Written by David J. Ahearn, DDS Monday, 16 July 2012 13:14
Try as we might to ignore this fact, nothing stays the same. There is progress or collapse, advancement or decline, improvement or erosion. Our practices are no different than the natural rhythm of life, with the wonderful exception that we have significant control over the destiny of our workplace. In short, even in the worst of times, we have significant control of the health and vitality of our practices. The sad thing about dental practice is that so many practitioners act like hostages rather than as leaders. Would you like a practice with a full schedule?
HERE'S SOME SIMPLE MATH
Thirty new patients plus modest customer satisfaction leads to approximately 20 new hygiene hours a month in 6 months. At an 80% retention rate, that’s at least one new full-time hygienist every 8 months. Yes, that’s 3 new chairs in 2 years. Now, the good news in this regard is that some of your existing customers will die, move away, or decide that they don’t like you, so the pressure to grow will be somewhat reduced. However, what if you see 100 new patients a month and do a fairly poor job at being nice, and many do not return? One hundred new patients at 50% retention rate is 40 hours of new hygiene time a month, permitting a new hygienist every 4 months! Most doctors simply can’t build fast enough.
HOW ARE YOU DOING WITH RECALL AND RETENTION?
The reality is that most of us are absolutely horrible at recall and retention, simply because we can get away with it. And the reward is a no- or slow-growth practice. Unfortunately, slow growth in hygiene equals slow growth in the number of dental procedures. That is not a good survival plan. Do you want to grow the dentistry in your practice? The easiest way is to grow hygiene; it’s that simple! Want to grow hygiene? Add treatment capacity to accommodate hygiene! It’s really that straight forward: grow or die.
WHAT LIMITS DOCTORS?
So, if the opportunity for growth is so clear and compelling, why don’t doctors make the effort to grow? There are a number of reasons, and rarely are any of them legitimate:
1. I don’t have enough space. How would your favorite retailer respond? “I’m sorry, too many of you want to buy a cup of coffee; I can’t possibly figure out how to help you.” Stated simply, you can either price yourself out of growth, reduce your customer satisfaction in order to establish equilibrium, or expand your space or your hours. It’s your choice.
2. My staff will not tolerate change. Perhaps you can’t change people. If not, you can change people. After all, it is your practice, and at the end of the day, you are fully responsible for all the good and the bad. Work hard to create your vision, and then do not back down. But remember, you will need great systems and training to make your expanded future possible.
Yes, it will require expenditures to grow. Opportunity always requires expense, but not growing has a cost all its own, and the failure to grow creates risks that may not seem obvious. In my opinion, the failure to grow enables the most significant loss—the loss of your most highly motivated team members whose futures are stagnated. The loss of great talent is a cost that can be almost impossible to quantify.
Reduced Income Percentage During The Early Growth Phase
This is a very real and legitimate issue. However, you must note that you will see a reduction in income rate, not necessarily in absolute dollars. This means that you will need to choose one of 2 strategies:
1. Many hands make light work/Work smarter, not harder. As logical as it may sound, most doctors refuse to change what they do as practitioners and will work longer hours doing exactly what they do now (only more of it), as the capacity is expanded. Then, only at the point of exhaustion, they will choose to bring on an associate, a process for which they have little enthusiasm and no experience. As a result, new unexpected levels of complexity emerge. Further, rarely does a single associate add significant income to the owner-doctor, and owner-doctors tend to forget the other significant benefits an associate brings. In addition, the management expertise required to bring an associate to success is wildly disproportionate to the amount of in-come received. Most dentists just stop rather than learn how to successfully benefit from this transition.
2. Unclear practice signals. Most offices lack adequate tracking signals for growth. Therefore, it is entirely unclear to the owner exactly what the growth potential is. A universal observation, from my work designing dental offices during the past decade, is that their growth horizon is extremely short, even for those offices committed to growth. We meet doctors who have been in a steady state in 3 chairs, with a 4 month wait for a hygiene appointment, who are sure that one (or maybe 2) additional chairs most surely will provide for sufficient capacity expansion. Of interest is the fact that doctors with 7 chairs and 2 associates commonly give the same “only 2 more chairs” answer to their capacity needs.
MAKING PRACTICE DECISIONS FROM A BUSINESS PERSPECTIVE
There is a reason for all of this misunderstanding, and it has nothing to do with potential demand. It is that most doctors make their growth decision as it relates to what they can perceive of doing as practitioners rather than as an ongoing business entity. Indeed, it is often quite difficult to envision the day-to-day practice of dentistry at 2 to 3 times its existing scale. It is natural for defensive emotions to override the decision-making process. Further, in the smaller practice, cancellations cause disproportionately large holes in the schedule, leading the practitioner to doubt the wisdom of his/her nascent growth plans. In other words, a hole in the middle of one or 2 days in a week leads a doctor to conclude that there must not be enough patients, and a small daily hygiene flow does not provide much onsite need from which to pull.
So, if growth is clearly quite possible, but if the reality is that most doctors are petrified of growth (or do not even desire to grow?), another question emerges: “Can I possibly get away with not growing long enough to save enough to retire?” There are 2 answers to this: the first answer is that, at our current rate of interest, savings compounding is virtually nonexistent. You’ll be able to retire, but not to the lifestyle to which you have become accustomed. The second, and even more significant answer from my vantage point, is the fact that most of our joy and stress in practice relates to great (or not so great) co-workers and their attendance or departure. And in this matter, the smaller practice is at a significant disadvantage.
A 3-chair practice with 4 employee suffers a rather catastrophic loss with the departure of any one team member, whereas a 10-chair practice with 2 doctors and 10 to 12 employees is not only better able to work through such a loss, it is far more likely to have a competent replacement worker in the wings. Thus (and ironically), a well-run larger practice is often less stressful than is a well-run smaller practice. The larger practice will also have more opportunity for upward mobility, thus making the loss of motivated and well-compensated team members less likely. If you really don’t want to grow, and you really wish to retire, perhaps you should consider a practice merger as a possibility.
The demand for appointments in well-run, customer-centered practices has never been greater. It is our option as to how we choose to respond. Opportunity awaits those motivated to pursue it.
Disclosure: Dr. Ahearn is the founder of Design/Ergonomics, a leading office design firm.
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