Cliff's Notes

The Business of Dentistry

“Embezzlement!” & “What is Your Dental Practice Worth?”

Cliff’s Notes for May 8, 2011

….. E-Blast…..

Cliff Marsh, Henry Schein ……Cell: 201-321-7494……Fax: 201-262-2210…..E-mail: cliff.marsh@henryschein.com

http://www.cliffsnotesblog.wordpress.com

 

“Honest pays, but it doesn’t seem to pay enough for some people.”

Frank McKinney Hubbard

        

In This Week’s Issue

  • Embezzlement is Alive and Well!
  • What is Your Dental Practice Worth?
  • Product Review – Latex Gloves & the Associated Dangers!

 

Embezzlement is Alive & Well!………………………………………………………..

As a practice owner (also known as a “business owner”), a dentist will face a multitude of business related tasks, issues and challenges.  However, the rewards far exceed the drawbacks to business ownership.  But there will be challenges.

One of these potential challenges a dental practice owner faces is possible employee theft.  Depending on the source checked, estimates for the number of dentists who will experience theft at least once during their dental career range from thirty-five to fifty percent (35-50%).  Estimates of dollar loss range from $100 to $500,000+.  This loss due to employee dishonesty may take the form of out-right theft, fraud, or embezzlement.

The good news:  with certain minimal protective measures, the majority of this theft is preventable.  The key is to understand where the potential exists for theft to occur and implementing the necessary strategies to prevent this loss.

Definitions:

Before going any further, we need to define the different terms used to describe loss by “staff dishonesty.”  Theft is simple defined as “the taking of another’s property.”  This is also referred to as “the five fingered discount.”

Embezzlement is the theft of an employer’s property while in the embezzler’s trust.  It is also defined as a misappropriation or conversion of entrusted money, property, etc. to the personal use of the employee.

Fraud is the intentional deception that causes another to give up his/her money, property, etc.  The easiest to understand method of fraud is to submit a claim to an insurance company for work that was never completed.  There have been multiple instances wherein the employee submitted these fraudulent claims, unknown to the employer.  This provided funds that in combination with other methods of embezzlement allowed the employee to divert the payments to the employee’s personal use.

Understanding the Thief:           

Why does a dental staff member steal?  There are different reasons for different individuals.  For some it is the need for money.  For others, feeling they have not been treated fairly, it is revenge.  For many, feeling they are not compensated enough in light of how much the doctor “earns”, jealousy plays a major role.  And for some, just like gamblers who continue to “lose” but continue to bet, it is the “excitement.”

Many staff that steal, share certain characteristics.  Many have life-styles beyond their means.  Excessive debt and constant money problems accompany many.  Many are also the victims of excessive family problems.  These problems come from children, spouses or significant others, and “ex” spouses/significant others.  Many have excessive habits including alcohol, drugs, and gambling. So, what does an employee who is likely to steal from you look like?  They are intelligent and knowledgeable in office procedures.  They are personable and friendly.  They are tireless, willing to put uncompensated over-time and rarely take their allotted vacation time.  Basically, the perfect employee, except for a tiny character flaw-they are dishonest!

Signs Theft May be Occurring:

The most common sign that theft by embezzlement may be occurring is patient complaints regarding their accounts.  The problem with relying on this sign to deter theft is that most of time the person who handles the complaint is also the person doing the stealing.  However, patient complaints that come to the attention of another staff person or the doctor must be carefully and fully investigated. Review of end-of-day reports may also show signs of a problem.  Excess patient account write-offs or adjustments are a warning sign.  So are “inactivated” patient accounts. An increase in accounts receivables with no off-setting increase in overall office production is also a reason for concern.  While this may indicate financial policies are not being followed, the problem may also be due to employee theft.

Preventing Theft:

Whether theft takes the form of fraud, embezzlement, or outright theft, theft by an employee shares three steps.  For theft to occur, all three components of the theft triangle must be intact.  The first is “Motive”.  The employee needs a reason to steal.  The reasons are as varied as there are individuals. 

Next, they need the “Opportunity”.  In a dental office, they need unimpeded access to the funds they are attempting to steal with minimal or no restraints, checks or accountability. Finally, they need to be able to “Rationalize” their behavior.  They need to justify in their mind that what they are doing is acceptable.  They need to quiet their conscience.

The key to preventing theft is to break the triangle by attacking the only area under the control of the dentist.  Steps must be taken to remove the “Opportunity”. Controlling access to those areas providing the “Opportunity” to steal must be done to avoid theft.

The most important part of controlling employee theft is to contact your financial and legal consultants BEFORE you confront anyone! Accusations can backfire and cost you big time money.

These situations are common, I run into uncomfortable discussion on a monthly basis. For more information please feel free to contact me directly at any time 201-321-7494.

 

What is Your Dental Practice Worth……………………………………..

On Tuesday evening, May 10, 2011, there will be a special webinar designed to show you how to understand the basic methods for valuing your practice. Knowing the points that add value to your asset and what potential buyers are looking for will increase your retained earnings.

Tuesday, May 10, 2011

9:00 PM – 10:00 PM

To Register:

Call Cliff @ 201-321-7494

or log onto: www.henryschein.com/pptwebinars

 

Latex Gloves & The Associated Dangers…………………………………

Have you seen EMS, Police & all other public service employees that deal directly with the public in emergency situations wearing blue Nitrel Gloves? Did you ever wonder why? 10% of the adult population in the United States has an allergy to latex. Some of those allergic reactions could be life threatening. Also, the powder in some gloves can cause a respiratory reaction in patients and staff.

The solution – Powder Free Nitrel Gloves. With your next order, I can send you some free samples to evaluate.

The following information was supplied by the Health Compliance Team

www.healthcomplianceteam.com

From Infection Control Today

Surgical and patient examination gloves that have cornstarch powder on them or are made of natural rubber latex should be banned because of the serious threat they pose to patients and healthcare workers, said the group Public Citizen in a petition filed late Monday with the Food and Drug Administration (FDA). Further, safer alternatives,
such as powder-free, non-latex gloves, are readily available. For healthcare workers, the major risk posed by the gloves is allergic reactions to latex, some of which can be serious or life-threatening.
These allergic reactions can occur when healthcare workers wear latex gloves or when they inhale cornstarch powder bound to latex proteins that has been released from late   gloves worn by others. Breathing in cornstarch powder bound to latex proteins can cause acute asthma attacks and anaphylactic shock in healthcare workers sensitized to
latex.
For the entire article, log onto:
http://www.infectioncontroltoday.com/news/2011/04/group-tells-fda-that-latex-medical-gloves-should-be-banned.aspx

Cliff Marsh

Henry Schein Dental

P.O. Box 663 / 45 Rt. 46 East, Suite 605

Pine Brook, NJ 07058

Cell: 201-321-7494

Fax: 201-262-2210

cliff.marsh@henryschein.com

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May 8, 2011 - Posted by | Uncategorized

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