Office Management

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Chapter

13

Office Management

Sunny Stewart, MS, MBA, SD, PhD, Ric Salvati, OSA, and Suzanne McCormick, MS, DDS

We make a living by what we get, we make a life by what we give.

Winston Churchill

Its 6:30 at night, the office is closed, the last patient and staff have left and it is quiet. You wonder, “now just how was it that I got here?” Four years of undergraduate education, 4 years of dental school and 2, 3, or 4 years of residency and how do I run this thing? We enter dental school with aspirations of patient care and even specialty care. However, the import of what we do should not overshadow the how we make it work. We are proficient at the most precise aspects of odontogenic disease control and restoration of form, using an instrument such as an explorer with the point diameter of less than 0.5 mm to determine clinical success, yet are we that precise in running our business? The general consensus would be a resounding “no.”

Greater than 85% of all dentists graduating from dental school will enter into some form of private practice setting. Some dentists will choose to be in solo practices with one office or a few satellite offices, while others in multi-group practices with several offices employing up to 20–30 persons. The economics of these situations can be significant. Yet, it is joked that doctors and dentists are often poor business people. And let’s face it, the majority of us are.

Ironically, the dental school application process can self-select for those who are compassionate caregivers as most applicants discuss how their matriculation from dental school will result in positive social change and giving back to one’s community. We have never read an application that says, “I want to become a dentist because I want to make money and have a study income with few persons to answer to.” However, that is the precise business model of a private dental practice. The following are situations/conditions that can occur in one’s day-to-day practice that test our moral compass. Some situations hold seemingly obvious answers until it is you who have to make the decision. Ultimately, as we will see in the following, it is the leadership style of you, the dentist, which determines the tone and moral fortitude of your dental practice.

Business 101

The dentist, as the practice’s leader, determines the scope of dentistry to be performed, sets the fee schedule, the insurances accepted, the size of the office staff, and salary of the employees they hire. The dentist and their team must balance the wants, needs, and desires of their patients versus the goal of the practice. At the helm, the dentist reaps the rewards and also holds the ultimate responsibility, for it is their license that can be disciplined should deviations occur from the community standard. Unlike a traditional business that when poorly managed fails; failure of a dental practice from poor ethical decision making may result in not only the loss of a business, but it can also result in the discipline of a license, and thus, the potential loss of a career along with the loss of all the time and money invested in 4 years of dental school and even more years in postgraduate training and building a practice.

Admittedly, our lives get busy especially as clinical and business success comes our way. However, the business of a dental practice must be cultivated, guarded, and maintained to ensure long-term success. Developing a business plan is central to defining the direction of a business and is useful when considering decisions concerning the money aspect of the business. Core to a successful practice is your dental team, your staff. Managing the two aspects, money and personnel, is the cornerstone of any business venture.

The simple act of hiring staff is not so simple an action. The salary offered is not the true number affecting your bottom-line budget. One must factor in the benefit package the practice offers its employees as well as payroll taxes, social security and unemployment taxes, and so forth. It has been said that the actual salary one must budget for is 1½ times the salary offered to an employee. The salary should reflect the employee’s worth to the practice and still be within the fiscal goals of the practice.

Firing staff can also lead to moral decisions. Practices strive to adhere with 100% compliance to the complex local, state, and federal regulations. The human condition always allows room for improvement such that all of our practices are vulnerable to audit. The dentist, as the owner of the practice, is ultimately responsible for compliance with these regulations. This very fact can be a source of concern in the workplace especially when an employee is terminated from their position. It is well known that a disgruntled employee, even one still in your employment, may report the practice to the authorities and thus initiate an audit. This audit can be warranted if the practice is grossly negligent in its procedures, or the audit may not be warranted and a nuisance case. The stress, time, lawyers, and consultant fees that one may need to invest to deflect such an audit are monumental. Consequently, some may offer a severance to an employee who is fired just to “keep the peace” even though it may not be warranted. A decision that is based on an office policy applicable to all who are employed is preferred to a decision that is based on an individual case or situation, where emotion may overshadow good judgment.

The act of setting one’s fees is a similar challenge, for your fee structure is what drives the cash flow of a practice. It is considered unlawful to discuss fees for services among colleagues. Yet, there are practice surveys that one can purchase that gives the average fee charged per procedure code based on the zip code in which you practice. The decision still remains, where in the spectrum of the local fee structure should you set your fees? Should you place your fees at the higher 95% range or lower in an effort to be price competitive. It is important to realize that the fees must be sufficient to fund the practice and pay for the overhead.

Some practices choose to set the fees higher and then offer discounts to appear to be offering the patient a “deal.” Others offer free examination, radiographs, or teeth bleaching trays, and so on in an effort to draw new patients to their practice. Remember that these offers may be under the jurisdiction of your state’s Dental Practice Act. For example, your state may have laws governing advertising and claims made. These offers must also be “as advertized” regardless if the new patient chooses to remain in the practice or not. For example, in California, the Dental Practice Act specifically addresses that a patient has the right to a copy of their chart and may only be charged a reasonable fee for duplicating their chart. So, a patient who was offered a free examination and radiograph cannot be charged the full fee for a service, such as an x-ray ($300) should they choose to leave the practice and obtain a second opinion. The patient may only be charged a reasonable duplicating fee ($10–$20) for the x-ray. It is the dentist’s responsibility to be aware of their state’s Dental Practice Act and adhere to these statutes and regulations.

Practice Consultants and Other Sources of Practice Advice

Recognizing that a dental education does not ensure business savvy, we often turn to outside sources for business advice. It is easy to find resources for advice as companies offering to help, for a fee come to us through the mail, fax machine, and e-mail. Practice management courses are given through competent and national dental societies. We may even hire a Business Manager to help in with the day-to-day running of the office. However, do not forget that it is your tax identification number and your license, not your staff’s, that is on the documents that are submitted during the normal course of a day. Thus, the ultimate responsibility for the office and its decisions are with that of the license holder and no one else. It is advisable to attend practice management courses with the staff rather than innocently sending them to these classes while you, the license holder attend another class on the latest technique. Similarly, it is advisable to “keep a finger on the pulse of your practice.”

Weekly, monthly, or quarterly meeting and review are advisable to keep informed of the direction of your practice. Again your leadership style will dictate the frequency and depth of the information covered during these meetings. At minimum, a profit/loss statement should be reviewed frequently by you, the business owner.

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Sep 15, 2015 | Posted by in General Dentistry | Comments Off on Office Management
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