As a dental consultant I have to be very focused for my program members on events both past and current and how they apply to the economics of dentistry and where we are headed.
It’s funny to look back over a decade ago. An article rejected for publication at the time by those “forward thinkers” at Dental Economics……was the seed of genesis of an International consulting business (Big Case Marketing) and the foundation of a sales training program aimed at doing just what’s described in the article (allowing appropriate fees for the most trained in the profession) via the McAnally Selling System………
Spot on as our UK members would say…..
The “BIG” story that wasn’t surfacing yet in the year ‘02 was middle class demographics and income changes that have made selling bread & butter services to the masses a harder proposition. In case you missed it, middle class wages are at where they were in the nearly 70’s AND with two people working. Wal-Mart deserves a medal of honor for prevention of social class warfare since it’s one reason most “middles” are enjoying every day items that otherwise would be out of reach. That enjoyment goes a long way with keeping the pitchforks from being gathered in mass.
For those focused on middle class selling who think they’ll stay on top of technology and treatment changes courtesy of that strategy, from my perspective as a dental consultant—- good luck….!!!
Enjoy stepping back in time and then move on to make a decision about your next decade.
Doctor, Stop Undervaluing your Services.
Take the lead and listen to your dental consultant.
Every one of your patient’s dental benefit maximums has peaked for the rest of your practice life. Your patients must pay 5-10% more out of pocket expenses each year forever or you must personally eat this cost from your salary. Is this a bad dream?
Fellow doctor, get used to these concepts; they are the operating guidelines for the rest of your practice career and are rapidly becoming reality.
What can you reasonably do to guide your practice thru these economic realities and minimize their impacts? This is the first part of a series of articles about the ongoing evolution of fee for service dentistry and what you can rationally and practically do about it in your own practice. By the end of the series, you will have learned how to help ensure annual income growth by having fair fees seeing fewer patients, and with less stress.
Capitation is D.O.A. in dentistry but the PPO and Delta fee control system are the new mantras in benefit land. More restrictions on covered care, exclusions of preexisting conditions, exclusions for new treatments, and lower maximum allowable charges are as predictable as tomorrow’s sunrise. Paralleling these changes in benefits is the common complaint among many colleagues that fundamentally they believe their fees and annual incomes are not coincident with the level of care and service they provide to their patients.
If you’ve scanned the pages of any reputable business publication in the last few years, it isn’t hard to find salary data from occupations requiring equivalent experience, skill sets, and education to see that there is some good evidence to validate these feelings. We all see those lottery size salaries of high profile sports figures but lets look at other more equivalently skilled occupations. Over the past six months, casual observations have shown that senior airline pilots, the local friendly news actor in the second level news market, and even a significant number of MBA’s bring home the bacon to the tune of $300-500K per year. Don’t get me wrong its fantastic that people in those occupations earn those salaries. Why shouldn’t a highly skilled caring dentist who serves and important role in society be able to earn the same if they are providing a great service and public good?
This combination of economic changes in benefits and the real world economics of fair value for our occupation’s service to society are the signs and symptoms of a new malady in the profession called ‘service undervaluation.’
So, how did we get here and whose fault is it? Let’s look at all the parties that we typically point the finger at when we are unhappy with something in our profession.
1) Moving collaterally on the food chain, let’s pass the buck to the accountant and the attorney. Shouldn’t they have advised us of what the future held and how to avoid the approaching train wreck? If we learn best by example then we should have been paying closer attention to their billing and fee structures. They charge for the real value of their skilled time. When was the last time you filed a claim for your “free” preventive checkup at their offices or paid for their services over 4 months with no interest? You probably noticed that physicians were left out of this equation. By now, everyone should know what has happened to the average physician’s income. If not, a striking example is a colleague of the author’s father who was a general physician 25 years ago and at the time earned the equivalent of $300,000 in today’s dollars. Now it is not unusual for a general physician to earn a maximum salary of $120,000.
2) The insurance company? Arguably, part of the undervaluation of fees has arisen due to doctors unwittingly agreeing to a reduced rate in fee inflation as benefit levels stagnated over the last 25 years. Three generations of dentists have played ‘Dr. Milquetoast’ and felt personally responsible for their patient’s benefits buying less dentistry each year and subsequently kept the rate of increase in their fees lower as the solution. These insurance folks are smart cookies, know what they are doing and are doing a great job of controlling their cost and increasing their reserves. They’ve even got some of those well-compensated MBA’s to make sure they increase market share, grow their business, and stay successful. With the market system, they have just as much right to operate in this manner as any other for profit business. Unfortunately, some dentists believe that because these companies are so big and have smart business people working for them that they are the best party to attach value to the service they provide. Even worse, many in the profession have convinced themselves that the benefit company is their friend (i.e. Delta). It is hopefully obvious to the majority that your business interests and their business interests are at irrevocable polar extremes.
3) Is it our patient’s fault? We all feel that they don’t value our skills enough and they always complain that we are already too expensive. Besides they would really rather purchase some other more practical consumer good like a ski boat or a vacation to Disney. Earth to dentists—-Depending on your belief system, your fighting 5000 or 5 million years of human nature and in the words of Will Rogers’ “it ain’t gonna’ change”. Trust me. I’m a third generation dentist representing nearly 100 years of clinical dentistry and there is a fundamental truth about fees and that is no matter what you charge whether it is 10% of the guy next door or 1000% of the guy next door, your patients all think your fees are too high. In all seriousness, how can we expect people to value things like a preventive prophy when their benefit plan says 100% coverage (AKA “free”)? I’m not saying you should install a cash register as the ultimate artificial heart. You can and should empathize with your patient’s and give them choices on how they pay for your services which their insurance doesn’t cover as “free”. In our society, it is up to each patient to individually determine what value, if any, they place on dental health and whether they want to budget any of their income to our excellent yet mostly elective service.
4) Non-production staff must somehow be part of the problem. Guess again. Those hard working assistants and business office staff earning $25-30K a year would always like your practice to make more money so that they can be better compensated for their skills. Better compensation means continued skill improvement with things like communication skills that will enhance your productivity and bottom line.
5) What about the big guys of “organized” dentistry? Be ye lover or hater of the moribund bureaucracies of indecision and bickering that characterize organized dentistry (starting with the American Dental Association and working your way down and laterally) the very real fact is that anti-trust issues prevent the blanket directives to the profession on these subjects that would save us. Can you imagine the public relations nightmare of reading in the daily paper about your friendly and benevolent state attorney general on line at the cash cow of dentaldom to ride the new gravy train of “big dental.”
Every one of these examples of analyzing the pointed finger all lead to back to the undervaluation in what you provide in your practice on a daily basis as a clinical dentist. So what is the underlying problem? Ladies and gentlemen, the problem is a leadership issue. It’s a leadership issue at your practice level and it rests squarely on the shoulders of each individual doctor as the CEO, business owner and planner. Doctor, you can be guaranteed that if you take up the leadership mantle to find solutions that your staff and spouse or significant other will be right in line behind you and be your biggest cheerleaders. Your patients, god bless ‘em, will mostly adapt and fall in line or leave for less greener pastures and offices adrift without leadership. They will be replaced by other patients that want better service. The reality is when you rock the fee boat patients always leave for cost reasons. You shouldn’t take it personally. If you decide to be proactive instead of reactive or complaining, you’ll be a happier doctor, have happier patients in the long run, and positively impact the future generations of dentists who follow.
So, what’s the next step with determining where your practice is headed with its relationship to these changing realities of dental benefits and fee structures? Are you going to take my advice and run a report on the demographics of your practice including age range, number of patients, etc. Then run 3 reports detailing your contractual insurance write-offs for the last three years. Finally, run reports for each individual carrier that you are contracted with and the numbers of patients covered under the carrier. Armed with this information, you’ll start to make rationale decisions about “what’s next.”
I am here to help………..check out my website here or try my #1 top selling book on Amazon.