Episode Transcript
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Paul Etchison (00:56):
Now, I want to
paint a hypothetical picture in
your mind right now.
Let's picture a restaurant.
Okay.
It looks great.
It's a beautiful place.
You step inside there and it ispacked.
There is so many people waitingto eat there.
There's so many people alreadyin there.
And you're just like, oh mygosh, why is this place so
popular?
(01:16):
Oh my God, I have to eat here.
So you get on the waiting list.
They tell you it's going to befour hours.
You're like, oh my God, what isthis?
It must be worth it.
So you wait four hours and thenyou finally sit down on your
table.
And after you have your meal,you realize that it actually
takes about three hours to getyour food.
It takes 40 minutes to even geta drink at this place.
(01:39):
The service is incredibly slow.
And the reason that they're sobacked up is because instead of
a normal dinner taking maybe anhour for people, people have to
stay for four hours just to evenget their food.
Now, you might have looked atthat restaurant before and you
said, man, this place ispopping.
But now you look at it and yousay, This place is horribly
inefficient.
(02:00):
I want you to think about doesyour practice ever give you that
impression?
Are you one of those docsthat's like, I'm booked out for
three weeks?
I must be doing really well.
Is your schedule maybe lying toyou?
Because we can have a fullschedule in our dental practice.
But I assure you, that is notthe barometer that's going to
show us how efficient we are andhow well we're doing.
(02:20):
The great equalizer, I'm goingto tell you what it is today,
and I'm going to give you someideas of how to make it better
so that you can make more moneyin less time.
Now, you are listening to theDental Practice Heroes podcast.
I am your host, Dr.
Paul Etchison.
I'm an author of two books ondental practice management, a
dental coach, and the owner of alarge five-dock practice in the
(02:43):
south suburbs of Chicago.
I want to teach you how to runyour practice in a way that
gives you mega profits, megatime off, that gives you so much
peace of mind that every daywhen that head hits the pillow,
you feel accomplished and you'relooking forward to the next
day.
So if you want to create ahighly efficient practice that
runs without you and allows youto take a ton of time off, you
(03:04):
are in the right place.
All right, let's talk aboutthis full restaurant analogy.
Now, like I said before, full,it doesn't mean profitable.
A lot of owners, we equatehaving a packed schedule with
success.
But if it's packed with lowyield procedures or we have a
lot of cancellations, it can bea totally false signal.
I remember I had this oneclient who I started working
(03:26):
with.
She started talking about hernumbers, and her numbers weren't
very good at all.
And I was actually reallysurprised because then she
followed up and told me that shewas booked out like over a
month.
And I'm thinking, with thesenumbers, how could you possibly
be booked out over a month?
So we started looking deeperinto it and we realized that the
dollar per hour productionisn't there.
(03:47):
The scheduling methods,horribly inefficient.
The delivery of care, horriblyinefficient.
And then along with that, therewas a mega cancellation rate.
So even when we looked at theschedule the night before and we
said, this looks great, by theend of the next day, it looked
like Swiss cheese.
So full does not meanprofitable.
This is why the greatequalizer, it's dollar per hour
(04:09):
production.
You take what your productionis, adjust it production after
the write-offs and all thatstuff, and then you divide it by
the amount of hours that ittook you to produce that.
That is the great equalizer.
Now there is, I'm gonna giveyou some numbers that I think
you should follow.
All of my associates in mypractice are able to do greater
than $650 per hour production,adjusted.
(04:30):
That is not a stellar number.
I don't think that's what youshould strive for as a dental
owner.
I think we can do much better,but I'm telling you, that is the
bare minimum for my associates.
And I've never had an associatenot hit it.
So people say, How do you getyour associates to produce?
It's within the block system,it's within the way that we set
up our practice.
This is what we teach you to doin our coaching.
(04:51):
Now, what do I think you shouldbe hitting as a dental owner?
I think you should be hittingabout $1,000 an hour.
I know people doing $2,400 anhour.
And I can tell you in myheyday, in my prime, when I was
just grinding like hell, I wasdoing about $1,200 an hour.
This is almost 10 years ago.
And that's back like mess,probably six years ago now.
(05:12):
So it's I don't even know whatthat's worth now, but that's
what I used to consistently do.
Now, could I have done more?
Possibly, but that was thenumber I felt comfortable with.
And it wasn't too much, itwasn't too little, it was really
efficient.
So I want to give you anexample of two different
schedules.
Okay.
These are gonna be verysimplified.
Let's say you have a schedulein which it's an eight-hour
(05:32):
schedule and you do eightfillings.
I know you're saying, I don'tneed eight hours to do eight
fillings.
I know you probably don't.
If you do, call me.
We got to figure this out.
But that's $250 each for eachfilling.
So that's gonna be a $2,000schedule in eight hours.
Okay.
That's a $250 an hour.
Now let's take this otherschedule.
(05:53):
This is gonna be three crowns,and we're gonna do it in half
the time in four hours.
We're gonna say each crown is$1,500.
So as opposed to that $2,000eight-hour day, now we have a
$4,500 four-hour day, and we'reproducing at a level of $1,125
per hour.
Day, the second example isliterally four times more
(06:15):
profitable in half of the time.
So, what I want to show you isthat a full day of low dollar
work can make such a bigdifference in the profitability
of your schedule.
So, this is why.
Why don't we control that?
How do we control that?
Through DPH block scheduling.
We're holding time for bigdollar procedures, we're
limiting the amount of lowdollar procedures that we will
(06:38):
do in a single day.
I remember there was one day,man, dude, I did like 30
fillings in one day.
And as you can imagine, youlook at your numbers at the end
of that day, and it does notfeel like it represents how hard
you worked.
It will not, you're like, holycow, like that was the worst day
ever.
I can't believe we got throughit, what I get paid.
And then you want to barfbecause you're like, wow, that
is a full day of low profitprocedures.
(07:00):
Stay away from that.
All right, for this next point,I want to ask you a question.
What is the most expensive roomat a hotel?
Now, I've asked this beforewhen I've been speaking.
People raise their hand, theysay, uh, it's like that
penthouse suite.
It's the the king's suite, theexecutive suite, this and that.
No, the most expensive room inthe hotel is the empty one.
(07:21):
And it's just like that in ourdental practices.
We need to understand thehidden loss that comes from
cancellations and gaps in ourschedule.
These holes, they matter.
All right, let's talk about ahygienist that's doing about
$150 an hour.
Now, when somebody cancels onthem and they have an opening,
what happens there?
Well, that appointment nowrequired twice as much time.
(07:46):
So it becomes half asprofitable.
So maybe that Profi and theexam and everything was gonna be
$150, but now they had tosecure another time to do it.
So now it took you two hours tomake $150.
We see this so often inpractices with big procedures.
They're not pre-collecting theschedule.
So they might take like a$2,000 procedure and somebody
(08:06):
cancels it.
Now that $2,000 was be reallyprofitable for that day.
But when they cancel an hourbefore their appointment or they
don't show up because theydon't have the money and they
call back to do it again, nowyou just book twice as much
time.
So now it's like it's half asprofitable.
So we need to preserve ourschedule and do everything we
can to make sure that patientsare showing up.
You need to have a cancellationpolicy that is buttoned up and
(08:29):
that your team can enforce.
So it's not always about howfast you or efficient you can
move through the procedures, buthow consistently can you keep
them on the schedule so that wedon't lose time to the empty
hotel room, to the empty chair.
So we talked about how a fullschedule doesn't always mean
we're profitable and how dollarper hour is the great equalizer.
(08:51):
How do we make the scheduletell the truth?
Well, we set up a blockschedule.
We protect the high valueproduction, we make sure that we
have blocks with dollar valuesin it.
We make sure that if you'regonna put an appointment here,
it is of a certain dollar value.
So nothing lower than a dollarvalue can go there.
And that's how we assure at theend of the day, if we fill all
(09:14):
of our blocks, it will alwayshit our production goal because
we designed the schedule to hitthat production goal.
Now, I want to give you anotherexample of dollar per hour.
So we're gonna take the averagedental office in the United
States.
And I don't remember where thestat was.
Don't quote me on the study.
It was around $700,000.
That was the average productionand collections in a dental
(09:36):
office.
Now, let's say this is 48 weeksa year.
So you're this doctor in theoffice is gonna take off four
weeks each year.
So what does this mean?
If we're doing eight-hour days,that means that this office,
the doctor and the twohygienists are producing at a
total of $455 per hour.
I mean, that might be eachhygienist doing $75 an hour and
(09:58):
the doctor is maybe doing $300per hour.
So at the end of 48 weeks, fourdays a week, they're gonna be
at $700,000 a year.
Okay.
So that was 32 hours a week.
Now let's go back to what meand my hygienist, and I don't,
this is not a flex.
I just want to show yousomething, is that I was
producing at a level of $1,200per hour.
(10:20):
All of my hygienists produce ata base level of $150 per hour.
So if myself at $1,200 per hourand each of my hygienists are
producing at $150 per hour each,how many hours each week with a
48-week schedule in a yearwould we have to practice to
reach that average $700,000?
(10:42):
Okay.
Me and my two hygienists and myteam, we would have to show up
a total of 9.7 hours each weekto make $700,000.
So think about that.
If you can get your productionup to $1,200 an hour, if you can
get your hygienist to $150 perhour, you can have an average
(11:04):
dental practice in just 9.7hours per week.
So when you're focusing ongetting new patients, when
you're focusing on adding justone more crown and all these
things that are short-termthinking, look at what can be
done if we start from thefoundation and we build the
systems and the efficiencies andwe bake them into the office so
that we can enjoy the fruits ofour labor and all of our hard
(11:28):
work.
Now, I would never just show upto practice 9.7 hours a week
and say we're good.
I mean, that would be crazy.
But the thing is, this is howyou, as the owner doc, can get
your production up and you caneasily practice one or two days
a week, have associates to dothe other stuff, and you can
enjoy the rest of your time off.
So here are your tacticaltakeaways for this episode.
Do the math, figure out whatyour dollar per hour is for your
(11:51):
schedule.
All you got to do is take yourproduction and divide it by the
hours it took to produce that.
You can do this for yourhygienist, you can do this for
yourself, you can do it for anoffice.
Then, number two, I want you toaudit your procedure mix.
Really get a feel for what kindof days.
Go back and look at some highproduction days and then go and
look at that schedule.
What was on these days?
(12:12):
What made these suchhigh-producing days?
I guarantee it, it was theprocedure mix.
So start figuring out a waythat you can control that
procedure mix so that you don'thave a schedule full of those
low profit procedures.
Three, find out a way to ensurethat you're gonna see a certain
amount of high value time slotseach day.
I tell people when they'redipping their toes into block
(12:33):
scheduling, all you got to do isjust hold a space for two
crowns a day.
Here it is.
Here are where the two crownseach day are gonna go.
Don't book anything else there.
That will give you a taste ofwhat's possible as you get more
intentional with your schedule.
Number four, track yourcancellations and do everything
possible to reduce those.
Realize how costly they are foryour practice and the kind of
(12:57):
ROI you would get from settingup a cancellation system and
setting up protocols andenforcing them with your team
and holding them accountable tohold your patients accountable.
It's not only about holdingyour patients accountable, it's
also about doing the things thatmake them show up too.
So it's a little bit morecomplicated than just make your
patients show up.
But nonetheless, it's somethingyou can do.
(13:18):
And number five, shift yourfocus.
Stop celebrating how far you'rebooked out, stop celebrating
the full days, celebrateprofitable days, celebrate the
days in which you hit yourproduction goal.
And this is what I love aboutblock scheduling is if you can
figure out what your dollar perhour goal is, you can then
reverse engineer how many weeksyou can take off each year.
(13:41):
Say, you know what?
I want to produce $1.5 million.
Cool.
What's it gonna take if you doit $1,200 an hour production?
How many weeks off could youtake?
And then just be happy with it.
We hit 1.5.
I took off all out of time.
It was great.
That's the whole idea behindthe lifestyle practice.
Now, I love the lifestylepractice.
I love Justin Short, I loveDerek.
I mean, they're great dudes.
(14:01):
But the thing is, I like theDPH practice, which is a lot
like a lifestyle practice forthe owner, but the owner gets to
take more time off and let theteam run the practice.
You can have the lifestyle, butyou set up the systems to make
them way more profitable than alifestyle practice.
So, in closing, a full schedulehas the ability to lie to you.
(14:22):
The truth is in dollar perhour, not on how busy the
schedule looks.
So I want you to ask yourselfif you looked at last week's
schedule, do you see trueprofitability and true
efficiency, or do you just seebusyness?
And if you want someone to helpyou and plan with you and guide
you through it, reach out to usat dentalpracticeheroes.com and
set up a free strategy callwith me.
(14:42):
I would love to give you someideas and talk to you about
what's possible.
Thank you so much for takingtime out of your day to spend it
with me.
I really appreciate it.
And we will talk to you nexttime.