EP34: The Key to a Successful Fee for Service Practice; Its All About the Service; With Dr. John Evanish

Podcast

Listen to the small town practice story of Dr. John Evanish, as we open the vaults to an older interview in which Dr. John discusses the Fee for Service model and all that Dr. Evanish has done to create a patient-centered incredible practice in small town New Jersey. You won’t want to miss this!

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“EP34: The Key to a Successful Fee for Service Practice; Its All About the Service; With Dr. John Evanish!” Transcript:

[music] Welcome to the Double Your Production Podcast with the Team Training Institute. The one place designed for dentists and their staff who want to grow their practices by following in the footsteps of those that have done it who are in the trenches, who know exactly what you are going through. And now your leaders, the stars of the podcast Doctor John Meis and Wendy Briggs. [music]

Hey, listeners. It’s Kati with another double your production podcast. We want to wish you a happy New Year. And we’re bringing today a gem, an older call with Doctor John and a small-town dentist from Hawley Pennsylvania. It’s really an interesting listen. He’s got an interesting practice. So we hope you enjoy it today. With the new year, we want to invite you to come and see where we are speaking this upcoming year. And if you would like to get more in contact with the team training institute, just come over and visit us at www.theteamtraininginstitute.com. We look forward to another year of amazing podcasts. And for today, enjoy this call with Doctor John. We’ll see you next time.

Hi, we’re here today with Doctor John Evanish from the wonderful state of Pennsylvania, and I’m not even going to try and say the name of the town where your practice is, John.

it’s like that ortho retainer, Hawley.

Oh, Hawley. Well, that’s easy enough. Tell me about your practice.

Well, our practice is a little unique. We run a fee for service office, John. We don’t participate with any insurance, and we don’t accept assignment of benefit at this time. We’re in the growth posture. We presently have nine chairs and 2,700 square feet, and we’re in the process of expanding out between 8 and 10 chairs, wherever more we can get into this new construction. We have about 20 employees and one and a half associate dentists. It’s interesting because the area that we’re in, the population of Hawley is 1,300. That’s one thousand three hundred. And I hear of all these high population towns, and I’m thinking, “Wow. I wish I could be in these areas.” But we’re not, and in the truest sense, we’re a country dentist, and we’re the town’s dentist. And we do have plenty of dentists around us, although we’re still talking 15, 20 miles immediate area, and that would be considered local for us.
I border on two counties. One county has about 46,000 population. The other has about 53. So that sounds great, but when you consider the fact that one county’s 567 square miles – the other’s 751 – that’s not so great. Okay? So we’ve really been able to develop a decent practice in an area where there really shouldn’t be one. And if any dentist came in and said, “Let’s look at the logistics,” like if Heartland Dental came in and said, “Let’s look at these logistics. Would we move to this area?” The answer would be, “No way.” They would not move to this area. There’s really no jobs, no industry per se. 25% of the income from the employment is from arts entertainment, recreation, food service. Different things like that. And then you go down to retail trade at 20%.

So we don’t have any department stores locally. The closest department store might be 15 miles away. The closest McDonald’s might be 15 miles away. And many of the people are snow birds from Florida who migrate back and forth. So, consequently, they’re an older population, which is fine. So maybe much of their income is not on the census, but really, if we talked about census, the average household income, depending on where I’m looking for the immediate town, is around 25,000, and up to 53,000. So it’s not really the wealthiest area. So we’ve really tried to get a market to help those people in the area.
How did you start practicing there?

I was working as an associate closer to Scranton and wasn’t making very much money, and this wasn’t too long ago, this was in 1993 and that was every other associate out there demanding 40% of their production to be paid and he paid me 40% of not much which ended up being very little. Halfway through the year, I said, “Can you just pay me $25 an hour?” And he said, “Sure, I’ll pay you as an independent contractor.” So then it ended up being 25,000 for the year is what is what I made for my first year at [inaudible]. And that was enlightening. So a friend of mine who was working this little satellite office out in this town told me about this opportunity that the two owners wanted to get out of the town, there was no business. And it was a little two-chair office, rented space.

So we got into this place in 1994 and I was actually still working as an associate for the other guy to just pay the bills until things got running. We grew that two-chair office to three chairs by the end of the year and had a hygienist within three years. We were collecting right around $400,000 at that time. Then we built a six-chair free-standing building up the street which is the building we’re in right now which is this 2,700 square-foot building. And as that progressed, I hired my first associate in 2000, 2001 era. And that didn’t work out too well. And then I used his little spark as my growth to say, “Well, I can do what he’s doing.” And then, in fact, we did. Grew a little further, ended up having another associate about two years ago where we picked up a bit more. We added two more chairs, so we were up to eight chairs.

And then when he left I didn’t have any associate for the previous year, and then this past year we hired one and a half associates and added a ninth chair into this facility. Meanwhile, I use the private office, I lose the break room but it’s all worth it because I don’t need it, I have my own private office anyway.

That’s right. You don’t make any money or serve any patients in those rooms.

You don’t, that’s right. They’re expensive lunches [laughter].

That’s right. So you’ve had some learning opportunities with associates.

We have.

Yes, tell me about that.

I was rather inexperienced at the whole associate thing. I bought a couple of books on it and thought that I knew a lot of things. Well, there is so many aspects with associates, I think it’s just one of those things you just kind of have to go through it and figure it all out as you go because it’s so unpredictable. The first associate told us, he’s like, “Yeah, it doesn’t have to be that good, John, you don’t have to have perfect crown margin. No one else is doing that, it doesn’t have to be that good. It’s okay that the other side of the mouth is hanging open after you do those fillings [laughter].” That didn’t really work, that was a quality issue sometimes you assume quality but you can’t [inaudible]. So we learned to do working interviews from that. The second associate was a friend and unfortunately, he’s still a friend, but it was awkward when you have a friend working with you, it’s tough to be a leader and to define that role is very difficult especially when there becomes quality issues that have become attitude issues or any issue really a friend that’s not good. If you start the business together that will be a different story, but when someone comes in with you, that’s difficult.

So this last time we took our time, we really interviewed a lot of different dentists which is was great that we even had a chance to. And we have two really great guys right now. One guy is mid-50s, he has his own practice in [inaudible], but he comes up two days a week. And he started with us about a little over a hear ago now and he’s doing really great. He comes up on Wednesday when I’m doing my sedation. And the other dentist is off. And then he’s here on Friday as well. The other dentist is Dr. Harley. He’s in his mid-30s. He’s been practing seven or eight years he’s eager to learn and he’s willing to learn, which is probably one of the biggest things that I’ve seen. Both of these guys, I love them. They’re really great. They want to be able to learn and do things because they’ve never seen practices like mastermind-style practices. They’ve never seen things that they think are just not possible become possible. So when it’s possible for an associate to be doing $8,000, $9,000 a day, they’re salivating. “Whatever it takes, John. Tell me whatever it takes, I’ll do it.” And they want to do it. So that’s been our latest venture, is growing these associates to help them become profitable and to really blend in with this system.
How’d you find these associates?
I actually wrote a letter to the whole dental community, everybody that was in our district and beyond. I got the mailing names from the ADA somewhere, and I think we mailed to maybe five counties [laughter] with basically, “We’re looking for an associate,” I mailed the letter [three of the guys?]. Still get calls from people, “Oh, I hear you’re looking for an associate, or you’re always looking.” And I always, “Send a resume in. We’re not looking at this time, but maybe in the future.” But one of the dentists had kept the letter and just on a whim called me. And that was Dr. D, and he called me. And I said, “You know what, perfect timing. This’ll work, even if you can give me two days a week. That would be great.” So that’s how we started with him. The other dentist, Dr. [Harlan?], he was driving by. And he just liked the way the building looked, and he dropped off a resume. So we really got lucky on that one.
Wow, that’s terrific. It’s very difficult to find people to go to– well, I’ve not been to your practice, but I assume it’s a relatively rural area.
It’s a relatively rural area. It’s in the Poconos, Lake Wolampompac at the Poconos. It’s very rural. It’s a beautiful area. It’s a hunters, fishermen, skiing area, but it’s not the place to go if you’re looking for a job [laughter].

How many hours of patient care do you do each week?

The whole clinic is open 43 hours. And basically we’re open Monday through Friday, we have two late nights, which would be Monday and Thursday, where we’re open till 7:00, and then Tuesday, Wednesday, Friday are basically 4:30, 5:00. Now, I work 29 hours. I do work one late night. And actually – that’s another thing – we’ve tried this early mornings– we’ve tried everything. And we do try everything. In this area, we don’t have a 6:00 or 7:00 am calling. I wish we did. I’m a morning person, so it drives me crazy to go in for 11:00 and work 11:00 to 7:00. But that’s when the patients want to come in. And our peak time is 4:00 to 7:00. So we work with that. And I do Monday night, Dr. [Harlan?] does Thursday night. So we split that up in that way. Dr. [Harlan?] does 30 hours a week, and Dr. D does 14 and a half hours a week. So combined, there’s a little bit of overlap there. One of the things I’ve learned is to try to keep everybody there at one time as much as possible, and when we get more facility we may definitely have everybody there one night and with more facility that we can process them.

Have you found you somewhat have shifts where you have somebody that’s starting early in the morning and at some point getting off, and some people coming in later and working later on at least Monday and Thursday– have you found that to fragment the staff somewhat?

It does somewhat. And we’ve tried everything, and at this point, this was the least amount of fragmentation that I can seem to get, where we try to have the core people. When I’m there, I want some pretty good all-stars there, particularly on a new-patient exam side. So they worked the full shift with me, and many of them are still working in the morning. For example, my Monday. Dr. Hartland will work 8:30 to 4:00, and I’m working 12:00 to 7:00. Okay. So there’s a bit of overlap, where we still have some people there, so we’re really talking about maybe three hours on the tail end. What I’ve seen is it’s less fragmentation than we’ve ever had. Previously I did the one-shift, two-shift and two separate teams. It was like two separate offices, and it just killed the overhead. This year, after evaluating 07, even though we didn’t grow very much this year comparatively because we’re trying these doctors, this year the overhead did wonderful things for us [laughter], so we really got back a lot of points that we were missing because of that split shift.

This is one of the things that I’ve seen in watching the mastermind members and from my own experience that, once you become somewhat capacity-blocked because you don’t have enough rooms, you naturally think the answer is to use those rooms in the times when you’re not using them, which requires some kind of split shifting.

Right.

And if you look at the biggest practices, none of them are using split shifting. They’re all working the same hours. They’re just building enough rooms to keep ahead of it. And I had the same experience. The split shifting drove my overhead up. If I wasn’t present in the office, the productivity went down. That sounds like what your experience is too.

Exactly. Even during this course of training associates, where typically I had a 4-day work week. I go in on Fridays now with the other two doctors there, if anything just to boost their production by hanging out [laughter]. And you know how that works.

Yes, I do.

That’s exactly what happens. And everybody’s a little more on it, instead of having a play day. But we do a lot of training, and I listen to them, and I videotape them and use it for training.
Part of being a leader is being the person with the energy, and being the person with the drive, and being the person that inspires other people to their best. And so if that leader isn’t there, and you don’t have a reasonable substitute, I think the practice grinds down a notch or two, just because of that.

Right.

So, John, how much are you collecting each month?

January we did pretty good. We collected 300 in January. But for the most part, I’m going to tell you last year, we collected about 2.6. Most of that was, unfortunately, my production. We’re still growing the associates and getting them into the synch of things. Now I did notice, toward the tail end of the year, if it’s any barometer, Dr. Harland. who’s our full-time guy, he’s right now up in the mid-sixties. He’ll touch on 70. We hope that he does better this month. He’s already off to a great start. He might do 20 this week, which is really great. And things are just falling into place. Dr. Dee, he’s there two days at this time, and our goal is actually for him to close his place in Scranton and continue on with us for the other two days. If not, we’ll find more. And he’s in the 30-40 range right now, which we’re happy with. So that’s good. We’re really looking for 300 a month at this time on a continual basis. It’s tough to get at this time the consistency because we’re a little capacity-blocked, and we do run the snow-day problem [laughter] in northeastern Pennsylvania. So snow days kind of kill us, especially in the beginning of the week, and that’s when we get a lot of treatment in. Whatever’s not in for that day, we do a lot of add-ins. We hope for them to schedule by the end of the week and get them in by the end of the week if we can’t get them in that day and do same-day treatment. So we’ve been hurt by that in February, so February’s numbers were in the low 200s, but that’s okay. We’re going to pick it up for March.

Now people are listening to this, and they’re saying, “Okay, you did 2.6 million last year.”

Right. Oh, here’s an interesting one for you, John. The year before, when I was solo, working basically, maybe 32, 33 hours a week, two chairs assisted. In eight chairs, I collected 2.35 alone. So that’s why I said we didn’t grow very much because we were trying to grow these associates. And it’s amazing when you see efficiency or lack thereof coming from new patient exams. How many people get blown out of the water? One of the Dentists, Dr. D, is a MAGD, and he’s comprehensive treatment planner, and he’s dropping these $12,000, $15,000 bombs on people, and that’s not our market. Our market we’ve defined as– basically, we keep our crown fees low, cleaning fees low. We’re fee for service again in an area where there are a lot of insurance plans. Although, they’re not paying very well. On a single unit crown, we’re looking in the mid 400s for single unit crown, and that’s really low. They’re welfare rates is what we have here, and it’s a function of the area that I live in and the area that I work in. So we kind of work with that. We keep the crown fees low, the cleaning fees low. Basically all the comparable things. And–

So what’s your crown fee? If insurance is paying 450, what’s your crown fee?

We just raised it. We were at 695 for probably four years in a row, and we just raised it up to seven and a quarter. And then a buildup’s around 200. So the other thing with local insurance, we have the United Concordia, Blue Shield, and they kind of have a monopoly in Pennsylvania. They don’t pay the buildup fees either. If you’re doing a crown, you’re not getting paid for the buildup.
That’s becoming more and more common. You still hear of locations that are paying that, but that’s becoming less and less common over time. When we started practice, John, a buildup was a separate procedure, a separate day because the materials had to harden before you could prep them. And so now, with materials that you’ve screwed in and shine a light on, it’s a whole different ball game.

Right.

So what are you producing then, John?

I typically do between 160 and 200 a month, and I do sedation. I do IV. I do it one day a week. I usually do that on my Wednesdays. So in any given week, I’m really looking for 50,000 a week to produce. It’s nice to stay at that level, but we all have ups and downs and such. But that’s my goal is where I want to be, and sedation’s either a make me or break me day. It’s hard to say what’s coming in. Sometimes in my mind, I think, “Oh, I’d like to go to two days of sedation.” However, one of the things that I’ve realized in dentistry, there’s no golden rule to anything anymore. I used to think sedation was the pen via of dentistry, that, “Oh, this is going to be great. $15,000, $20,000 days.” Well, then I see that on any normal day I can do that a lot less stressful with add-ins, with different things. And it’s the opposite of what I thought was working, and the same thing with cosmetic dentistry and comprehensive dentistry. The things you think that bring you there are the same things that are holding you back in the end. We went through the whole thing with the cosmetic dentistry. I tried that. I did that. I did the comprehensive care, and you know what? I guess it’s just a matter of figuring out what works for your area, and it just takes what seems like a dental lifetime to figure all this out. The rules keep changing.

That’s what keeps it interesting.

Oh, yeah. It’s fun.

If it were that easy, everybody’d be doing well. [inaudible] not everybody’s doing well. So people are listening to this, and they’re saying, “My gosh. He’s doing 50K a week on $725 crowns.” People who see this are going to be shocked by that. Those are phenomenal numbers. How are you doing it?

I don’t know how I’m doing it, actually. We do a lot of crown and bridge. We do a ton of extractions, lot of endo, a lot of molar endo matter of fact, which I know a lot of people don’t like to do because of one thing or another. But I like to do it, and I can do them quickly, and I’m very happy with them. We use [John Shopal?] system, and we’ve been doing it since ’94 and I’m real comfortable with that system. It works for me, but actually, I wanted to be in  that [inaudible] and thank God I never did because I’m much happier with this. I love this [inaudible] practice.

We have an in-house denture lab, which is kind of nice because I doubled my lab tech as an assistant to help with the denture patients for the trials and the repairs and the relines and whatever else. That works real nice, and he’ll take up one share perhaps three days a week doing some of that stuff. From my own schedule, it really is a lot of crown and bridge, a lot of extractions, and a lot of endo. And if I had limits to those things, that would be it. Now, do I do ortho? I used to do ortho with conventional Eurpoean method, and when I broke it down to how much I was making per visit, per hour, I figured I was better off doing a single surface resin, and it was just too much, so I dropped that. After all those years of training on that, it just didn’t work financially. Not that I’m certainly convinced that invisalign does unless it’s on a large scale, but we offer that.

How many cases do you have going on on this line?

I don’t know. 15. We don’t have a lot going on. Very, very low. That’s the whole office. Implants. Yeah. We we place implants. I grab the easy ones and having the trained assistance that you trust to take care of the patients to work with that.

And no, I don’t get a break. When I work a shift that means that’s the shift. There’s no phone calls. There’s no talking to anybody. We’re cranking it out. I don’t have time to return a phone call. I don’t have time to do anything outside of seeing those patients.

Yeah. The constant motion is key, isn’t it?

It is. And you get in the groove, actually. It’s a lot of fun, and when you give a couple of no shows or something [laughter] and you only have two things going on at one time, you feel like you’re just wasting time.

Yep. And if you slow down, it’s hard to get gear back up again. So if you got something that doesn’t show, and then you get back to your full schedule, it’s tough to get geared back up.

It is.

So for marketing, you’re doing billboards, radio, Chrisead, which is a direct mail.

Yes.

What else? Anything? Yellow pages, probably.

Yellow pages. Yeah. I think we might have a–

The internet. Are you getting a lot of patients off the internet?

I actually don’t know that number We just switched over to [inaudible] internet, and that looks pretty nice. i don’t really know that number at all.

I think that will go for you.

Yeah. We have a separate website address for our sedation as well which links right to the main address, but for our billboards– we advertise for sedation on the billboards, and then it links in and does count. I know it does count, but I don’t know those numbers.

Yeah. You have an in-house denture lab. Tell me how that works.

Again, we double the lab tech a dental assistant who cares for this patient, so it’s really great for media or for something that we need in a hurry. Monday, I hada a guy come in who needs full upper and lower immediate denture. My schedule’s wide open this Wednesday because I had a sedation moved, so as it turns out, I said, “Okay. If they wanted sedation, and it’s usually maybe a week and a half that we get them back to take the teeth and insert the denture, well, we go downstair, “Hey, Charles. Can you do this in a day?” “Sure. We can do it in a day.” So they’re coming in Wednesday, and we’re going to insert and immediate upper and immediate lower denture and do a full mouth extraction. So that’s kindly. We have a basement, and we have him set up in the basement with a denture lab. He doesn’t do partial frameworks. We send those out. He des all the repairs. He does all the flasking processing, boilouts, and everything. He does it the old-fashion way. We’ve only be doing trhe system maybe three years now, but it’s definitely working out now, and we love having him here. If you ask me how much am I saving on it, I haven’t really calculated that because it’s still a new system. We are saving something on it. Okay. And i can say that. If anything, having him there doing the relines, it’s definitely profitable.

Well, it’s huge because he’s probably able to do some of the chair side things that you would have to do otherwise.

Everything.

So he’s freeing up your time, which is the most valuable thing that he could offer.

The beauty of that is– and you can probaly teach an assistant to do this. We do the final impression and then denture. That’s what the state law says that we have to do, but from there, he can pretty much carry it from there. If there’s something tricky, we’ll check the bites if there’s something they can’t get suction or something, we may have to go and take a look and do different borders or whatever needs to be helped, but these guys are competent. They know what they’re doing, and they’re just so used to looking at a lab slip and poster on the side of the cinder block wall that when they get to see patients, they really grow as individuals. And this is the second lab person I’ve had. And one was driving an hour to get to our office, and the drive just kind of took him over. Butt they love that position. You grow on a person, too. It’s really nice, and the patients love them because they’re talking to the person who made their denture, and I think that’s just the wildest thing.

It’s the big question now. If you were to take all you’ve learned in your years of practice, and you were to distil it down to the one thing, that very most important thing that has led to your success, what would that one thing be?

Wait. That’s just such a tough question, so I’m going to give you a whole bunch of one answer [laughter].

That’s a good thing.

I think it all has to do with faith and persistence and the strong desire to succeed and realizing– as I mentioned a few times that I’m really realizing lately that you’re going to have to be flexible and willing to change possibly everything in your life that would get you to one place, will not carry you any further, or maybe reverse where you’re at. It’s the constant ability to learn and always be the student.

That’s a great one. So here you are. You’re practicing in only 2,700 square feet. You’re not taking any insurance. You don’t have much of a population base to work with and those that you do have are not relatively high income yet you’re hitting huge numbers. That’s amazing. That really is. And just because you’re such a great leader and because you’ve done such a good job building a good team and because you are so intune to what’s going on with your patient and how you can help them one step along the ladder to getting their mouths healthy.

Well, we’re trying.

Well, John, I want to thank you for the call. You gave us some great information. I appreciate it very much.

Well, you’re welcome. I hope some of it was helpful. I’m just trying to share some of the things that people shared with me and your mastermind groups are wonderful, and I’ve had a lot of good relationships with a lot of the other dentists because of this, and everybody working together, it sure does help.

Well, thats great.


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