Keep in mind that this is the second integer of understanding how to score in the practice of dentistry. Last time we visited the number of patient visits. Today we look at PEV or Production per Each Visit from our equation for profits in dentistry:
PV x PEV x CP – O = P
If you have not read the first couple of articles about this fundamental success formula for dentistry, just go to www.summitpracicesolutions.com/blog and catch up. Also, please, please go to www.superdentalpractice.com and pick of your free copy of The Super General Dental Practice.
Previously, while discussing Production per each Patient Visit (PEV), you learned the importance as well as the sources affecting this integer in our equation. Let’s move into the production per each visit. Certainly, more patient visits are extremely important, but we also understand that more visits as well as the production per visit can drastically impact our bottom line. The whole purpose of incorporating this equation comes right after the equals sign, or PROFITS.
Underlying our discussion is the understanding that doing a three-surface filling or a crown prep for the same amount of time invested yield a huge difference in production per hour or minute. Key to more profits certainly will be affected by this fundamental understanding. Before we jump into the PEV, allow me to connect the patient visits and production per each visit with some pretty common-sense logic. There are four key connecting truths of production success. We already mentioned the first one in our last discussion: increase the number of new patients. Secondly, we need to increase the revenue generated per new patient through upping our game in case acceptance and inspiring our clients to a higher level of commitment in health for their mouth. This is also affected by the service you render and your clinical speed. Thirdly, our goal should be to continue to increase our fees to reflect our level of clinical excellence and the quality of the patients we attract. This has become difficult to impossible when 94% of all dental practices are participating as an in-network provider. The obvious solution would be to attract as many fee-for-service patients as possible, while eliminating the poorest reimbursing insurance companies you currently participate with. Finally, and this is an overlooked or even avoided topic on Facebook groups: expand the range of services you provide and expand the age range of patients you are comfortable working on. Basically, a larger data base with far more opportunities to grow your practice. Patients/consumers have voted, and they want to go to one dental office for all of their needs and their family’s dentistry. Like it or not, practices and doctors that only want to do single crowns, fillings, and cleanings in a 3-op office are outdated and are not in step with what the public is looking for. Even higher end FFS practices are struggling to attract the patients they need, needing the services that drive profit in that type of practice.
If you have graduated from dental school and decided that dentistry is just too stressful to do implants, ortho, oral surgery, kids, insurance, etc., you might as well go ahead and look for a new career. You will not prosper in the new dental economy you find yourself in.
Take note. Sad but true, you are currently working at capacity. In other words, your results are exactly what you currently deserve to get. Doing what you do now, will in no way propel you to the next level of success without a new dedication to engage, adapt, and change everything you do. Expecting anything less has to be some form of misguided neurosis that will only end your career in disappointment. On the other hand, if you have read this far, you are not what you have accomplished in your past. You are reading this to reacclimate and change by setting new goals and visions for the future. You are literally creating opportunities to rewrite your financial future. I know you can do this.
The six areas that fall under the Production per Each patient Visit (PEV) will overlap with our previous discussion about number of visits and the connecting points I just made. This is awesome, because once combined, you will see there are not that many areas to consider that would improve fifty percent of our profitability equation.
- Increase fees: Even in a practice with 76% insurance participation, you must increase your fees twice a year based on whatever the current cost of living index indicates. I would rase my fees about 2% every January and again in June. While this will not immediately raise your insurance contract reimbursement, it will, over time, help you with any increase possible. Market for all of the fee-for-service clients you can find while making sure you maximize the reimbursements you get from your current in-network plans. One way to do that is to learn how to code properly. Get the latest edition of Coding with Confidence by Charles Blair. It can mean an increase of about 3%-6% in reimbursements.
- Reduce insurance dependency: The key word here is “dependency”. It has been and still is possible to have 76% of your income from contracts from insurance companies if you become a Tarzan in a Managed Care Jungle. Overheads are still doable below 60%. Dependency means that you need to always consider ways of increasing reimbursements, leaving insurance companies that are terrible, all the while tracking, measuring your results, and then and only then, leave an insurance company if you can replace the loss of income and patients. A little acknowledged fact is that the very best practices from patient satisfaction, gross, and net income are in-network for insurance plans. These same practices have a larger number of fee-for-service patients than 90 percent of the FFS only practices. Yep, life rarely is black or white, all or none, this or that. Great, successful, well-liked practitioners will always attract the lions share of available patients. So, when you hear FFS this and FFS that, keep in mind that every practice is going after as many FFS patients as they can find.
- Expand the range of services: We have already covered this, but I always made a promise to myself to add new value-added things every year in our practices. Services were at the top of the list, second was making sure that each doctor expanded what they could do. I wanted everyone in the practice to move towards the same skill level. While we are talking about services here, we also added new changes in all of our systems and protocols to adapt quickly to an ever-changing consumer base. We embraced consumerism, based on patient trends and the changes I saw in any consumer driven business, not just dentistry.
- Diagnose needed treatment: I have written extensively about case acceptance and treatment planning so go to www.summitpracticesolutions.com/blog and access our article data base and read the details. The key here is making sure you understand that the number one reason that patients don’t have treatment done, is that they were never told by the dentist or team. Yikes, how crazy is that. Diagnosis is not a single time and place, but a strategic, well-staged protocol where both the team members and doctors move patients through the practice while helping them want what they need. Not just tell them. Use technology, partner with your hygienists and assistants to triage each patient, so by the time you walk into the room, the patient will have asked numerous questions and had each and every one of them answered. Diagnosis and case acceptance requires a whole team effort.
- Increased case acceptance: The average case acceptance in dentistry is below 60%. It just makes sense to learn how to help people want what they need. At our website, we have articles that detail exactly how to move that percentage to over 90%. Take the time and look at the hundreds and hundreds of free articles at www.summitpracticesolutions.com/blog. The nice thing about getting more people to say yes, is that you can increase profit and production without having to increase marketing. The ripple effect of more people saying yes, is that your number of direct referrals will also increase. Hand in hand with people saying yes, this is also telling you that they like you and the office, and they will refer their friends and neighbors to you.
- Increase the recall percentage: I consider hygiene as the hub of my practices upon which every other aspect is dependent. Hygiene services should be bringing in at least 33% of your collections. Also keep in mind that 67% of all the dentistry that you will do comes out of hygiene recall, not new patients. Recall percentages should average about 85% but the national average is about 42%. This is an obvious area where every office needs to stay engaged and informed. The hygiene department is not a loss leader, but the key to consistent growth and profitability. Take the time to measure the numbers and then act consistently to improve them.
- Increase the revenue generated per patient: Every dental schedule needs to be engineered or staged to produce maximum production. Diagnose comprehensive dentistry, help the patients say yes, fit this investment into their budgets, and figure out a way to do the work as quickly as possible. Part of this is not doing “one tooth at a time” dentistry. If you are doing endo, do the crown prep too. Do the fillings all at once if they are in the same quadrant. Utilize technology, delegation, four handed dentistry, new techniques, and the best equipment to deliver a perfect result for your patients. No more pray and prep. You have built your practice via people skills, and being competent and consistent. Find time to be more productive by being specific about the time needed. Stop jumping from one chair to another. Sit down, do the work, and move to the next patient. Every day must be specifically designed to give you maximum productivity. Key to this is making sure that at least 60% of your schedule is made up of substantial cases (anything at or above the fee of a crown).
- Add a wider range of service: You must think about your patient’s needs. How many times have you seen a need for a procedure that you don’t, won’t, or can’t do, and you send them down the road to another dentist or specialist? There have been years in my practice where I only referred one endo case out of our office. Same with oral surgery and wisdom teeth. You can bet your bottom dollar that 99% of the time we have the skill, training, and confidence to deliver a superior service at or above any specialist we know. Generally, the only thing we refer out is a procedure that we know will fail, or a child who enters our reception area screaming. The fact that we have the skill, understand the economics, and stage every interaction with our clients guarantees that the patient will get a great result and not have to hop from one office to another.
In our next discussion, we will delve into the fuel that runs our Profit & Loss Statements: The money we collect.
Michael Abernathy DDS