One of the things that surprises me when I talk to dental practice business owners is how little emphasis they put on profit.
Most of the time I find their core beliefs are based on being busy.
And gross.
Most dental owners believe that if there’s plenty of gross coming in to the dental practice then at the end of the day, the end of the month, the end of the year, there’s bound to be some net around somewhere.
This is not a good plan.
I’ve heard dentists and insurance fund owners say this about the low fees paid to dentists for certain items:
“Oh, don’t worry about the low fees, you’ll make it up in volume.”
Which is a total fabrication.
Because if there’s no profit, or worse still, a loss being made by the business on a procedure, then doing more of those procedures will only multiply those deficiencies.
One times zero is zero.
And one hundred times zero is still zero.
And one times minus ten is minus ten.
While one hundred times minus ten is minus one thousand.
Do you get the picture?
Don’t be tricked into doing procedures just for the sake of doing them.
One of my clients in the USA worked out that the fees being paid to her by the government for some dental procedures were less than what she was spending on staff and laboratory costs in delivering those procedures.
When she started sifting out these loss-making procedures, she soon worked out that she was better off not accepting any government “plans” at all.
End result?
She removed her dental office from those plans, sacked over 1500 patients, and her annual collections went up by over $220,000.00, or 20.56%.
Because she now had freed up a whole pile more available time to be seeing patients who valued what she could do for them and were willing to pay her to do so.
Another dentist I knew removed his dental office from an insurance company plan, and in so doing his collections for the year dropped forty percent.
Forty percent?
That’s a big hit!!
But guess what?
What he found was that his net profit for that same year rose by twenty percent!
What this means was that he was subsidising the procedures being performed on those patients with THAT company’s insurance, without really realising that this was the case.
In both these cases, these dental offices saw less patients as a result of this rationalization, and yet their bottom lines grew significantly!!
Thirdly, I’ve seen dental offices where there are multiple treatment rooms and multiple associate dentists employed.
And in a lot of these cases, the practice owners ARE NOT making a profit and are indeed making a loss because the associate dentists are under-diagnosing, under-presenting and under-treating their patients, and too slow, while they take up valuable practice resources of staff, staff time, and equipment.
These offices would be far better off if they removed these slow-speed associate dentists and went back to simply treating patients, as opposed to window-dressing their practices with multiple associate dentist brass plates.
I once had an associate new-graduate dentist who I employed and mentored in my dental office for twelve months. Each week I would meet with her for one hour to discuss her patients.
What I worked out was that the revenue that my practice was keeping as a result of her being there was less than the revenue I would have collected if I had simply seen patients myself during that hour that I spent mentoring this dentist.
I really needed to give myself an uppercut….
What does this all mean?
At the end of the day, when the banks come knocking on your door wanting their money back, your historical stories of compassion and mentoring will mean “not much” as they toss you out of your home and lock you out of your under-performing dental office..
And that’s the harsh reality.
Coupled with this, as you push your shopping trolley of your soiled worldly possessions away towards the nearest underpass where you can shelter, be sure to make sure you keep count of all of those patients who you gave discounts to over the years, who come forward to offer you financial support during these times….
I’ll bet there won’t be many…
*****
Have you read my book , How To Build The Dental Practice of Your Dreams [Without Killing Yourself!] In Less Than Sixty Days.
You can order your copy here: Click Link To Order
*****
The Ultimate Patient Experience is a simple to build complete Customer Service system in itself that I developed that allowed me to create an extraordinary dental office in an ordinary Sydney suburb. If you’d like to know more, ask me about my free special report.
Email me at david@theupe.com
Did you like this blog article? If you did then hit the share buttons below and share it with your friends and colleagues. Share it via email, Facebook and twitter!!