Ed Rabinowitz

Who’s minding the store? Sounds like a silly question, yes? But if your answer is, “I don’t know,” or “I just have my office manager handle all finances,” then it might not be such a silly question.

Having your practice finances in reliable hands is imperative, says Jason Champagne, D.D.S., principal of Sparks, Nevada-based 

In 16 years of practice, Champagne has run the gamut as far as how practice finances have been handled. In the beginning, he paid all the bills and balanced the checkbook. Eventually he brought in a bookkeeper whom “I tried to keep a close watch on.” Now the organization has grown to where he has a dedicated account team.

“But I do believe that (handling practice finances) is an area that a lot of smaller solo practices tend to overlook because of the busyness of the day and the focus on clinical dentistry,” he says.

Champagne recalls the time when practice revenues weren’t at their current level, and he had to employ an individual who perhaps wasn’t as skilled in handling finances and pay them a lower dollar-per-hour figure. He also had to watch them more closely. That’s a precautionary tactic that smaller or solo practitioners must follow.

They should also request regular updates.

“If you’re going to have somebody paying your bills — kind of doing the bookkeeping, accounts payable and maybe even payroll—you should be getting updates at least monthly and understand the processes they’re going through,” Champagne says. “And then their CPA should be doing various audits to make sure the person handling the money is handling it appropriately.”

There is a direct correlation, Champagne says, between having the right people handling practice finances and the financial health of the practice. That correlation comes from the ability of the dentist to focus less on the actual task of managing the finances. He or she now is able to spend more time promoting their treatment plans, and delivering the dentistry that they were trained so well to do.

“A lot of times dentists get distracted in the day-to-day,” he says. “If we’re caught up in, ‘Did this bill get paid?’ those things are distractions from the product line.”

Champagne recommends that dentists not dive so deeply into the waves that they get caught up in examining every check that’s written. Rather, he suggests there are a few key elements they need to keep their eyes on. The first is knowing what is being posted in the practice’s bookkeeping software, and how it reflects to the practice management software.

“You need to understand what’s being deposited compared to what you’re producing,” Champagne says. “There’s always the potential that some of the money you’re producing is not being collected.”

Next, Champagne says dentists should be tracking expense ratios on a monthly basis. In other words, examine major expense categories as a percentage of total revenue to give you a better idea of where you might be overspending.

“I look at employee costs,” he explains. “Employee costs include gross payroll, benefits and payroll taxes. I look at dental supplies. I look at my facility costs, and I look at my marketing budget.”

The most important as far as profitability, Champagne says, is employee costs. If there’s low profitability at the bottom of your financial statement, chances are you have a higher than ideal employee cost as a percentage of revenue.

How do you know you’ve got the right person handling practice finances? That’s a tricky question, Champagne admits, because dentists are not trained to identify an individual’s financial skill set.

“There are a few (dentists) who might go to business school before they go to dental school, and those people might have a little better understanding,” he says. “But most of the time we don’t know what to look for.”

One recommendation Champagne makes is finding some mentors, perhaps even outside the dental industry, who can “really open your eyes” to how a business operates. Perhaps an individual who runs a car dealership and can share what they look for when overseeing their finance department.

But also, pick up a book or talk to your CPA and learn.

“I think dentists need to take more time to learn about this area of their business, and have people really explain to them how a business runs,” Champagne says. “Learn what it means to have somebody doing this, and what expectations are reasonable to expect. And be clear with that person so they know how they’re going to be measured.”

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If you're not certain who's handling your dental practice finances, you're not alone. But that doesn't mean it's a comfortable position to be in. Making certain that your dental practice finances are in the right hands is critical to your practice's financial success.

Who's Handling Your Dental Practice Finances?

You can spend a lot of time and money marketing your dental practice to patients, or you can try a more cost-effective method: word-of-mouth marketing.

And the key to successful word-of-mouth marketing is happy patients. Just ask 

“Give patients the care and service just like you would treat a family member,” Letran says. “The patients can feel our genuine care for them.”

And then when the patient has something complimentary to say, particularly before they’ve even left the practice, that’s the opportunity to maximize word-of-mouth marketing.

Letran’s approach is simple. As soon as a patient mentions anything positive — “That shot didn’t hurt,” or “I like my new teeth” — be ready to ask for a testimonial on video that you can share on social media.

“What I do is say, ‘Thank you very much. I appreciate your feedback. Is there any way I can get that on video?’” Letran says.

Don’t patients balk at being asked to be recorded?

“I would say nine out of 10 people say, ‘Yeah, sure,’” Letran says. “I explain that it helps me spread the word about what we do as a dental practice. I don’t tell them to say anything more than they had just said to me. It makes them feel that they’re contributing.”

Letran admits, however, that such a forward approach with patients takes a little getting used to. Most dental professionals are not used to asking for testimonials, especially when face-to-face with patients.

“It may be a little hard to do at first,” she acknowledges. “But we’re looking for every opportunity to market our office. And when you have a happy patient, that’s the best time.”

Letran also asks patients for written testimonials to share on social media, and makes it as simple as possible for patients to participate. She uses a service called 

. Patients receive a text while still sitting in the chair asking them to provide some written feedback of their experience that day. Once they provide feedback, if it’s positive, it’s shared on social media.

“They’re not going to go home and go on Yelp or Google,” Letran says. “So sometimes I just give them a piece of paper and a pen right then and there. They sign it, and I put it up on the wall. Then I take a photo of it and put it on social media.”

The practice also holds referral contests so patients can refer friends and earn a chance to win a non-dental-related gift. The gifts range from three days, two nights in Las Vegas, to a large wine-filled holiday gift basket. When patients receive their prize, their photo is taken and shared on social media.

And then there are patient appreciation events that Letran says show gratitude to patients, strengthen goodwill, and of course, get patients talking about the practice on social media. For example, Letran will rent an entire movie theatre and invite patients and either family or friends to attend a free screening of a recently released film. She mails out invitations to the 263-seat theatre along with a coupon for a drink and popcorn, and a raffle ticket that could earn patients a $500 gift certificate for dental services.

If the film runs two hours, Letran books the theatre for three, and uses the additional time to talk to the audience about what the practice has been doing, as well as single out patients who have been with the practice for a long time. That’s also a good time to obtain on-the-spot testimonials.

“It usually pays for itself within a week or two,” Letran says. “I’ve been doing this for about five years now, and I always make (the money) back. It builds tremendous goodwill.”

Letran believes that marketing should be a focus for every business owner, and every dentist should think of him or herself as a business owner. Word-of-mouth marketing, she says, is a very effective but often overlooked tool.

“I do a lot of business conferences, so I’m exposed to (the idea of word-of-mouth marketing) a lot,” she says. “My feeling is it’s about getting different people to give you different perspectives about the practice, and about the work you do. Because when you have multiple things like that going on, it just strengthens your credibility.”

Engaging patients in word-of-mouth marketing could be the most cost-effective way to spread the word about your dental practice. Often, the only cost to the dentist with this marketing method is time. Dentists should simply ask patients who have had positive experiences in their practices to provide feedback. The key is having systems in place to streamline that process.

Free and Low-Cost Marketing Efforts to Use in your Dental Practice

Ross Segal, D.D.S., has developed a reputation at his southern New Jersey orthodontic practice of taking on the most difficult Invisalign cases.

When Ross Segal was growing up in Boston he would frequent his mother’s dental practice on snow days or when school was not in session to witness firsthand how cosmetic dentistry can improve peoples’ lives.

“She had a lot of complicated cases where she really transformed peoples’ lives,” Segal recalls. “She took people who were embarrassed to smile and, after a few treatments, she would hand them a mirror and they would just cry in her chair because they were so happy. That really left a lasting impression on me.”

And it was the main inspiration for Segal, a partner in Marlton, New Jersey-based 

, to follow his mom into the field of dentistry.

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Segal says he chose orthodontics because he didn’t just want to care for people’s teeth. He wanted to treat “the whole facial complex.” His philosophy is when he creates a smile, he takes the person’s entire face into account.

“There are many different types of situations where we have to create a smile that doesn’t just look good by itself, but that compliments the individual’s face,” Segal explains. “We really help transform faces, not just smiles.”

That approach has helped put his practice in the top one percent of all Invisalign providers nationwide. Challenging cases that practitioners didn’t think could be treated with Invisalign were referred to Segal and Iyer.

“We were like the last stop,” he says. “And we were able to get some pretty amazing results.”

Word got around, and from then on the practice saw more and more cases. Segal began lecturing at universities, including Harvard and Temple, and still lectures at the University of Pennsylvania every semester. He talks about using orthodontics to change faces. To create smiles that compliment faces. His reputation continued to spread.

“It’s just a snowball effect at this point,” he says.

But Segal doesn’t lecture just to spread the word about Invisalign or his practice. He says the philosophy of treating the whole person as opposed to just their teeth was not stressed as much as it should have been while he was in dental school. That’s a perspective he enjoys bringing to current dental students.

“These days with insurance-based dentistry there’s a tendency to avoid treating the whole person, because that becomes more costly for the individual,” Segal says. “What we teach is a way to treat the whole patient, a comprehensive approach that really changes lives, and a way to present it to patients.”

It’s a holistic, comprehensive style of dentistry, Segal says. Interdisciplinary, in many respects, because dental school graduates often don’t understand the importance of using other specialties to obtain the best outcome. Instead, they try to do everything themselves.

“If they can’t do orthodontics, they may camouflage,” he says. “They’ll do something else and not necessarily get the best results. But you can use a team of dentists when you don’t necessarily have the expertise yourself.”

Segal has been involved in martial arts since he was 14 years old. He says it has taught him discipline; a kind of don’t-give-up attitude that he says was most beneficial when he graduated dental school and had several hundred thousand dollars in student loans. That level of debt, he believes, is the main reason students either join corporations, or open up an insurance-based practice, or do what Segal calls low-fee treatment, because it pays the bills.

“They worry about rejection,” he explains. “So they do a treatment that, even though it’s more likely to gain acceptance from the patient, in the long run, they’re not doing what’s necessarily best for the patient. Working becomes a job as opposed to the passion that initially gets people to join dentistry.”

Martial arts, Segal explains, has helped him stay disciplined, and stay focused on his end goals, even when he first came out of school and patients went to another dentist because they didn’t accept his comprehensive plans. Today, with the reputation he’s earned and the expertise he has accumulated, those patients are much more likely to accept his treatment plans—despite some added costs.

“I attribute a lot of that to my ability to never give up, and to do what’s best for the patient, not necessarily what is more likely to get the patient to accept treatment,” he says.

Despite a demanding schedule, Segal stays actively involved with his family. It’s not unusual for him to dance with his daughter Alexa, who participates on a local dance team, or to climb into the mixed martial arts cage in his basement with his 9-year-old son Jordan.

“He’s a little prodigy wrestler,” Segal says of his son, who recently went undefeated in winning the South Jersey varsity championship. “He’s the only one I’m scared of.”

The wrestling, Segal says, is helping Jordan learn the same positive attributes his father learned from martial arts.

“Wrestling is very demanding,” Segal says. “There are many times when you want to stop and give up. He’s learning the type of discipline that you cannot give up. And it carries forward into life.”

Segal acknowledges having a substantial sweet tooth, perhaps an unusual admission by an orthodontist, but he says that recognition has actually helped him in his philosophy to children and sweets.

“When I was a child I was told, ‘You can’t have sweets because they cause cavities,’” Segal explains. “So I kind of sneaked the sweets and ended up getting multiple cavities. Because you can’t tell a kid they can’t have something they obviously want.”

His solution as an oral practitioner? Allow children to have sweets as long as they have a bottle of water next to them, and they swish their mouths right after eating the sweets. That alone, he says, will reduce the chance of cavities. As will adding one more brushing during lunch rather than just in the morning and at bedtime.

“Rather than deprive them, find a way to work around it.”

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Ross Segal, D.D.S., believes in treating the whole facial complex. It's a philosophy that has positioned him as one of southern New Jersey's top orthodontists. Segal has accepted and successfully treated numerous cases that others have deemed impossible. He continues to advance the orthodontic field through a commitment to self-discipline and improvement.

Orthodontist Focuses on Leaving Lasting Impressions

Conflict in your dental practice is inevitable. The key to making sure it doesn't become a chronic issue is addressing it head-on.

It’s often said that conflict is inevitable, and that’s true. As Sharon Dolak, MDR, R.D.H., of 

 points out, anytime there is more than one person in a room, at some point, there will be conflict.

But that doesn’t mean that all conflict is bad.

“Conflict indicates that something isn’t working right,” Dolak says. “Positive changes can occur when the team is focused on finding ways to resolve the problem in the business.”

Dolak explains that there are so many moving parts in the dental office that very good systems need to be in place to keep the office running smoothly. Often times those systems are either not in place or they are not adhered to by the team. And often people will try to avoid dealing with a problem with the hope that it will just go away. It won’t.

“Conflict management styles that are either aggressive, or avoidant, are ineffective,” Dolak says.

It’s very common for conflict to be present at different levels in a dental office. Staff is working closely, working on a tight schedule, and dealing with patients who are afraid or in pain — or just don’t want to be there. Team members are expected to be “on” all the time. Throw into the mix a perceived hierarchy in the office, and it’s a recipe for conflict.

For example, Dolak points to conflict between the back and front offices, in which the front office is packing too many patients into the schedule and assistants can’t keep up. Or the assistant versus the dental hygienist conflict, in which hygienists see themselves as producers and don’t want to engage in tasks to keep the office running. Assistants then become resentful. There are also overbearing office managers who micromanage and push for more production.

Dentists, Dolak says, didn’t go to school to be facilitators of human relationships, and generally just want all the problems to go away.

“These are simple but common scenarios in the dental office,” Dolak says. “What causes them to be a problem is most times these issues are ignored and not dealt with properly.

Poor communication, and hurtful communication mostly is the cause.”

Why doesn’t staff deal with problems head on and handle them face-to-face?

“Why would they want to when they have an attitude of I am right and they are wrong?” Dolak points out. “The parties each become entrenched in their position.”

Dolak says that if left unresolved, dental office conflict can have a significant negative impact on practice revenue. For example, a dentist has two employees whom he or she is paying $20 per hour for a 36-hour work week. That’s $720 per week, or $37000 per year. Over the last month, they have been bickering over petty stuff. The dentist ignores it. It’s barely on his radar. Very easily the two employees spend about a couple hours per week of time gossiping and stirring the pot.

“Tensions will escalate and it spreads through the office,” Dolak says. “It becomes a toxic work environment. The dentist paid them but they were not working and producing.”

And patients definitely feel and are aware of the conflict. They will often leave a practice and no one ever knows why. But they’ll talk to their friends about the office, and that affects referrals and new patients who might have considered coming to that practice. Perhaps most importantly, Dolak says, is that the direct cost of this office drama is not obvious to dentists.

“CPP Inc., of the Myers-Briggs Assessment and the Thomas-Kilmann Conflict Mode Instrument, commissioned a study on workplace conflict, finding that in 2008, U.S. employees spent 2.8 hours per week dealing with conflict,” Dolak says. “This amounts to approximately $359 billion in paid hours (based on average hourly earnings of $17.95), or the equivalent of 385 million working days.”

Dolak says that, fundamentally, businesses are built on relationships. In a healthy workplace, service and profit flow smoothly through open communication. As staff communication and relationships remain open, patients receive good treatment, and the business is profitable. As relationships among staff deteriorate, service erodes as well. As such, there is a direct link between the quality of the relationships in any business and the quality of service, production and profit.

“When we are in conflict, we say things we do not mean and we mean things we do not say,” Dolak says. “Rarely do we communicate at a deep level to truly express what we are thinking and feeling. Learn how. Spend money and time teaching communication skills. Make it a safe place to express differences of opinions and train to do it respectfully.”

Unresolved conflict can have a significant impact on a dental practice's image and productivity. Recognizing conflict and addressing it early on are the keys to avoiding serious problems down the road. Sharon Dolak, MDR, R.D.H., explains how to make that happen.

Conflict Can Damage a Practice Professionally and Financially

When Mariana Blagoev was growing up in Europe, she loved to paint and draw. She knew early on that working with her hands, creating something, was what she wanted to do with her life.

But until she spent time working in a dental office, she didn’t know that would be the path she would take.

“In Europe, we didn’t do internships like they do here,” Blagoev, D.D.S., explains.

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But once she experienced what the oral health field had to offer, she knew it was the perfect choice.

“There’s a lot of art in dentistry,” Blagoev says. “A lot of art.”

Blagoev is a graduate of the University of Detroit Mercy, School of Dentistry, and received the Jefferson Dental Study Group Merit Award, and The Diploma for Academic Excellency graduating at the top of her class. She practiced for years with prominent clinicians in the area of cosmetic and restorative dentistry in New York City, and today is the owner of 

 in Parlin, New Jersey, specializing in cosmetic dentistry. She loves the personal touch she’s able to provide to patients in her office, as well as giving back in her community.

Blagoev says what’s rewarding about her work is it’s an area of dentistry that doesn’t revolve around pain and anxiety. She references a friend, a neurologist, who often feels there are many times she’s unable to ease patients’ pain, and can do no more than listen and try to provide comfort.

“For me, it’s exactly the opposite,” Blagoev says. “When people come in they may have pain, but they leave with a smile. It’s kind of like seeing immediate results.”

Patients like those results. Blagoev makes certain to take before and after photos in case patients forget what the before looked like. They’re often surprised, albeit pleasantly.

Last December, Blagoev organized a Toy Drive as a way to put smiles on the faces of some of the needy children in her community during the holiday season. But doing so didn’t come easily.

Blagoev admits that she’s a shy person by nature, and prefers to maintain a low profile. But the California-based agency that helped build her practice’s website encouraged her with different ideas to become more involved in her community.

“Like every dentist, I started advertising because we need new patients,” Blagoev recalls. “That’s the way of the profession.”

But her agency helped her see that, not only is advertising expensive, it doesn’t always work. Becoming more involved in the community through food drives and other events, however, had more of an appeal — especially after Blagoev saw patients’ positive reactions.

That led to the Toy Drive. Blagoev encouraged patients and other members of the community to drop off new, unwrapped, or lightly used toys at her office between December 1-21. All the collected toys were donated to Second Chance Toys. Then, in the true spirit of giving, Blagoev offered each donor a free dental check-up, complete with an exam and X-rays.

“But they didn’t want it,” she says. “They liked the idea, but they just wanted to donate the toys. People like doing things to help other people, and I just gave them the opportunity. And now they know where my office is.”

Blagoev has learned that it’s a funny thing with patients. If you don’t ask them to do something, they probably won’t. But if you ask, they’re happy to accommodate. That’s a strategy she employs on the practice’s Facebook page. Three years ago she started asking all patients who schedule appointments online to provide a review. Now, the positive reviews continue to pile up.

“These are my patients,” she says, “so I very much like reading the reviews. And I’ll tell you, when I have a day that’s not so good, I open (the reviews) and read them.”

When she has spare time, Blagoev says she enjoys doing the opposite of what she does at work. In other words, she doesn’t like spending all day in one place.

“I like open spaces,” she says. “I like skiing, walking and windsurfing,” the latter of which she only recently began. “But I love it now. I’m so hooked.”

The physical nature of the activity is important, but Blagoev says it’s also about open space.

“The beauty and space of nature,” she says. “That’s what affects me.”

Blagoev acknowledges that she loves cosmetic dentistry because of its creative side. But there’s another element at work: the investigative aspect.

“You have to listen to patients, and ask the proper questions so that you come up with the right treatment that’s going to help,” she says. “And when it all comes together and works, and you relieve the patient’s pain and they’re happy, that’s very rewarding.”

She’s also very proud that she was able to make it on her own.

“I worked for somebody, and with other people, and then decided to take the risk and open my own practice,” she says. “Every time you do that, you take a big risk and it turns out to be successful, that’s the other reward.”

Mariana Blagoev, D.D.S., owns and operates Bright Smiles Dental in Parlin, New Jersey. She wound up in dentistry because she enjoyed working with her hands. Though she considers herself a somewhat shy person, she recently discovered how connecting with your community can make a difference in the lives of patients, and raise awareness of your practice.

Dentist Discovers Power of Connecting with Her Community

Marketing is marketing, right? No, not exactly. With today’s technology, marketing is anything but a one-size-fits-all strategy. And if you’re marketing to millennials — and of course, you should be &mdash; then it’s imperative that you understand how this generation makes decisions.

Millennials grew up with smart phones and computers. Most of them don’t know a time when they couldn't find the information they wanted or needed within a few quick keystrokes. And when they reach out, you’d better be ready to respond.

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“In the old days, I call you, and I leave a voicemail,” says Naren Arulrajah, founder and CEO of 

. “Nowadays, if I’m a new customer and you don’t answer the phone, you will lose me. I don’t have the patience to leave a voicemail and wait.”

The old saying that you don’t get a second chance to make a first impression rings particularly true among millennials. They are an impatient generation, Arulrajah says, and they don’t need to take six months and talk to 10 of their friends to figure something out. They have choices, and they exercise them.

“Remember when you had the Yellow Pages, and that was all you had?” he asks, rhetorically. “You didn’t have the ability to switch very easily. Now they do.”

Arulrajah explains that the playing field has changed, and the bar is being raised all the time. If you want to reach the millennial population, forget about voicemail. For that matter, forget about email. You need to be prepared to text.

“Some of our clients are having us enable texting on their mobile website,” Arulrajah says. “They’re used to texting. They live on texting all day long. That’s how they make an appointment to see you. And if you don’t serve them the way they want to be served, they’ll go elsewhere.”

Millennials also form relationships differently. Arulrajah says he has clients in their 60s who love a handshake and the personal touch of a face-to-face encounter. Those elements don’t impress millennials.

“They’re more into data,” he says. “Give me what I want, don’t waste my time, and get to the point.”

The source of information is also important. For example, millennials are more likely to trust the wisdom of the crowd than they trust individuals, and more likely to trust strangers than large institutions. Consider Airbnb — sleeping in someone else’s bedroom, and everyone is okay with that. Why?

“Because they read the reviews,” Arulrajah says. “Because 20 other people slept there, so they feel it’s a decent place to sleep.”

Do patients say nice things about your practice? If they do but others don’t hear those comments, or those comments are not recorded somewhere for others to read, what good are they?

Ekwa Marketing has a product called Gotomyreviews.com, and Arulrajah says it makes leaving a comment as easy as pressing a button. Patients are sent a text and it asks them if they’re on Facebook. If they are, they press a button and they’re taken to the practice’s Facebook page where they can select the number of “stars” they want to award the practice.

“Two minutes and it’s done,” Arulrajah says. “Many practices miss out on this because they’re either not asking patients at the right moment, or they aren’t making it easy for patients.”

Handing patients a postcard and asking them to fill in comments and mail it back never happens.

Arulrajah points out that millennials rely heavily on social media. Even on birthdays, no one talks to each other. They post on friends’ Facebook pages instead, and the messages are seen by hundreds of other people. Dentists can maximize that exposure.

When the patient’s exam is finished, have a staff member take a photo of the patient and dentist, with the patient holding a sign that might say “I had my crown done at Joe Smith Family Dentistry.” Then upload the photo to the practice’s Facebook page and tag the patient.

“The patient didn’t have to do anything,” Arulrajah says. “He or she didn’t even have to smile. But because they are tagged, now all of a sudden 300 of their friends are seeing it.”

And because their friends want to be nice, they’ll award the post a Like. Now, all of 

“The mindset has changed,” Arulrajah says. “It’s not that people don’t like sharing good news with others, it’s just that the way they do it is different. You can reach thousands of people with one minute worth of effort.”

Attracting millennials to your dental practice requires a tech-centric marketing strategy. Naren Arulrajah, founder and CEO of Ekwa Marketing, says that this generation wants instant information, delivered on their terms. Social media, email and text-based marketing are all critical components of a strategy that will reach this group, Arulrajah says.

We’ve all done that juggling routine of delaying the mailing of bill payments until we know there will be money in the checking account to cover the payment once it’s received. It’s not a fun game to play, and it’s a clear sign that our expenses may be out of control.

It’s an even worse feeling if it’s happening in your dental practice. There are certain indicators that this troubling trend is occurring under your practice’s roof.

“The warning signs have to do with what I call the checkbook reach out,” says Linda Drevenstedt, R.D.H., MS, principal of 

. “In other words, there’s not enough money in the checkbook to make payroll.”

Or, you’re paying your bills and your staff, but then what’s left in the checkbook for you? Fortunately, there are steps you can take to better control your overhead.

The first step after having that oh-my-gosh moment signaling overhead may be out of control is identifying a benchmark — a model for your practice. Because practices—whether you’re a general dentist, orthodontist or prosthodontist—not all alike. And just looking at a profit and loss statement from QuickBooks won’t cut it.

“In my experience, dentists have accountants who are not dental specialists,” Drevenstedt says. “And the accounting statements they get are alphabetical lists of categories with no percentages, and no benchmarks. So (practitioners) are not necessarily getting a tool on a monthly or quarterly basis to even look at their overhead.”

And even if they are, too often expenses are not properly categorized. For example, Drevenstedt says she often sees a category called Wages, and everyone at the practice is lumped into that one category. If you do that, how can you tell if certain salaries are too high?

“That’s generally one of the places where overhead is out of whack,” she explains. “I have them break things out. What do you pay your hygienists? What do you pay your assistants? What do you pay the people who run the business, including office managers?”

Effectively categorizing expenses will enable you to better see departments or areas of the practice are functioning well, and those that may be out of line. Otherwise, you may fall victim to a knee-jerk reaction based on insufficient information.

“Doctors may pick up that their overhead is too high,” Drevenstedt says. “They know that staff salary should be a certain percentage because they’ve read it in a magazine. So they categorically decide to freeze all wages. That’s a managerial decision that may or may not be correct.”

One of the benefits of properly categorizing and benchmarking expenses is you may find that your overhead is not necessarily out of control — or not 

 out of control. The bigger picture may indicate that collections need to be improved. This is what Drevenstedt refers to as the full picture of the practice’s financial health.

“It’s about how much is the practice producing, and is it producing at a good level?” Drevenstedt says. “That’s why I go back to the benchmarks. It’s no different than is your blood pressure okay compared to last year. What is the average that a well-functioning orthodontist produces? Well, are you there or not?”

Looking at production is important, Drevenstedt says, because it’s the side of the practice that can most often be influenced without having to drastically cut expenses. Nobody likes that. And nobody likes to freeze wages. Doing the latter, she says, takes staff out of creative mode and throws them into freak mode.

And once you generate revenue, how good is the practice at collecting what is owed?

“Are we pretty good at collecting?” Drevenstedt asks, rhetorically. “Or are we letting the insurance companies keep our money and not following up?”

Fortunately, there are tools that can help. Drevenstedt says one of the best advances in a while is the automated parts of billing; being able to look at and automatically re-file insurances. These automated statements can help collect the revenue that the doctor and hygienists have worked to produce.

“You can have a lot of things that are automated and they can work really well, but the other part of the picture is, you still have to do the calculating of how well is it working, and is it getting us the results that we want?” Drevenstedt says. “Do we need a human to get on the phone to call the insurance company and find out why we didn’t get paid?”

In other words, she adds, rattle some cages.

There are certain key indicators that your dental practice's overhead may be out of control. First and foremost, after the bills are paid, and your staff has received payroll, is there any money left over for you? Linda Drevenstedt, R.D.H. and principal of Drevenstedt Consulting, says using a dental-specific CPA and equipping your practice management team with proper software will go a long way.

Take Steps to Control Your Dental Practice's Overhead

Midlife crisis is defined as an emotional crisis of identity and self-confidence that can occur in early middle age. It’s a dreaded period of time that many men and women experience, and it’s extremely personal.

Perhaps a little less personal, but certainly no less important, is what Linda Drevenstedt, RDH, MS, principal of 

, refers to as practice midlife crisis. Do you know the feeling?

Perhaps your practice isn’t growing as much as you’d like, or you’ve got that is-this-what-it’s-going-to-be-like-forever kind of feeling. Drevenstedt believes that happens because dentists pay a great deal of attention to their technique and clinical expertise, but not nearly as much to their business.

“Because their education was never about being in business,” she says. “It was about being a dentist who’s a technician. So you get graduates who are well versed in taking care of their patients, but not well versed in how to run a small business.”

Teaching dentists how to run a small business, Drevenstedt says, is easier said than done. Most dentists would rather spend two days in classes learning how to do better crown preparation than two hours in a class learning about how to run a business or how to analyze their numbers.

“Dental software will provide all kinds of reports,” Drevenstedt says. “But many times those reports may or may not be giving them any useful information unless they know how to crunch some of the numbers.”

And when dentists crunch the numbers, are those numbers good compared to dental industry benchmarks? Do they know what to do with those numbers?

Drevenstedt says what many physicians in hospitals or even smaller healthcare entities do is align themselves with professionals who have an MBA or a degree in business or finance. For example, the 

 equips medical practice leaders with the information and tools they need to thrive.

“Dentistry is way behind in that model,” Drevenstedt says. “A lot of that stems from the fact that most dental businesses have been solos up until the last few years. They didn’t have the money to hire someone who understood finance and business, and they didn’t know that that’s what they needed to know.”

Drevenstedt says that as the world changes, particularly where insurance reimbursement is concerned, an emerging figure is the dental office manager. Many of these individuals are born out of the 

American Association of Dental Office Management

, which, according to its website, “gives the front office team the opportunity to enhance their skills.”

It’s a start, Drevenstedt says, but acknowledges that many of these individuals are truly office managers rather than practice administrators. They’ve come up through the ranks at a dental organization. Perhaps they’re very good front office or scheduling managers, and then suddenly, they’re the office manager of a million dollar-plus business. Most still lack a master’s degree in finance or healthcare administration.

Drevenstedt recalls that she was coaching an office manager because the practice was having some personnel issues. She had previously recommended that they consult a labor law attorney group in their state, but that hadn’t been done.

“I explained that she really should, because her doctor could more likely be sued for labor law faux pas than for dental malpractice,” she says. “So, they may know scheduling, or how to close the deal if the doctor’s got a case that they’re trying to have the patient accept. But when I start coaching them about numbers and percentages of overhead, many times I have to start with a very basic level of information.”

Still, Drevenstedt sees the emergence of the dental office manager, an individual who is interested in learning and better serving the dental business component, as one of the bright spots in the dental staffing environment. And most dentists, she adds, are “at least peripherally aware” of the need for assistance in this area.

Some dentists, she says, are reluctant to hire an office manager because they or someone they know may have had a bad experience. And oftentimes dentists take a hands-off approach to running the office. If the office manager has his or her own agenda which doesn’t align with those of the dentist, that can be problematic.

“Dentists are very intelligent, they’re good problem-solvers, which makes them good dentists,” Drevenstedt says. “Many of them will want to solve a problem themselves, first. They tend to be, ‘Let me see what I can figure out,’ because there’s plenty of information out there.”

For others, there are dental practice management consultants, like Drevenstedt.

Linda Drevenstedt, RDH, MS, principal of Drevenstedt Consulting, LLC, says that many dentists find themselves in the business doldrums because they lack the necessary skills to be a practice administrator. Fortunately, there's help to be found in this area.