In 1984 a patient told me that he believed that Dentistry was the last bastion of free enterprise.
This comment from him came to mind while I was reading a thread on a Dental Forum about the proliferation of Preferred Provider [PP] Dental Practices in Australia and how profitable that model of dentistry appears to be.
On the forum, the angle seemed to be that PP Dental practices are profitable and ARE a viable business model.
My reading, or my take from the poster was that those who are anti- the PP model need to take a step back and review the model again, because based on his early days and also the experience of one other friend of his, these two instances were proving to be successful.
The biggest conundrum in the current dental landscape was brought up by a dentist posting his thoughts which I believe are valid concerns.
His concern was that as a Dentist working in a PP Dental practice he was getting paid less for doing the same procedures as a dentist working in a non-PP Dental Office.
This is a really valid point.
However, with time, the validity of this point will diminish.
Who knows how long that period of time will be?
If the number of PP Dental practices proliferates and the number of non-PP Dental practices reduces then working at the lower fee will become the “usual and customary” norm.
I mean, if that happens then most dentists will be working at the lower fee, and only a select few will be working at the higher fee.
And so with scarcity, the higher fee will become the exception.
At the moment, there will be a difficulty in transition for some dentists.
For some dentists who have owned or worked in a non-PP dental practice and then left and gone to work in a PP dental office, then there is an adjustment that they need to make mentally.
Because all of a sudden the fees that they were charging previously are now reflected as lower in a PP office.
And so someone is judging their worth as a dentist to be less.
I bet it is tough.
If you were used to producing $4000.00 a day of dental treatment in a non-PP office then now that same treatment may only be valued at $2200.00
Can you live with that?
Some can and some cannot….
Thirdly, when there is insurance involved, the Insurer gets in between the provider of the dental treatment and the recipient of the dental treatment.
Patients decide their treatment based on rebates, and annual limits imposed by third parties. And they do not decide wholly on need and urgency.
Let’s take it out of dentistry to show you …. imagine needing a double mastectomy and your insurer saying:
“You’ll get more money back if you can delay the second mastectomy into the next calendar year”
The thought is offensive, yet similar parameters and modalities are accepted as normal when it comes to teeth and dental.
I know when there are only two parties involved in the diagnosis and treatment it certainly is a much nicer way to practice.
Both models of Dental Office can exist side by side in society, so long as we do not submit to a “divide and conquer” mentality.
Only the percentages of each model will vary, depending upon market forces.
Sadly, big business cannot divest itself from that “divide and conquer” philosophy.
There will always be those with insecurities who hide in big business and entertain themselves and fuel their febrile egos by trying to crush their smaller opponents with unfair advantages and processes.
And you don’t have to be a B-Grade Magician to see this…
There will always be Dental Practices where patients seek out quality treatments and exceptional service in a relaxed and comfortable environment and will be happy to pay for those services.
And there will always be a need for dentists wanting to own and operate those Dental Practices.
I was thumbing through some photos this morning and came across this photo I took on Christmas Day 2014 in Notting Hill London.
It’s a Porsche 911 Carrera S Convertible, covered in bird droppings and with a flat rear tyre.
You’d have to wonder, with that much money invested in this car, why the owner didn’t seem to value the asset they owned enough to keep it in better condition?
And it can be the same with business owners….
Have you ever walked past the front of a business and wondered whether the people who worked inside there took pride in their business, or were they just turning up and going through the motions to pick up their pay cheques?
What the customer sees and what the employees see are often too different things.
And what about the business owner?
Does the business owner see what the customers see?
Sometimes the employees and the business owner enter and leave the place of business through a different doorway to the one used by customers.
Sometimes the front entrance to the building can look really inappropriate and the people inside the business may have absolutely no idea about what is going on outside their front door.
I drive past a dental office on a regular basis that is positioned directly opposite the carpark entrance to a local shopping centre.
It never ceases to amaze me how the lawns at this dental office are less than perfectly manicured and that the grounds there could really do with some nice plants and shrubs.
I often wonder whether the dentistry performed inside the building is as untidy as the exterior grounds of the business?
Surely it wouldn’t be too expensive to manicure the lawns rather than just mow them?
And more frequently?
And how much do a few shrubs cost to add greenery and colour and fragrance?
There’s nothing homely or welcoming about the look of this office whatsoever.
Another dental office I walked past recently had leaf litter, dirt, trash and significant bird droppings adorning it’s covered entrance.
The amount of bird droppings present was indicative of a long-term unsolved problem.
It certainly was a turn-off for me, and I imagine that more non-patients walking past would notice the aggregation of bird excrement in the doorway more than they would even notice that the place was a Dental Office.
But here’s the pièce de résistance….
If a customer was even to traverse the mat of droppings in the doorway they are greeted by a finger marked glass door with a large paper sign sticky taped to the door that reads:
PLEASE CLOSE DOOR
Now if that were my office I’d have a sign that reads:
Welcome to ABC Dental. Please enter.
And I’d be installing one of those pneumatic automatic door closers on the door, and making sure that it operated seamlessly.
One of my rules is that a sign should never replace something that a person needs to do, or say, or fix.
And it’s obvious here that there’s a problem with the door not closing automatically.
And the sign makes it even more obvious that nobody wants to take ownership of solving the problem.
Will they be able to solve my dental problem once I have negotiated their filthy entrance way?
The problem with common sense is that it’s not that common.
To me the answer is simple in both these cases.
And it’s the same with the Carrera owner…
Nobody inside these dental businesses is taking ownership of the external appearance of the premises.
And if that’s the case, who knows how many customers and potential customers are noticing this and choosing to go elsewhere for their dentistry?
I don’t know about you, but every year Christmas seems to be “eroded” in the community.
One of my family traditions was for my daughter and son to have their photos taken with the Santa in our local suburban David Jones department store.
Both of my children had been photographed with Santa either together, separately, or with the whole family, for every year of their life on earth.
Sadly, three years ago, David Jones, and another retailer Myer, decided to centralise their Santa to a city store location only.
And so, our twenty-one year long tradition was brought to a sad ending, because of a decision made by someone who thought they knew better.
Was having suburban placed Santas really that much of a costly exercise for David Jones and Myer?
The removal of Santa from our local stores certainly put an end to what was for us a very meaningful family tradition.
There would not have been many twenty-one and eighteen year olds who could have said that they had a David Jones Santa photo of themselves for every year of their lives on Earth?
What’s this got to do with Dentistry?
Every day, someone who thinks they know better makes a decision with wider sweeping ramifications.
And it’s our choice, as Dental business owners, to stand up to those decisions, or to lie down and accept them.
Sometimes they are decisions that have no rhyme or reason to them.
But they are decisions that someone thought was going to be “acceptable” at the time.
Some of these decisions in your Dental Business may be law.
Other decisions may simply be at best “speculative culture”.
Down here we were told for years and years that you couldn’t charge your patients in advance and bill them up front before they had their dental procedures done.
In the same way that hotels, airlines, and concert promoters can’t bill their clients and collect money in advance for things that are yet to happen?
After all, you do all that work with impressions and prosthetic work but someone tells you you’re not “allowed” to charge the patient until you’ve permanently glued the crown into their mouth?
Give me a break….
I learned from a concreter nearly thirty years ago that if I did not pay him in advance under his terms for the driveway that I needed, that I was simply not ever going to get a driveway from him.
Best driveway ever was installed, by him, on my property.
What decisions in your business life are you making to simply go with the flow because someone else “said so”?
My mother, bless her soul, was a left leaning voter.
So, when bulk billing was introduced into medicine in Australia in the 1970’s by a socialist government, my mother sought out a doctor for our family who would not charge us, but billed the government.
And I thought that this was “standard behaviour”.
I thought that this was how all doctors were now going to be billing their patients.
And it wasn’t until 1983 when I met a doctor from the Eastern Suburbs of Sydney who told me that his patients paid him upfront, and then it was up to them to go and claim back their benefit.
He told me that that was simply how he did it.
And what he was telling me was that he had a relationship to treat his patients first and foremost, without letting a third party tell him the way that they thought he should be doing business.
And it was still working fine for him.
There will always be people out there willing to do business with you on your terms, provided your terms are reasonable, to them.
And if you are serving up a product of excellence, then those people will happily pay you for that service.
It’s up to you to work out where that “line in the sand” is for you, in your world.
There will always be people out there trying to sweep you away from the position that you want to take.
You can, and you should, hold your ground, and not submit.
To all my readers, I wish you a very Merry Christmas and a Happy New Year.
Be safe, and be thoughtful and kind to each other.
After all, you never know what’s going on in other people’s worlds…
I was in Dan Murphy’s store this week buying a Christmas gift for a dear friend.
And I’m a regular customer of Dan Murphy’s, where I buy wine and beer on occasions.
But today I was at a different store to where I usually visit.
[Dan Murphy’s is a large chain of liquor stores in Australia]
And as I stood in line, for a while, waiting to purchase my bottle of Penfolds, and a gift bag, I had time, and sufficient time, to observe who ahead of me was buying what, as well as observe the service behaviours of the staff at this liquor retail store.
Here’s what I observed:
Firstly, there were more cash registers available than there were people operating those registers.
This created lines, or queues, of people with product waiting to pay.
There were two registers open, out of maybe four or five available.
There were at least ten customers queued patiently in two lines, waiting, and I mean waiting, to purchase their liquor supplies.
They waited with bottles, with baskets and with trollies of alcohol.
While the customers waited and waited, one of the cashiers called over the public address system for someone to come to the registers.
This made sense to me.
This cashier appeared to be aware of the imbalance of supply and demand that was existing at the registers.
Too many customers. Not enough servers operating the registers.
Time to call for the cavalry to clear the backlog.
A female employee appeared at one of the vacant registers.
More staff! Yippee!
It looked as if she was about to open up a third register.
It looked as if at any moment the two lines would equilibrate into three shorter, faster moving lines.
It looked as though the world had been saved.
She was only an apparition.
As quickly as this woman employee appeared at the register she just as quickly departed that scene and moved to a sign in the post-checkout area where she proceeded to administer attention to that sign.
This woman was oblivious to the long lines of valued customers waiting to make their purchases.
And although our two lines were growing in length, this woman proceeded to administer mouth to mouth towards the said sign, despite the intensity of attention being hoisted upon this woman by those in the line.
Putting it bluntly it was fairly apparent that this woman’s attention was required at the registers and not at the sign.
Just because a customer has goods in their hands and is waiting to pay for those goods doesn’t mean that the sale is completed.
Maybe not in a liquor store, where customers are beholden to their goods as a matter of life and death, but certainly in other retail outlets, I have seen customers simply drop their goods and head out of the store without making a purchase because of the service at the register being non existent or glacial in pace.
Too many retailers believe that the sale is a fait accompli once the customer has chosen the goods.
The sale is only complete when the customer’s money has left their person and is on your person, or in your register or in your bank account.
And at no other time.
The easiest way to satisfy the retail customer is to reduce the time taken between choosing the good and owning the good to as little as possible.
And yet most retailers ignore this fact.
Some retailers such as JB Hi-Fi and Chemist Warehouse now use a maze of additional purchase upsells to negotiate through before reaching a register.
No such idea at Dan Murphy’s though. Just plain old bad service.
And just when you thought the story could not get any worse….
The cashier who called for more cavalry goes to the hand mic and makes another call for more help.
Though this time, after he calls, he then dons an orange fluoro vest, which seems so stupid that it’s almost unbelievable.
You see, the fluoro vest is an item of clothing worn by store employees when they are required to do some out of store attention in carpark areas.
Duties such as trolley collection, or rubbish bin emptying.
And so what this meant was that this cashier was more intent on collecting trolleys than he was on clearing the lines of waiting customers.
And sure enough, another employee appeared and like magic, mid customer and mid transaction, our “hero” departed with vest on and our replacement server slotted straight in to complete the transaction.
So what happened next?
Well, I don’t know.
I just picked my jaw up off the ground, proceeded to my cashier, and made my purchase.
As I left the store I looked back and made a quick customer audit.
Six customers queued in two lines still waiting to be served, while the car park was attended to as well as the poster in the exit to the store.
The worst thing you can do is to take your customers for granted.
I felt as though my custom, or my business, was being taken for granted.
There was no *WOW!!* factor at the check out here at Dan Murphy’s at lunchtime this Wednesday.
Was it simply this outlet that was having a bad day?
Or was it that this “attitude” was particular to this outlet? And that you could expect this lack of attention every time you visited this store?
Whatever it was, it was not a *MAGICAL MOMENT*.
Make me feel important, valued or special?
No, sadly, it did not.
WHAT’S THE LESSON HERE FOR DENTAL PRACTICE?
How’s the check out process at your office?
Do you have insufficient people available to process your departing patients?
Are your patients having to wait, unattended, before they can pay for the dental treatment the have just received, while the front office person is on the phone, or attending to another patient arriving or departing?
Or is there more than one patient at a time waiting to settle up for their treatment?
Don’t for an instant believe that because the treatment is over that the appointment is over.
Because “parking” your departing patients out the front is a very deflating end to what is meant to be an *Ultimate Patient Experience*.
Don’t allow this point of difference between your Dental Office and the Dentist down the road become the reason why your valued patients defer or delay or cancel their ongoing necessary treatment.
Look at your patient visit from the customer’s point of view.
You’ll be amazed at how much of their experience you are overlooking…
Now you’d think that a hit of this amount to a business’s collections would be catastrophic….
But in this dentist’s case it was not.
In fact, in the case of the dentist concerned, he reported that despite the fact that his collections were reduced significantly by 40%, his own business profits had risen to the tune of being up twenty percent [20% increase] on the profits of the previous year.
So he was making more money [profit] from lower collections.
What this proved was simple.
He proved that the fees paid by insurance were less than the costs incurred by his business to produce those services he provided to those patients under those insurance plans.
What this meant was this:
That by treating those insurance patients her was really writing a cheque from his own money and paying it to those patients each and every time that he treated them.
And this monetary donation was independent of the donation of sweat equity, heart muscle, stomach lining, and brain tissue that he was also donating as a result of participating in those plans.
This dentist would have been emotionally better off writing a cheque to Cunard and spending all that time cruising the world, as opposed to traumatizing his mind and his body and participating in those plans.
The trouble is that the plans rely on the premise that doing “something” for “some money” has to be better than doing nothing for zero money.
When the contraire is true.
And of course, while ever he was treating an insurance patient, his office would have been turning away any full paying fee for service patients who may have needed to see him, because he would have been busy working on the unprofitable patient.
Meanwhile, a young dentist I know has just ventured along the same pathway.
With a young family, and his heart in his hand, he has decided that the burnout that he is feeling while treating insurance patients day in day out is not good for his health.
So here’s what he has done:
He’s scheduled a day a week where he is not available to treat insurance patients.
On this day the Dental Office only sees full paying fee for service patients.
And the office has seen an immediate benefit in working this way.
1. The days have been productive.
Daily goal has been reached already on this day after only three weeks.
2. The days have been way less stressful.
The office has seen fewer patients, but because these patients are full paying, these days have been more profitable.
3. The patients seen on those days are benefiting from the extra time the dentist and team members are able to spend with them.
Not only is the office able to provide treatment in a more relaxing environment, the extra time allows the office to explain fully to the patient what they are having done and what they are needing regarding future visits.
This is a simple win-win for the patients and the office.
This young dentist is already looking ahead now at how he can drop more insurance with a goal of becoming a true fee for service dental office only.
Because in the previous month, the collections of the office were forty percent insurance and sixty percent fee for service.
And I’ll hazard a guess that the cost to the office of producing that forty percent insurance income was probably more than the cash collected for providing that service.
The key to this story is this:
Simply, to be able to sustain a profitable fee for service only dental office the practice needs to be providing something more than dentistry.
The Dental office needs to be providing a tangible Customer Service Experience each and every time that the patient visits that office that leaves each patient gasping:
“Wow! This place is different.”
Because, people will pay for a tangible difference.
It’s the reason why people will fine dine rather than eat burgers.
It’s the reason why people will purchase fancy cars instead of base model A to B vehicles.
It’s the same reason why people choose to holiday at a Ritz Carlton or a Four Seasons.
To be able to practice dentistry in that “rarified air” is a truly magical experience.
And it can be done.
I know it.
The choice is yours…
Do you have the intestinal fortitude required to make it happen?
Or are you happy to keep writing emotional and physical cheques to your insurance patients?