This article originally appeared on DentalEconomics.com – April 19, 2016
Everyone on our team has a Fitbit. We have lost many pounds and kept off the weight. The secret to our success is this: We know our progress and can take ownership of the results.
If you don’t measure what you are doing, it is very difficult to affect results. What’s more, “not knowing” perpetuates the feeling of “not enough”: not enough time, not enough money, etc.
After experiencing our Fitbit results for a sustained period of time, we created the equivalent of the Fitbit for your practice.
Our personal surveys showed that approximately 85% of practitioners did not know their key performance numbers. We also discovered four domains where dentists could be categorized: the “denial” domain, “committee” domain, “knowing” domain, and “owning” domain. Let’s see where you fit in:
The “denial” domain is defined as not knowing your key numbers, such as your fees, profitability, expenses, case acceptance percentage, patient retention, and new patient conversion rate. In a state of denial, everything is “fine,” which stands for “fouled up, insecure, neurotic, and emotional.”
In our workshops, when we ask who has read their P&Ls (profits and losses) in the last month, usually 15% of dentists raise their hands. We found that 10% of these dentists thought a P&L stood for posterior lingual. It’s not your fault if you’re one of these dentists. You’re not trained in business management. You’re a health-care provider. Yet, to be successful, you have to understand your numbers as foundational to your work.
If you are in the “committee” domain, you find yourself incessantly complaining to yourself, your spouse, and your colleagues about your financial situation and how hard you are working. You find yourself attracted to negative conversations with others who validate you by complaining about the same things you do. Yet there’s no awareness, plan, or intention to make any changes. In this domain, you get payoffs and juice from self-pity and being a victim rather than a victor.
Are you in the “knowing” domain? If so, you know where your practice is and you’re doing enough—mostly living a mediocre, minimally acceptable life. This is where everything’s OK. You could live out the rest of your life in this domain. Sometimes you may feel like you have hit the glass ceiling, are stuck, and have done everything that you’ve known to do. You’re possibly resigned that this is all there is.
The “owning” domain is where the navigators lie. This is where living a full life of having it all—health, family, and success—happens. It doesn’t mean that you don’t have glimpses of denial, committee, and knowing. However, the owning domain is where you delegate and rely on other people and still have control by measuring the effectiveness of each team member. The way you do this is by measuring their individual results for which they are accountable. You own the outcome of it all, but you don’t necessarily have to do it all.
We’ve found that “owners” own their numbers. This can be done with a daily dashboard that helps you measure, monitor, and make things right on a proactive versus reactive basis.
Which kind of these four dentists are you? If you’re ready to be a dentist who owns his or her numbers, let’s talk about your daily dashboard. Your dashboard should include these points of control:
Daily production: This number should be equal to or greater than your daily collection goal plus an average write-off percentage. For example, if you write off an average of 20% and you want to collect $1,000,000 per year, you need to produce $1,200,000.
Daily collection: This number is calculated by adding your annual personal income goal, retirement fund, annual debt reduction amount, 10% cash flow, and all practice expenses (including taxes), and dividing by the number of days you are going to work. This is how you increase your vacation time by proactively blocking out your annual days off.
Daily treatment presented and accepted: This is your peace-of-mind, go-away-and-come-back-from-vacation, worry-free metric. When your daily case acceptance amount is equal to or greater than the doctors’ daily goals, you will always have enough treatment to make goal because what gets closed in April usually gets produced in May.
Daily primary outcomes by position: This metric turns your payroll expense into a profit center. For example, you want to produce $1,000,000 annually and you are a one-doctor, one-hygienist office. You want to work four days a week and enjoy four weeks of vacation a year. You have 20% write-offs for insurance. You need to produce $1,200,000 to collect $1,000,000, and when you are working 192 days, your daily goal is $6,250. The doctor’s daily goal is $5,250 and the hygienist’s is $1,000. Your appointment coordinator’s personal goal is to end each day with $5,250 for the doctor and $1,000 for the hygienist. He or she gets a bonus based upon this. The hygienist is to produce $1,000, your assistant—or who you should call “NINJA” (“No, I’m Not Just an Assistant”)—is responsible for $5,250, and the treatment coordinator is responsible for closing $5,250 in treatment daily.
The Fitbit helped us know and own our numbers in regard to steps, water, and sleep, which had a direct effect on our results. The new model for the private practitioner, in order to compete against dental management organizations (DMOs), includes a “Fitbit” dashboard.
This year, you will see “Practice Management 2.0” emerge. Imagine the iPractice where your dashboard will alert your team leader on key performance indicators that are tied to each team member’s daily primary outcome for the day. When the team member’s personal statistics are trending down for a period of time, your team leader will be alerted and directed to a coaching and interactive video education platform delivered to your team members via smartphone. Then it alerts you once they have completed the training. This is the future of private practice—one that you can “own” with the right attitude and willingness to change!