Systems

Business Systems: The Key to Dental Practice Success

Roger P. Levin, DDS, MBA

In the past few years, dentistry has experienced some tremendous changes. To be successful in the past, one simply had to take care of existing patients and provide them a reasonable number of services. By doing these things, one could have a relatively profitable career in dentistry. Today, practices are subject to a variety of pressures: new services, staffing issues, third-party reimbursement challenges, and even government intervention. But they also have more options for competing, including internal marketing, external marketing, and public relations. There is also the emergence of management service organizations that may or may not prove to be a long-term successful model for a percentage of dental practices. All of this adds up to significant change and the redefinition of the dental practice as a business.

This article will address several of the key management business systems that allow a practice to increase overall productivity and decrease stress. These systems have been identified based on experiences with clients since 1985 and the results that have been achieved.

Business Is About Systems

Dental practices can no longer afford to simply operate the way they did in the past. In most practices, patient flow is defined by general scheduling guidelines, and the major attempt is to make sure the day is full. As long as there are patients to schedule, dentists generally ignore the need to develop their practice as a business. Their main goal is to take care of their scheduled patients. Rarely is there time to consider how they might redesign or change the practice so that it is more efficient and effective.

Let us examine some of the key issues in dental practices today and for tomorrow.

* Business is currently at the top of the longest upward cycle in history. This upward cycle has lasted nine years and may or may not continue. Although nobody can accurately predict when the business cycle will end or how heavily the economy will drop, it is known that the economy runs in cycles. Inevitably, many practices will be shocked when they find that a great deal of their current success is due more to the economy than to strategies they have initiated. When the economy changes, a great deal of the discretionary dentistry that is currently being performed will slow down.

* Another cause for concern is the staffing crisis. Unemployment is at an all-time low, and the options people have for job opportunities are at an all-time high. The computer and Internet industries are also spawning numerous opportunities for people who do not mind changing jobs on a one- or two-year basis. People are no longer staying with one company their entire working career. In fact, people entering the workforce now will change jobs more frequently than older workers, and each position will probably be better than the previous one.

* A third factor to consider is that employment reorientation has made it more difficult to find and hire trained and qualified staff. Dental practices have never been in a position to provide short- or long-term training programs for staff and, thus, the job candidate is often less skilled in the areas the dental practice needs. This makes the hiring cycle longer, as well as the length of time it takes a new team member to become effective. Since dental practices are not in a position to employ extra individuals for overflow, this typically leads to fairly high levels of stress for the dentist and staff.

* The fourth factor to be considered is that dentistry has had a limited number of new services available in the past few years. While it is true that in 1985 the implant and cosmetic services revolution began in dentistry, the reality is that there are very few truly new services that have entered the profession recently. There have been a number of improvements and modifications of existing materials and techniques, but not necessarily entirely new areas of treatment. This is of concern in that if practices are seeking opportunities to expand the number of services they provide, they may be limited in the choices. In no way does this mean dentistry has not had significant quality improvements and that manufacturers have not created much more impressive technologies and materials.

Business Systems Are Essential

All of the above adds up to one realization: Each practice needs to be run as a well-tuned, highly refined business. Until now, dentists have been able to take a relaxed posture toward the highly effective and efficient operations of their dental practice. This is due to dental practices performing reasonably well in today’s economy.

The reality is that dental practice will change. The economy cannot continue to expand forever, and the staffing issue continues to present a challenge. When these two issues are combined with the reality that there are not a large number of brand new services to bring into practices, it means the dental practice of today may be a bit more challenged tomorrow. Fortunately, it is easy to prepare for those challenges and, in fact, enjoy 30 percent to 50 percent growth in the productivity and profitability of a practice without adding work hours and while decreasing overall stress.

The key is to create written, detailed business systems. All businesses operate based on specific sets of systems. In most dental practices, these systems have allowed the dentist to achieve a reasonable lifestyle but have not in any way allowed the practice to approach its true potential.

Many professionals believe that to increase the productivity and profitability of their practices by 30 percent to 50 percent, they need to work harder and survive even more stress and chaos in the practice. The truth is that practices that are reaching their profitability potential are usually better organized, operate more efficiently, and have far less stress than the average practice.

Dental practice statistics from throughout the United States show that practice gross revenues are increasing. The problem is that simultaneously the average production per patient is actually declining. This does not mean that doctors have not increased their fees, but rather that overall reimbursements from insurance companies are declining. Practices that do not participate in insurance need to be even more aware of the points stressed in this article because they will be affected first by a changing economy.

When average production per patient is declining at the same time that practice gross revenues are increasing, it means that patient volume through dental practices has increased as well. This means that each dentist is working harder to sustain certain levels of income by having more patient visits every year; and the higher the volume of patients, the higher the overall practice overhead per patient.

The solution is simple but requires a definitive expertise. The solution is found in creating written, detailed business systems. Each practice has a minimum of five to seven major business systems (and 11 minor systems), depending on whether it is a general, orthodontic, oral and maxillofacial surgery, endodontic, periodontic, or prosthodontic practice. The basic business systems in each office include:

* Scheduling;

* Case presentation;

* Patient financial management;

* Practice financial management;

* Customer service; and

* Human resource policies.

For general practice, periodontics, and prosthodontics, dental hygiene is also a major business system with enormous potential. Although this article will focus mainly on scheduling, case presentation and customer service issues, all six of the above management systems have a great deal of importance.

There are also 11 minor business systems that will not be discussed in this article that also need to be brought into a highly organized format so that they do not detract from the day-to-day operations of the major business systems. These include inventory control, OSHA compliance, and laboratory controls. Practices operate by systems. When this concept is applied, it can help a practice achieve a 30 percent to 50 percent increase in productivity and profitability.

Writing Business Systems

The first step in writing out detailed business systems is to understand that they will be the backbone of a practice. This concept was originated based on a series of intensive programs on the science of total quality management. Total quality management is a broad-based management science founded by Edward Deming that revolutionizes businesses. Total quality management in its true form could never work in a dental practice because it is far too statistical and would require almost a full-time statistician to monitor and analyze the statistical results.

This is unrealistic for dental practices, but there are certain principles in the science of total quality management that can be adapted for dentistry to help practitioners achieve higher levels of success. This concept of written, detailed business systems has been the single most powerful management process for increasing production and profit in dental practices. It is essential that every written detailed business system be created in a step-by-step format with a level of expertise that avoids missing any steps. It is also crucial to understand that a system must be complete because missing parts will cause that system to function far below its potential.

Scheduling

All systems are not equal. Without question, the scheduling system overpowers all other systems and must be the starting point for all systems change. The scheduling system reflects the use of time, and time is the key factor in dental practices. While dentists do not get paid equally for their time (as in they do not have the same production per hour), they are paid for their time in some format. And while there is a fee for a specific service, such as a crown preparation and placement, that fee is relative to the amount of time involved. Most dentists are not even aware of the overhead of the different services they provide.

Scheduling also controls the level of practice production and stress. The majority of organizational problems in dental practices emanate from the scheduling system more than any other system. Scheduling must be a carefully thought out system that requires well more than 150 components. In addition to the 150-plus components, verbal skills are also a key factor. As scheduling systems are created, key scripts that the staff can use should also be developed because they have a tremendous impact on patient reaction to the scheduling system.

As an example, some immediate actions one might take include:

* Scheduling to a template so that the dentist’s time is accounted for every minute of the day. One goal worth achieving is for the dentist to be chairside or with patients approximately 98 percent of the day. This reduces the management stress on the dentist because the staff is then running the day-to-day operations of the practice, and the dentist can spend 98 percent of the time either diagnosing, treating, or talking with patients.

* Evaluating the daily schedule from a production and case-complexity mode. This means that the practice should create an ideal-day format that is similar most days of the week. While this will vary slightly for specialty practices, there should not be a significant deviation in daily production from day to day because a well-paced schedule will have production and complex cases paced throughout the week to decrease doctor and staff fatigue and create well-paced days.

* Establishing a daily production goal. This way the practitioner can schedule evenly throughout the year and achieve the production levels that are appropriate for the practice. When a practice follows a technique known as scheduling for production, there is an excellent organization and flow to the schedule, which keeps the practice productive and enjoyable.

* Scheduling dentist and assistant time separately. The dentist and dental assistant do not necessarily need to work together 100 percent of the time. There are many times during the day when dentists and assistants can be working with patients during different parts of procedures as long as all laws and state board regulations are followed. Increasing the responsibilities of dental assistants and scheduling dentist and assistant time separately significantly increase the capability of the practice.

Case Presentation

The second most important system is case presentation. While this is not as important in an endodontic practice as in general, orthodontic, oral and maxillofacial surgery, and periodontal practices, it is still essential to properly present cases to create not only acceptance, but also a sense of value for the fee. Even in the endodontic practice, many patients suffer from buyer’s remorse once they are out of pain and realize the cost of the procedure.

The key to case acceptance is outstanding selling skills. Selling is a process of education and motivation. The education and motivation of patients is an essential aspect of the selling process. Therefore, based on that definition, selling is an excellent process in which everyone in the practice should excel. Each patient that turns down necessary treatment loses an opportunity for health, and each patient that turns down elective treatment loses an opportunity for life enhancement. For each lost procedure, the practice loses an opportunity for increased productivity. Fortunately, many of the practice’s goals and patients’ goals tend to go hand in hand.

Most dentists have not had any training in the education and motivation of patients. They simply feed back to patients information they have learned through experience. Dentists often overwhelm patients with technical information in which they have little interest. People care mostly about benefits, and dentists should be stressing what these procedures will do to enhance the lives of their patients. The motivation factor is essential and one that has been generally poorly incorporated into the dental profession. Dentists tend to present a series of facts to patients and hope that this will be sufficient in creating a desire to have treatment.

Presenting cases requires a system as well. Excellence in dentistry and practice productivity is dependent on having an excellent system. For example, the comprehensive exam performed for every new patient ultimately leads to case presentation. There should be a step-by-step format for the comprehensive exam, patient interview, relationship building, etc. Using an established set of forms that are followed step by step to ensure that every aspect of the comprehensive exam is performed can systemize this. This would be followed by using treatment plan worksheets and final treatment plan presentation forms to organize the findings in regard to a specific patient. Finally, the case presentation should have a standardized format that allows the patient to become fully educated as to the oral health condition and potential treatment that may be beneficial or of interest.

While entire books have been written on how to develop relationships with patients, perform comprehensive diagnosis, and present treatment, it is essential to understand that underlying all success is a clear system. Practices that have different approaches to new patients, bring new patients in through hygiene with only quick exams, or fail to rediagnose current patients over the years as if they were new patients will have significantly lower long-term profitability. These are some of the reasons that practices plateau and stress levels increase. Some examples of key factors in case presentation include:

* Always being prepared for every patient. The office should have a written, organized treatment plan that is reviewed prior to meeting with the patient. This will help to create highly organized treatment presentations.

* Recommending the ideal treatment to a patient first. It is extremely important that every patient have the opportunity to understand the best option(s) that can be offered and to make a decision on that recommended treatment. Many patients will accept higher levels of treatment if they fully understand all of the ramifications and future benefits.

* Talking to patients in benefits rather than features. Most dentists have a highly technical background and a great deal of technical information. It is natural that they want to share this with patients, but they often fail to realize that this is not the main motivational factor or psychological interest of the patient. Patients are interested in understanding how a specific treatment plan will be of benefit to them. For example, cosmetic dentistry does not deal with something that people need from a health standpoint. These patients must be addressed from a psychological standpoint as to the enhancement of their smile and its effect on the quality of their lives rather than based on their short- and long-term health.

* Answering all patient questions slowly and carefully. Patient questions typically come toward the end of the appointment when dentists and staff are rushing to finish before the next appointment. Most patient questions about treatment come toward the end of the presentation and after the patient has been presented with the overall fee for the case. Answering each question clearly and slowly creates a sense of confidence in the patient. People learn by asking questions, and answering them properly will significantly increase the level of case acceptance in the practice.

The Hidden System

The last system to be covered in this article -- the "hidden" system -- is customer service. Customer service is not an independent system, but one that truly pervades all other systems in the office. Customer service is not something that happens by accident or by simply hiring nice people. It goes far beyond basic personality and requires a systemized approach to every patient every day. The steps of customer service are as integral to the success of the practice as those of scheduling or case presentation. Customer service is a unique opportunity to differentiate a practice, justify the value for the fees, and satisfy almost every patient who walks through the door.

Customer service also represents an internal marketing program. These are almost synonymous concepts that are based on an understanding that if a practice exceed the expectations of every patient, it will ultimately be successful. It does not matter if the practice is in an area inundated with managed care or dental insurance. It does not matter whether it is an urban practice or rural practice. It does not matter for the most part where the practice is -- customer service is almost always a key ingredient in success.

What makes customer service so powerful? For the most part, customer service in the United States is reasonably poor in quality. Although it is probably the single most talked about management issue in business, it is probably the least implemented. Very few businesses systemize their customer service to the point where they can ensure almost 100 percent customer service success. Instead, it often depends on how much time the individual has to pay attention to a customer, the mood of the day, scheduling availability, and a host of other factors.

Most people see their main job as the technical job, which they must do, and do not view themselves as customer service representatives. Many dental assistants see their job strictly as high-quality dental assisting. Hygienists often judge themselves by their ability to scale and root plane and perform a host of other periodontal-related services. And, truthfully, many dentists define quality strictly as the ability to properly treat teeth. This is only 50 percent of the equation for success.

The other 50 percent is customer service. This requires a way of developing relationships with each customer and exceeding expectations. The same activities that are defined as customer service act as the internal marketing to build a dental practice over time. Customer service will allow a practice to attract certain types of patients who are seeking their definition of high-quality care. Since patients are generally unable to judge the true clinical quality provided in the dental practice, they make their quality judgments based on how they are treated as people.

Most of the highly successful practices in the United States have outstanding customer service. In most cases, customer service has been created almost as a byproduct of high-quality clinical dentistry, but the dentist was able to figure it out nonetheless. There are many practices with outstanding clinical care that do not get their message across to patients because their customer service is either mediocre or poor.

The truth is that a dentist can distinguish his or her practice by applying daily customer service principles in a comprehensive system for every patient. The reaction from patients is one of greater appreciation, increased referrals, and fewer conflicts.

Some examples of customer service opportunities include:

* Making sure the practice has a highly esthetic look and is updated on a regular basis. Enhancements in the practice’s physical appearance give patients the impression that the practice is up-to-date in terms of modern dental procedures.

* Giving each patient a gift of some type before they leave the practice. Little things make a difference. Whether it is carnations, pens with the dentist’s name on them, or any other tangible gift, it is a nicety that patients enjoy.

* Greeting every patient by name, shaking hands, and expressing pleasure in seeing them. A positive greeting can make a tremendous difference in the psychological orientation of a patient in the practice.

* Asking patients at the end of treatment if they have any questions and if they are completely satisfied with the treatment they received. This is a delightful question that can be asked of patients in a comfortable manner and signifies that the practice cares and reinforces the excellent care and service the patient has received.

Summary

The future of dentistry will be similar to that of many other businesses. It will be faced with radical changes, new ways of thinking, new services, and greater competition. As these factors occur in all businesses, it will be those with systems and outstanding customer service that are able to not only survive, but also to thrive. Achieving practice success will be tied to having effective and efficient business systems, including customer service. While the world is changing rapidly, basic business principles and human nature have not changed. While businesses continue to work toward maximum productivity and profitability, patients will want to continue being treated with the greatest service and respect.

The future may bring a gradual shift in dental practices. The top 20 percent of practices in five to seven years will have higher profitability than the top 5 percent of practices do today. On the other hand, the other 80 percent of dental practices will actually have decreased profitability. The difference will be that the top 20 percent of practices will implement outstanding business systems that allow them to be more efficient and effective than ever before. They will implement many new services of both traditional needs-based dentistry and of an elective nature. These practices are preparing today for the future regardless of the effects of the economy or changes in dental insurance or health care regulations.

Author’s note

The statistics referred to in this article are based on experience with several thousand clients since 1985. Clients submit statistics during their consulting programs, and these are evaluated and tracked on a regular basis.

Author

Roger P. Levin, DDS, MBA, is the founder of the Levin Group, a dental practice management consulting firm.

To request a printed copy of this article, please contact/ Roger P. Levin, DDS, MBA, Levin Group, 10 New Plant Court, Owings Mills, MD 21117.