Cliff's Notes

The Business of Dentistry

The Audit … Get Ready Because It’s Coming!

Federal Tax Audits, State Tax Audits, Insurance Company Audits

Yes, they are all coming and they will be in real time. With changes in federal regulations and the Affordable Care Act more freedom is being given to the states to manage their own programs. With that, the government‘s plan to lower the federal tax rates will also lead to a reduction in federal aid to the states. The idea is to give the general population more money to spend and a greater say in how they spend it. That is a consumer driven economy. However, to maintain public services the federal and state governments will need capture lost revenue. With the technology now available, and years of electronic data random audits will be the new normal.

Lost Revenue … Hundreds of millions of dollars in uncollected sales tax revenue is lost through interstate retail commerce. Individual state laws do not apply to non-resident companies, states cannot force other states to comply with their laws, that’s where the feds come in. One of the responsibilities of the federal government is to regulate trade between the states. The lost revenue issue may be solved by creating a federal sales tax.

The Federal Tax Audit … Don’t think you are too small to be noticed. The feds understand investment so their time was spent on big organizations. Technology has redefined the term “BIG”. If your organization accepts payments through federal programs such as Medicare, you are on the radar screen. If patients claim your services as tax deductions you’re on the radar. If your cash deposits fluctuate beyond an average range you’re on the radar. Maybe it’s time for a self audit on record keeping, ask your tax advisor.

The Random State Audit … If you have never been through one, you can’t understand. I live in New jersey so I can’t comment on the other 49 states but I went through a NJ State audit and I got to tell you, it is not fun. One of my clients is dealing with it now so I thought it would be a good idea to spread the word of caution. The state asks to see everything and when you give them everything you have, they will ask for more. That’s when the fun starts, finding what you don’t have. You will need to prove every payable and receivable transaction. Everything needs to balance with back-up documentation and if you don’t have it, you pay. State tax laws are very specific and the local governments want every tax dollar due to them. However, taxable items in one state may not be taxable in another. As an example, NJ & NY classify taxable items completely different and the point you take possession is where the tax is collected. Ask your tax advisor about state tax compliance and reporting taxes not collected in both your receivable and payable departments. A $17.00 mistake cost my company $2500.00 in interest and penalties plus the accounting time.

Insurance Company Audits … If you do not participate with any insurance companies this will not effect you. However, if you do participate you are required to prove full regulatory compliance upon request. From OSHA to emergency medical equipment all state and federal regulation must be in place. It amazes me that so many dental offices don’t have an emergency O2 tank with an Ambubag and those that do haven’t checked the tank since they got it. You may want to review your insurance contracts for more details.

The Bottom Line … Benjamin Franklin said “a stich in time saves 9”. Preparation and accurate records are essential. Please feel free to contact me with any questions or concerns.

 

May 16, 2017 Posted by | Uncategorized | Leave a comment

Doing Things Right or Doing the Right Thing?

    From the Disney’s Talking Points .. Doing Things Right or Doing the Right Thing?                 https://disneyinstitute.com/blog/2016/02/are-your-employees-doing-things-right-or-doing-the-right-thing/394/

Picture yourself staying at a Disney resort. You’ve just completed your weeklong stay and are checking out at the front desk, when the Cast Member looks you in the eye and says with a smile, “Thank you for being our Guest this week.” How does hearing the word, “Guest,” make you feel? Since the opening of Disneyland in 1955, Cast Members at Disney theme parks and resorts have referred to our visitors as Guests. Does it matter?

Although using the word Guest is not necessarily unique to our organization today, there are important reasons behind why we encourage our Cast Members to do so. It provides a framework for understanding how we should interact with people – actually treating our visitors as if they are guests in our own homes.

As we have previously shared in our book, Be Our Guest: “…words create images and corresponding assumptions in people’s minds. Take the word Guest. An unhappy Guest and an unhappy consumer create two very different images in an employee’s mind. Guests are welcome visitors, whom you host; consumers are statistics. If someone is your Guest, don’t you feel a greater obligation to ensure his or her happiness?” And, at Disney, happiness is the goal!

In fact, everything we do in terms of service design revolves around our guests and our common purpose—a simple statement that represents what we stand for and why we exist as an organization. This statement defines the expectations we have of ourselves as Cast Members and reads like this: “We create happiness by providing the finest in entertainment for people of all ages, everywhere.” Striving to create happiness allows us to begin forging life-long relationships with our Guests.

So, how can an organization ensure that its employees are able to actually deliver on the purpose? We now return to the question at the opening, “How does hearing the word, ‘Guest,’ make you feel?” You would probably agree that, in general, the words alone are not sufficient. The behaviors – the eye contact and sincere smile – also matter a great deal. In other words, we should consider our focus on “doing things right,” and “doing the right thing.”

“Doing-Things-Right” This is critical for efficient, high-quality, and consistent delivery of the desired Guest experience. One method commonly used is providing scripts. By scripting transactions, you can help to ensure that employees have the tools to “do things right.”

“Doing the Right Thing” On the other hand, providing a clear framework can help employees “do the right thing” on behalf of their Guests, rather than abdicate to the script alone or simply do what’s been done before. This unscripted approach empowers people to internalize and “own” the common purpose and then deliver the Guest-focused behaviors that bring that purpose to life. In past Talking Point posts, we’ve shared that the key to our success lies in a holistic approach. You must give people purpose, not just rules. Once employees understand and internalize the common purpose, they can choose to go that extra mile because they have a heart for service, turning “customer service” into “Guest service.”

Think about it: Are your employees able to “do the right thing” on behalf of your customers, or must they focus solely on “doing things right?”

May 7, 2017 Posted by | Uncategorized | Leave a comment

Marketing 101 … Packaging is 95% of the Sale!

When my oldest son was looking at colleges we attended a seminar on college admissions. The speaker was the Dean of Admissions at St. John’s University in New York and he talked about real world college marketing. One comment he made stuck with me, he said “when visiting the dorms you walk in the front door, when you leave go through the back, colleges never clean up around the back door. Also, ask for a few copies of the college news paper, they may not want to offer it because it may not fit “the package”.

My personal marketing GURU is Stu Leonard. His family started with a dairy farm and created the most unique food store in the north east. Stu Leonard once said “retail is detail & packaging is 95% of the sale. There is nothing special about Stu’s food, it is the way it is presented.

Packaging is 95% of the Sale … The average patient doesn’t know if you are a good dentist or a bad one. Remember the old joke “what do you call a dentist that finishes at the bottom of the class? Doctor!” They just know if they like you and your team. If they like you they trust you. Ask your team members if patients ever asked if you are a good dentist or when you leave the room they ask your assistant if they really need the work done. That brings us to “The Package”.

The Package … Everything your patient sees is part of the package. It starts with the name of your organization and goes though reappointing the patient. Let’s start with the name of your practice. I believe in using names that the local population can relate to, they are easy to remember. Piggyback off a popular name. I call my marketing program “Cliff’s Notes”, why do you think I do that? How your office physically appears to patients is a major factor. If it looks old patients think it’s old. Dental practices should up-date there office decor every 5 years and keep current with local style and colors. Team members should be color coordinated to look like a team, it makes a difference, and have name tags. Give your team a uniform allowance, talk to your accountant about the write-off, not only will you look like a team but you will feel like one and that “ORA” will effect your patients. Now we need to talk about the clinical package.

The Clinical Package … How old is your dental equipment? How old is your car? Your dental equipment is less expensive than your car. Your dental equipment pays for your car. Again, old will be thought of as old. Do you have video monitors in view of the patient? Can you display your digital images and pictures? Do you use your intraoral camera? Your patients see these things everywhere they go. Every retailer uses digital technology to market customers. What is you clinical WOW factor? Digital radiography is old news, everyone has it and the patient can’t relate to it, the sensors hurt. However, intraoral cameras and digital trans illumination really impress and initiates referrals if used correctly. Please feel free to contact me at any time with questions or concerns.

April 23, 2017 Posted by | Uncategorized | Leave a comment

Where Have All the Dentist’s Gone? “Enter The Millennial”

The cultural revolution of the 1960’s brought on many changes, that’s the first one I remember. Being at the back end of the baby boomer generation has given me the opportunity to see the future in the past. There is an old saying, History repeats its self and change is inevitable, but are all changes for the best? Are we forgetting how to think?

Last week I had the opportunity to sit in on a restorative update sponsored by Asteto Dent Labs with Dr. Stace Linde from Colorado. Dr. Linde lectures throughout the United States and after the program we had a chance to sit and talk. His observation were the same as our mutual friend Dr. Howard Glazer, where is the clinical advancement of the Millennial Dentist going?

The Millennial Dentist … This is something new and it will take 10-15 years to gauge the effect on dentistry. Several months ago over a fast lunch with Dr. Glazer, he noted that the average age of seminar attendees was getting older. Dr. Linde agreed with his observation and shared a few stories of his own. Millennial Dentists are getting more of their information on products and techniques through on-line chat rooms and are avoiding physically attending lectures. But, is this a good thing? Physical interaction with speakers and groups is essential to a better understanding of a subject. Hearing questions asked and seeing the response of the speaker, watching their body language, and interacting with other practitioners is quickly becoming a lost value. Millennials are so caught up in technology that I sometimes wonder how they will continue to provide quality customized medicine for their patient base.

Customized Medicine … Dentistry is a medicine that requires a unique approach to every patient. On-line forums, due to their format, can only provide case scenarios and solutions where as face to face group interaction raises questions and various solutions can be discussed and debated without distractions. At Dr. Linde’s restorative program there were questions asked that raised other questions steering the discussion into a different direction and then circled back. Every procedure is an action and for every action there is a reaction. Physical group interaction can give you a scope of reactions to a single procedure and you can’t put a value on that. Technology is a wonderful thing but it takes free thinking, discussion and debate to advance the diagnostics and techniques.

What Makes a Better Dentist … Professional athletes get better by watching, directly competing and communicating with athletes better than them. Healthcare professionals get better by interacting with clinicians that are more experienced than them. How many times have you heard a seminar participant ask a speaker about a unique case that would vary from the technique?

Life Gets in the Way … The demands on today’s healthcare professional take a lot of time away from family and friends. However, taking a few hours here and there to sit in on a quality subject may be very enlightening. Try it, you just may be energized.

 

 

April 16, 2017 Posted by | Uncategorized | Leave a comment

You’re Getting Sued & You Don’t Know Why? Risk Management?

It happens everyday. In the litigious society we live in protecting your practice and your family from the bad guys needs to be a priority. The great Vince Lombardi said “The Team with the Best Defense Wins”.

Throughout the 20 years I coached baseball I always told my team that they worked hard in practice, were good and that we would score runs, but we can’t let the other side score. Don’t let the run cross the plate (baseball terms) and we can never lose. The same goes for your business, prepare for the game and you won’t get burned, too bad.

I have the highest respect for attorneys and our legal process, however, sometimes the law overrides a defendant’s best intentions and good people get hurt. So what are your exposed liabilities? Do you know?

Healthcare Practice Liability … I could go on for hours telling stories of litigation and out-comes with patients, employees and business associates. Most of the stories end financially painful because proper documentation was not in place. The law is complicated and requires professional assistance. You wouldn’t suggest that an attorney work on their own teeth so what makes a dentist think they can develop a risk management program?

What Patient Risks Need to be Managed? … Do you have a written “Patient Bill of Rights” that is signed by the patient? Do you have a written “Office Policy” statement? What about procedure consent forms? How current are your medical history up-dates? Are you prepared to handle medical emergencies?

Medical Emergencies …. Yes, they do happen. As a matter of fact, let me give a shout-out to Dr. Dan (don’t want to give his last name) for saving the life of a Henry Schein service technician that collapsed in his parking lot just a few weeks ago. A structured plan and a good team went into action and did everything possible while waiting for EMS to arrive. Here is the question, is your team prepared and practiced in emergency response? Probably not, but it should be part of your risk management program.

Clinical Liability … This one you know well. A failed procedure, poor infection control protocol, improper emergency protocol. If a healthcare issue arises, for whatever reason, it’s your fault.

Employee Management … You are responsible for everything your team members do. Are you protected from your employees? Have you protected your “intellectual property”? Have you thought about it?

Risk Management … Every business, especially healthcare, must protect its self as best it can in as many arenas as possible. From medical emergencies to clinical liabilities to employee management, procedure and protocol must be established and maintained with consistency. Your best intentions may be useless in a court of law. Don’t be foolish, engaging with qualified professionals is the best insurance you can buy.

 

 

April 9, 2017 Posted by | Uncategorized | Leave a comment

Mr. Dentist, Meet Watson

Have you met Watson? He is your very near future so you should know who and what he is. He is not just a Jeopardy champion he is artificial intelligence and he is learning healthcare.

Watson or one of his siblings, will eventually design the crown you scan and send it to wherever you want, a mill or a lab. The end result will be nothing less than perfect. Watson will diagnose, treatment plan and pre-D on its own. Your medical counterparts are already utilizing Watson’s diagnostic options and to think that dentistry is not far behind is just sticking your head in the sand.

How far behind the curve are you? … When do you plan on jumping on the technology train? OK, you bought digital radiography, but how long did it take you to engage with the technology and what was the result? Now we are into all types of digital imaging that greatly increase diagnostic abilities and provide very predictable results. The train has left the station and if you will be practicing for more than 5 years it is important that you catch up. At the end of the day consider the value of your business and its curb appeal.

Where do you need to go? … You need to fit into the future healthcare network. Insurance companies will require more diagnostic information for pre-determination. They will require digital transmission to reduce their expenses and claim processing. Every business, big or small, looks for ways to reduce or control expenses, it’s part of doing business. However, doing business requires investment. Your first step should be to fully understand your practice, surprisingly most of today’s dental practitioners don’t.

Understanding Your Practice … What type of practice do you have? Is it restorative, hygiene or surgical based? Are you high volume or a private boutique? What ever it is you will need, at a minimum, to accommodate industry standards. Watson is only the first, there are more coming. Technology is fueling technology and a business today has to budget technology as an annual operating expense.

Make the plan, meet Watson … He is waiting to meet you. Please feel free to contact me at any time with questions or concerns.

March 26, 2017 Posted by | Uncategorized | Leave a comment

Just-In-Time Inventory Management

 

Maintaining an inventory for any business is a necessary evil. It is part of the life blood to continue business operations and requires an investment of time and money. Although it is not a glamorous investment it does effect every profit center within your dental practice. We’ll get into “profit centers” later on, but for now let’s try to understand inventory expense and control and what Just-In-Time Management can achieve.

Just-In-Time Inventory Managementhttp://www.accountingtools.com/questions-and-answers/the-advantages-and-disadvantages-of-just-in-time-inventory.html. Who handles the replacement of consumable inventory in your office?

Consumable inventory … Your practice can’t function without products or tools. From copy paper to cotton rolls everything you use you during a normal business day needs to be reordered. Most dental offices have a clinical assistant make the list of clinical supplies and place the orders (what happened to the checks and balances from my last issue of Cliff’s Notes?). You have the clinical team make the list because they know what the products are and the front office orders the business office supplies that they need because they know where to get the cheapest pens. There is nothing wrong about this approach it just is not very cost effective or smart. Most dental practice owners tell the team members doing ordering “just get me the best deal” or they do it themselves. That is a consumer mentality and not good business sense, it may actually cost you more money due to carrying costs.

Carrying Cost … Most dental entrepreneurs don’t understand carrying costs. Did your business advisor ever ask about your operational procedures or do they just talk about numbers. Numbers tell you that if you buy 4 and get 1 free you are saving 20%, that’s true if all the product is used up within 30 days of paying the bill. If the inventory sits on the shelf more than 30 days it has a carrying cost. If it reaches expiration date you may have laid out money for un-usable product and now that savings could turn into a negative. How much expired inventory do you discard every month? How much is sitting in your supply closet? Do you know? Probably not. Distribution Partners also affect carrying costs.

Distribution Partners … Your choice of the distribution and supply chain organizations you work with is a key factor in achieving J-I-T inventory. Aside from an occasional hiccup (even Babe Ruth struck out once in a while) you need to have consistent restock time frames. You need to know how long it will take for product to arrive. My clients know that if they palce an order by 4:00 in the afternoon (EST) UPS will deliver the order the next day with a 99.8% fulfillment rate.

An Example … About 4 years ago I was approached by a large dental practice in crowded/fast paced northern New Jersey. The problem was lost inventory. Lost inventory is what expires and needs to be destroyed. The owner was alerted to the issue by accident when he observed his head assistant throwing away dental supplies because they were expired. He decided to centralize his ordering process for everything the practice was ordering, from light bulbs to composites. Clinical and business supply lists would be given to one person who could access usage levels and order product for a 5-8 week supply. The problem was that the “buyer” did not know clinical supplies so everything needed to be turned into widgets, we did that with a bar code scanner. The scanner along with purchasing software allowed the buyer to track usage quantities. The office orders twice per month and the stock room is in perfect order. Inventory is turning 4 to 6 times per year and nothing expires. Carrying costs have been minimized and they never run out of product.

Why keep walking over dollars to pick up dimes? … Start automating your systems! Next week we’ll talk about why and meet Watson.  Please feel free to contact me with any questions or concerns.

 

March 19, 2017 Posted by | Uncategorized | Leave a comment

Once Again it is Time to Talk About … Dental Office Embezzlement

Embezzlement is live and well and the dental office is no exception. As a matter of fact, most dental office have been embezzled. Some catch it some don’t, I have heard about it and seen it countless number of times over my 40 year career (I started when I was 8). New team members, long time staff, young or old, it doesn’t matter. Who’s fault is it? The boss!

The Boss … The identification of faults in any business relies on information supplied by reports from different departments. Management’s job (The Boss) is to review these reports and make sure they match. Checks and balances are necessary to insure that all procedures and protocols are operating efficiently and “that the check book balances”! Production reports, daily collections, day sheets & deposit slips must all balance with each other. Trusted long time team members as well as new ones must all be subject to checks and balances. A team member should never feel insulted by verification. As Tom Hayden said to Sonny Corleone “it’s only business”.

The Control Freak … We all have or have had the team member that wants to be in control. They develop ownership of their tasks and get agitated when someone else gets involved or asks question. This situation is not healthy for the practice or the employee. Assuming the person is extremely honest, any inconsistency may cast doubt and damage a good relationship with management or other team member and disrupt team harmony. That will effect the patient experience and office production. Then there is the other side of the equation, they don’t want you to look.

Receivables & Deposits … Who opens the mail? Who enters payments into your management software? Who fills out the day sheet? Who fills out the deposit slips? Who goes to the bank to make the deposits? If it is the same person and not a family member, a change is needed. Checks and balances, ask your business financial advisor to help set up the system. Let the accountant be the “bad guy” changing the system. My dad once told me that when it comes to business trust two people, God and yourself and watch God.

Payables … Payables involves so much more than just paying bills. Why do you have the bill? Who authorized the services? Where the services requested in the best interest of the organization? Embezzlement isn’t just diverting receivables, it could be theft of goods and services. I could think of a hundred examples like the front desk that has the snow plow company do their home and add it to the office bill. Or, the assistant that places a $2000.00 supply order to get the “Free Kindle” that is shipped with the order and the assistant is checking in the shipment. Did you need the supplies? Were they priced correctly? Nothing is free. Then there is the accounting manager that has been with you for 10 years submitting bills from non-existent companies and depositing them into a personal account..

Embezzlement … is alive and well in the dentistry. It is all about prevention. Talk to a professional and please feel free to contact me with any questions or concerns.

March 12, 2017 Posted by | Uncategorized | Leave a comment

Professional Healthcare Practice Ownership, You’re a Dentist, What’s So Tuff?

ask-the-right-questions Invasive dentistry is surgery so you have to be pretty smart to be a dentist. Unlike your primary care counter parts, you don’t just diagnose and treat, you repair and create, you are a specialist. That takes a special talent and it’s what you enjoy doing, but practice ownership is getting more complicated.

What was your vision of the future when you finished dental school? If it was running a business, great, because that’s what your doing. As a healthcare provider you need to deal with almost every regulation and legal requirement for the public trust as well as generating the revenue to pay for everything. On top of that, you would think that the difference between what you spend and what you collect is yours, wrong! Uncle Sam still has to take their fair share. Then there is the anxiety of making payroll.

Making Payroll … Making payroll, for a small business owner is something you can’t understand unless you have been there. Dental business owners are entrepreneurial making them competitive by nature. Making payroll every 10 days is always a competitive challenge that will keep repeating until the day you retire. Team members get paid before the boss and for most of us there were times when your pay check was left in the desk draw for a few days until cash flow caught up. You can’t imagine that pain unless you lived it, it’s like facing the unknown alone.

Cash Flow … Let’s talk about the value of a healthy positive cash flow. Equate it to the blood stream feeding the body. It supplies all the things your business needs to survive and grow. My dad once told me that a sale is not a sale unless you get paid and until then it’s a gift, so how far out are your receivables? Beyond 30 days you are starting to give gifts and after 90 days you are loosing money. You also need to budget your expenses to match your inbound cash flow. In-bound and out-bound revenue need to be carefully monitored and budgets need to be reviewed. The best way to do this is to review your P&L on a quarterly basis.

The Profit & Loss Statement (P&L) … The P&L may be the most misunderstood report that a dental business owner looks at. It tells you where your money is coming from and where it is going. This single report will tell you the most important area’s to address. To the surprise of most dental entrepreneurs , Lab, clinical & office supply costs have the smallest effect on the P&L yet so much time and energy is spent on managing them to “reduce the overhead” that you can’t reduce.

Overhead … Don’t you hate paying bills? Aren’t things getting more expensive? You are concerned about raising your fees and insurance re-imbursements are falling. You are trying to reduce overhead but you can’t. Let me say this again “you can’t reduce overhead, you can only control it and reduce it’s footprint on your P&L by increasing production”.  The cost of doing business will continue to rise and so will your operational overhead. Address the costs that will give you the biggest impact on overall investments. Note that I said investments. You don’t have expenses, every check you write is an investment in your future. Rent, insurance, payroll, etc. are all investments. Look at where you money is going. Think of overhead as a necessary investment guided by the P&L.

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March 5, 2017 Posted by | Uncategorized | Leave a comment

The 80/20 Rule, Are You the 80 or the 20?

80-20-rule

Did you ever wonder how you are classified by the dental industry? Being in this industry for a long time I can tell you that there is so much data available that just by the way you run your practice determines your “growth” classification. The top 5% are the innovators and bleeding edge participants. Then there is the 80/20 rule. 20% of the remaining dental practices jump on board within the next 5 years and embrace change leaving the 80% waiting for the new and improved. Question, are you the 80 or the 20?

It was over 20 years ago when Rich Yangst walked into our office with a lead lined wooden box. That was my exposure to the Trophy X-Ray System., the first dental digital radiography system in the U.S. market. In 1997 Gendex Corp. introduced the Denoptics Phosphorus Plates but it wasn’t until 2010 that dental digital radiography became main stream. Mostly because of industry and peer pressure. Think about all those years you waited to implement digital imaging and now you can’t live without it.

Some of you younger folks may not remember Jackie Gleason as Ralph Kramden in the Honeymooner’s so you may want to watch this short seen https://www.youtube.com/watch?v=yRPMetvTAYw. Think about everything Ralph missed because of his fear of change. Change is inevitable so we need to embrace it.

Radiographic imaging is continuing to change …. X-ray film was replaced with sensors. X-rays will become obsolete in in the future and replaced by ultrasound. Temporary acrylics will be replaced by 3D printers, and impression materials are being replaced by digital scanners that also do shade matching. For your practice to thrive through the years to come you will need to prepare for the changes in an organized fashion by examining the ROI of each. A great place to start is the CariVu System by Dexis.

Why the CariVu and What is it? …. The CariVu is dental trans-illumination on steroids. I saw the original system, Difoti about 15 years ago (it is still called Difoti in Europe) and since Dexis Corp. took it over the technology has advanced dramatically. The ROI with this product is unlimited as is it’s ability to dramatically raise your standard of care. You can see inside teeth and find fractures and lesions that traditional x-rays can’t pick-up. The patient’s reaction to “no radiation” is a definite practice builder, however, there is a small down side. If patients know you have this technology they may be more resistant to x-rays. That is when you will need to explain that the CariVu cannot see below the gum line to examine the rest of the tooth. The reason the CariVu is a great place to start is because it is very affordable and can pay for its self in full in 90-120 days.

The 80% …. Everyone in an advancing industry will fall in line and implement new technologies, it will be required to run your business. The question is when do you jump in. My suggestion is to look at your practice and evaluate what will give you the best ROI and invest a portion of the increased revenue to implement the next level.

Carivu2Carivu TipCarivu

February 26, 2017 Posted by | Uncategorized | Leave a comment