John Meis (00:02.188)
Hey everybody, welcome to this episode of The Double Your Production Podcast. I'm Dr. John Meis here with my partner, Wendy Briggs. Hey Wendy, how's it going?
Wendy Briggs (00:10.407)
Great. Looking forward to a great conversation today.
John Meis (00:13.964)
Yeah, our topic today, we're going to be talking just about profitability and some of the major things that we see, some of the major mistakes that we see dentists make, and maybe some of the major myths that have been floating around in our profession for a long time.
There's never been a time where practices have to focus on profitability as much as they do right now. With the inflationary pressure on our costs going up, particularly in wages. And at the same time, insurance companies beating down reimbursement. We've never been in a profit squeeze like this before. So while it would be a wonderful world when we didn't have to worry about profits, we just had to take care of patients and everything else would work. We're not working in that environment right now. And so we have to focus on it. And so that's why we spend some time not only talking about excellent patient care, but also talk about having a profitable business.
Wendy Briggs (01:17.999)
It's always stunning when we're lecturing in front of groups of hundreds of dentists, we'll ask a question, what are the three things that you think are most important to track in a dental practice? And the answers are almost always the same, right? Production, collections, and...
John Meis (01:33.262)
new patients.
Wendy Briggs (01:34.715)
New patients, right? But when we stop and think about how that correlates to actual earnings or profit of the practice, it really doesn't. And so that ends up with some practices focusing in on production and collections and new patients. But then at the end of the month, when they're managing their practice by spreadsheet, they realize, gosh, we really didn't do well on the profitability side this month. In fact, sometimes I've seen a few recent messages and emails from doctors saying they were actually in the negative and they're having to take out loans to meet payroll And that's happened at various times throughout the years But it seems like it's happening more and more now and that should be alarming for some folks
John Meis (02:10.882)
Well, yeah, most definitely it's happening more now than it ever has. And we're seeing the same thing. And those three numbers that everybody watches, they say, well, if you do well on those three, you're going to be profitable. And I can tell you, no, you're not. Not necessarily, because I've seen practices that had a tremendous new patient flow, great productivity, and collecting most of it and still not be profitable. So it's not that easy.
So that's maybe one of the first myths is that those three numbers, if that's all you're tracking, those are not adequate. And there's another number that everyone should have on their top numbers to watch, and that is our profitability. What is our net profit, net operating profit margin? And very few practices track that, very few practices understand that.
Wendy Briggs (03:01.139)
And that's another number. Right, I was gonna say sometimes when we ask doctors what that number is, they don't know, right? So that's another common thing. In dentistry, there's not a very clear way for us to measure that. It's not something that we can ask our software at the end of the month. So it becomes a little bit unwieldy, if you will. It's a little bit like catching smoke. We don't exactly know what that number looks like or how practices come up with that profitability number.
So we have a great formula that was shared with us a few years ago by our friends at Dental Intel that we've taken and adapted somewhat. And certainly you've added to it, Dr. John, you've added, think, maybe 27 different ways that we can influence those numbers. But let's talk about that profitability formula here for just a few moments so that people can understand maybe a simpler way to get to that number.
John Meis (03:55.47)
Yeah. So, and this is a super simplified way of thinking about it. And it works very, very well in a single doctor owner doctor practice. It becomes a little more complex when there's multiple doctors, a little more complex when there's multiple locations. But let's start with the simple principles because they're what everyone needs to understand regardless of the structure of your practice. So the simple formula is that per production times collection percentage minus overhead equals profitability. And when we look at production, we can look at it in visits times production per visit. So that's maybe one of the places where we ought to start, is what we see as recommendations that we're hearing people use and what we're hearing from the stage even, certainly in podcasts that it is, in our opinion, not the right way to go.
Wendy Briggs (04:59.283)
Right, you know, I can't tell you how many times we hear the only way to be profitable if you accept insurance is to get more patients through. Now granted, part of the formula is the number of visits times the production per visit. So there are a lot of experts out there, a lot of doctors who are well-intentioned, but they're focusing on that number of visits. And when you take into consideration the increase in hygiene wages, the ADA says hygiene wages were up 20, I believe it was more than 12% in 2022 and I know that it's continued to climb. So there are areas of the country where doctors are saying, "You know, I'm not even getting reimbursed enough from insurance to pay my hygiene wages. That doesn't even consider all of the other expenses that go into running a hygiene department."
So we understand that there, as you mentioned, there is a squeeze on the profitability side. So the thinking is to shorten our appointments down to get more patients through in that hour, that's going to elevate our production per or production numbers, certainly. The other line of thinking is to get rid of all the hygienists, right? Doctors just do the hygiene yourself. You know, there's a lot of ways that well-intentioned people try to solve this issue. But in our opinion, this is one of the key mistakes that can actually take you backwards from profitability. So danger, danger, and how you handle this current situation can really determine, you know, not just your profitability for this year or in the recent months, but for many years down the road.
John Meis (06:26.242)
Yeah, for sure. So in our opinion, assuming that you're wanting to improve profitability, the better end to work on in the productivity category is working on production per visit, not increasing visits. So in increasing visits, we're shortening treatment times. And we're talking about hygiene particularly right now. We're shortening treatment times, less service, and trying to make up for it in that way. Now by doing that, we're increasing the number of exams that doctors have to do, which is pulling time away from the restorative. And so that's why we don't think this is the best way to go. Number one, we think the quality of care can go down. We can shorten the appointments down enough that quality of care is affected. We certainly will decrease the amount of electives same day dental hygiene care, preventive care, even periodontal care. We'll be reducing the amount of that if we go to this model of super short appointments.
Wendy Briggs (07:35.335)
Another challenge that we have is retaining our patients, right? Patients that have become accustomed to a certain standard or quality of care, they can tell the difference when all of a sudden they feel more like we're really focused on minimizing the care we provide. They feel rushed through. They feel like they're just a number. And another thing obviously is providers, right? Hygienists often feel like they're not given an adequate time or even respect to do the job that they've been hired to do. So therefore we have churn there. And when we see churn with providers, we naturally see churn with patients and patient retention becomes even more of a struggle.
Now I will say Dr. John, there are a few exceptions that we have seen practices in play. We've taught this for more than 15 years now, but in certain circumstances, I don't think I could be more clear when I say this is not applicable for all practices, but some practices could benefit from an assisted hygiene model when it's done well. Now, again, danger, danger. There are some very common mistakes that running assisted hygiene could actually take the practice backwards towards their profitability goals as well if they make these critical mistakes. But when it's done well, and provided there's a few other things in place, for example, enough doctors to handle those exams, because again, with assisted hygiene, you will have more exams. So in a multi-doctor practice with a couple other key elements in place. Assisted hygiene can be a great strategy to help drive profitability, but there are some ways that we have seen practices sadly take a misstep that's also very costly.
John Meis (09:12.792)
Yeah, when hygiene salaries went up and the hygiene workforce went down, some practices thought, well, we'll just convert to assisted hygiene and we can solve the problem that way. And what they found out was that it was very, very hard to do well. And Wendy, you have a fantastic model on how to do that well. And we have a great training on our member site on how to do it well. But it is very difficult to do well and maintain the level of patient service and to maintain doctor productivity. And if you're dropping on either one of those, it's a win in one area, but it's a lose in a couple other areas. So it can be done well, but it's hard. And the people who just tried to wing it with that found that it just did not work very well.
Wendy Briggs (10:03.067)
And again, patient retention is a critical component. And you mentioned, Dr. John, that the patient experience suffers as well. So that's another critical misstep that we see with assisted hygiene or just going with the other options of shortening the appointments down. When patient experience suffers, that also affects profitability and takes us backwards. So that's a tremendous point that we want our listeners to understand as well, that our focus definitely needs to be on five-star patient experience all the time. So as you're trying to make these important shifts towards profitability, that's why we prefer focusing so much on production per visit on the hygiene side and the restorative side, because almost always that has a positive impact to patient experience. When we're giving patients more of what they want when they want it, usually the general emotion and feeling of the practice is positive. So everybody wins when we focusin the profitability formula on the profitability formula in that way.
John Meis (11:00.566)
Sure, and you've taught for many, many years the three roles of the world-class hygienist, and that is the preventive therapist, the periodontal therapist, and the treatment advocate. And I can tell you when we shorten down appointment times, one of those roles, it doesn't get done. And the one that doesn't get done most likely is the treatment advocate. And so now hygienists are not talking about the treatment that patients want and need, and they're rushing through appointments. And now that affects the doctor's chair and the treatment that the doctor's doing. So Wendy, what are some of the things that we do on the doctor's side to improve productivity per visit?
Wendy Briggs (11:40.381)
Yeah, that's a great question. So I think in a way, we've got to focus and understand the role of efficiency in that. And on the sort of side, this has never been more important because I think we both can agree that we work with, you know, amazing practices all over the country and no two doctors practice exactly the same, right? We all have our unique practice style, our modes of practice. Some, example, really focus in on cosmetic dentistry. Others might do more, you know, complex dentistry with implants and other things. So every practice kind of has their own unique footprint of the type of dentistry they enjoy doing.
But I would say efficiency matters in all of those. So when we look at production per visit on the doctor's side, you know, some doctors burr tooth time might be for prepping a crown, you know, 15 to 20 minutes when another doctor, same tooth might take twice as long. So efficiency matters on the restorative side in a big way. And we also have learned that often it's not even the burr tooth time that's affected, it's everything else that's happening in the context of that appointment. So when we ask, you know, doctors, how long do you schedule for a crown prep? We hear a wide, wide range of timeframes. So understanding, you know, if you have a longer timeframe, why is that? What are some of the things in that appointment time that we can delegate or that we can really focus in on providing that care in a more efficient manner?
John Meis (12:42.453)
Everything else. Yep.
Wendy Briggs (13:05.777)
We've seen tremendous impact on the production per visit side with a stronger focus on efficiency.
John Meis (13:11.694)
Just looking at how long it takes you to do each procedure. One of the things that we watch when we watch video is number of burr changes for crown prep, for instance. How many times did you change the burr? Well, some people use one burr for the entire thing, and some people are going back and forth between burrs over and over and over again. So treatment times is one of the ways we improve productivity per visit.
Next thing is being more comprehensive in our diagnosis so that when we're talking about treatment that may be necessary or wanted, we're being more comprehensive. And when we're looking, say we have a tooth with a crown, let's say that there are some restorations in that same quadrant that have age and wear on them and maybe needing to be replaced soon, giving the patient the option to do those at the same time as the crown. So being more expansive, and when you're looking at a clinical case as to giving the patient the options on doing the entire quadrant, for instance. So that's another example. And another example is same-day dentistry, trying to do any single tooth dentistry the day that it's diagnosed. So if that patient's in hygiene, doing it that very day. So that improves productivity per visit. That improves the appointment availability for longer appointments for more complex dentistry. So those are a couple of our favorite ways.
Wendy Briggs (14:47.015)
Yeah, absolutely. The third mistake that we often see Dr. John with doctors trying to increase their profitability formula is that intense focus on overhead. And we have seen probably the height of ridiculous with doctors spending their own time cross-checking 15 different supply companies, trying to do the ordering themselves to keep those costs down. We've seen a variety of things over the years that we have to step back and say, huh,
There's probably a more efficient way to do that, right? I think that maybe, and you can probably answer this better than I can, but maybe doctors feel a sense of control that that's something that they can personally control when it comes to that part of the formula, try to keep overhead down. We've seen doctors obsess over the percentage they're willing to pay on team salaries because their accountant has said it has to be in this range. And we know that sometimes that can actually take a practice backwards rather than forwards because we may need more people.
to support our growth, but if we're not able or willing to invest in those people, it may be limiting our profitability. So there's so many different ways that we've seen practices make a misstep in the desire to keep overhead costs down. That's something we should probably talk about as well.
John Meis (16:00.312)
Yeah. And then we look at overhead, there's really just four categories, maybe five that are big enough that really we can affect much that the material. that's people, supplies, lab, office supplies, and marketing. Those are the five that we can adjust. Well, marketing is not related to cost. It's related to what do we need to fill our chair. So that cost is maybe controllable.
but maybe not controllable because we may need to spend it. But you and I have seen practices that have very little appointment availability, the practices are full, they're out of capacity, and yet they continue to spend marketing at a ridiculous rate. So looking at those five things, and there is progress to be made in each of them, and you brought up people costs. Well, we can manage people costs by making sure that we have
that were staffed appropriately for the size of the practice. So I've seen practices that are doing $100,000 a month and have four administrative full-time team members. Well, that doesn't make sense. It absolutely doesn't make sense. You're overstaffed and therefore your people costs are going to be high. I've seen people practices where team members routinely get unplanned over time. Well, that's just wasteful. That's people not planning carefully enough for their schedule.
And some overtime is going to happen when we're hyper-responsive to treating patients when they want to be treated. That's going to happen some. But that's in a planned fashion, not in an unplanned fashion. And the last one, the very common dental practice is that employees are milking the clock. Coming in early, staying late, that kind of thing. So those are the ways that we can reduce costs of people. But it's not by trying to drive
team salaries down below the market rate. That doesn't work. We have to pay what the market is bearing in order to attract and retain team members.
Wendy Briggs (18:02.013)
Right, you know, it's very, very common that we see practices higher on new people, which is wonderful because we often say many practices are running too lean initially. If you're wanting to do the same daycare, for example, we need to have, we often say you need to have a room and an assistant in order to get these things done same day. And if you don't have that assistant, which we understand sometimes in some areas of the country, it's still really difficult to find capable people to join your team. But if you have those assistants, if you have additional support team,
John Meis (18:07.79)
you
Wendy Briggs (18:32.017)
and you're worried about your profitability, take a good look at how you can leverage that human capital, right? For example, this time of year, we see a lot of practices with team members and they're working on very specific things, right? A lot of times at the front desk, they're just answering the phone when it rings or scheduling appointments and checking patients out. These are all important tasks. But this time of year, at least the last three months, we could have and should have had someone working on unscheduled treatment plans.
Right. And if you set a target for these, these team members that you're trying to justify their cost, you know, here's your goal. We want to see at least, you know, maybe 50 to $70,000 in unscheduled treatment plans converted into the schedule per month. you know, there's, there are very real tangible goals that you can set with your team members. and, and again, if they just do those things when they have time, they never get done. So it has to be.
Very specific, has to be planned and customized based on your circumstances, certainly. But that's just one example. Now, here we are, you know, towards the end of the year, we often see practices kind of stop that effort. But in reality, you have a whole other opportunity of patients who had possibly maxed out insurance last year that still have treatment that need to be done. And now we have a new calendar year beginning with their insurance coverage. So again,
We often say we don't want to make decisions based on insurance coverage, but we're certainly wanting to help our patients leverage the benefits they have. So that's just an example of a way that you can, I guess, challenge your team to help with that profitability formula. know, everyone on the team, when they understand what that profitability formula looks like, can help influence it in one way or another.
John Meis (20:13.96)
Absolutely. So the next mistake that we see is practices that are participating in PPOs in discounted care when they don't have capacity. When they're full, their schedule is booked way out. So the reason why we would be one of the main reasons we would belong to PPOs is in order to fill our chairs. But if our fair chairs are too full and we continue to take this discounted care,
It drives down our reimbursement and now our profitability suffers. And so being thoughtful on whether you're a provider for PPOs or not, and I don't mean this to be all inclusive. It's not an all or nothing thing. If you're out of capacity, if you're scheduling patients way out, certainly would make sense to take a look at all your PPOs. The ones that are lower paying, drop them. And that's a thoughtful decision.
but it's one of the mistakes that we see. On the other side, we see people who are not thoughtful about the amount of demand and capacity that they have that drop PPO is when they don't have enough patient flow. And that's equally disastrous to profitability as well.
Wendy Briggs (21:24.881)
Yes, absolutely. know, when we see practices that are trying to grow and looking to expand capacity, the last thing you want to do is drop those PPOs. And we have doctors who, out of frustration and emotion, we get it. We understand. Sometimes you've just had it up to here and you just can't deal with it another day. But don't drop the one that you have 65 % of your patient base utilizing. So sometimes when we make these decisions, if we don't understand
You know, how many of our patients are under a specific plan and we choose to drop that one because we think it's the worst. You know, we've seen practices unable to recover from that. although we mean well, there's a lot of experts out there and again, from the stage, certainly podcast heroes that say, drop them all. You're going to be fine. That's not always the case. You know, we do see some, practices really struggle to the point that maybe less than a year later, they're saying, how do I get credentialed again? And now they can't because the insurance companies.
don't want them based on their history. So just be very, very thoughtful. I love how you said that Dr. John, you've got to be thoughtful with these decisions because they're make or break decisions often. So we want to make sure that your capacity demand ratio can support a change like that, a significant change. And we don't just drop the hammer on the team and stop all participation next month. Like sometimes this can take six to nine months to really thoughtfully
execute so that you don't lose many of those patients.
John Meis (22:58.114)
Yep, for sure. So there's a lot of emotion around insurance, but we have to use some logic. going just on emotion would be a common mistake that we see dentists make. Very good.
Wendy Briggs (23:09.767)
Very good. Well, Dr. John, if our listeners today have liked this topic, it's such a compelling topic and such a struggle for so many practices right now that our summit in April of 2025, this is the topic really that we've chosen to spend on our summit. It's profitability through five-star patient care. And there's going to be so much incredible information at the summit about how to retain profitability, how to grow profitability while providing
a five-star experience for patients. So we'd love to have you take a look at that. And I'm certain that on our podcast homepage, we'll have a link where you can explore a little bit more about our summit. This is our 20th year. We're super excited that it's been, I can't quite believe it's been that long since Dr. John, and your first few years of summits were without my involvement at all. And I think I joined you maybe eight or nine years in, but it's been a great journey and it's one of our favorite events of the year.
John Meis (24:00.558)
That's right.
John Meis (24:06.966)
It sure is. And we look forward to seeing you all there. And that's it for this episode of the Double Your Production podcast. We're glad you were with us and have a great day and a better tomorrow. Thanks everybody.
Wendy Briggs (24:18.951)
Thanks everybody.
