Dental Practice Management in the Face of Financial Stress
For dentists under financial stress, it can be difficult to know how to handle staff. How much should you share with them? If you say nothing to your team, then they won’t understand the financial pressure – and the dentist can end up feeling resentful. A dentist who feels their staff are “spoiled” because no matter what they do, they receive a paycheck at the end of the day – this is a sure sign that more communication is needed. On the other hand, how much information is too much? If you share your real financial dilemma – that the unpaid bills are double the payroll – then you worry that staff may start looking for a new practice to work for!
As the owner of the practice, you can lead your team through this financial forest. You do not owe them every detail – they won’t understand it and they will become stressed themselves! Instead, take this opportunity to educate them on how the business side of dentistry works. Staff want to understand the business of dentistry, they want to know that the practice they work so hard in is doing well! They want their hard work to matter. So, as you choose to show them the big numbers – production, collection, overhead and share with them where these numbers need to be, they will get on the wagon with you. This gives them the opportunity to identify cost savings you may have missed! Suddenly, you’re all working together to slay the financial beast – and as you achieve some success, you can cheer together.
Understand the business side of dentistry
First of all, your job is to get a handle on the business-side of your practice. Meet with your accountant and get an updated income statement. Print the list of all unpaid bills. You need to face the facts, no matter how ugly, and create a plan to get your finances back on track. Your plan is going to look at only two things: Making more money and Spending less money. As dentists, you are also responsible to look at these professionally – and personally. Sit down with your spouse and family and let them know what is going on. Everyone can help.
In your practice, look at these numbers to find opportunities to improve your dental finances:
- Production and Collection – In Dentrix, run your Providers AR Total report and circle the net production and net collection to make sure you’re looking at your numbers after all adjustments.
- Unfilled hours
- Hygiene production vs. hygienist compensation – Check their timeclocks to make sure they are not clocking more than 15 minutes before the first patient and 15 minutes after the last patient.
- Insurance aging – In Dentrix, this is in the office manager, Reports, Ledger, Insurance aging report. This can be a quick way to increase your cash flow – get these claims paid!
- Personal portion aging
Train your staff
Take time in your next regular staff meeting (and if you’re not regularly meeting with your staff, start NOW) to let your team know that you want to teach them the business side of dentistry. Its okay to share the overall big issues, for example, “You all have seen how many insurance patients we have in our schedules now. We need these patients to fill the schedule, but because these patients receive reduced fees, it’s harder for us to pay our bills. So, I want all of us to understand how we need to run this practice as this change is happening.”
Next, share your findings from the reports listed above – and be sure to spin them as opportunities to improve. For example, let’s say you ran your insurance aging report and were shocked to see how many pages and how much money was outstanding. Your gut reaction may have been anger that this hasn’t already been collected. However, getting angry with your team is not a good management technique. You never get better results by yelling at your front desk team than you do by sitting down with them, sharing the report you run and working together to come up with a plan for how the practice can improve. In fact, you may find that there are other issues the staff were aware of, but felt you weren’t interested in. It can be VERY difficult for a front desk team to get time with the dentist. (Did I mention staff meetings? hint, hint) The more the dentist talks with the team and asks for their help to improve the practice financially, the more the staff will look for opportunities to help!
Month after month, run your reports, and meet with your staff. Recovering from a stack of unpaid bills can take months of concerted effort. This is just like losing weight. Exercise more, eat less and the pounds come off slowly. When you’re doing this in your dental practice financial management, your job is to cheerlead the success. Perhaps you set a reward for the whole team when you reach certain milestones. And, because we’re talking financial milestones here – the reward can be as simple as a surprise treat of ice cream from the local Dairy Queen at the next staff meeting because you’ve reached a specific goal.
You may want to come up with rewards at home as well. Start with yourself. When you – your practice and your personal budget – hit halfway towards your goal, do something special for yourself – nothing crazy now, but treat yourself to a nice restaurant or a round of golf. If you’ve been cutting back on expenses personally, then these treats will feel BIG. Also take a moment to congratulate yourself – look back at where you started and appreciate that you’re doing it – you’re overcoming significant financial challenges and you’re going to make it!
Managing through dental financial stress is just one way to run a successful dental practice. If you’re interested in new ideas on running a dental practice, please subscribe to my weekly blog. One of the biggest challenges to managing a dental practice is managing dental insurance. With dental insurance handled, then dental marketing for new patients becomes a primary focus. In today’s day of online reviews, handling patient complaints well is essential. As your practice grows, hiring dental staff becomes more important. With 16+ years of dental practice management experience, I’m open to your questions to help you run a successful dental office.
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