The Latest in Area Economic and Technical Trends Exclusively to Clients and Friends of Advanced Practice Management
The Dental Dow Jones—2011 Wrap-Up:
In 2011 the 37 mature area practices sampled increased production by 2.5% and collections by 1.6%. A little bit better than the last couple of years of growth (2009-2010 was up 1.4%, in production and .4% in collections and 2008–2009 was up .5% in production and .4% in collections). New patients were up 6%. Overall patient flow was up .5%. Doctor Production per Hour was up 2.4%. Hygiene Production per Hour was up 2.7%. Doctor Open Time was up 12% but Hygiene Open Time was down about 1%.
Remember the good old days when growth was almost a given? Back in the 2008–2009 year, there was 3.5% growth. Back in 2003, the average mature practice increased production 6.6% and collections 4.7%. If you can pretty consistently average growth of 7%–10% per year, you should have plenty of resources to reinvest in the practice, take good care of your staff and live the good life.
As I mentioned in our last newsletter, for the first time in two years, the “Economy” was not first on the Doctors’ list of issues. It went back to the gripes we had before all of this stuff… Insurance, PPO’s and government program limitations and write-offs. We don’t see that stuff going away anytime soon, but we do see the practices that actually work to grow do! To a large degree, practice growth is a reflection of the growth of the Doctors and staff within the practice. The economy is certainly no help. So if we want to grow, we gotta earn it!
Want More New Patients? Make Sure Those Phones Are Answered During Lunch!
We surveyed about 100 clients in our database asking this simple question, “Do you answer the phone during lunch hours?” About 15% said they didn’t.
We then sorted the data out. Offices that answered the phone during the lunch hour averaged 20 new patients per full-time Dentist per month. Offices that did not answer the phone during lunch hours averaged 14. Enough said?
Practice Values Continue To Be Strong in a Weak Economy:
Shea Practice Transitions reports that practice values continue to stay steady if not increased slightly from 2010 through 2011. Shea Practice Transitions reports over 50 practice sales during that period of time, with some interesting statistics. Of these, the average practice collections were over $775,000. The average patients per practice equaled 2,005. Over 95% of the practice sales were sold in cash transactions. The average price per patient record was over $180. The practices sold from a range of 31% of annual gross collections to 78% of annual gross collections. Over half of these practices sold for over 60% of their gross, and over 10% of the practices sold for over 70% of gross. The average practice took approximately 8 months to sell.
The above are simply averages; however, somewhat enlightening. Naturally all of these practices are in different geographic locations, facilities, patient compositions, overhead structure, as well as many other fluctuating variables. Nevertheless, what these statistics do point out is that there is still an excellent market for practice sales (including practice buy-ins). So, don’t sell yourself short. Make sure you get proper value for your practice. Contact Kevin Shea at: www.sheatransitions.com or firstname.lastname@example.org
Is Your Hygiene Department in a Slump?
In my travels over the Upper Midwest over the years, I’ve often compared the Doctor’s procedures vs. the hygiene procedures as the difference between a Main Menu and a “Bar Menu”. The Dentist often has access to a myriad of different procedures which has its advantages in keeping the schedules full and, more importantly, affecting his/her productivity.
If your hygiene department has a more limited menu (i.e., the “bar menu”), it becomes even more critical that your hygienists are delivering these small-scale services consistently. By small-scale services, we’re talking about laser/periodontal procedures, x-ray coverage, in-office fluoride applications, delivery of site specific antibiotics and cosmetic procedures such as whitening. Make no mistake, a gap in delivery of any of these services can make a big difference with patient care as well as hygiene productivity.
All productive up-to-date hygiene departments have one thing in common: they deliver a wide range of services consistently. 2012 might be an ideal time to schedule a Clinical Policy Summit with your staff about practice protocols specifically for hygiene related services.
A crude but simple way to measure the range and depth of Hygiene related services is “Production per Hygiene Visit.”
Check out your Hygiene Production per patient visit (it’s right there on your “Manager Report”)
Joe, The Kisco Guy, Is Coming to Town!
Our good friend Joe Steven, founder of Kisco Dental, is going to be in St. Paul on May 18 & 19 for the Efficientendo and Efficient-prosthetics course. Our clients who attend Kisco Seminars tell us they appreciate their down-to-earth practical stuff for the bread -and-butter dentist. Call 800-325-8649 or visit them online at www.kiscodental.com.
What We Have Here Is a Lack of Confluence:
As you know, the outcome you can get for your patient is so often a matter of their choices, not “just” your clinical skills. Put another way, if you could give your patients a magic pill that would have them understand, value and act on Dentistry to the same degree you would, it would do more for them than if you took a magical pill to further enhance your clinical skills.
In every practice there is a gap between what you can do for patients and what they choose to have done. This can lead to frustration, compromised care and tens of thousands of dollars in lost income per year.
It may give you some comfort that you’re not alone. This is common to all health care. Just looking at pharmaceuticals:
- According to Reuter’s, 22% of prescriptions are not filled, 28% are first time prescriptions (this was a study based in Massachusetts of 75,000 patients).
- From Consumer Reports (2007) in a large study of over 79,000 people, fully 3/4 who got a prescription in the previous 12 months said they had not filled a prescription, skipped a dose, forgot to take a drug or had taken less than the recommended treatment.
- Furthermore, 25%–50% of the people with diabetes, high blood pressure and high cholesterol stopped taking the medications as directed within a year.
All of this costs millions and millions of dollars and immeasurable loss to people’s health. In medicine the term they used to use was “patient compliance.” Nowadays, the phrase used is “confluence.”
Once you and your staff really own the fact that patients’ choices are critical to the quality of the care you can deliver, you will automatically start investing more and more of your energy and time into patient communication and other items that will help to positively influence their behavior. This affects your decisions regarding Continuing Ed, the technology you use (buying that intra-oral camera or CAESY for example), and even the staff you choose (obviously you want staff people who convey a positive attitude, communicate well and enthusiastically believe in your/their Dentistry).
There is just as much or more range of services delivered per patients between dental offices as number of patients seen. If you want to produce more, you have to see more people or do more for the people you see. For most of you, doing more for the people you see is the quickest and most satisfying way to growth. That growth gives you the resources (income) you need to further invest in the practice (e.g., practice advertising, website, technology, staff, etc.).
The care should drive the numbers, not the other way around.
That is, if you and your staff have “Clinically Calibrated” so you’re in agreement about what criteria calls for the various sorts of treatments (everything from crowns to x-rays), the numbers will move! This approach is the opposite to using “quotas” where the numbers drive the recommendations.
Patient confluence is important but as important is making sure that you and your staff are presenting your best options in the first place. Ironically, more patient care is not delivered because of providers’ fear of rejection than actual patient rejection.
We feel very fortunate to work with so many fine practices throughout the state. Sometimes we experience some long, lonely miles on the road but it’s all worth it when we get a chance to sit down with you and your team. Thank you very much for your business! Let’s make 2012 your best year ever!