All businesses have two ways to generate revenue: selling services or selling products. Revenues in dental practices come predominantly from delivering dental services, ie, selling time. Time is required for both service design (creating strategy) and service delivery (implementation of that strategy).
The cornerstone for managing the way you deliver your service is the appointment book. Some appointment types are more productive than others, and prioritising them will improve revenue.
Some people advocate maximising the time given to the highest revenue generating items, but this can be a mistake because a ‘return on sales’ is not necessarily a true indicator of the financial viability of a service you offer.
Prioritisation should actually be based on a combination of:
• Quantitative assessments, such as contribution analysis
• Qualitative assessments using measures for satisfaction and trust.
Reducing downtime is an important aspect of time management. Delays and downtime are frustrating – revenue is lost and other patients are denied appointments. Although there is a cost to the practice, in my experience, fining patients for non-attendance alienates them – worse still, they are likely to tell 11 other potential patients!
Instead, an effective way to reduce downtime is to reinforce the value of planned treatment throughout the patient journey, outline the cancellation policy upfront and reinforce the benefits of timely dental care.
If a patient fails to attend once, take it seriously – this is the moment to stop behaviours that are not favourable to your revenue. A well-planned system should kick in to present the patient with an emotionally engaging reason to ensure that there is no repeat of the resultant downtime.
Where possible, collect deposits – if you have created something of value, you should have no problems doing this. It is easier to retain a deposit than collect a fee for something the patient has not done yet.
Contribution analysis is a technique for making short-term decisions, where the contribution of a particular service is assessed for the real contribution it makes after all direct and variable costs associated with it are accounted for.
For example, you may be able to charge the same amount for a fixed course of orthodontic treatment and a clear aligner approach, but the contribution each treatment makes to the bottom line depends on the deductions made for lab bills and materials.
Using similar principles to assess contribution, it becomes possible to:
• Protect sessions for high production/contribution treatments such as bridge preps and implants
• Fit lower contribution service appointments, such as fillings, around these
• Maximise production by fitting recalls, fits and emergencies around these.
New patient referrals are the lifeblood of a practice, and recalls are the bread and butter, so there should ideally be systems to encourage both. With excellent verbal skills, you can still keep all patients who are delighted with your service.
The patient experience
People management includes management of patients – or more correctly, the patient experience. After all, our patients are our unpaid salesforce, and word of mouth is the most powerful tool for growth.
There are many articles about rolling out the red carpet every morning and switching into ‘showtime’ mode, but in this article, I am going to talk about trust: the key ingredient for cementing long-term patient loyalty and, indeed, for binding teams to work effectively together.
Trust is essential for effective leadership. We have an expectation in dentistry of ethically justifiable behaviour – in other words, that we can trust a person to do the right thing.
Creating high trust organisations is a challenge faced by all leaders. Trust doesn’t just happen, it requires:
• Promotion of a relationship-orientated culture
• Creation of opportunities to meet informally
• Day-to-day management of competencies.
Policies and procedures are certainly important, but trust can reduce transactional costs by removing the need for excessive controls and regulations, and promoting positive relationships.
This is why complaints monitoring is so essential. Feedback is a key indicator for ensuring that practice systems are modified responsively, to keep elevating the patient experience, and feedback from your team is similarly a valuable tool for personnel engagement.
Take steps to offer the best possible care to patients and to gain their trust and commitment to an ongoing relationship that puts their needs and wants at the centre of your service.
Compliance and regulations
As compliance with regulations around health and safety, infection control and the Care Quality Commission become more and more onerous, it is worth considering the following:
• Policies and procedures are essential – carefully documented operational manuals with procedures are required to ensure that some areas of compliance are not forgotten
• Training and support needs to be provided to the relevant team members
• Monitoring systems need to be established to maintain high-quality standards.
Writing a business continuity plan and creating a calendar of tasks is a good starting point for getting a management system and a facilities management plan in order for equipment, premises, and paperwork around maintenance/compliance records.
A practice owner or manager should approach the management of premises, fittings, fixtures and equipment on a pro-active cyclical basis, using reproducible systems. Planned maintenance and a rolling programme of care and repair, replacements and refurbishment will help avoid emergency situations and the shock of unexpected repair bills.
Good managers also ensure that there are adequate stocks of essential supplies to keep up optimal production, while maintaining an appropriate stock levels minimum, so money is not wasted in the event that supplies go out of date and become ineffective.
Managers should also be aware of the need to seek out the best value on utility supplies such as gas, water and electricity, and to ensure that the most cost-effective communications contract is in place.
The foundation of a practice
Operational systems are essential for efficient practices, and there are four essential components to ensure they are effective:
1. Explain why with policies
2. Explain how with procedures
3. Train your team
4. Monitor with surveys, audits and other such monitoring tools.
Seema Sharma is honorary lecturer in entrepreneurship and management at the Dental Institute, King’s College London. She is also the founder and CEO of Dentabyte Ltd. For further information, visit www.dentalbyte.co.uk