protection, the capacity to borrow, and in what format that borrowing should take place, one of the best places to seek advice is from a CPA experienced with dentists and their financial matters.

What are some differences in these structures?
The “S” corporation has certain characteristics that can trap a dentist into a bad income tax situation. “Basis” is critical for the ability to take advantage of losses that flow through to the dentist’s personal tax return from the “S” corporation. What is “basis?” Profits that remain in the corporation and funds advanced to the practice by the shareholder(s) establish “basis” in the dental practice’s corporation. Loans from lending institutions and anyone other than the owner (shareholder) of the corporation don’t count as “basis” even if those loans are guaranteed by the dentist personally, outside of the corporation. In an LLC or LLP, loans that are personally guaranteed by the dentist DO count as “basis” and allow the dentist to report losses that flow through to the personal tax return.

Why does it matter?
Suppose you are a shareholder in an “S” corporation and have treated its income as most professionals do? That means that you probably have withdrawn all of your practice income. Chances are that your “basis” in the “S” corporation is minimal. Now suppose the practice is ready to acquire equipment with a cost of $125,000 and the dental supply house has arranged financing for the “S” corporation. You are ready for a write off that will flow through to your personal tax return so that you can receive a refund or not pay taxes in the current year. You can’t write off the loss without the “basis.” The loan from the lender to your corporation does not count towards your “basis” even if you have personally guaranteed it. You won’t receive the refund until you establish your “basis” in the “S” corporation. With an LLP or an LLC, and using the same set of circumstances, you will get your refund or not pay tax if you have personally guaranteed the loan in the fiscal year of the dental practice.

What are some of the differences?
Your compensation is another variance between the “S” corporation and the LLP and LLC. With an “S” corporation, you receive a salary and the corporation pays payroll taxes upon its disbursement and profit is probably treated as a dividend. You most likely never have heard of the term “unreasonable compensation” which is an area that the IRS likes to challenge because you have tried to report a salary at a level that will save you payroll taxes. Many dentists report a high dividend which is not subject to payroll taxes. Be careful how low your salary is and how high your dividend is. The IRS may want to reclassify these items so that you have to pay more payroll taxes and adjust your salary and dividend. You will also owe penalties and interest if there is an IRS audit and a change to the classification of salary and dividend do occur. The LLC and the LLP do not pay salaries to their owners. They pay “guaranteed payments,” which are not subject to payroll taxes when received from the LLC or the LLP and the practice has no payroll tax liability for those payments.

Tell me more
The “S” corporation and the LLP and the LLC both offer liability protection to its owners as long as they do not treat the dental practice as their alter ego by disregarding the business aspects of the entity. Minutes of meetings should be documented, business expenses should be paid from the practice and support for those expenses established, and the overall approach should be that it is different from the owner. The phrase “piercing the corporate veil,” should be looked at carefully.

Bruce Bryen, CPA has successfully assisted dentists with their personal and financial matters for more than thirty years. As a partner in The Snyder Group, he delivers creative and prudent financial strategies to help dentists build and protect wealth at every stage of their careers. His extensive expertise includes financing, debt restructuring, retirement planning and tax advising to help dentists keep more of what they earn. Bruce is also experienced in providing litigation support services and has testified on numerous occasions as an expert witness.

If you would like additional help or are interested in having Bruce Bryen speak to your dental society or study club, he can be reached at bruce@thedentistsnetwork.net or at 1-800-988-5674.

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