Podcast: Becoming More Efficient and More Effective Without Burning Out

Kevin:This is Dr. Kevin Coughlin. You’re listening to Ascent Dental Solutions with a focus on knowledge, education, training and development. I want to give special thanks to VOCO dental supply company for their expertise in training and providing the supplies to allow dentists to provide the highest level of care and service in the dental profession. I also want to give special thanks to Mr. David Wolf for his expertise in developing these podcasts.

Tonight’s topic is how do we become more efficient and more effective without burning out? I am getting prepared for a meeting of approximately fifty team members in my organization this week, and what we’ve done is we’ve taken a cold, hard look at really what the bottom line is. It’s something we all talk about, but very seldom ever do. There’s a big debate and, like most debates, there’s some truth in all parties, but do you accept all dental insurance plans? Do you only accept certain dental plans? How do you decide? And basically, I think every healthcare professional would love to see one thing: control of their fees.

Right now, most dental plans, and certainly medical plans, there is absolutely no control of our fees. It’s almost laughable that you would be in a business, and a business owner at that, and have zero control of the fees. The insurance companies are dictating what fees we have. We’ll take a cold, hard look. And in the real world, most general dentists or specialist dentists accept most dental plans out of necessity. It’s nice for the few that can say they have concierge practices and they only accept fee for service. But I think for the bulk of healthcare professionals, we accept what comes in the door. To me, the real question is how to manage it. And I strongly suggest that you consider some simple approaches that may make your life easier.

In the state of Massachusetts, it amazes me that under government-subsidized programs, such as Common Care Alliance or MassHealth, sometimes the reimbursement for restorations, composites particularly, can be somewhere between $60 and $90. I think most dentists know that when you’re doing a composite and you want to do it at a high level with high level of materials and expertise, it is almost impossible to do these restorations for that type of fee schedule and stay in business. I personally pay our dental hygienist $40 an hour plus approximately $8 to $9 in benefits and all my dental assistants or team members are paid $30 an hour with, again, approximately $8 to $9 in benefits. So if you just add up the two assistants assisting me plus myself doing a restoration for thirty minutes that’s going to give us a reimbursement of between $60 and $90, you can immediately see that you either have to see a hundred patients an hour or you’re going to go out of business.

The simple fact is, the following things, it at least helped me in the state of Massachusetts and perhaps may help you manage your practice and take the stress and reduce some of the financial pain. As you know, many states allow dental hygienists to (unclear 04:01) locally anesthetic. I can tell you for the last six months, in almost all cases, my floating dental hygienists, which takes walk-ins, call-ins, people who are behind in their hygiene recall or recare program, are doing my local anesthetic. I can also tell you that with the Triodent Matrix System, the matrix systems are set up, everything is prepped and ready, the DryShield, which I’m using as a rubber dam, is ready and set, that I have been able to reduce my composite times down in, I believe, a high degree of success, very little to no sensitivity, and very little occlusal adjustments, down to about eight minutes.

What that means is the patient is still booked for twenty or thirty minutes, but the actual clinical chair time that I’m in there, providing that service, is about seven to eight minutes. Although I’d still like to see a compensatory return on my training and expertise, somewhere between $300 and $400 for a posterior or anterior composite, many times, insurance companies have dictated the fees closer to that $60 to $100 rate, and perhaps the techniques of delegating and providing a system for your composites along with other areas of dentistry will help your bottom line.

If you find these topics and other topics interesting, please contact me at Ascent Dental Solutions. My name is Dr. Kevin Coughlin. I’m still practicing full-time. I’ve been practicing for thirty-six years. I grew and built fifteen general dental practices, sold to a managed service organization, and now currently have fifty team members in three offices here in Massachusetts. I want to give special thanks to VOCO for their expertise in providing the supplies and trainings to provide high level of care and service in our practice, Ascent Dental Care, and I want to give special thanks to Mr. David Wolf for his expertise in producing these podcasts. My name is Dr. Kevin Coughlin. I look forward to chatting with you in the near future. Thanks for listening and have a great evening.

Podcast: Breaking up is hard to do with MSOs

Kevin: Welcome. This is Dr. Kevin Coughlin. You’re listening to Ascent Dental Solutions with a focus on knowledge, training, education, and development. I want to give special thanks to Mr. David Wolf for his production of these podcasts. The following episode is a combination of a variety of things as I’d like to think I’m an expert or have significant knowledge with managed service organizations, dental service organizations, because we’ve developed over fifteen practices over my thirty-six-year career. I’ve dealt with the DSOs, created my own DSOs and sold these DSOs to MSOs. For the new listeners, basically the difference is, one is venture capital and equity-backed group and the other is generally a dental-backed group. Both, along with private practices, have the same goals; that’s to expand their business, make them more efficient and effective for a better bottom line.

 

I’m not here to push you one way or the other, but lately for the last several weeks, I’ve been listening to the news and listening to the cost of what’s been going on with attorneys and lawyers and the representation of their clients. I also was privileged to listen to Elizabeth Holmes and what’s been going on with Theranos in the amount of money, in excess of over $300 million in legal expenses for them to defend their business, which is now less than zero as far as their net worth is concerned. And the reason I bring this up is I’ve had some difficulties with managed service organizations. Perhaps some of those difficulties were brought on by myself, perhaps it was brought on by them, or a combination of both. But that’s beside the point. The cost to litigate these differences were in the hundreds of thousands of dollars. The hours and time wasted has been enormous. In my thirty-six-year career, I have had partnership problems, employment-ship problems, a combination of problems along with managed service organizations.

 

And for our listeners, I can tell you this straight up: if you’re going to pick a fight, make sure you pick a fight with a group that you know you can at least control the finances. I can tell you with the MSOs, there’s almost an unlimited, bottomless pit of money, experts, and accountants, and attorneys and they can bury you in time and effort. I would tell the listeners, before you join an MSO, before you consider signing papers with MSOs, it is critical that you have a team that supports you that are experts in the managed service organizations. If you don’t have that, trust me, if a problem occurs, the ability to litigate, the ability to continue the fight, and the ability to come out winning or ahead or even breaking even is actually almost impossible. I can recall walking into several meetings where there were no less than four certified public accountants, six lawyers, and other expert testimonies. I can just tell you that as an average dentist, most of us will not have the financial means to put up the fight. So even though you may be clinically correct, even though your business may be clinically correct, in the end, if you don’t have the time, finances, and expertise, you’re probably going to lose the battle. Or if you’re fortunate enough to win, when you look at the actual cost of that litigation and your time and effort, I would think that in the end you’d say to yourself, you still got the hell beat out of you.

So the message today in this particular podcast is we hope that all discussions, all issues, and all contracts lead to an amiable reconciliation where both parties give a little bit, both parties take a little bit, but in the end there’s a compromise and a solution to the problem. But if anybody’s been through a divorce, if anybody’s been through partnership disputes, I think we all know that in the real world it can get personal, it can get mean, it can get ugly, it can be drawn out.

What the MSOs are particularly concerned about is protecting their reputation because if they allow one dentist, one partner, one individual to break away, that leaves the door open to potentially hundreds, if not thousands of other partners or investors. Their main concern is most of them know that their situation is they want to control, as tightly as possible, the management and the day-to-day workflow along with the production and collection. But as most dentists know, in most states, at least thirty-eight states, an MSO cannot own a dental practice. It is up to the dentist. So in many cases what they’re looking for is a managing dentist, and I don’t mean this in a derogatory manner, but basically someone that they can push and manipulate to do what they want. So the orders are coming from a non-dentist to a dentist and that dentist understands, without it so clear in the contract, that there are certain things that have to be done, certain ways that things have to be done. And if they’re not, trust me, you probably will not find yourself the managing partner.

As far as this podcast is concerned, I would like to say if you have questions, if you need information, I have been doing my consulting business now for five years and I find it extremely rewarding. I am still a full-time practicing dentist. I have now three practices since I sold the fifteen practices to a managed service organization, and I’d like to think that I’m non-biased and I could try to help you if you’re considering joining, competing against, or working with an MSO. The name of my consulting is Ascent Dental Solutions with a focus on knowledge, education, and management. I’d like to give special thanks to VOCO, supply company who provides the expertise, training, and education along with the materials to provide a high level of dentistry on a day-to-day basis. I also want to say special thanks again to Mr. David Wolf and his expertise in producing these podcasts. This is Dr. Kevin Coughlin. Have a great night and I look forward to speaking to you soon.

Podcast: Marketing insights with Erin Rosario

Hello and welcome to Ascent Dental Radio, a program dedicated to the balance between the clinical aspect of healthcare and the business of healthcare. And now, here’s your host, Dr. Kevin Coughlin.

Kevin: Welcome. This is Dr. Kevin Coughlin. You’re listening to Ascent Dental Solutions with a focus on education, development, training, and knowledge. I want to give special thanks to Mr. Doug Foresta and Mr. Dave Wolf who provide the producing of these podcasts. I also want to thank our sponsor, VOCO Dental Supply Company. It’s an international and worldwide company providing excellent support, training, and education for some of the world’s best dental supplies anywhere available for our restorative needs. With that said, we have a special guest today. Her name is Mrs. Erin Rosario. Erin, thank you so much for joining us help the dental community along with other businesses and how can we improve our marketing material and address our customers and patient base in the most efficient and effective manner.

Erin: Thank you so much for having me here.

Kevin:] You’re quite welcome. Tell us a little bit about yourself and your business and how you’re helping dentists all over the country and other businesses with your business.

Erin: My business is called Rose & Gold. We’re a digital marketing agency and we provide a full range of marketing services for clients, specifically logo and website development. We do a lot of brand identity and brand strategy. The biggest thing right now in today’s advertising world is social media, which is very important for people to be advertising there today ,so that’s a big key of what we do as well.

Kevin: Erin, with these SEOs, et cetera, et cetera, Yelp, Google, how do I get my company, and other dentists with their companies, get the best reviews besides just being great to your customer base or patient base? Once you’ve had an excellent customer experience or patient experience, how does that relate to improving our Google Reviews? What’s the most efficient and effective way to get the highest rankings?

Erin: In my opinion, to get the feedback from your customers would be to do some sort of email campaigns after their visits. There’s a lot of different systems that can be used. We particularly use constant contact with our clients in terms of setting up an account that stores emails and sending a wide variety of different email campaigns to them after their appointment. You’re fresh in their mind, that way when they open it, they’ll be amped to give the feedback of their appointment to you and those will get pushed to Google and Yelp depending on how it’s set up so that now, that review is out on the World Wide Web for others to see as well.
Kevin: What happens, Erin, with a negative review? The owner of the business, do they have any control? Whether it’s through constant contact or another social media, that review was less than ideal. Is there a way that the owners can prevent that from going out or controlling that message?

Erin: It depends on which network. Some, there are and some, there just aren’t. What we typically tell people, if it’s on Google, if you have a poor review, you need to find ten good customers to give you good reviews and it’ll boost you back up. Of course, no business is perfect. Typically, we like to recommend that you follow up with that negative review in a positive way so it shows that you are interacting and want to make that relationship better. If it’s unable to be brought down, that will publicly show that you’re willing to work with this customer and make them have a better experience the next time.

Kevin: For the listeners who aren’t aware of it, I’ve owned group practices since 1983. I had a patient base of close to forty thousand active patients with multiple locations here in Massachusetts. I cannot emphasize the importance with managed service organizations, higher competition, doctors that are more market savvy than some of our older dentists, in my opinion, the ability to team up with a firm such as Erin’s opens up a tremendous amount of possibilities. Can you explain for a small business, medium business, or large business, what you would expect to be a reasonable cost per month for services for companies such as yours, Erin?

Erin: Sure. We work with small businesses and very large businesses. What we typically do is in our first appointment, we’ll sit down and figure out the goals of that particular client and, whether using their marketing budget or using what they’re looking to have done, come up with a really customized package. Because every business is so different from each other, there’s always different needs so we really try to customize everybody. But I would say, typically, a range would be anywhere from $500 a month for a social media package. It could go up to $5,000 a month depending on what type of campaigns they want, whether it’s emails and blogging, media coordinating. There’s many other services we provide so you could really get in at a reasonable cost for the smaller business, or if it is a large business, it’s all relative in terms of the services that would be provided for the larger expense. But at the end of the day, hiring an agency like us tends to be less than hiring a marketing full-time staff with benefits and where we’re trained in everything that we do, we find that our clients have been very happy with our services on that we’ve provided them with.

Kevin: Erin, is there truth, at least in the dental field, that most dentists should earmark between 2% and 4% of their gross revenues to marketing? For example, a majority of dentists’ solo practices are usually right around that eight hundred thousand to $1 million a year in revenue. 4% would be roughly $40,000 earmarked for that. We’re roughly about $3100, $3,200 a month. Is there a rhyme or reason to that? Does that seem, in your experience, to be relatively accurate?

Erin: I think three is kind of the lowest in terms of gross revenue, 3%. But I really think it depends on what exactly they’re looking for in that type of revenue. I would say probably a little bit more expense would need to go into it just based on having a larger business and wanting to reach more people to grow. A smaller business can grow smaller but a larger business would particularly want to grow faster. It’s typically the way it works.

Kevin: My expertise is really in dentistry. I do think I have other business knowledge but as a general term, I always felt that to get a new patient into the practice, the cost of that practice ranges right around $200 to $250. For our listeners, each time you see a new patient, if you were to just assess the cost to get that new client or patient in the practice, that range is around $250 so I can’t emphasize to some of our newer dentists just starting their business how critical it is to not just focus in on getting new customers or new patients, but to maintain everything possible, the existing clientele. Because once you’ve obtained them, it is much more cost effective to maintain them and use their goodwill to generate your new patient base. Would you agree with that assessment or want to add anything to that?

Erin: No, I think that that’s absolutely correct. I think just in terms of the marketing side of that, that’s where social media really comes into play right now because that’s the place right now where people are engaging and kind of getting to know more of the personal side of businesses. People are shopping there first prior to searching online. I think that keys into it because the relationship-building can continue after the appointment on social media as they’re seeing things going on in the office and everything like that. We see that that really builds relationships even more so than just your appointment every six months or that kind of thing.

Kevin: Erin, can you take some time and discuss your company’s philosophy? Do you find it easier to just charge your clients a fixed monthly fee or do you feel that you look for a return on investment? What is generally your company’s philosophy?

Erin: Our company is set up so that we have monthly clients and then we also have clients that are on retainer in terms of if they want us to work four hours a month for them just to do miscellaneous tasks. We have a variety of different ways we set it up and it really depends on what the client is looking for. We try to really customize it to fit their needs. For instance, a social media package is a monthly thing and that would be every month consistently until they want to change that package or if they want to add something to it. Typically things like that are monthly. We also do a lot of graphic design and website development. Those, of course, are one-off, project-type based services.
Kevin: And based on your experience in the dental market, what would be an average fee that a client could expect to, let’s say, develop a logo?

Erin: The way we set it up is it’s typically anywhere from $800 to $1,500 but that would include a variety of edits and initial content, logo generation, so that you have an option of different choices that you can do. With that also comes all of the files. We provide the files that you can have put on a t shirt or up to the size of the billboard so you would never have to come back to us for any additional sizing or anything down the road. That’s typically for logo development, where it comes from, and then we’ll always bundle that in with a website. If a website development is part of the package, we’ll group that in with the website and make it more of a customized package.

Kevin: Well, I can tell you in full disclosure, I am familiar with Erin’s business. Their reputation is exceptional. Their service has been over the top and I have not heard any bad reviews. I can tell you that whether you use Erin’s company or a company similar to hers, I think it’s imperative in today’s market that we as dentists take our heads out of the dental operatory periodically, look what’s around us, know that big companies and corporations are constantly taking over and pushing the smaller mom and pop shops around. You have to be smarter, nimble, and you have to be able to beat them on service and care. My motto has always been better care, better service for better results and companies like Erin, I believe, can truly achieve this. Erin, can you tell our listeners what’s the best way for them to reach out and get additional information? How can they reach you? Give us your website, telephone number, and contact information.

Erin: Oh, sure. Our website is roseandgold.com. And they could contact me directly. It’s erin, E-R-I-N@roseandgold.com. Our phone is 413 224 3363.

Kevin: Erin, thank you so much. I know your business is growing in leaps and bounds. I know how busy you are. I appreciate you educating our dental listeners and also other business owner listeners. You’ve been listening to Ascent Dental Solutions with a focus on education, development, training, and knowledge. Our guest has been Mrs. Erin Rosario and her company is Rose & Gold. Today’s topic was the marketing of your practice and the crucial needs for it. I want to give special thanks again to VOCO Dental Supply Company and their expertise and support to the dental profession. Thanks for listening. I look forward to speaking to you in the near future. Enjoy your evening and enjoy your profession.

Podcast: What Is Your Time Worth?

Hello and welcome to Ascent Dental Radio, a program dedicated to the balance between the clinical aspect of healthcare and the business of healthcare. And now here’s your host, Dr. Kevin Coughlin.

Good evening. This is Dr. Kevin Coughlin. You’re listening to Ascent Dental Solutions with a focus on knowledge, education, development, and training. I want to give special thanks to Mr. David Wolf and Mr. Doug Foresta for helping me produce these podcasts. Without their expertise, these podcasts would not be possible. I also would like to send out a shout to VOCO who’s been providing me with the best in most up-to-date supplies, education, and training for my general dental practice and I can’t thank them enough for their expertise and also their ability to sponsor me for these podcasts.

Today the topic is “What is our time worth?” Many years ago, I went to a business seminar and I was told the difference between a laborer and a professional is that a laborer uses their brawn, their muscles, their back. A professional uses their brain. I’ve been practicing clinical dentistry for thirty-six years. As a matter of fact, I just completed another twelve and a half hour day, nonstop, doing orthodontics, implant surgery, temporomandibular joint treatment, surgical extractions. As a matter of fact, I removed twenty-two impacted wisdom teeth just today. The point of this is not to try to impress you with my knowledge or work ethics, but to tell you that my last patient today spent fifty minutes and out of that fifty minutes of conversation, 99% of it was based on what the insurance was going to pay and what it wasn’t going to pay, what was going to be covered and what wasn’t going to be covered. And I can tell you after thirty-six years of practicing extremely hard, like most of my compadres, it’s exhausting, day in and day out, to spend more and more time discussing what some individual’s insurance will or will not cover.

I’d love to tell you that I’m at a position financially that I don’t need to take any insurance. I actually don’t even have to clinically work anymore. I’m sixty years old. I have fifteen different dental practices. I have Ascent Dental Solutions. I’ve sold and resold to two managed service organizations, but I do enjoy practicing. But the frustrations of dealing with the day-to-day aggravation that I’m sure all of my listeners can relate to and appreciate. And the question comes in is during the last twelve months I’ve had an extensive amount of time dealing with lawyers, business attorneys, investment attorneys, financial attorneys, and the one thing that amazed me is they all billed by quarter hours. Whatever the fee is, whether it’s two hundred, three hundred, six hundred, or a thousand dollars an hour, they’re billed for their time. In dentistry, as in medicine, most of us are not compensated for our time. What we’re compensated is if our high speed is spinning. We’re either removing teeth, filling teeth, root canaling teeth, straightening teeth, and that’s how we’re compensated. And in my personal opinion, our expertise and knowledge, which is the treatment plan formulation, the diagnosis, is almost completely non-compensated for.

Here in the western Massachusetts area, basically, we have a limited exam, a periodic exam, and a comprehensive exam with a patient base of which about 65 to 85% are insurance-based patients. There is a standard fee and whether we agree with it or disagree with it, once you accept that insurance plan, you’re obligated to accept that fee. So in an evening appointment, like tonight, where fifty-some odd minutes were spent in the consultation, the reimbursement was $69. If you’re paying your dental assistant, like I am, between 25 and $32 an hour and then another $4 to $8 in benefits, and your dental hygienist between $40 and $44 per hour plus benefits of four to $8 on top of that, you realize how ludicrous it is to be able to spend fifty minutes on a consultation and be reimbursed $69. I would hope that the individuals listening to this get as much aggravation as I am and say -when do we stop and honestly say to ourselves, “We should be compensated for our time, our expertise and our knowledge.”? And that means whatever that fee is, my personal opinion is, adjust that fee based on your overhead, the amount of time you believe you should be compensated for and that fee should be set. If the insurance company decides not to cover it, then that patient is responsible for the balance and the free market will determine whether Mr. and Mrs. Smith want to stay with you or go somewhere else. I think all of us as businessmen and businesswomen in the practice of dentistry understand that you can’t spend fifty minutes and do an excellent comprehensive treatment plan exam and a development of a relationship and be compensated for $69, $49, $39, or even a $125 because mathematically it doesn’t make sense.

The answer is not simple. I personally believe the best approach for all practitioners, along with the patients receiving care, is to allow the market to dictate the fees and you set your fees based on your overhead, your expertise, and the value you place on your time. The patient will make a determination whether they’d rather have a five or a ten minute consultation that only addresses a single tooth rather than a comprehensive plan and that individual may only end up being reimbursed or paying that dental office the $69 fee. I do think that most people are looking for a fair treatment, a high value, on that treatment. In my opinion right now, I believe our profession is being treated more as laborers than professionals. I believe in my heart and in my soul, this is a mistake for the patient base and it’s a mistake for our profession. As we see the managed service organizations and dental service organizations growing at a rate of 18-25%, the reason for this is they’re taking advantage of our lack of acumen when it comes to business. They’re taking advantage of our inability to realize what’s going on outside our four walls. I think that our profession should be shaken up a little bit. They should realize what’s going on and say to themselves, “Enough is enough. We need to band together.” Realize what the strength, weaknesses, opportunities, and threats are to our profession and start saying to ourself, by educating our patient base, that, “It’s your insurance, it’s not ours. As a courtesy, we’re providing the information, knowledge and expertise to handle your forms, but ultimately, you’re paying us for our expertise and our knowledge.”

I realize during this podcast that I’m a little hot under the collar. I realize I’m slightly aggravated and I think you could sense that in my feel. However, in my opinion, there’s no one to blame but myself. No one is twisting my arm to accept these plans, no one is twisting my arm to not just give up and retire. I’ve elected to do it and hopefully share my thoughts and my recommendations to the profession through the podcast.

I would like to say, if you’re interested in feedback and more information, please feel free to email me at kevincoughlin@ascentdentalcare.com. I’d love to hear from you. Perhaps maybe instead of me always giving advice, I can receive some advice from some of our listeners.

It’s important that we take care of our profession because our profession is taking care of us. But I believe when we leave it to large corporations and organizations and insurance companies that may not have our best interest at heart, I feel we’re going to come out on the short end of the stick. I’ve been practicing, as I said, for thirty-six years, and I believe that it is a rewarding and wonderful profession, but some days it just gets to me as I’m sure it gets to you. In my personal opinion is action steps needed to be taken by me, have to be taken by me, if you want a change.

I hope you listened to this little rant and appreciate that although I come across as an expert, I have the same stresses, problems, and aggravation that all practices have. If you’re interested in more information, contact me through Ascent Dental Solutions with a focus on knowledge, education, development, and training. I want to give special thanks again to Mr. Doug Foresta and Mr. David Wolf for their expertise and providing the knowledge to provide these podcasts to you. And I also want to say special thanks to VOCO, continuing their good work and providing us with outstanding processes, procedures, equipment, and supplies so that we can provide the highest level of care and treatment. Thanks again for listening. My name is Dr. Kevin Coughlin. I look forward to speaking to you soon.

Podcast: How To Create a Thriving Dental Practice

Dr. Howard Farran from Dentaltown joins the program to discuss how to create a thriving dental practice, and the biggest mistakes that young (and not so young!) dentists make.

Podcast: Payroll Solutions for Dentists

Jamie Scherban, Senior Business Consultant at Paychex, discusses payroll solutions for dentists and the most common problems that dentists face regarding payroll.

Podcast: How to Build A Successful Dental Team

Joel Dearing joins the program to discuss the takeaways that he learned in his over 30 years of coaching women’s and men’s volleyball on how to build a successful team and the lessons for dentists.
Read more at http://ascentdental.libsyn.com/#tzje0FdSBgQ0bOKf.99

Podcast: How and Why You Should Empower Your Dental Assistants

Kevin Henry joins the program to discuss how and why you should empower your dental assistants and the impact that can have on your practice.

An advocate of today’s dental assistant, Kevin Henry speaks to dental audiences across the nation on topics that empower dental assistants, helping them recognize the leadership role they hold in the practice.

With 16 years in the dental publishing industry, Kevin is the managing editor for Dental Economics and former group editorial director for Dental Products Report. He was recently named as one of the top five influential voices in the industry on Twitter (@kgh23) and serves as the co-founder of IgniteDA, a community designed to enlighten, empower and educate dental assistants.

Read more at http://ascentdental.libsyn.com/#tzje0FdSBgQ0bOKf.99

Podcast: Growing Your Dental Practice Through Referrals

Stacey Brown Randall from Growth By Referrals joins the program to discuss how dentists can use referrals to grow their practice and attract ideal dental patients to their business.

To learn more, visit www.growthbyreferrals.com

Podcast: Dr. Howard Farran From Dentaltown On How to Succeed As a Dentist

Kevin: Welcome. This is Dr. Kevin Coughlin. You’re listening to Ascent Dental Solutions with a focus on development, training, education and knowledge. Before we begin with our special guest, Dr. Howard Farran, I just like to give special thanks to Mr. Doug Foresta and his company, Stand Out and Be Heard. Without his expertise, we would not be able to provide this podcast. We hope you enjoy today’s podcast. I can’t tell you how excited I am that Howard is taking the time from his incredibly busy schedule.

If you don’t know who Dr. Farran is, he not only is a dentist, he’s not only an MBA, but he’s also an international lecturer and he’s fast, easy and understands what’s important to our profession, not only clinically, but business wise. I’m a firm believer that the best clinicians in the world, if they don’t have an association and a knowledge of business, they’re in an uphill battle. And if you’re a great business person and you don’t attain basic clinical skills, then you’re also in an uphill battle.

Without any further ado, I’d like to introduce Dr. Howard Farran for today’s podcast. Howard, thanks so much for joining me today and thanks so much for everything you’ve done for the field of dentistry and all the aspects of dentistry. Thank you so much.

Howard: It is a huge honor to be on your show. I’m a big fan of your AD podcast and thanks for uploading on the Dental Town website and the Dental Town app. These kids have an hour commute to work every day and they just love listening to dental podcasts like yours and mine.

Kevin: Thanks so much. I thought what would be valuable to our listeners are basically three segments of the dental profession. I’d like to start off with that first segment, and that’s that new graduate. They’re in their senior year, they’re really focused on just basically getting the hell out of school, getting things started, but they really don’t have a roadmap. With your expertise, your background and all the information that you have coming into Dental Town, what would you say would be the three to five bullet points that you’d recommend for these young graduates just getting started in their career?

Howard: I had an extremely lucky childhood. My dad was dirt poor and when I was ten years old, he saved up his money and bought a SONIC Drive-In franchise. He went from making like $11,000 a year to $60,000 his first year, then he opened up another SONIC every year for nine years. We went from dirt poor and I didn’t even know what an air conditioner was — I didn’t even know that people had air conditioners in their house — to living in the wealthiest area of Wichita, Kansas in United States.

In that church that we were in was also the founders of Pizza Hut, Dan and Beverly Carney, who ended up with 2,800 Pizza Huts that they sold to PepsiCo, the Shah family that started Godfather’s. So when I was a little kid and went fishing, I would sit next to my dad who had nine restaurants, Roger Carpenter who had 100, Jim Williams had 1,000, Roger Carpenter had 2,800 and there was a lot of takeaways from growing up with these guys.

Number one, you would never know any of them had a dime. I mean, my God, they lived below their means. When Sam Walton died, everybody always says that Bill Gates was the richest man in the world it’s because they don’t know addition. When everybody said Bill Gates is the richest man in the world during my entire life, if you look at the Walton family and Sam and his wife Helen and his four kids were like number 17, 18, 19, 20, 21, 22. If you added them up, they were worth the 40 percent of the poorest Americans in that one family. And his desk was a door on two sawhorses and he drove a pickup truck.

Dan Carney, my God! You damn well would have thought he was homeless if you ever ran into the guy. He had these old corduroy pants. I think he only had about five different pants and shirts. They all lived below their means.

And then the second thing that the takeaway was is every one of those legends in the restaurant franchise business, by the time they had five employees, one of them was a fulltime bookkeeper. All they did was master their costs. These dentists would go in a room and they’ll do two MOD composites and I’ll say, “How much did you charge for that?” And they go, “Like 250 for an MOD composite.” And I’ll at them and say, “250! Dude, 90 percent of your practice is PPOs and this plan you got 125. How were you off a Benjamin on each one of these damn fillings? And what did that room cost you?” No idea.

I remember when I was ten years old and I was working at SONIC and I was making a number one cheese burger and I was dressing it and I put on four pickles, my dad picked up that hamburger and threw it at the wall as hard as he could and he said, “Howard, if you’re going to put four pickles on a hamburger, you might as well give it away for free.” And I was like, “Wow! How many pickles are supposed to be on a hamburger?” He says, “Three.” These guys all knew their cost. And by the time they had five employees, one of them was a bookkeeper. It was amazing.

I hired a bookkeeper when I started out. She’s now the president of my company and makes $200,000 a year. It’s all about cost. These dentists, they don’t know their cost. When you go in there and they have practice management information systems like Dentrix and Eaglesoft, they don’t even have an accounting software. So all your day you only manage people, time and money so all their costs were incurred in time, but they bill in units. The PPO price doesn’t even matter. The only thing that matters is what does that room cost for an hour and how much production do you do in that hour.

Southwest Airlines takes 100 percent of all their cost and reduces it to one airline seat flying through the sky for a mile. If that chair takes off where you’re at in Boston and flies to my house in Phoenix and no one’s sitting in it, it still has costs. That plane is not being flown by the tooth fairy, it’s not being pulled by magic fairy dust, it has costs. These dentists don’t even know what an operatory costs because Dentrix and Eaglesoft, those are the two worst things that ever happened to dentistry. They’re the WWI and WWII of dentistry.

The receptionist is out there, she books an hour for two fillings, she doesn’t even know what it is, then she books some lady to come in for a cleaning for an hour, she’s getting $55 for the cleaning and the hygienist is getting $40 and these dentists don’t even know they’re in quicksand. You have to hire a bookkeeper at every position you have.

I’ll go into a dental office and the supplies last month they were five percent, the next month they’re eight percent, the next month they’re seven percent, the next month they’re nine percent. It’s like how do your supply costs vary 100 percent from month to month? But if I hire a bookkeeper, she’s not in health care so she’s not used to inflated wages. Everybody in health care and government and unions are used to these overkill wages that are market reality so you hire outside of health care, outside of government, outside of unions. You bring in a bookkeeper, I can teach her how to be a dental assistant in a month. But then my supplies, if I say my supplies are 4.5 percent a month, then she’s totally organized, puts up all these bookkeeping accounting systems.

Same thing upfront. My gosh, you hire a girl that worked across the street in a dental office for ten years on Dentrix and I’ll ask during the interview how many reports does Dentrix have? Does it have five, ten, 20, 30? She has no idea. I’m like how did you sit on a software system for ten years and never even go up and click this icon? Mainly because what Dentrix and Eaglesoft does, instead of hooking it up to Quicken or Payroll or Peachtree or Microsoft Great Plains Accounting, they sit there and you send in all these wish list features so they’ve added so much bullshit that 85 percent of all the functions are not even used in any dental office.

Anybody go into anybody’s dental office, go to report generator, go to the utilization, none of it is utilized. But when you Marriott, it’s striped down. They only do like seven things to check you in, but they always do every one and you can’t go from four to five or five to six without doing it in order. When you go to return your rental car to Hertz Rental Car, they only do like five things to check you in. That’s why we switched to Open Dental. I have no connection with Open Dental, they don’t advertise in Dental Town. In fact, they don’t advertise anywhere because they’re the best damn software ever because they are open. So you can have your own programmer program right into it and make your own self a dashboard or whatever. But it’s the most open software for your data.

And if you get a bookkeeper in there — what we have to do is we have to dump everything out of Open Dental into Excel spreadsheets and then dump everything out of Peachtree Accounting into Excel and make all these damn reports because the receptionist, you call up and — if I sell bottled water, I make this bottled water for 90 cents and I sell it to 7-Eleven or Circle K for a dollar, I know it costs me 90 cents, I know I make a dime on every one and then they sell it for $1.15.

In dentistry, the average dentist is signed up for about 12 to 15 different PPO plans, he has no idea what he is charging for any procedure, he has no idea what his room costs and then the receptionist is scheduling your only cost, time — the Fortune 500, the SD500 average payroll is 53 percent. That’s what it is in dentistry. The dentist is making 35 percent on 65 percent overhead, the staff is making about 25 percent, lab bill 10, supply is 6, rent/mortgage/utility is 5 – 6, but that’s all spread out over time and the receptionist is just sitting there saying, “Well doctor, how much time do you like for an MOD composite?” I don’t care how much time you like for an MOD composite. What does that room cost and what are you getting? If that room costs $200 an hour and you put in $145 MOD, you just took a $50 bill grant and shredded it in a shredder.

Dentists also do weird things like they only do quadrant dentistry where they’ll say, “Let’s do the fillings on your right side and have you come back in two weeks to do your left side.” And then right next door to him is an oral surgeon that numbs up all four quadrants all day eight times a day, five days a week for 40 years. I just tell them, they’ll say, “I only want to do the right side today.” “Well, due to your insurance plan, it’s a heavily discounted plan. The only way this works is if I do all of them at the same time. I can only afford to do all these fillings that we do all at once. On this discounted PPO plan, I can’t schedule an hour four different times to do four different fillings. The way your plan works, I have to do them all at the same time or I can’t even do them.” And then it’s like, “Oh, okay,” and then they do it.

When you staff your assistants and your receptionist with bookkeepers, they get numbers, they get cost. Some dentists make 25,000 a month on 40 percent overhead, they only got to do $41,000 a month to make 25,000. At 50 percent overhead, obviously, all you have to do is 50,000. But at 65 percent overhead, which is the national average, you got to do $71,500 for the dentistry to make 25,000 a month. And 20 percent of dentists have 80 percent overhead, they got to do $125,000 of dentistry to make 25,000.

The other thing they do wrong is that they’re doing everything right in their mind, like they get out of school, they go to their church, they ask their pastor or the Rabbi, “Hey, I need a CPA. Do you recommend anyone?” And they’re like, “Sure, there’s a CPA in our church, in our mosque and he’s just a great guy. Go talk to Rick.” Rick doesn’t know anything about dentistry. I’m sure he’s a great guy.

But now we got the Academy of Dental CPAs at www.adcpa.org, they got 6,000 dentists on one database, they got the Institute of Dental CPAs at www.indcpa.org, they got another 2,000. But every dental office, every dentist I know that has switched to someone like Cain Watters and Associates, someone who only does dentists, then they’re sitting there because dentists know if all, they just know it all. They’re not a doctor of dental surgery, they’re a doctor of freaking everything. They don’t listen to anyone, so they’re not going to listen to their CPA.

But dentists listen to other dentists because they hang. They hang out with these dentists in dental school. They know everybody that got into dental school got A’s in calculus and physics and geometry, they know how many ATP come out of glucose on the Krebs cycle, they know their homies are smart. So when that American Academy of Dental CPAs or Institute of Dental CPA sits down and says, “Well, Dr. Kevin Coughlin, we have 6,000 dentists and their supplies range from 4 to 8 percent and the mean is 5.25 and yours are 7 percent. Can we talk about that?”

The dentists love numbers. Just kind of like when you’re in dental school and you’re taking a test and they went and posted the computer printout of everybody’s score and what the curve was, dentists are used to that herd mentality with their other doctor homies. So when they start seeing this data bank and they start realizing what’s going on…

The other thing is with PPOs. Let’s just say you’re in Wisconsin, that’s a very different PPO market than New Jersey, which is extremely different than Kansas. And so when you got a dental CPA who’s doing 150 dentists in Kansas, he can sit there and say, “I don’t know what’s correlation or what’s cause effect, but I do know everybody who’s on this PPO here, whether it’s Connecticut General or Blue Cross, whatever it is, everyone that’s on this PPO is running like 68 percent overhead. But we’ve had several doctors, we’ve had five that dropped these two plans and what we saw is that their gross production went from $1 million a year down to $900,000 a year. But their net went from 1.75 to 2.25, which shows you how much dentistry they were doing at a loss because now they do less dentistry and they net more money.”

And then the other thing is your hygienist comes in and your staff, the whole promotion system is based on astrology. They come in your office once a year and say, “Doctor, the earth has gone around the sun and past Uranus and it’s time to give me a dollar raise.” And you’re like, “A dollar raise? My God! I just talked to my dental CPA and I’m paying you $40 an hour to do $55 of cleaning and we’ve reduced all of our costs for operatory. Of course, we took out crown and bridges and applied that to the dentist, but your operatory is costing $90 an hour and you’re doing $80, I lose $10 every single time you do a cleaning. You take an hour. Is there any way you could schedule 50 minutes so I could break even? Or if you go to 45 minutes, I’ll give you a raise.”

But once you get the team on the same page and you build trust and integrity, if you have no trust and you have no integrity, if you lie, cheat and steal, you can’t lead a team, you’re not going to get repeat business, you lose everything in life. And then when everybody starts getting on the same page with the numbers, everybody starts making better decisions. The front office makes better decisions on how much time to schedule.

A lot of dentists are realizing that composites, I mean oil is trading this morning at $71 a barrel and CLEARFIL SE is trading at $1,250,000 a barrel. These dentists say these crazy whacko things like composites last longer than amalgams. When a dentist says that, you almost got to think his mom dropped him when he was a little kid. The average composite lasts six and a half years, it’s a neuroplastic, the [recut 00:16:45], decay and release composite is just much. You take out with a number four, number six, number eight round bar.

These amalgams are half mercury, you’ll never find mercury in multivitamin. The other half is silver, zinc, copper and tin. Every one of them is antibacterial tin, stannous fluoride, that’s tin. Silver diamine fluoride [detrinia 00:17:04], pediatric nursery, everything in an amalgam is toxic. And when you put in an amalgam, those things last 38 years but the thing is an amalgam doesn’t cost anything and they’re fast.

So when you sit there and you start realizing that this room cost you $200 an hour and you’re getting paid $100 for an MOD composite and you can barely do two of them in an hour, it makes you start thinking well maybe instead of putting in a six and a half year old inner plastic composite without an active ingredient, maybe I should just go back to amalgam. And a lot of these dentists are going back to amalgam because their patients prioritize PPOs and price over aesthetics. I can’t make a bottled water for 90 cents and sell it to you for 45 cents. These are what dentists are doing. They’re doing it all day, every day.

Gosh, at this point, I don’t even know what question you asked.

Kevin: I’m going to tell you this, Howard, first of all, the information is terrific. And if I was to paraphrase and summarize, I think what you’re trying to tell these new graduates is number one; live below your means. I know you want a new Porsche, I know you want a Mercedes, I know you want a Tesla. Hold on to it and save some money and spend below your means. Even though you think you deserve it, in the real world, my data says you’re going to be close to $300,000 in debt. And at a 6 percent interest over seven years, it’s going to cost you almost $4,000 a month to get out of debt. So the first $78,000 to $80,000 is going to go just to deal with school debt. So I believe what you’re trying to say is live below your means. Save some money.

Number two; know what the hell your costs are. When you sit there and look at your schedule, say how much time am I planned for and what am I going to generate for revenue? All that’s great, but if you don’t know what your overhead costs are for your business and your personal life, you’re just swimming in a circle going nowhere.

Last, if I was to say what I learned is remember, three pickles are just as good as four pickles and it’s going to put more money in your pocket and your old man taught you the right way.

Howard, I can’t tell you how much I appreciate this. If these young graduates, these people getting started in the profession they wanted to get more information on you, they wanted to learn more about you and how you’ve conducted your business and helped thousands of dentists throughout the country and the world, how do they reach you?

Howard: I would have them go to Barnes & Noble and buy my book in print or audio called Uncomplicate Business. You only manage three things; people, time and money. That book is my masterpiece. I was 50 years old, had an MBA, had been practicing 30 years and collecting a million dollars a month before I wrote that book. It’s my magnum opus. The secret to writing is rewriting. The first draft was 600 pages, second draft cut down to 400, the final draft, 200 pages. That book could tell you everything you ever need to know. And then it costs like ten bucks.

Kevin: Howard, I can’t tell you how much we appreciate that you’re doing this podcast. I know how busy you are. I personally want to thank you and I want to also say, thank you for what you’re doing for our profession. I hope that we can do a follow up podcast with a focus on those dentists who started off with a bang and a flurry, but for a variety of reasons that I think we both know, their practice is not going in the way they wanted to, they’re not accomplishing what they want and it’s sad. And with the proper processes and procedures, their lives could be turned around, not only clinically, but financially, and that’s better for them and their family.

And then that final podcast is how do we prepare that dentist for the ultimate exit strategy. For whatever reason; health, nerves, desire, they know that they’ve got to take this asset and they’ve got to, in most cases, sell that asset. And how do they get the most valuable return on investment for that asset? And I think with your knowledge and expertise, if you’re willing to spend the time with me, I’d love to follow up on those two additional podcasts.

Howard: Kevin, it would be an honor to come back two more times on your podcast. I’m a huge fan of your podcast. And again, thanks so much for putting it up on Dental Town because these dentists tell me they get in their car, they open up the app, they scrawl through the podcast, say what are they in the mood for. I’ve gotten so many great feedback and comments on your podcast on Dental Town. I think what you’re doing is just amazing.

Thank you so much for transferring your amazing knowledge from doing that for so many years and all the, hell you’re at 14 dental offices — to think that some dentist who’s done it for 30 years, who built 14 years telling these little kids that just walked out of dental kindergarten class everything you know is just a noble course. I’m so proud of you. Thank you for all that you’ve done for dentistry and Dental Town.

Kevin: Thanks so much and I look forward to our next podcast. This is Dr. Kevin Coughlin. You’ve been listening to Ascent Radio.