Living With Cancellations And No-Shows Is Not Necessary
I am noticing as I read the analyses we are doing free for dentists that there are indications of high cancellations and no-shows. What a waste this is. We work very hard with our clients to eliminate these, and we know exactly how to be effective. Candidly, it is not that difficult, if a protocol is followed precisely, no exceptions. I am going to rewrite some general comments I made about this subject several years ago. Today, I will discuss hygiene, and in a few days I will discuss doctor’s appointments, too.
This first quarter was excellent for all of the dental practices with which we are associated nationwide. Hopefully, it was for your practice as well. The first quarter is an excellent time to stop to assess your progress this New Year. Multiply your production and collections by four. That is about what you will have at the end of 2002, if you stay on the same course. That will be one thing to consider, but there are other critical areas.
For instance, how bad were cancellations and no shows for hygiene, as well as the doctor, this first quarter. If they were about like last year, you are following the same procedures as last year. In many average-sized dental practices there may be 20 to 30 cancellations and/or no shows per month. The problem is that the more we take it for granted as a practice, the worse it gets. A sort of “resigned acceptance” attitude spreads throughout the entire office. Cancellations and no shows are a chronic problem in dentistry that CAN be solved. However, it does mean that we have to pay attention, and we have to be proactive. We have to be proactive in time to make the difference.
First, hygiene no shows and cancellations result from inconsistent following of the hygiene protocol…or, an ineffective hygiene protocol. Pre-booking is important and effective, but it must be done properly. It starts with a good Hygiene Card (samples in our Cookbook and Hygiene Protocol) clearly stating that the patient should call the office upon receiving the card. The patient while in the chair should address the card. The Hygienist should remind the patient that they are to call upon receiving the card by pointing to that portion of the card upon handing it to the patient. The Front Desk person should highlight that sentence on the card in front of the patient, so that when the patient receives it in the mail, he/she will be reminded.
Why should patients write the address on their own Hygiene Card? Because when patients see their own handwriting it is like an implied contract they make. Most people are honorable and do not break contracts. Why do we want them to call us? Two reasons. First, action by the patient will again substantiate the implied contract and make them less likely to forget. Also, it saves a lot of phone calls. Assume 1500 recare patients per year. That means about 5,000 calls, recalls, etc. to reach the patients. At even two minutes per call we can save as much as 167 hours per year. At ten dollars per hour that is $1,670.
The cards are to be sent the first of the month for appointments in the last half of the month and at mid-month for patients in the first half of next month. When the patient calls we mark that call on our recare schedule. If they have not called within a week of the card’s being sent, then we must call. This is critical because this is the step that is most often missed and most often leads to cancellations and no shows in the hygiene schedule. At this juncture we have enough time to become proactive in filling the schedule from our lists of patients who are due. (Always call those with the most outstanding treatment first. Then the next, etc. Every Hygienist’s schedule should have at least three patients with treatment outstanding per day.) We still confirm patients the day before their appointment too, but we have fewer surprises. Leaving a message is not confirming. Only speaking with the patient of patient’s guardian is a confirmation. No confirmation, no appointment.
Still, there will be patients who cannot make their appointment at the last minute. For this we have the “Special Consideration Patient List”, or “VIP List”, or whatever you like, so long as it makes those patients feel they are getting extra service, should they ever see it. Never put someone you want on a list that would insult him or her, if they heard about it. Actually, this is the list of patients who are good patients but who are chronic cancel-ers or no show-ers. Of course, it is essential to KNOW YOUR PATIENTS.
Just because a patient has problems making appointments does not make them a bad patient. Some times the office forgets that they are not the most important thing in the world. I personally am always on the list by choice. For years I was in a highly demanding position as the CEO of a company with worldwide offices. No matter how much I wanted to have my teeth cleaned, if I got into the office and we had a crisis in Moscow, or wherever, I had to deal with it, immediately. If a large stockholder or important customer wanted to drop by to say hello, I had to be there. Many, many patients nowadays are in similar situations. Yet, they also usually have the flexibility to leave on a moment’s notice, if an opening comes at a time that is convenient. You may have to call many times before it works, but they are still good patients. Luckily, this is a small percentage of the practice, but it is an important one. Think of these patients as a gold mine with potential to produce on a short notice.
Don’t even consider charging for missed appointments unless you want to run the patient, all his family, all his co-workers, etc. out of your practice forever. It takes hard work and following a good hygiene protocol precisely, but there is no reason for the hygiene schedule to fall apart at the last moment. Someone is not properly executing the protocol, or the protocol is not complete, or the protocol is not understood, if this is a chronic problem. Just because someone tells you they are doing everything I stated does not mean it is actually being done. Again, a left message is not a confirmation.
This has run a bit long, so I will send another in a few days to discuss the doctor’s cancellations and no shows.
I guess no matter how long I am away from my home town of Dallas I will always feel a closeness. Now honestly, I know and the experts all know that the Lakers are going to win another NBA Championship short of disaster to either Shaq or Kobe. Still, several other teams have an outside chance including the Dallas Mavericks.
Have a great week,
Hurston Anderson
813 963-7228
PS: Many of you have the Practice Management Cookbook by now. There is a discussion of this week’s subject in Section V. The methodology for establishing an efficient hygiene protocol is in the Protocol Series workbook, Increasing Productivity in Hygiene. Cookbook is $249.95 plus 19.95 shipping/handling and each Protocol Series member is $199.95 plus s/h. Fax 813 963-5974 with Visa/MC#, exp. date, and address; call above #, or buy online at http://www.wisedentist.com/.
For a FREE Production Potential Analysis and Evaluation, http://www.wisedentist.com/.
This is a sample of an actual evaluation we performed recently. To submit form click here.
Wisdom Management Group
Practice Production Potential Analysis
For
Dr. H
Thursday, April 11, 2002
Dear Dr. H
Type Practice
General
Age of Practice
26
Years Present Management
26
New Fee For Service Patients
4
Other New Patients
1
Active Patients
1680
Hygiene Hours
200
Hygiene Assistant Hours
0
Dentist Hours
160
Dental Asst. Hours
292
Administrative Hours
168
Treatment Rooms
4
% Fee for Service
78
Gross Production $
$56,750
Hygiene Production $
$19,760
Collected $
$52,270
I realize that it took a great deal of effort to fill in this form so precisely. Actually, only about one-third of the evaluation forms we receive are properly completed, as is yours. That indicates a great deal about you and your practice already. Congratulations, you have a great practice. Assuming a healthy overhead of 60% (hopefully a little lower), the doctor’s personal income should be in the $225,000 to $250,000 per year range. Probably, you have deductions that reduce that to a more attractive taxable amount, but you are definitely in the top 15% in dentistry. This analysis hones in on areas for improvement, but that should not detract from a great accomplish over the past 26 years.
Typically, a dental practice will produce about 50% to 80% of potential. Your practice appears to be producing about 55% of your potential of $102,789 per month. While I realize that looks ridiculous, I hope you will bear with me and read my further explanation below. Ultimate potential is based upon a perfect situation given your patient base, staff size, experience level, and facility size. While we do have a few clients who have reached 100% of their potential, that is extremely rare and 80% achievement of potential is in the top 5% of all dentists. In your case, that would be just a little below $1,000,000 per year, and that is reasonably achievable within two to three years, if the right steps are taken.
Patients. I have some concerns about shutting down the new patient flow, and I think I know how that can be solved. As you are aware, it is new patients, which bring in new treatment, and it is difficult to change your image back to welcoming new patients once the word is out in the community. For now, I recognize your concern about not properly treating your existing patients of record, but I think there are other solutions. I would like to see the new patients limited to only full-fee patients, if that does not violate your personal commitment to community. I do not know what percentage write off is necessary for your reduced-fee patients, but it seems that limiting to full-fee patients as a way to stem new patient flow is a feasible and a financially advantageous approach. This doctor will approach retirement in 10 to 15 years (or less, maybe). We need to have the practice at its peak when it is time to sell or reduce hours giving way to a partner/buyer. By natural attrition the patients of record will dwindle faster than 5 per month, so the goodwill value of the practice is diminishing as well. At present the practice would normally be worth about $350,000 to $375,000, but that would be reduced somewhat due to the meager new patient flow. Although shutting that “spigot” was probably a good solution at the time, we need to find other ways to solve the problem and slowly open up for new patients. It will take time for that flow to return to a healthy 20 to 25 per month.
Staff. Your staffing looks about right for the volume you are producing. If you are in an area of high salaries, you may be having a hard time keeping total staff compensation within the 20% range ($11,350 per month for you). In particular, you could be paying your hygienists rather well. I would advise that you keep them happy by any reasonable means, because they are producing very well (see below). I do want to be clear, though, that while this staff is probably necessary for the present volume, there is significant unused capacity to reach much higher production without increasing staff. If you remember the essay I wrote a couple of months ago on Parkinson’s Law, you will get a feel for my thoughts in your situation, as well. The staff may not think there is any way possible to grow without hiring additional staff, but statistics from thousands of dental practices do not agree. Internal protocols must be closely analyzed and fine-tuned to provide an efficiency that probably seems impossible at present, but that is based on the current paradigms. Those must be changed, too.
Hygiene. I am impressed with the production per hour from your hygiene department. While we expect our clients’ hygienists to produce $1,000 per day (some are reaching $1,250+ per day), we would equate that to $956 in your practice, which is only 78% full-fee. Your hygiene department is producing $790.40 per day, an impressive 82.7% of weighted potential. Still, this leaves us with $4,140+ per month in unrealized potential based upon present staffing, which is almost $50,000 per year that could be applied to hygienists’ income, doctor’s portion, etc. Also, your 1,680 patients should all be recare/recall patients, if we are restricting new patients. Certainly, some will be 12-month recare/recall, but an equal number will be 3-month, perio-maintenance patients. We find that on average using 6-months as an average is appropriate. That means you should have 3,360 hygiene appointments per year. For one-hour hygiene appointments, which seems likely in a practice like yours, you would need 280 hours of hygiene per month. That is 40% more hygiene per month (at your hourly rate that is $7,904 per month or $94,848 lost in hygiene). It is possible that you have hygienists who use 45-minute appointments. The rather high production per hour could be due to shorter appointments. If you have judged that 45-minute hygiene appointments properly serve your patients, you would need to increase only 5% to 210 hours per month of hygiene. While there is potential to do better in hygiene, this hygiene department is well above average in per hour production in the general dental community, and it is even more than 80% of our clients’ objectives. It is possible to do better in hygiene, but you should tread lightly here, because this is already an excellent area of your practice.
Facility. Four treatment rooms are adequate to reach the $1,000,000 per year goal, but it would require precise timing and scheduling. Just one more room for overflow during the times that there are two hygienists working would be helpful, and it would allow the scheduler some leeway. If this requires moving, that is a very big decision, and considerably more analysis would be necessary. If, however, there is a room that can be outfitted for about $10,000, that should be considered when the practice is consistently producing in excess of $60,000 per month.
Summary. SCHEDULING. Plainly and simply, you should be able to grow significantly by fine-tuning the scheduling approach. At present, you have a great practice, and the only thing that appears different from practices already producing $60,000+ per year is doctor’s production. A healthy ratio of hygiene to doctor’s production in a dental practice with a great hygiene department is 1:2 to 1:3. Your ratio is 1:1.87. That is pretty close, and your hygiene department is near great. At $119.50 per hour hygiene would be great. That means your production needs to be from $239 per hour to $359 per hour. At present your production is $231 per hour. If there are patients in your schedule (and in your dental chairs) who require treatment that will average more per hour, you will treat them. Therefore, it is the schedule which must be improved.
If I were advising your practice, I would suggest that you begin a growth phase with the ultimate goal of reaching 80% of your potential. I would expect to do that in three years’ time. The first year we should grow to $65,291 per month, which is 15% growth. The second year we should grow another 12.5% to $73,453 per month, and by the end of the third year we would have grown another 10% to $80,797 per month, just under 80% and almost $1,000,000 per year. Depending upon the team attitude this could be done much more quickly. We have clients who have grown more than $30,000 per month in a single year, but yours is an excellent practice already. Your team is justifiably rather proud of their accomplishments, probably. The task of changing paradigms and changing habits to the degree that the same staff can produce $1,000,000 per year may take some gentle persuasion over time.
Incidentally, collections are below our normal acceptable rate by 6% of gross production. If that is because of write-offs for reduced-fee patients, the only solution is to make the transition to 100% full-fee patients. If a good part of the $40,860 per year loss in collections is for staff, family, or professional-courtesy dentistry, that is less likely to be reduced without an examination of policies that you probably would not want to alter. If neither of these explanations accounts for the shortfall, then we need to look at the collections protocol because it is not working effectively.
Again, I find myself apologizing for being so critical of a practice that is already doing so well. However, there is unrealized potential that could increase the production to $1,000,000 per year while lowering stress, but I fear that all this discussion of growth sounds like more hard work for the doctor and the team. That should not be the case.
I am reminded of a story my father told me about the first job he had after college. He was to be a schoolteacher in the fall, but he found a summer job working on a road crew in the late 1930’s. When he started work the supervisor asked him to go help a couple of guys who were using sledgehammers to remove a large flat rock that was in the way. They had been alternately banging at the edges of the rock for two days to reduce it little by little. It was going to work ultimately, but dad suggested another approach. With the help of the two others he used a long pole as a lever, and wedged a smaller round boulder under the large one. Then, with one swing he broke the rock into. Sometimes, it takes new ideas and new approaches to help people accomplish things that are unimaginable based upon their existing experience.
Your practice should work toward your seeing patients only 128 hours per month. That can still include some large cases on Friday mornings, but that should be because you have stopped seeing patients my midday one day a week. You need that time to think and plan for your practice, and 128 hours per month is a lot for any dentist to work in the highly stressful clinical portion of the practice. I know this is possible, because I have seen it happen many times. You can produce $1,000,000 per year (which is probably irrelevant to you as a goal), while working fewer hours and with much less stress. Accomplishing this will not only increase your personal cash flow to around $400,000 to $500,000 per year, but it will increase the value of the practice to more than $500,000. This three-year plan could probably reduce the time until retirement is possible (whether desired or not) by as much as ten years.
Have a great day,
L. Hurston Anderson, PhD
The Value of an Appointment.
Sometimes, it is just a bad day, and it seems that everything is going wrong, and sometimes it is time to make changes. The email below is from a new client with whom we will be starting March 25th . I suspect, though, that there are thousands of dentists every day who have the exact same feelings. My response to the Midwestern dentist is below.
Subject: not doing so well....
I am not sure if this is salvageable. For the 2nd time this week the hygiene 8 am has not shown . We average 2 hygiene no shows per day. The staff acts like it is the luck of the draw. They seem to feel they have been given absolutely no direction. I hate coming to work and I feel that I am wasting my life. Yesterday the schedule was non-productive. I have been more productive when I am here alone!!! The assistant just left at 2pm to pick up her child. She can't get here before 9am so I work alone until then. It is a free for all and I pick up the tab…….I would honestly gladly hand the keys to this office to anyone who would accept them. I can't manage people, I don't feel anyone wants to work, but they all want to be paid. I hate the one way street. I pay for education, hep shots, uniforms on and on and then get excuses for everything that goes wrong. We lost money last year and I am funding my life with credit cards. I feel sick from stress and haven't slept well for months. I have been lied to, cheated, and ignored by my employees, and I don't have any faith in myself as a manager or CEO. I have tried writing things down for them. The paper gets lost, "I forgot. Yatta yatta…”. I am just busy enough not to be able to monitor every transaction, conversation etc. that goes on here.
So how is your day? Are you sure you guys are still interested?
Hi Dr. A,
Not a good day, I would say. Your situation is salvageable, but it will take many different steps to make permanent changes. We can release the pressure with some quick fix methods, but it sounds as if there may be some reorientation and retraining necessary for long-term change. It may be that all the staff is not salvageable, but it may be that setting a detailed and clear direction will bring them along.
Most dentists feel they are not good managers. It is particularly difficult, I think, because dentists are so smart, IQ-wise. Throughout most of childhood, the teens, and young adulthood most dentists were among the smartest people in their groups. Admittedly, entering dental school and meeting a room full of people who are equally smart is a bit sobering. Still, the experiences of our early lives mold our attitudes and reactions including our approach to problem solving. Smart people are accustomed to out thinking problems, and it works in many areas of life. However, effective personnel management is not about intelligence, and it is critical for success in any business.
Your example of herding cats is appropriate. Unfortunately, few employees are dedicated to their jobs anymore, anywhere. I do not want to denigrate all who work in dental offices because that is not fair, nor accurate, but in most cases it seems that dental office employees are there for the pay check, period. Our consultants all spent years working and managing in dental offices, and they are incredibly talented, so there are ambitious creative thinkers in the industry. However, the harsh reality is that most dental office positions are not high paying, and do not have a great future potential. That is why a dental office that has a management philosophy which relies on the staff to be self motivated, creative problem solvers will be dangerously dependent upon key individuals. Sometimes, the practice will sail along with few morale problems and healthy growth. Then, someone’s husband is transferred, or someone is going through a difficult personal problem, or a new staff member is added who is a strong personality with a negative attitude. Almost immediately, stress increases, the staff is unhappy, the patients start canceling more or simply just not showing at all, and eventually the finances suffer. Written, understood, and followed structure and internal systems must become the "Supervisor" that a dentist cannot be during the day. We use the word protocols because the internal organization cannot be based upon guidelines, but rules to be followed precisely. Too many dental offices have general guidelines as the only structure. That is not enough.
Also, give yourself a break. If you were able to oversee everything all the time like most managers of small businesses you could easily get it under control. That added "evil" twist with dentistry is that you must spend your day in the treatment rooms or there is no income. This leaves the staff to their own devices. If they are trained and motivated they can easily follow protocols and perform miracles. Of course, some cannot be trained and some cannot be motivated. If you have any of those employees, they will not be able to help us, and they should be asked to "shine their lights elsewhere". But, that is not the majority of employees. We and you will be discussing each and every person in detail, and we will make quick judgments if anyone is just never going to be able to contribute. Don't worry about that, though. It is unlikely that you would have hired anyone that incompetent.
Probably, we will be able to get the ship righted by first cleaning up the schedule. A first appointment cancellation/no show is inexcusable. We must treat our appointment times as treasures, with some are more important than others. Each hygiene hour is worth $100+. Losing that hour is like losing a one hundred dollar bill. It is essential that we know our patients. We must never allow our treasured first appointment to be occupied by someone who has any potential for canceling...based upon their history in the practice. No patient with a bad history or from a family with a bad history can be appointed for Monday, either. It is important for the first day of each week to go smoothly, and that is also true for the first appointment of each day. A cancellation or no show is not the patient's fault only. It is the fault of the dental office, especially the scheduler/confirmer. Now, we do not gain anything by coming down on her like a ton of bricks. She must be educated, motivated, and trained, if she is capable. If she is not, we must have someone there who is. If the attitude has become so negative that it is beyond help, we must find the ringleader, and replace that problem. You do not have a huge staff, so it will be a breeze to discover upon whom you can depend. It is better to hire employees who have a positive outlook on life, but if that is not possible, they must not be assertive. A negative dominating personality will ruin a dental practice more quickly than anything else.
For the doctor the key person for his/her psyche is the assistant. If the assistant does not assist well, the doctor will always have a heightened stress level. You must have an assistant who lightens your burden. If this assistant cannot be depended upon, you would be better taking an inexperienced person with a good attitude and training her to assist. A replacement trained assistant would be preferable, but you cannot allow anyone to throw you off first thing in the morning. The attitude and momentum build or collapse based upon the first appointment each day. If you have an assistant who cannot be there until 9 you must either not see patients yourself until 9 and use the time for office work, lab work, etc. or you must get someone who is available when the practice needs her. A practice is bigger than the unique needs of one person. Everyone there could be affected if this practice fails. How can you give raises, increase benefits, etc., if you are losing money? You owe it to yourself and them to see that this practice prospers.
When we arrive Monday it will be 100% business. We will first try to find ways to get your income increased, even if it is through means that are temporary. By that I mean, we will be watching that the schedule contains enough treatment and patients with good history for keeping appointments and paying their bills. Really, scheduling is about three days only...today, tomorrow, and the next day. Nothing beyond that is relevant right now. We must always try to fill today, tomorrow, and the next day before looking at anything else. If we do that today, then tomorrow we will be adding the following day, etc. If there is good production next week and tomorrow is a bust, we must see if there is any way to bring some of that forward, or we must dig through charts looking for production. In dentistry, the schedule is the thing. You will hear us emphasize this ad nauseum, and we will have the schedules faxed to us each day, if we think there is a chance that our message is not being taken seriously. We are very much positive in our approach, but we are firm about what will work and what will not. I do not mean to brag, but we know what will work, and we can detect quickly who will work.
Obviously, everything is filtered through your sensitivities first, but we will help you turn this practice around. Usually, when there is a staff just looking for direction the impact is immediate, and the income jumps the first month. Sometimes, we run into a bit more difficult group to inspire. It is just as the President says about foreign countries and terrorism. They are either with us or against us, ultimately. It is important to find out which as soon as possible, because this is a team effort, and the entire team must be contributing. Whatever the difficulties, we have seen them before, and we have a way to overcome any difficulty. The analysis I did on your practice is based upon our experience, and we expect to be held to that standard. As I said before, just hang in there. Help is on the way, and we have a 100% record of achievement for more than ten years. In 99% of the cases everything can be resolved, and the existing team pulls together, joyfully. That is what we expect to find, but if we do not, we still have the solution you require.
Continue to keep me informed. Very often I get out of the loop when the consultants gets involved, but I do stay informed and I am available to you at any time.
Have a better day,
Hurston
For anyone who has purchased the Practice Management Cookbook whether the first or second edition, we are now releasing the 3rd edition, the first update in 5 years. There is a good deal of new material and updated material contained in this version. While your previous editions are still quite useful, you might want to consider the new 2002 version. For a few weeks only we will send this new version to those who have purchased an earlier edition for half price, and the price has not increased yet. It will be another week at least before we will be able to accept credit card purchases on our website, but you secure your new version by following the instructions on our website http://wisedentist.com/workbooks.htm#costs .
If help is needed to establish effective and efficient internal protocols consider the Protocol Series as described at http://wisedentist.com/workbooks.htm#BooksAvailable. Also, we provide in-office assistance to expedite the establishment of essential protocols and to provide growth, help with transitions, etc. That is discussed at http://wisedentist.com/consulting.htm
