3-Year Action Plan

Over the twenty plus years that we have been evaluating and analyzing dental practices we have collected an enormous data base of statistics about pertinent areas of practices such as healthy overhead percentages, production potential based upon specific criteria, etc. Some years ago we undertook an extensive effort to create a computerized modeling system which allows us to input statistics from other dental practices into the model.  By utilizing these data and comparing data from other practices we are able to determine the production potential of a dental practice.  When an expert analyzes the output he/she can then tweak certain areas to see how that will affect that potential.  Knowledge of what can be changed easily allows the expert to produce a result that accounts for not only existing conditions, but assumes some slight modification. 

Within time constraints we provide as much as possible of this in the free analyses we send to all those who fill in the form on this website.  We do not intend to discontinue this free service.  However, given a bit more analysis by properly trained senior experts on our staff with specific expertise, we are able to suggest a course of action which could be undertaken to reach closer to the potential as suggested by the analysis.  By suggesting certain action to be taken in specific sequences, we are able to produce a plan which will assist a dentist to realize a higher percentage of his/her potential.  The resulting Action Plan is very similar to the document we use for our in-office consulting team as they begin direct action in client dental offices.  

Unfortunately, we cannot do this at no charge.  It takes too much time.  However, we are offering the service at a break-even price of $249.95.

Included in the bound document, a sample of which is below, is a restatement of the data as submitted, a printed copy of the evaluation we have done, a prioritized list of action steps which can be taken with proposed timeframes for instituting the changes, copies of revised procedures which should be used to improve the efficiency in the areas suggested by the analysis, monitoring techniques for assessing the effectiveness of changes made, and a summary discussing the practice and opportunities presented.

Under normal conditions the analysis can be prepared and mailed within a week of receipt of the data submitted.  Be sure to include enough information in the data submitted in the free evaluation section for us to provide a proper analysis.  Data fields left blank are automatically filled with probable answers based upon the other data, but a completed form provides the best analysis.  Also, we will need an address and phone # in the general discussion area for demographic analysis and for mailing of the bound plan. 

To order this report after having completed the evaluation form, click here   

Front Cover

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Three-Year Action Plan

 Assumptions

The primary assumption of this plan is that the doctor wants to strive toward maximizing the potential of his dental practice.  

It is further assumed that the information provided on the form is accurate except where anomalies seem to exist.  That is, the average gross production in this dental practice averaged for the past six months has been $50,604 per month.  The average collections are $44,626 per month.  Write-offs from insurance and other reduced-charge or no-charge dentistry do not exceed 5% of gross production placing net production at an average of $48,074 per month.  (If write-offs are different, an extrapolation can be done because we will be discussing net production at all times.) 

Collections are presently 93% of net production.  That is, 88% of gross production

Taking positive action is necessary to achieve the goal of realizing a higher percentage of overall practice potential.  Conversely, undirected or ill-directed actions could worsen rather than improve the situation at the practice.  Likewise, timid acts may exacerbate the situation as well.  The appropriate and effective approach is to analyze the situation, consider the alternatives, and take decisive action in the right direction.  The purpose of this document is to suggest a reasonable course of action that will help the dentist to reach attainable goals.

Note: There will necessarily be some rather broad actions suggested which require additional resources such as systems for planning meetings, reducing cancellations, and instituting specific protocols.  Certain resources which can help with these actions can be obtained from Wisdom Management Group at our website or by calling (813) 963-7228.  A list and explanations will be on the last page of this document. However, there are other sources as well, and this plan does not require the use of any items from our firm to be effective.  No further purchases from our firm are required.*

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First Year

Goals.

1. Increase monthly net production to $57,760 per month by following the plan laid out on this and subsequent pages.  This will mean a probable gross production of $60,800 per month ($729,600 for a year).

2. Increase collection percentage to 95% of net production.  (It must be remembered that a practice in growth transition will always be collecting based on production for the previous two months averaged.)

3. Increase annual income from $535,512 to $658,464 (annualized) while increasing expenses only 5% of gross production.  That will result in an increase in doctor’s portion by $7,206 per month.  Bear in mind that the growth to the goal will not be accomplished immediately.  Assuming a constant growth curve the actual income at the end of the year will be $596,988 with the net increase in doctor’s personal income to total $43,236 by year’s end. 

Steps.

1.      There are too many patients in the practice to treat properly.  You are suffering from too much of a good thing.  Your target should be for 1,500 to 2,000 active patients to remain in the practice.  Do a Chart Audit to separate patients into the following categories:

a.       Patients who have not been treated in the past two years.  Send them a courtesy letter asking if they want to be considered as patients of the practice.  The letter should include a return postcard, which can be marked, if they consider themselves patients.  If there is no return within one month place their charts in storage.  If they return the card, add them to active recare and pursue them in appropriate fashion.  As a patient, they consider your practice responsible for their dental health and part of that is regular hygiene treatment and checkups.

b.      Patients who are simply emergencies and are not expected to return to the practice.  Send them a courtesy letter asking if they want to be considered as patients of the practice.  The letter should include a return postcard, which can be marked, if they consider themselves patients.  If there is no return within one month place their charts in storage.  If they return the card, add them to active recare and pursue them in appropriate fashion.  As a patient, they consider your practice responsible for their dental health and part of that is regular hygiene treatment and checkups.

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c.       Patients whose insurance carrier pays less than your regular fee.  Rate the companies based upon the worst payers first, then the next, etc.  Take care to know how many active patients each carrier covers, and begin discontinuing acceptance of the plans that are the worst payers first, etc.  Do this humanely and methodically.  Inform the patients first.  If it is possible, let them make the decision to pay the difference.  Of course, that is not permitted with many insurance carriers.  Be very careful to use good common sense here.  We cannot afford to eliminate down below 1,500 to 2,000 active patients of record. 

2.      Analyze fees to make certain that they are appropriate for the quality of dentistry performed in your practice.  There are two approaches to this:

a.       Compare EOB’s from insurance companies to fee billed. If the insurance companies are paying the entire fee each time, there is probably room for an increase.  (A practice with too many patients should not worry that increasing fees will cause the loss of patients.  It is actually a way of focusing a practice.)

b.   Use an outside source for fee comparisons and audits.

3.      Analyze the hygiene protocol, and take steps to make it more effective.   Your goal in hygiene this year is requires only a modest increase.  You need to raise production per hour by 25% from $70 per hour to $87.50 per hour.  That will result in an increase to $22,400 per month in hygiene production.  Actions which should make this happen are as follows:

a.       Analyze all procedures relating to hygiene and write those down for closer scrutiny.

b.      Institute a more effective protocol in hygiene, which reduces cancellations in half and sets a daily hygiene goal of $700 per day per hygienist.  (No day is properly scheduled, if the added production is less than $750 per day.)

c.       Do not fill an entire day’s schedule for either hygienist with pre-appointed patients.  Always leave room for new patients, emergencies, and perio-maintenance.  Goals cannot be made treating healthy mouths only, even if it is more fun for the hygienists to treat “their” patients.  (Unless they are producing at least 3 times their total cost to the practice the practice is losing money in hygiene.)

d.      Institute a bonus system for hygienists that rewards them for production in excess of three times their total compensation when averaged over a pay period.  This should be done even if they must produce much more than $700 per day to gain the bonus.  Bonus should be about 30% to 1/3 of excess.

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e.       Have each hygienist fill in a blank schedule with her ideal day of production.  If she has difficulty with this, have her refer to a day in her past, which fits that criterion.  Schedule on this basis.

f.        Confirm each patient no more than two days in advance and consider it confirmed only if the patient is reached in person.  (A left message is not a confirmed appointment.  This is an inviolable rule.)

4.      Analyze the present approach to scheduling for the doctor, and take steps to make that more effective.  The goal in for your production increase this first year is also modest.  You need to raise production per hour from $230 per hour to $300 per hour. This is a 30% increase but it should be done working only 128 hours per month, so that is only an increase per month of 17.8%.  Actions which should make this happen are as follows:

a.       Use two hours per week for a preplanning meeting with all members of the team to help eliminate cancellations and improper scheduling.  There can be absolutely no personal issues discussed at this meeting.  Patient issues only.

b.      Hold a five-minute standing huddle each morning (attendance required) to review changes to the schedule for that day as it was discussed during the weekly preplanning meeting.  (There can be absolutely no personal issues discussed at this meeting.  Patient issues only.  A staff meeting once a month should be reserved for these issues many of which will disappear before the meeting.)

c.       Fill in a blank schedule with your ideal day’s schedule.  If you have difficulty with this, he should refer to a day in his past, which fits that criterion.  Schedule on that basis.

d.      Make certain that at least two to three patients per hygienist per day have treatment pending.  (NO exceptions!)

            e.       Schedule to a goal for the doctor of $2,500 per day. 

f.        Do not worry about anything on the schedule beyond today, tomorrow, and the next day. (The future becomes the present in its own time.)

g.       Confirm each patient no more than two days in advance and consider it confirmed only if the patient is reached in person.  (A left message is not a confirmed appointment.  This is an inviolable rule.)

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5.      Begin selecting three patients in each day’s schedule to ask for referrals.  During the preplanning meeting specify which member of the team is best suited to make the contact.  Quite often it is the hygienist, front desk, or assistant, not the doctor. Review this during the daily standing huddle.

These goals and actions are easily attainable during the first year.  In fact, it is probable that actions taken will result in a much higher increase than suggested as the goal.  It is recognized as part of this analysis that these actions will not be easily instituted or completely comfortable for the team.  If the team really gets excited and motivated, the net production increase will be much greater.  When we help with such efforts we expect the increase to be between $12,500 and $15,000 the first year rather than just under $10,000.  Also, these actions must be actually taken for anything to happen.  If they are just introduced and not enforced, there will be a temporary affect, if any.

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Second Year

Goals.

1. Increase monthly net production to $66,880 per month by following the plan laid out on this and subsequent pages.  This means a probable gross production of $70,400 per month ($844,800 for a year).

2. Increase collection percentage to 97% of net production.  (It must be remembered that a practice in growth transition will always be collecting based on production for the previous two months averaged.)

3. Increase annual income from $596,988 to $778,483 (annualized) while increasing expenses only 5%.  That will result in an increase in doctor’s portion by $6,042 per month.  Bear in mind that the growth to the goal will not be accomplished immediately.  Assuming a constant growth curve the actual income at the end of the year will be $687,736 with the net increase in doctor’s personal income $72,507. 

Steps.

1.      Begin sending a patient newsletter each quarter to all patients’ families in order to increase new patient flow to 25 per month.

2.      Increase hygiene daily goal to $800 per hygienist per day.  This will represent an increase of only about 14% while still representing only 75% of an acceptable rate of $133 per hour per hygienist.  Provide at least one course in perio-maintenance if the hygienists are not diagnosing and treating an adequate amount of perio-maintenance.  (Healthy-mouth prophy’s are alone are inadequate to reach hygiene requirements.)

3.      Hire one full-time employee to work on hygiene scheduling (and confirming) and collections for the practice.  She should also have some assisting experience in order to help out about 25% of her time in the back.

4.      Institute a team bonus plan based upon paying exactly 20% of gross production to the staff.  Your increases should have made the percentage fall in line by mid-year at the latest.  Also, propose a team trip as a reward for some sort of extraordinary success, about 15% above goal for the year.

5.      Increase your daily goal to $3,000 per day.  Expect $350 per hour, which represents an increase of 17%.  This will be accomplished by even better effort at scheduling and the additional new patient exams.  Consider a reward to the scheduler for exceeding daily goals regularly.  (It is free money because goal is higher than $350 per day.)

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These goals and actions are easily attainable during the second year.  In fact, it is probable that actions taken will result in a much higher increase than suggested as the goal.  It is recognized for the purpose of this plan that these further actions will not be totally instituted or completely comfortable for the team, initially.  If the team really gets excited and motivated about these further changes, the net production increase will be much greater.  If they are just introduced and not enforced, they will have a temporary affect, if any.  

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Third Year

Goals.

1. Increase monthly net production to $76,000 per month by following the plan laid out on this page.  This means a probable gross production of $80,000 per month ($960,000 for a year).

2. Increase collection percentage to 98% of net production.  (It must be remembered that a practice in growth transition will always be collecting based on production for the previous two months averaged.)

3. Increase annual income from $687,736 to $893,760 (annualized) while increasing expenses only 3%.  That will result in an increase in doctor’s portion by $7,584 per month.  Bear in mind that the growth to the goal will not be accomplished immediately.  Assuming a constant growth curve the actual income at the end of the year will be $778,748 with the net increase in doctor’s personal income $91,012. 

Steps.

1.      Purchase new equipment for better presenting treatment.  Such as in office cameras, etc.

2.      Increase hygiene daily goal to $900 per hygienist per day.  This will represent an increase of only about 11% while still representing only 85% of an acceptable rate of $133 per hour per hygienist. 

3.      Increase your daily goal to $3,500 per day.  Expect $400 per hour from doctor, which represents an increase of 14%.  This will be accomplished by even better scheduling and the use of additional treatment presentation tools. 

4.      Control overhead to no more than 55% of gross production.

These goals and actions are easily attainable during the third year.  In fact, it is probable that actions taken will result in a much higher increase than suggested as the goal.  It is recognized for the purpose of this plan that these actions will not be totally instituted or completely comfortable for the team, initially.  If the team really gets excited and motivated about these further changes, the net production increase will be much greater.  If they are just introduced and not enforced, they will have a temporary affect, if any.

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Action Plan Projections