2. Implant Indicators: What my numbers mean to me? Laura Jamison

3. Objectives 1. 2. 3.

4. Business Statistics ______ start each year ______ remain after 1 year ______ are still in business after 5 years ______ are in operation after 10 years

5. Three People in One

6. 99% of Dentists have worked for someone else, doing technical work. What am I doing this for? Why for this guy? I know as much as he does... Any dummy… I’m working for one. THEN… Entrepreneurial Seizure sets in.

7. The business is started. To the technician, the dream has come true The boss is dead! But to the business, it’s a _______ because the wrong person is at the helm. The technician is in charge! 1+1=3!

8. To the manager, _____________ becomes a problem to be managed To the technician, _________ becomes a meddler to be avoided.

9. And to both of them _____________ is the one who got them into trouble in the first place.

10. Entrepreneur Dreamer Visionary Energy Imaginative Catalyst Future focused Creative Controlling Ordinary man is the problem.

11. Manager Frets Pragmatic Order Predictability Organizer Past focused Status Quo Unchanging Likes problems

12. Technician Ruminates Doer Tinkerer Don’t dream, Do! Present focused Happiness is work One thing at a time Suspicious Individualist

13. Fatal Assumption If you ________ the technical work of a business, you _________ the business that does the technical work.

14. Solution IF YOU WANT YOUR BUSINESS TO IMPROVE YOU MUST IMPROVE _______ FIRST.

16. What can be deduced from this Income Statement?

17. Dr. O’Dontal must now rely on his own business skills to make his decisions. Skills like… Guilt Gut Feeling Flip a Coin

18. Dr. O’Dontal must now rely on his own business skills to make his decisions. Skills like… Guilt Gut Feeling Flip a Coin Why must he be forced to make a business decision with this document and the apparent lack of information?

19. It is because he is trying to use a ______ Accounting document to make _________ decisions.

20. The Profit and Loss Statement A tax document Expenses calculated as a % to collection Shows depreciation and interest Financial accounting Goal: To show the least amount of profit possible.

21. The Operating Statement A management report Expenses calculated as a % to production Shows true cash flow Managerial accounting Goal: To see the owner’s true compensation Not For IRS

22. Do not confuse activity with getting results.

26. Norm: 15-18% of the total office production Staff Salaries The total salaries for business, clinical and sterilization employees, including contract labor (does not include hygiene, lab personnel, or associate) for a given period of time. This includes hourly, weekly, daily or monthly salaries, holiday pay, sick pay, vacation pay and any bonus dollars awarded.

27. Norm: 4-12% of total production Rule of thumb: Add 2-3 plus number of hygiene days for percentage. Hygiene Salaries The total salaries for hygiene team members during a given period of time. This includes a dedicated hygiene assistant if applicable.

28. Norm: 2-2.5% of total Office Production Employee Taxes Matching The total dollars contributed by the doctor for staff and hygiene toward FICA, Medicaid, Medicare, state and federal unemployment tax, state disability, etc.

29. Norm: 2-4% of total office production Employee Fringe Benefits The total dollars contributed toward employee benefit package including; savings account, continuing education, professional fees, goodwill, travel and entertainment, uniforms, medical insurance, pension, IRA, miscellaneous

30. Norm: 10-14% of total office production. Lab Expenses The total dollars spent toward outside lab work including for the purpose of TMJ, orthodontics, implant placement. CAD Cam technology should also be recorded here.

31. Norm: 5-7% of total office production Facility Expense The total dollars spent on all facility related expenses including; monthly rent, utilities, structural insurance, property taxes, maintenance fees, janitorial, structural repairs, biohazardous waste disposal.

32. Norm: 4-6% of total office production, add 2-3% of total office production for supplies and hardware stored in house for implants. Dental Supplies and Drugs The total expense of replaceable dental supplies and hand instruments, not to include small equipment purchases, lab supplies or office supplies.

33. Norm: 1-3% of total office production general practice or 2-5% specialty practice. Promotion Expense The total expense to promote the practice. This includes; thank you gifts, business stationery, contributions, patient newsletters, telephone directory advertising, promotional entertainment, welcome service, advertising, promotional printing, web development and maintenance, and miscellaneous.

34. Norm: 41-71.5% (note: it will run this high as a percentage if there is a large hygiene program and the practice is placing implants) Major Expenses The sum total of five categories: Employee expense + Lab +Facility + Dental supplies + Practice promotion

35. Norm: 10-12% of total office production Minor Expenses The total of all on-going expenses related to the practice including; Accounting, Bank service charges, Bookkeeping, Collection fees, Computer expenses, Consulting, Continuing education for doctor, Dues, Insurance (malpractice, general liability, worker’s compensation) Laundry, Legal, Licenses, Office supplies, Postage, Petty cash, Equipment repair, Subscriptions, Telephone, Property taxes, etc.

36. Goal: Less than 10% of total office production Discretionary Expenses The total expenses considered to be elective. These expenses are generally short term in nature (5 years or less). This includes: Equipment loans, leases, small equipment purchased, building and leasehold improvements, practice buyout loans, and associate expenses.

37. Owner’s Non-Cash Compensation The total of all expenses paid through the practice to pay the owner. It can include; Auto reimbursement or lease, auto insurance and repairs, key person life, disability, medical, buyout insurances, medical reimbursement, pension, profit sharing, relatives on payroll, social clubs, travel and entertainment, uniforms, etc.

38. Goal: Total of compensation to exceed 25% Owner’s Cash Compensation The total expense paid to the owner directly. This includes; salary, taxes matching, bonus and draw.

39. Norm: Major + Minor expenses = 51-75% Total Operating Expense Expenses that will last continually throughout the practice’s existence are what would be considered true overhead for a practice.

40. Goal: < 75% of total office production Total Office Related Expenses The total of Major + Minor + Discretionary expenses.

41. Goal: > 25% of total office production. Earnings Before Owner’s Compensation The difference between total office collections and total office related expenses.

42. “The drudgery of the numbers will set you free” - Dr. Jim Pride

43. Cycle of Good Service Systems Orchestration Quantification Patient Satisfaction Low Patient Turnover Higher Profit Margins Employee Satisfaction Low Employee Turnover Cycle of Good Service

44. Production Goal Workshop

45. Fear of failure Fear of success Lack of clarity Waste of time Too rigid Don’t realize the function Six reasons people avoid setting goals:

46. Six reasons to set goals: Focal point Communicates expectations Provides accountability Measure of success Cause for celebration Increases self esteem

48. Make sure the goal is realistic and incremental. Goals should be written down. Don’t over do it. Create a plan for achieving your goal. Celebrate often. Try not to get disappointed if you seem to be getting nowhere fast. How to set realistic goals, and stick to them!

50. Step One Determine the number of available work days to be worked during the new production year. This should be done per producer. Use one worksheet per doctor and per hygienist.

51. Step Two Determine the new average daily production potential. Identify the three highest production per day months from the previous year. Example:for Doctor Production July$ 2331 Sept.$ 1997 Jan.$ 2071 Total$ 6399 divided by 3 equals $2133 average per day Complete for each producer.

52. Step Three Determine the new annual production goal for each producer. Average daily X number of = new annual production goal days 2009 goal Step 2 Step 1 $ 2133 X 171 = $ 364,473

53. Step Five Determine the three-month average daily production for the most recent three months of the completed year. Example:Doctor April$ 1805 May$ 1765 June+$ 1810 Total$ 5380 divided by 3 equals $1793 for previous months’ average daily production.

54. Step Five The team presently has the ability to average $1,793 per day without making ANY changes to the practice. What about with a plan, could the team produce this consistently? What would it take to produce more than this amount?

55. Step Six Determine the annual production if no further changes were made during the next year. Example:$ 1793 previous quarter production per day x 171 days projected $306,603 This is the base annual production for the following year if no further changes were made to the practice.

56. Step Seven When gradual growth is necessary to achieve the new annual goal, subtract the baseline from the new annual goal. Example:$ 364,000New production goal (step 4) -$ 306,000Base annual production (step 6) $ 57,400Increased production necessary

57. Step Eight Determine the increase in production needed for each quarter. Example:A)$ 306,000 Base annual production (step 6) divided by 4 = $ 76,650 which is the Quarterly Base Production. B) $ 57,400 Increase needed (step 7) divided by 10 = $ 5,740 Quarterly Production Increase Increment

58. Step Nine Add an increment to the average quarterly base production to calculate the first quarter goal. First Quarter Example:$ 76,650 Average Quarterly Base Production + 5,740 Quarterly Production Increase $ 82,390 First Quarter Production Goal

59. Step Nine Add an increment to the First Quarter Production Goal to calculate the Second Quarter Production Goal. Second Quarter Example:$ 82,390 First Quarter Production Goal + 5,740 Quarterly Production Increase $ 88,130 Second Quarter Production Goal

60. Step Nine Add an increment to the Second Quarter Production Goal to calculate the Third Quarter Production Goal. Third Quarter Example:$ 88,130 Second Quarter Production Goal + 5,740 Quarterly Production Increase $ 93,870 Third Quarter Production Goal

61. Step Nine Add an increment to the Third Quarter Production Goal to calculate the Fourth Quarter Production Goal. Fourth Quarter Example:$ 93,870 Third Quarter Production Goal + 5,740 Quarterly Production Increase $ 99,610 Fourth Quarter Production Goal

62. Step Ten Calculate the new daily production goal per quarter by taking the new quarterly production goal and dividing by the average number of days per quarter.

63. Step Ten Quarterly Base Production 76,650 76,650 76,650 76,650 Quarterly Production + 5,740 + 5,740 + 5,740 + 5,740 Increase Increment + 5,740 + 5,740 + 5,740 + 5,740 + 5,740 + 5,740 Total Quarterly Production 82,390 88,130 93,870 99,610 Actual Number of Days Per Quarter 42 days 42.5 days 44 days 42.5 days Daily Production Goal $1,962 $2,074 $2,133 $2,344 +$112 +$59 +$211

64. Step Ten Quarterly Base Production 76,650 76,650 76,650 76,650 Quarterly Production + 5,740 + 5,740 + 5,740 + 5,740 Increase Increment + 5,740 + 5,740 + 5,740 + 5,740 + 5,740 + 5,740 Total Quarterly Production 82,390 88,130 93,870 99,610 Average Number of Days Per Quarter 42.75 days 42.75 days 42.75 days 42.75 days Daily Production Goal $1,927 $2,061 $2,195 $2,330 +$134 +$134 +$135

65. Revenue Planning Worksheet Helps you set goals. Measure your progress. Benchmark application volume and approval rate. See how patients are taking advantage of patient financing. by ChaseHealthAdvance

66. Revenue Planning Worksheet by ChaseHealthAdvance Box 1 helps you calculate how many patients need affordable financing. (On average, 15 – 20% of all patients.) Box 2 calculates how many applications are needed to meet a given annual revenue goal. Box 3 displays Application and Funding performance over time.

67. Key Rule Number One There are two ways to make a business decision: A. ______________________ B. ______________________

68. Key Rule Number Two One number means nothing – until you compare it to something else. A. B. C.

69. Key Rule Number Three The numbers will tell you if something is out of line. It is necessary to learn how to _______and ________.

70. Goal: Established in the annual plan Total Office Revenue The sum total of all office charges, including trades, favors and barters recorded at the office. These are considered to be total production fees for any and all services rendered. This sum total reflects all services posted and all production regardless of whether or not it can be collected.

71. Goal: None, simply tracked to make business decisions Adjusted Revenue Amount Discounted fees of any sort that cannot be collected yet could have been charged for. These discounted fees include: the difference between HMO, Capitation and Welfare fees and total production fees, Cash, Senior Citizen, Promotional, Advertising and Professional discounts given, all free dentistry and all bartered dentistry.

72. Too many dentists don’t understand that if they give a 15% discount, without increasing production or decreasing their costs, profits will fall - not by 15 %, but by much more. The real impact of fee reductions:

73. Too many dentists don’t understand that if they give a 15% discount, without increasing production or decreasing their costs, profits will fall - not by 15 %, but by much more. The real impact of fee reductions:

74. Too many dentists don’t understand that if they give a 15% discount, without increasing production or decreasing their costs, profits will fall - not by 15 %, but by much more. The real impact of fee reductions:

75. Calculation: Total office revenue minus Adjusted revenue Adjusted Revenue The sum total of fees posted than can be collected in real dollars; production that can be collected.

76. Goal: Established in the annual plan Doctor Revenue Total charges generated by the doctor. These charges are not to include hygiene total charges, even if a hygienist is not being utilized. Hygiene charges are those charges that could be produced by legally delegating procedures to a hygienist.

77. Goal: Established in the annual plan Number of Doctor Days The total number of patient days actually worked by the doctor during a given period of time. A day scheduled for five hours or longer is considered a full day. A day scheduled for less than five hours is considered a half day.

78. Goal: Established in the annual plan Average Revenue per day Doctor The doctor production divided by the number of doctor days for a given time period.

79. Goal: Established in the annual plan Average revenue per hour Doctor The doctor production divided by Hours Worked- Doctor for the same respective period of time.

80. Goal: > $100 per hour before Dr. Exam Hygiene Revenue Total production charges that could be legally generated by a hygienist if the duties were so delegated. These charges are to include routine prophylaxis, root planings, periodontal prophies, bitewings, sealants, fluoride applications and periodic examination fees.

81. Goal: Established in the annual plan Hygiene Day The total number of patient days actually worked by the hygienists during a given period of time. A day scheduled for five hours or longer is considered a full day. A day scheduled for less than five hours is considered a half day.

82. Average revenue per day Hygiene The Total Production-Hygiene divided by the Number of Days Worked-Hygiene for a given period of time. Goal: Established in the annual plan

83. Goal: Enough to pay the bills Collections (Adjusted Collections) The total actual dollars collected via cash, check, credit cards or finance companies, less patient refunds.

84. Goal: 98% of Adjusted Revenue on a three month average. Collection Percent The relationship between Collections and Adjusted Revenue. Calculated as Collections divided by Adjusted Revenue.

85. Accounts Receivable All collectable dollars owed to the dental practice. (The dentistry has been produced but the money has not been collected.) This monitor should not include credit balances (money owed to the patient).

86. Norm: 1:1 in a growing practice on a three month average. Accounts Receivable Ratio The relationship between Adjusted Revenue and Accounts Receivable. Calculated as Accounts Receivable divided by Adjusted Revenue.

87. Adjustments to Accounts Receivable The uncollectible accounts, bad debts, collection agency fees that are adjusted off of the Accounts Receivable (as opposed to Adjusted Revenue Amount that shows discounts adjusted from Total Office Revenue).

88. Goal: Less than 2% Adjustments to Accounts Receivable Percent Calculated as Adjustments to Accounts Receivable divided by Adjusted Revenue.

89. Aging of Accounts Receivable A reporting of the age of the collectable dollars owed to the practice. Aging of these dollars owed can be done in one of two ways: from the point of production or from the date of the last payment.

90. Goal: 30-40% of Accounts Receivable Percent A/R 0-30 Days The percentage of the 0-30 days Accounts Receivable in relation to the Total Accounts Receivable. This is a monitor of “Payment at the time of services are rendered.” Calculated as Current Receivables divided by the Total Accounts Receivable.

91. Goal: 18-20% of the Total Accounts Receivable. Percent A/R over 90 Days Calculated as the Over 90 Days Accounts Receivable divided by the Total Accounts Receivable.

92. Goal: Less than 50% on a three month average. Accounts Receivable-Insurance Percent Defined as Accounts Receivable-Insurance divided by the Total Accounts Receivable.

93. Goal: One new patient exam per Doctor Day New Patient The total number of new patients making an appointment in the dental practice, desiring treatment of any kind within a given period of time.

94. Goal: >70% in general practice New Patients-Internal The new patient contacts resulting directly by referral from a patient of record.

95. Goal: 20-30% in general practice New Patient-External The new patient contacts resulting directly from the doctor’s and/or the staff member’s relationship with that respective new patient. These new patient contacts are a monitor of the entire team’s interaction with the general public.

96. Goal: 10-20% in general practice New Patients - Advertising The new patient contacts resulting directly from the advertising efforts of the dental practice. Such advertising efforts include telephone book ads, sign on the building, location of the practice, newsletter, direct mail, welcome services, newspaper ads, web site, etc.

97. Treatment presented NP The total production value of the ideal care presented to a new patient. (“Ideal” is meant to be specific to the practice in each situation)

98. Treatment Accepted NP The total production value of treatment accepted by a patient. Definitive financial arrangements were committed to by the patient and confirmed by the office.

99. Goal: >75% Percent Acceptance NP Calculated as the Treatment accepted NP divided by Treatment presented NP

100. Goal: $ 1,500 per new patient New Patient Potential The average amount of ideal treatment diagnosed on a new patient for a given period of time. Calculated as Treatment presented divided by Total number of new patients

101. Goal: $ 1,250 per new patient New Patient Value The average amount of treatment accepted by a new patient for a given period of time. Calculated as the Treatment accepted NP divided by Total number of New Patients.

102. Goal: > 80% Percent Acceptance EP Calculated as Treatment accepted (Existing patient) divided by Treatment presented EP.

103. Goal: >75% Patient Retention Percentage Defined as the Total Number of Patients in the Continuing Care System divided by the Total Number of Active Patients in the Practice. This can be calculated every six to twelve months. Active patient is considered to be active if seen within the previous eighteen months.

104. “ The most successful business people I’ve met are passionately determined to get it right, no matter what the cost.” -Michael Gerber “The E-Myth:

105. Law of Cause and Effect

106. “For every effect in our lives there is a specific cause. Whatever we want more or less of, we can trace back to the cause and by changing or deleting the cause, we have control of the effect.” EXAMPLE If you are experiencing a trend that new patient numbers are lower than goal, then consider that you may not have a marketing plan in place, that your systems are not polished, that the new patient experience is not worth talking about, that your verbal skills need some practice, etc….

107. New Patient Number is Lower than Goal

108. Dentistry has a Heart month February

109. Revenue Planning Worksheet by ChaseHealthAdvance Box 1 helps you calculate how many patients need affordable financing. (On average, 15 – 20% of all patients.) Box 2 calculates how many applications are needed to meet a given annual revenue goal. Box 3 displays Application and Funding performance over time.

110. Objectives To gain control of your practice. To plan for productivity in the number of days that you are available to work. To know what practice indicators should be monitored, and what they are trying to tell you.

111. Range norms For your own copy of the overhead range norms including the norms for your hygiene department, and to sign up for the enewsletter from Jamison Consulting Email Laura Jamison at jamisonconsulting@verizon.net jamisonconsulting@verizon.net

112. Thank you to our sponsors Visit chasehealthadvance.com E-mail healthcarefinancing@chase.comhealthcarefinancing@chase.com Call 888-388-7633 www.justsayplz.com www.rgplanner.com

113. Cycle of Good Service Systems Orchestration Quantification Patient Satisfaction Low Patient Turnover Higher Profit Margins Employee Satisfaction Low Employee Turnover Cycle of Good Service