March 10, 2024 • 30 mins
In this Ortho Marketing Podcast, Dean Steinman is joined by David Harris, CEO of Prosperident. They discuss the overlooked challenges faced by dental practices in the realm of financial security. Explore the ins and outs of embezzlement within the dental industry, shedding light on the tactics employed by unscrupulous individuals and offering valuable insights to fortify your practice against potential threats.
Ready to elevate your practice? Contact us!
https://orthomarketing.com/contact-us/
About David Harris
David Harris may have the coolest job in dentistry - he gets to chase, and catch, those who steal from dentists. A rule-breaker in his youth, David changed his direction and has spent much of his adult life in the world of investigation and enforcement, where he uses his unrivaled ability to understand the criminal thought process to help educate and protect dentists. David is the Chief Executive Officer of Prosperident, the world’s largest firm investigating financial crimes committed against dentists. David is a licensed private investigator, a Forensic Certified Public Accountant, and a Certified Fraud Examiner. He is the author of two books on embezzlement, the most recent of which, Healers versus Stealers: How to Outsmart the Thief in Your Dental Practice, was released in August 2023. In addition to being a prolific author, David is a frequent presenter at regional, national, and international dental conferences, and his vast wealth of experience, coupled with his keen sense of humor, makes David both an engaging and entertaining speaker.
Ready to elevate your practice? Contact us!
https://orthomarketing.com/contact-us/
About David Harris
David Harris may have the coolest job in dentistry - he gets to chase, and catch, those who steal from dentists. A rule-breaker in his youth, David changed his direction and has spent much of his adult life in the world of investigation and enforcement, where he uses his unrivaled ability to understand the criminal thought process to help educate and protect dentists. David is the Chief Executive Officer of Prosperident, the world’s largest firm investigating financial crimes committed against dentists. David is a licensed private investigator, a Forensic Certified Public Accountant, and a Certified Fraud Examiner. He is the author of two books on embezzlement, the most recent of which, Healers versus Stealers: How to Outsmart the Thief in Your Dental Practice, was released in August 2023. In addition to being a prolific author, David is a frequent presenter at regional, national, and international dental conferences, and his vast wealth of experience, coupled with his keen sense of humor, makes David both an engaging and entertaining speaker.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:00):
Hi. I'm David Harris, theCEO of Prosperitent, and I'm really excited
that I'm going to be doing apodcast with my friend Dean, who is
at one of the guys you haveto know in dentistry. Dean and I
are going to have a pretty wideranging conversation on embezzle it. We're going
to talk about how common it isin dentistry and I'll let it slip now
(00:20):
that it happens a lot. Andmore important, we're going to give you
a couple of strategies that you canuse to protect yourself in your practice.
So you do not want to missthis one. Orthomarketing dot com three hundred
and sixty degree digital marketing solutions foryour practice. Well, hell, everybody
(00:43):
out there in podcast lend. Thisis Dean Steinman from Worth of Marketing.
I guess what we are back anotherpodcast for you. So it is now
twenty twenty four January, and hopeeverybody had a great holiday season. Hopefully
(01:03):
you had an okay year last year. Looked forward to making twenty twenty four
a great year across the board.It was a tough year for a lot
of practices and one of the bigissues across the board in practice we found
had been you know, financials atembezzlement and security. And I have a
(01:25):
very special guest with us today.David Harris has been with us before.
They've been as the president of AlsomeCompanying World, cross Perident and Thome Board.
How are you? I am good, Dane. Good to be with
you and great to be starting offthe new year with a podcast. Appreciate
you joining me coming back up,man, So just what if you can
give us keep us a little overviewof prosper and again tell us who you
(01:48):
are what you do. Absolutely,Prosperitent is a dental specific forensic accounting company,
so we do our invezzlement investigations andwe also helped dentist put the safeguards
in place to protect themselves and weonly work with dentists. So we have
about twenty five people. We've beenin business for thirty four years and a
(02:09):
bit and that's who we are.Okay, So if you and I had
this question before, and you know, so if you can't just you know,
oliminate people from you know back,if you did this, how do
you know that you have this problem? How do you know that you get
because you're focused on you know,you have somebody point in your office.
(02:29):
You don't look at your books.You will look at this. You just
wouldn't make people smile. That's whatwe're in the spile business at the dental
world. So how does one evenknow that there have been a problem with
being a besil the security issue here? There are really two sets of possible
indicators team. First of all,there are financial indicators. And an example
(02:50):
of a financial indicator might be youhave practice management software in your practice that
collects information on how much patients payand how much has been built and things
like that. So an example ofa financial indicator would be that the collections
according to your practice management software donot line up with your bank deposits.
It could be, however, thatthey do line up and there's some other
(03:14):
problem, but we'll maybe get intothat in a few minutes. But you
know, financial indicators. I hadsomebody who I talked to yesterday and she
said, yeah, last year,my practice revenue increased by over a million
dollars, good for her. However, the cash collections went down by about
(03:35):
ten thousand, so she's kind ofwondering what's going on there. The other
type of indicator is behavioral, andit's pretty well established that when thieves steal,
they act in certain predictable ways.For example, a lot of thieves
are reluctant to take vacation because ifI'm stealing, I need to keep some
(03:59):
kind of control over the world waythat information moves around the practice, and
when I'm gone, I give upon that and I tell us stories on
times. A big embezzlement that Iworked on early in my career was a
two dentist peranomal practice and one Mondaymorning, for the first time anybody could
remember, the office manager was notin the practice. Why because on the
(04:25):
weekend she'd broken her leg skiing,so suddenly she wasn't there. And that's
when the wheels kind of came offthe wagon for embezzlement. And around eleven
o'clock in the morning, one ofthe receptionists came into the senior doctor's operatory
took him out, which was abig no no in their culture, and
(04:46):
said, there's something weird going onhere, because I've gotten three of these
very strange phone calls from patients thismorning. Anyway, it was all about
a problem with their bills, andit was all the same problem from three
different patients. And that's when shekind of spell we're at and uh went
to talk to the doctor. Hadthe office manager been there like she was
every other Monday, those calls wouldhave gone to her and not the receptionist,
(05:11):
and she would have just deflected her. Right. Yeah, So you
know conventually before about you know,looking at you know, the collectibles and
this and that, you know,and so I throw out throw off as
manager, We'll just say that they'rethe main culprit just as example. You
know, if they're the ones givingthe doctors the numbers, why would it
(05:32):
not to not believe them, youknow, because doctors you have some stuff
on your plate that have to lookat your report from your your your software
and then report from your bank andthen wind them up. That's might be
over the big gray so that theyhave to reach out. How do they
have to put this as part oftheir daily, weekly, monthly you know
job hype problem and make this partof what they have to do every month,
(05:56):
you know, because obviously they gotpeople do this for them. So
now is something like as a businessowner, I'm like, oh, I
got to ask what melse on mylist to do, but it's important,
So how do you have what doyou suggest from that respective? Well,
you hit on something key there.I mean, everybody who has access to
your money needs oversight. So youknow, if we think of the kind
(06:17):
of the typical pyramidal office structure whereyou have receptionists and an office manager and
an order dentist. One of thejobs of the office manager is to make
sure that the receptionists don't have stickyfigures. But somebody also needs to oversee
the office manager. Could be thedentist. It could be the dentist's spouse,
(06:39):
if if you are privileged enough tohave a spouse who has the time
and the inclination and the aptitude todo that. But the calculations that we're
talking about, and I'm going tomention too, are relatively mechanical. And
what that means is that it couldbe done by somebody else who does not
have d d S or d mD after their name. It just can't
(07:01):
be the office managers hurt on themselvesbecause that would never work. So you
suggest that bring in something that bringingan outside company to do it, like
what counter outside outside bookkeeper. Maybethere's a consultant who wants to do it.
Maybe you've got a kid in collegewho wants to earn severe money.
(07:25):
You know, any of those thingsare a possibility. The point is,
though, that you can't. Youcan't have an office manager who is unsupervised,
because sooner or later, that storyis going to end battle. This
podcast is sponsored by Orthomarketing dot com. Hey even know what the This a
(07:45):
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(08:31):
you practice success with the marketing.It's not just our name, it's what
we do. Is most of thefunds that are taking as a cash or
you know, if it's paper trailand you're gonna get busted eventually, potent,
potentially, unless if you're a bigcash office then it might be a
little harder. But picture way tocheck to us off if somebody, if
(08:54):
somebody paying you by credit card orwhat a my payments so that goes into
your bank account for Thember movie thatwhat isn't that basically the odd you're gonna
get busted pretty quickly because you havestepped very nicely into one of the big
misconceptions. When I talk to Dennisabout embezzlement, the mental picture that they
always start with is the theft oftwenty dollars bills, And the first thing
(09:16):
they'll say to me is, well, I don't take you in much cash,
and I sorry. I'm going togive you two pieces of news.
The first one is you have noidea how much cash actually comes in.
What you know is how much hasturned over to you, which could be
a rotically different number. And ifif I'm a receptionist or an office manager
and I want patients to pay morecash, I can make that happen.
(09:39):
You know, all I have tostart telling them Dean is doctor sonso gives
a ten percent discount if you paycash. So it's totally up to you.
But there's an ATM right around thecorner, and you might want to
go make a withdrawal and pay meso I can give you the discount.
Stealing ninety percent is basically almost asgood as stealing one hundred percent. So
if I if I have to discountsome people to influence their behavior, I
(10:01):
could do that. So that's pointnumber one. Point number two is most
Dannis don't realize how easy it isfor somebody else to cash to check with
their name on it. They almostall assume that that's impossible, and probably
thirty or forty years ago it wasdifficult. In twenty twenty four, it's
really easy. And that's unfortunately somethingwe see almost on a weekly basis.
(10:22):
I'm not going to get into thedetails of how it happens here, just
in case the wrong person is listening, but I can tell you that stealing
checks is is very easy. Athief who's a little bit enterprising can probably
find a way to steal credit cardpayments. And another thing that we're seeing
(10:43):
increasingly is electronic funds transfers getting devorned. So you have some insurance company that's
sending money they think to the practice, and the doctor thinks it's going to
the practice, and it's going tosome of their bank account. Keep us
an overall bird's eye view of thewhole entire industry. What percentage of practices
(11:05):
do you think are actually being embezzled. Well, I guess I have my
own opinions, but I'm going toinstead go to a study that was done
about five years ago by the AmericanDental Association. And what the ADA did
was they asked, I think thenumber was nineteen thousand, Dennis, if
they'd been stolen from, and let'sstart with the good news. Fifty three
(11:28):
percent of them said no, asfar as I know, I haven't been.
And you know this, this doesn'tlend itself to absolute answers. I
think everybody who answered any question herekind of finished with to the best of
my knowledge. So fifty three percentsaid I don't think I've been stolen from,
and of course, the other fortyseven percent said yes, I not.
(11:50):
The ADA asked that that cohort anotherquestion how many times? And now
it gets a little interesting. Sotwenty six percent of the respondents, in
other words, about half the peoplewho said yes, I've been stolen from
said once. As far as Iknow, eleven percent said they'd been stolen
from twice. Two percent were thetriple to burst three times. And the
(12:15):
one that really makes me scratch myhand is that eight percent of respondents had
been stolen from at least four times. So let's do a little frequency exercise
here. We take twenty six percenttimes one and eleven percent times two and
two percent times three and eight percenttimes. Let's assume only four and what
(12:39):
you end up with, Dean,is ninety two embezzlements have already happened in
a cord of one hundred denists.Kah. Interesting. This could be going
out for years. Obviously, Sometimessometimes it asks you there just adds up
a lot. So yeah, andthere are some unknowns there. For example,
(13:00):
we don't know how many people havebeen stolen from and didn't realize it.
You know, how many of thatfifty three percent who said no,
I haven't been actually had either eitherdidn't know it or I guess conceivably knew
about it and just chose not toshare that with the ADA. We also
don't know how many of that group, and for that matter, how many
of the other forty seven percent whohad been stolen from will get hit either
(13:24):
the first time or again and therest of their careers. This is a
really mainstream issue. So with somany practices now would be digitized than being
you know, technology oriented, howhas the increase of using technology influenced risks
(13:48):
associated with embezzment. Technology makes itway easier to steal, you know.
And I started doing this kind ofwork back in the days before computers.
So when dentists used the old pegboardsystem that was kind of the manual ancestor
of practice management software. And whenyou were working in a pegboard office,
(14:13):
there was what you were seeing asa dentist at the end of the day
was raw data. In other words, you saw individual patient appointments, you
saw whose handwriting made entries, thingslike that, and even the least adept
dentists in practice management software in Pegboardin those days could see what was going
(14:35):
on. When practice is computerized thedistance between the dentist and the information got
bigger. And now what you wererelying on what were reports, and reports
are essentially an abstraction of transactions insteadof seeing the raw information. And also
a lot of dentists decided that thatknowledge of practice management software was nobody else's
(15:00):
job and they consciously stepped away fromit. And what I'll say to the
audience is that software is probably moreimportant to your financial wellbeing than your hand
pieces. And yet you all knowthe hand piece like it's your child.
And when it comes to practice managementsoftware, so many dentists are just scared
(15:20):
they will break something if they touchit. And so the knowledge gap between
receptionists and office managers and doctors hasgrown, and that that creates an exploitable
weakness that plenty of embezzlers are happyto step into. It's it's funny,
n they'll talk a lot of practicealways find out what type of software they're
on. And it's still amazing thatthat huge majority are still computer based versus
(15:46):
cloud base okay, and the andeverything mind blowing that they're they're doing.
That that's where brants work could popup and problems like this for us to
board. What's one bit of adevice you could give a practice with listening
this to they just from a technologystandpoint of something they could do to potentially
bendit the am messlement opportunities that areout there. The first thing is to
(16:11):
accept the fact that practice management softwareis not going away. If you're a
dentist, it's going to be withyou for the rest of your career,
and you may as well embrace it. You know, I run into a
whole lot of dentists who do notknow even how to print a report in
their software. And the second pieceof advice I'll give you is print your
(16:32):
own damn reports. As soon asyou allow somebody to print your report,
it handed to you that report wasprinted without you having any control over the
parameters used to generate. And selectivereporting is a real thing. Again,
I'm not going to map it outhere for how people can do it,
but we see a whole lot ofselective reporting where the doctor thinks they're looking
(16:55):
at all the information in the practicemanagement software and they're not look right.
Yeah, yeah, bring somebody aboardand you know, especially if you know
practices it up. But what imaginesthere for ten fifteen twenty thirty years.
You trust these people that are lifelineand you know, so we deal with
(17:15):
that said the sense of topic abezlmit, So, how do you approach
flight education communication to create awareness withoutcausing alarm? Or is that? Or
is it? Or is it ifthis spoke this fire? I think we
need to cause a bit of analarm here. I mean, this is
a This is a mainstream disease thataffects dentists. And most of the dentists
(17:38):
I've met are great people, andthey didn't get into dentistry because they thought
it would make them insanely rich.They went into dentistry because they wanted to
help people and they were They werefortunate to have the manual skills and the
intellectual skills to do it through dentistry. But I see way too many dentists
(17:59):
to abdicate from the finances of thepractice and they simply leave this in everybody
else's hands and hope for the best. And that's exactly the recipe that embezzler
is looking for. And yes,they take advantage. I will quote a
former president of the United States knownas the Great Communicator, and he said
(18:22):
very simple statement, trust, thenverifying well, they and that should be
the principle that every Dennis lives by, every business owner should should do that.
Yeah. Yeah, you can't getby without trusting and without delegating,
otherwise you'll never get out of themud. But at the same time,
the trust and delegate then you knowbias and the ideal way to do that
(18:47):
is to bring in the third partybecause they might because they said they only
have been had a turn on theircomputer or they don't have had a printer
report. So you know, ideallyis just to bring in you had to
talk to you first in if youwant to just somebody, just here's two
things do relate to verify? Howwould you suggest to do that? You
know, there are systems and thereare there are guardrails that can be put
(19:11):
in place that will stop a fairnumber of problems. And we love to
work proactively with a practice owner toput those things in place because that lowers
the risk dramatically. The second thingthat lowers the risk dramatically is practice owner
involvement and it doesn't have to takea lot of time. I think the
time commitment to be effectively overseeing yourpractice is probably ten minutes a day in
(19:36):
an hour to an hour and ahalf once a while that that should be
the time commitment. If you're apractice owner and you don't want to make
that time commitment, then my generalsuggestion to you is you've made a bad
career choice and it's time to reconsiderand you know, think about affiliating with
the DSO or maybe an FQHC.You know, if you're of the right
(19:56):
age and physical fitness level, uhjoin the military. But with the privileges
of practice ownership comes from responsibilities,and this is one of them. You
know, they have to realize oneput a the dentist or business owner,
you know, playing planets a book, you know, and if it choose
one or the other. You know, if you if you want to be
(20:18):
a pure, a pure clinical dentist, there are plenty of options available to
you, but practice ownership should notbe one of them. So now let's
put your your your super vision cristbook football on. Alt's look at the
future. What do you envision thekey challenges opportunities out there in the de
de office, protection, industry andinvestment, you know program you're positioning yourself
(20:44):
to address in the future. Sorry, could you repeat that? That seemed
like an awfully complicated question in theway I heard it wor So basically,
we're gonna look, we're gonna lookin the future, all right, So
what would you see down the roadat the biggest challenge and opportunities Okay that
are out there for somebody from vestlementand how are you what are you doing
(21:04):
to position yourself to address those thatthe potentially is coming down the road.
Well, the challenge right now aswe sit here in the first part of
twenty twenty four is the way theeconomy has moved in. You know,
inflation has eroded people's purchasing power overthe last couple of years. We're now
in a high interest rate environment.And what that means is that you have
(21:26):
staff who bought a house when moneywas cheap, and you know, the
mortgages are just starting to cycle throughand people are renewing it sometimes four or
five percentage points higher than their lastmortgage. So the first thing for a
dentist in the current climate is tounderstand that a lot of their staff are
probably experiencing money problems. Does thatmean automatically that they will steal absolutely not,
(21:52):
but some percentage of them, youknow, who have maxed out their
credit cards and they bore all themoney they can from family and they're in
their eyes at the at the endof the line, financially, some of
those people will steal. So weneed to have probably a better understanding than
most Dennists do about where their staffare in the world. It's interesting,
(22:15):
Dean, when when I watch whathappens at at lunch hour and a lot
of practices. You know, Dennisgoes into their private operatory and they close
the door and they check the stockmarket or surf porn or do whatever they
do, and the staff all gointo the break rome and have a conversation.
One of the suggestions I'd make todentists is, you know, maybe
(22:36):
once or twice a week eat withyour staff. If you haven't done this
before, they're going to find itkind of creepy at first, and you
might have to bribe them with alittle bit of food to get them to
except that you're going to be arounda bit. But the breachrome is the
place where the hierarchy kind of getsleft at the door, and people tend
(22:56):
to relate to each other as people, and that's where you'll learn, you
know, who's put an offer ona house, but they're not really sure
if they if their financing is goingto go through. And you know who,
who's who's got an expensive repair billon their car that they weren't expecting.
You know, that's where you findthat stuff out. And again I'll
reinforce that not everybody with money problemssteals, okay uh, and people steal
(23:22):
for lots of reasons other than financialpressure. But get to know your staff
as people, and you'll be ina lot better place to spot when somebody
is likely to go off the rails. All right, So closing it,
what should a practice do? Today'sone thing somebody should do today that just
let them breathe easily to say I'mnot gonna be or or oh, I
(23:48):
might be one tip to day toActually, I'm going to give you two
answers to that. I'm going togive you. I'm going to give your
audience two financial strategies that they canfollow that are both pretty easy. The
basic challenge with practice management software isto make sure that first of all,
it records accurately what happened, andsecond that it corresponds to what's happening in
(24:10):
your bank account. So the firstthing is a comparison between collections and deposits.
The conventional wisdom was you did thatat the end of each day,
and there are two problems with that. It's a lot more work than what
I'm going to propose, and thereare things called timing differences that make the
real time calculation at the end ofthe day very difficult. So there's a
(24:33):
lot of money that comes into apractice where it's recorded on one day in
your software in a different day atyour bank, when a patient comes in
and pays by credit card, softwarecaptures that today, but it might take
two or three days before that moneylands in your account, and that really
complicates the end of day reconciliation.As soon as you move to doing that
(24:53):
once a month instead of at theend of each day a it takes a
lot less time and b most ofthose timing differences of self result. So
that should be part of a doctor'smonthly routine. The second thing I'm going
to do is introduce something called articulation. And when your audience hear about articulation,
what they're all thinking about is thatrelationship between the mandible and the maxilla,
(25:17):
and in a clinical sense, that'sarticulation. What I'm using that word
very deliberately for what I'm suggesting adentist do. Let's say your office was
opened sixteen days this month, andin your left hand you have sixteen day
end reports that you printed at theend of each day, and you stuck
aside, and in your writing it, you have a month end report that's
(25:40):
a summary of the whole month.Would it be fair to say a dean
that if you total the collections andthe adjustments and the payments for the sixteen
day end reports, they should exactlyequal what the month end report says.
What if they don't. If theydon't, what it means is somebody came
(26:00):
in after hours and they did stuffyou didn't. They didn't want you to
see. Okay, so hard youcatch it? How hard? How hard
to see that? It's easy?I mean, you just add up the
sixteen reports and I built a littlespreadsheet that that you know, makes the
math easy. So if if anybodyin the audience wants that spreadsheet, let
(26:22):
me no one, I'll send itto you. But when you total up
the sixteen they should equal exactly whatthe what the month end summary says.
Or there was extracurricular activity. Simpleand that's how you find it that what
that ensures is that you have seeneverything that happened in the practice this month.
Okay, so it's just another thingto add to your list to do,
but this is important. It's it'squick and you're you know, you're
(26:48):
you know, prioritized. I thinkyou're running a business and making sure that
it adds up is a priority orhanded or outsource it. I mean,
you can't delegate this. You can'task the office manager to do this calculation
because that's kind of like asking thefox if he'd might holding the keys to
the handhouse for you for an hourwhile you went to the gym. But
(27:11):
you know, your spouse, youryour kid, your account and your bookkeeper.
There's somebody who can do this foryou. If you say you know
that that isn't really what I signedup for. What you did sign up
for, though, is is tounderstand that it has to be done and
why it has to be done right. This is so important to you know.
I appreciate you know, the insightand giving this out there. So
(27:33):
in closing two questions, One,if somebody wants to get in touch with
you, get more information, youknow, thinking they might be you know,
this might be an issue for them. What's the best way for them
to do? So they can callus on our toll free number which is
eight eight eight three nine eight twothree two seven. So eight eight eight
three nine eight two three two seven, or they can go on our website
(27:56):
which is Prosperdent dot com and there'sa contact us farm right there. Just
fill it in and somebody will getback to you, usually within a couple
of hours. Awesome, great,as you really have to take a look
at this, and as it wasa you know, delegate it. You's
something that if you don't feel comfortablewith you with numbers or this or that,
(28:17):
just outsources it and you should beable to every month get a basic
report. Didn't take much time orcost much money to do it, but
it's something that's real important to do, especially with with how prevalent this is
without even realizing it. So,you know, thanks so much, and
we've got one final you know questionfor you. What are you binge watching
now? I always chose to watch, so what do you recommend? Yeah?
(28:44):
The series I'm watching when I workOut, which which came on last
season, is called fire Country andit's a it's a story about prison prison
firefighters in California. Okay, what'sit on Netflix? We're going to what's
it on? I'm seeing it onI think Amazon TV. But it's it's
(29:07):
a it's a network show. It'sit was on CBS last year and it
should be back live with us ina couple of weeks. Oh good,
All right, So guys, ifanybody's looking for a new show to watch,
check it out. David suggested that, so, David, thanks so
much again for joining. I appreciateit. Everybody out there podcast land,
thank you so much for listening,Thanks for all of the feedback, and
you know something, just make surethat your numbers add up and if not,
(29:30):
please, you know, reach outto David. These guys are great,
their best in the industry as faras what I know, and highly
recommend them do so, so thanksso much again for joining. I appreciate
it. Everybody in podcast land,thank you so much for listening, and
be happy, keep smiling, andmake twenty twenty four best year ever.
Thanks everybody. Kid worth the marketingdot com than sixty degree Digital Marketing Solutions
(30:02):
for your practice
Hi. I'm David Harris, theCEO of Prosperitent, and I'm really excited
that I'm going to be doing apodcast with my friend Dean, who is
at one of the guys you haveto know in dentistry. Dean and I
are going to have a pretty wideranging conversation on embezzle it. We're going
to talk about how common it isin dentistry and I'll let it slip now
(00:20):
that it happens a lot. Andmore important, we're going to give you
a couple of strategies that you canuse to protect yourself in your practice.
So you do not want to missthis one. Orthomarketing dot com three hundred
and sixty degree digital marketing solutions foryour practice. Well, hell, everybody
(00:43):
out there in podcast lend. Thisis Dean Steinman from Worth of Marketing.
I guess what we are back anotherpodcast for you. So it is now
twenty twenty four January, and hopeeverybody had a great holiday season. Hopefully
(01:03):
you had an okay year last year. Looked forward to making twenty twenty four
a great year across the board.It was a tough year for a lot
of practices and one of the bigissues across the board in practice we found
had been you know, financials atembezzlement and security. And I have a
(01:25):
very special guest with us today.David Harris has been with us before.
They've been as the president of AlsomeCompanying World, cross Perident and Thome Board.
How are you? I am good, Dane. Good to be with
you and great to be starting offthe new year with a podcast. Appreciate
you joining me coming back up,man, So just what if you can
give us keep us a little overviewof prosper and again tell us who you
(01:48):
are what you do. Absolutely,Prosperitent is a dental specific forensic accounting company,
so we do our invezzlement investigations andwe also helped dentist put the safeguards
in place to protect themselves and weonly work with dentists. So we have
about twenty five people. We've beenin business for thirty four years and a
(02:09):
bit and that's who we are.Okay, So if you and I had
this question before, and you know, so if you can't just you know,
oliminate people from you know back,if you did this, how do
you know that you have this problem? How do you know that you get
because you're focused on you know,you have somebody point in your office.
(02:29):
You don't look at your books.You will look at this. You just
wouldn't make people smile. That's whatwe're in the spile business at the dental
world. So how does one evenknow that there have been a problem with
being a besil the security issue here? There are really two sets of possible
indicators team. First of all,there are financial indicators. And an example
(02:50):
of a financial indicator might be youhave practice management software in your practice that
collects information on how much patients payand how much has been built and things
like that. So an example ofa financial indicator would be that the collections
according to your practice management software donot line up with your bank deposits.
It could be, however, thatthey do line up and there's some other
(03:14):
problem, but we'll maybe get intothat in a few minutes. But you
know, financial indicators. I hadsomebody who I talked to yesterday and she
said, yeah, last year,my practice revenue increased by over a million
dollars, good for her. However, the cash collections went down by about
(03:35):
ten thousand, so she's kind ofwondering what's going on there. The other
type of indicator is behavioral, andit's pretty well established that when thieves steal,
they act in certain predictable ways.For example, a lot of thieves
are reluctant to take vacation because ifI'm stealing, I need to keep some
(03:59):
kind of control over the world waythat information moves around the practice, and
when I'm gone, I give upon that and I tell us stories on
times. A big embezzlement that Iworked on early in my career was a
two dentist peranomal practice and one Mondaymorning, for the first time anybody could
remember, the office manager was notin the practice. Why because on the
(04:25):
weekend she'd broken her leg skiing,so suddenly she wasn't there. And that's
when the wheels kind of came offthe wagon for embezzlement. And around eleven
o'clock in the morning, one ofthe receptionists came into the senior doctor's operatory
took him out, which was abig no no in their culture, and
(04:46):
said, there's something weird going onhere, because I've gotten three of these
very strange phone calls from patients thismorning. Anyway, it was all about
a problem with their bills, andit was all the same problem from three
different patients. And that's when shekind of spell we're at and uh went
to talk to the doctor. Hadthe office manager been there like she was
every other Monday, those calls wouldhave gone to her and not the receptionist,
(05:11):
and she would have just deflected her. Right. Yeah, So you
know conventually before about you know,looking at you know, the collectibles and
this and that, you know,and so I throw out throw off as
manager, We'll just say that they'rethe main culprit just as example. You
know, if they're the ones givingthe doctors the numbers, why would it
(05:32):
not to not believe them, youknow, because doctors you have some stuff
on your plate that have to lookat your report from your your your software
and then report from your bank andthen wind them up. That's might be
over the big gray so that theyhave to reach out. How do they
have to put this as part oftheir daily, weekly, monthly you know
job hype problem and make this partof what they have to do every month,
(05:56):
you know, because obviously they gotpeople do this for them. So
now is something like as a businessowner, I'm like, oh, I
got to ask what melse on mylist to do, but it's important,
So how do you have what doyou suggest from that respective? Well,
you hit on something key there.I mean, everybody who has access to
your money needs oversight. So youknow, if we think of the kind
(06:17):
of the typical pyramidal office structure whereyou have receptionists and an office manager and
an order dentist. One of thejobs of the office manager is to make
sure that the receptionists don't have stickyfigures. But somebody also needs to oversee
the office manager. Could be thedentist. It could be the dentist's spouse,
(06:39):
if if you are privileged enough tohave a spouse who has the time
and the inclination and the aptitude todo that. But the calculations that we're
talking about, and I'm going tomention too, are relatively mechanical. And
what that means is that it couldbe done by somebody else who does not
have d d S or d mD after their name. It just can't
(07:01):
be the office managers hurt on themselvesbecause that would never work. So you
suggest that bring in something that bringingan outside company to do it, like
what counter outside outside bookkeeper. Maybethere's a consultant who wants to do it.
Maybe you've got a kid in collegewho wants to earn severe money.
(07:25):
You know, any of those thingsare a possibility. The point is,
though, that you can't. Youcan't have an office manager who is unsupervised,
because sooner or later, that storyis going to end battle. This
podcast is sponsored by Orthomarketing dot com. Hey even know what the This a
(07:45):
dentist looking to give you a practicethe competitive edge that deserves well. Look
no further than the Wealth of Marketing. What the marketing is the dentist orthodontis
choice for digital marketing. Wealth ofMarketing. We specialize in helping with adotis
and dentists just like you, attractmore new patients. A team of experts
knows the ins and outs of thedental and orthodotic industry, and we're here
(08:07):
to help you practice shine. We'regonna supercharge your online presence. We're gonna
optimize your website. We're gonna harnessthe power of social media to connect you
with the patients that you want.Say goodbye to empty chairs and say hello
to a thriving practice. Choose Wealthof Marketing today and watch your patient list
grow. Visit worthomarketing dot com andlearn more and take the first steps towards
(08:31):
you practice success with the marketing.It's not just our name, it's what
we do. Is most of thefunds that are taking as a cash or
you know, if it's paper trailand you're gonna get busted eventually, potent,
potentially, unless if you're a bigcash office then it might be a
little harder. But picture way tocheck to us off if somebody, if
(08:54):
somebody paying you by credit card orwhat a my payments so that goes into
your bank account for Thember movie thatwhat isn't that basically the odd you're gonna
get busted pretty quickly because you havestepped very nicely into one of the big
misconceptions. When I talk to Dennisabout embezzlement, the mental picture that they
always start with is the theft oftwenty dollars bills, And the first thing
(09:16):
they'll say to me is, well, I don't take you in much cash,
and I sorry. I'm going togive you two pieces of news.
The first one is you have noidea how much cash actually comes in.
What you know is how much hasturned over to you, which could be
a rotically different number. And ifif I'm a receptionist or an office manager
and I want patients to pay morecash, I can make that happen.
(09:39):
You know, all I have tostart telling them Dean is doctor sonso gives
a ten percent discount if you paycash. So it's totally up to you.
But there's an ATM right around thecorner, and you might want to
go make a withdrawal and pay meso I can give you the discount.
Stealing ninety percent is basically almost asgood as stealing one hundred percent. So
if I if I have to discountsome people to influence their behavior, I
(10:01):
could do that. So that's pointnumber one. Point number two is most
Dannis don't realize how easy it isfor somebody else to cash to check with
their name on it. They almostall assume that that's impossible, and probably
thirty or forty years ago it wasdifficult. In twenty twenty four, it's
really easy. And that's unfortunately somethingwe see almost on a weekly basis.
(10:22):
I'm not going to get into thedetails of how it happens here, just
in case the wrong person is listening, but I can tell you that stealing
checks is is very easy. Athief who's a little bit enterprising can probably
find a way to steal credit cardpayments. And another thing that we're seeing
(10:43):
increasingly is electronic funds transfers getting devorned. So you have some insurance company that's
sending money they think to the practice, and the doctor thinks it's going to
the practice, and it's going tosome of their bank account. Keep us
an overall bird's eye view of thewhole entire industry. What percentage of practices
(11:05):
do you think are actually being embezzled. Well, I guess I have my
own opinions, but I'm going toinstead go to a study that was done
about five years ago by the AmericanDental Association. And what the ADA did
was they asked, I think thenumber was nineteen thousand, Dennis, if
they'd been stolen from, and let'sstart with the good news. Fifty three
(11:28):
percent of them said no, asfar as I know, I haven't been.
And you know this, this doesn'tlend itself to absolute answers. I
think everybody who answered any question herekind of finished with to the best of
my knowledge. So fifty three percentsaid I don't think I've been stolen from,
and of course, the other fortyseven percent said yes, I not.
(11:50):
The ADA asked that that cohort anotherquestion how many times? And now
it gets a little interesting. Sotwenty six percent of the respondents, in
other words, about half the peoplewho said yes, I've been stolen from
said once. As far as Iknow, eleven percent said they'd been stolen
from twice. Two percent were thetriple to burst three times. And the
(12:15):
one that really makes me scratch myhand is that eight percent of respondents had
been stolen from at least four times. So let's do a little frequency exercise
here. We take twenty six percenttimes one and eleven percent times two and
two percent times three and eight percenttimes. Let's assume only four and what
(12:39):
you end up with, Dean,is ninety two embezzlements have already happened in
a cord of one hundred denists.Kah. Interesting. This could be going
out for years. Obviously, Sometimessometimes it asks you there just adds up
a lot. So yeah, andthere are some unknowns there. For example,
(13:00):
we don't know how many people havebeen stolen from and didn't realize it.
You know, how many of thatfifty three percent who said no,
I haven't been actually had either eitherdidn't know it or I guess conceivably knew
about it and just chose not toshare that with the ADA. We also
don't know how many of that group, and for that matter, how many
of the other forty seven percent whohad been stolen from will get hit either
(13:24):
the first time or again and therest of their careers. This is a
really mainstream issue. So with somany practices now would be digitized than being
you know, technology oriented, howhas the increase of using technology influenced risks
(13:48):
associated with embezzment. Technology makes itway easier to steal, you know.
And I started doing this kind ofwork back in the days before computers.
So when dentists used the old pegboardsystem that was kind of the manual ancestor
of practice management software. And whenyou were working in a pegboard office,
(14:13):
there was what you were seeing asa dentist at the end of the day
was raw data. In other words, you saw individual patient appointments, you
saw whose handwriting made entries, thingslike that, and even the least adept
dentists in practice management software in Pegboardin those days could see what was going
(14:35):
on. When practice is computerized thedistance between the dentist and the information got
bigger. And now what you wererelying on what were reports, and reports
are essentially an abstraction of transactions insteadof seeing the raw information. And also
a lot of dentists decided that thatknowledge of practice management software was nobody else's
(15:00):
job and they consciously stepped away fromit. And what I'll say to the
audience is that software is probably moreimportant to your financial wellbeing than your hand
pieces. And yet you all knowthe hand piece like it's your child.
And when it comes to practice managementsoftware, so many dentists are just scared
(15:20):
they will break something if they touchit. And so the knowledge gap between
receptionists and office managers and doctors hasgrown, and that that creates an exploitable
weakness that plenty of embezzlers are happyto step into. It's it's funny,
n they'll talk a lot of practicealways find out what type of software they're
on. And it's still amazing thatthat huge majority are still computer based versus
(15:46):
cloud base okay, and the andeverything mind blowing that they're they're doing.
That that's where brants work could popup and problems like this for us to
board. What's one bit of adevice you could give a practice with listening
this to they just from a technologystandpoint of something they could do to potentially
bendit the am messlement opportunities that areout there. The first thing is to
(16:11):
accept the fact that practice management softwareis not going away. If you're a
dentist, it's going to be withyou for the rest of your career,
and you may as well embrace it. You know, I run into a
whole lot of dentists who do notknow even how to print a report in
their software. And the second pieceof advice I'll give you is print your
(16:32):
own damn reports. As soon asyou allow somebody to print your report,
it handed to you that report wasprinted without you having any control over the
parameters used to generate. And selectivereporting is a real thing. Again,
I'm not going to map it outhere for how people can do it,
but we see a whole lot ofselective reporting where the doctor thinks they're looking
(16:55):
at all the information in the practicemanagement software and they're not look right.
Yeah, yeah, bring somebody aboardand you know, especially if you know
practices it up. But what imaginesthere for ten fifteen twenty thirty years.
You trust these people that are lifelineand you know, so we deal with
(17:15):
that said the sense of topic abezlmit, So, how do you approach
flight education communication to create awareness withoutcausing alarm? Or is that? Or
is it? Or is it ifthis spoke this fire? I think we
need to cause a bit of analarm here. I mean, this is
a This is a mainstream disease thataffects dentists. And most of the dentists
(17:38):
I've met are great people, andthey didn't get into dentistry because they thought
it would make them insanely rich.They went into dentistry because they wanted to
help people and they were They werefortunate to have the manual skills and the
intellectual skills to do it through dentistry. But I see way too many dentists
(17:59):
to abdicate from the finances of thepractice and they simply leave this in everybody
else's hands and hope for the best. And that's exactly the recipe that embezzler
is looking for. And yes,they take advantage. I will quote a
former president of the United States knownas the Great Communicator, and he said
(18:22):
very simple statement, trust, thenverifying well, they and that should be
the principle that every Dennis lives by, every business owner should should do that.
Yeah. Yeah, you can't getby without trusting and without delegating,
otherwise you'll never get out of themud. But at the same time,
the trust and delegate then you knowbias and the ideal way to do that
(18:47):
is to bring in the third partybecause they might because they said they only
have been had a turn on theircomputer or they don't have had a printer
report. So you know, ideallyis just to bring in you had to
talk to you first in if youwant to just somebody, just here's two
things do relate to verify? Howwould you suggest to do that? You
know, there are systems and thereare there are guardrails that can be put
(19:11):
in place that will stop a fairnumber of problems. And we love to
work proactively with a practice owner toput those things in place because that lowers
the risk dramatically. The second thingthat lowers the risk dramatically is practice owner
involvement and it doesn't have to takea lot of time. I think the
time commitment to be effectively overseeing yourpractice is probably ten minutes a day in
(19:36):
an hour to an hour and ahalf once a while that that should be
the time commitment. If you're apractice owner and you don't want to make
that time commitment, then my generalsuggestion to you is you've made a bad
career choice and it's time to reconsiderand you know, think about affiliating with
the DSO or maybe an FQHC.You know, if you're of the right
(19:56):
age and physical fitness level, uhjoin the military. But with the privileges
of practice ownership comes from responsibilities,and this is one of them. You
know, they have to realize oneput a the dentist or business owner,
you know, playing planets a book, you know, and if it choose
one or the other. You know, if you if you want to be
(20:18):
a pure, a pure clinical dentist, there are plenty of options available to
you, but practice ownership should notbe one of them. So now let's
put your your your super vision cristbook football on. Alt's look at the
future. What do you envision thekey challenges opportunities out there in the de
de office, protection, industry andinvestment, you know program you're positioning yourself
(20:44):
to address in the future. Sorry, could you repeat that? That seemed
like an awfully complicated question in theway I heard it wor So basically,
we're gonna look, we're gonna lookin the future, all right, So
what would you see down the roadat the biggest challenge and opportunities Okay that
are out there for somebody from vestlementand how are you what are you doing
(21:04):
to position yourself to address those thatthe potentially is coming down the road.
Well, the challenge right now aswe sit here in the first part of
twenty twenty four is the way theeconomy has moved in. You know,
inflation has eroded people's purchasing power overthe last couple of years. We're now
in a high interest rate environment.And what that means is that you have
(21:26):
staff who bought a house when moneywas cheap, and you know, the
mortgages are just starting to cycle throughand people are renewing it sometimes four or
five percentage points higher than their lastmortgage. So the first thing for a
dentist in the current climate is tounderstand that a lot of their staff are
probably experiencing money problems. Does thatmean automatically that they will steal absolutely not,
(21:52):
but some percentage of them, youknow, who have maxed out their
credit cards and they bore all themoney they can from family and they're in
their eyes at the at the endof the line, financially, some of
those people will steal. So weneed to have probably a better understanding than
most Dennists do about where their staffare in the world. It's interesting,
(22:15):
Dean, when when I watch whathappens at at lunch hour and a lot
of practices. You know, Dennisgoes into their private operatory and they close
the door and they check the stockmarket or surf porn or do whatever they
do, and the staff all gointo the break rome and have a conversation.
One of the suggestions I'd make todentists is, you know, maybe
(22:36):
once or twice a week eat withyour staff. If you haven't done this
before, they're going to find itkind of creepy at first, and you
might have to bribe them with alittle bit of food to get them to
except that you're going to be arounda bit. But the breachrome is the
place where the hierarchy kind of getsleft at the door, and people tend
(22:56):
to relate to each other as people, and that's where you'll learn, you
know, who's put an offer ona house, but they're not really sure
if they if their financing is goingto go through. And you know who,
who's who's got an expensive repair billon their car that they weren't expecting.
You know, that's where you findthat stuff out. And again I'll
reinforce that not everybody with money problemssteals, okay uh, and people steal
(23:22):
for lots of reasons other than financialpressure. But get to know your staff
as people, and you'll be ina lot better place to spot when somebody
is likely to go off the rails. All right, So closing it,
what should a practice do? Today'sone thing somebody should do today that just
let them breathe easily to say I'mnot gonna be or or oh, I
(23:48):
might be one tip to day toActually, I'm going to give you two
answers to that. I'm going togive you. I'm going to give your
audience two financial strategies that they canfollow that are both pretty easy. The
basic challenge with practice management software isto make sure that first of all,
it records accurately what happened, andsecond that it corresponds to what's happening in
(24:10):
your bank account. So the firstthing is a comparison between collections and deposits.
The conventional wisdom was you did thatat the end of each day,
and there are two problems with that. It's a lot more work than what
I'm going to propose, and thereare things called timing differences that make the
real time calculation at the end ofthe day very difficult. So there's a
(24:33):
lot of money that comes into apractice where it's recorded on one day in
your software in a different day atyour bank, when a patient comes in
and pays by credit card, softwarecaptures that today, but it might take
two or three days before that moneylands in your account, and that really
complicates the end of day reconciliation.As soon as you move to doing that
(24:53):
once a month instead of at theend of each day a it takes a
lot less time and b most ofthose timing differences of self result. So
that should be part of a doctor'smonthly routine. The second thing I'm going
to do is introduce something called articulation. And when your audience hear about articulation,
what they're all thinking about is thatrelationship between the mandible and the maxilla,
(25:17):
and in a clinical sense, that'sarticulation. What I'm using that word
very deliberately for what I'm suggesting adentist do. Let's say your office was
opened sixteen days this month, andin your left hand you have sixteen day
end reports that you printed at theend of each day, and you stuck
aside, and in your writing it, you have a month end report that's
(25:40):
a summary of the whole month.Would it be fair to say a dean
that if you total the collections andthe adjustments and the payments for the sixteen
day end reports, they should exactlyequal what the month end report says.
What if they don't. If theydon't, what it means is somebody came
(26:00):
in after hours and they did stuffyou didn't. They didn't want you to
see. Okay, so hard youcatch it? How hard? How hard
to see that? It's easy?I mean, you just add up the
sixteen reports and I built a littlespreadsheet that that you know, makes the
math easy. So if if anybodyin the audience wants that spreadsheet, let
(26:22):
me no one, I'll send itto you. But when you total up
the sixteen they should equal exactly whatthe what the month end summary says.
Or there was extracurricular activity. Simpleand that's how you find it that what
that ensures is that you have seeneverything that happened in the practice this month.
Okay, so it's just another thingto add to your list to do,
but this is important. It's it'squick and you're you know, you're
(26:48):
you know, prioritized. I thinkyou're running a business and making sure that
it adds up is a priority orhanded or outsource it. I mean,
you can't delegate this. You can'task the office manager to do this calculation
because that's kind of like asking thefox if he'd might holding the keys to
the handhouse for you for an hourwhile you went to the gym. But
(27:11):
you know, your spouse, youryour kid, your account and your bookkeeper.
There's somebody who can do this foryou. If you say you know
that that isn't really what I signedup for. What you did sign up
for, though, is is tounderstand that it has to be done and
why it has to be done right. This is so important to you know.
I appreciate you know, the insightand giving this out there. So
(27:33):
in closing two questions, One,if somebody wants to get in touch with
you, get more information, youknow, thinking they might be you know,
this might be an issue for them. What's the best way for them
to do? So they can callus on our toll free number which is
eight eight eight three nine eight twothree two seven. So eight eight eight
three nine eight two three two seven, or they can go on our website
(27:56):
which is Prosperdent dot com and there'sa contact us farm right there. Just
fill it in and somebody will getback to you, usually within a couple
of hours. Awesome, great,as you really have to take a look
at this, and as it wasa you know, delegate it. You's
something that if you don't feel comfortablewith you with numbers or this or that,
(28:17):
just outsources it and you should beable to every month get a basic
report. Didn't take much time orcost much money to do it, but
it's something that's real important to do, especially with with how prevalent this is
without even realizing it. So,you know, thanks so much, and
we've got one final you know questionfor you. What are you binge watching
now? I always chose to watch, so what do you recommend? Yeah?
(28:44):
The series I'm watching when I workOut, which which came on last
season, is called fire Country andit's a it's a story about prison prison
firefighters in California. Okay, what'sit on Netflix? We're going to what's
it on? I'm seeing it onI think Amazon TV. But it's it's
(29:07):
a it's a network show. It'sit was on CBS last year and it
should be back live with us ina couple of weeks. Oh good,
All right, So guys, ifanybody's looking for a new show to watch,
check it out. David suggested that, so, David, thanks so
much again for joining. I appreciateit. Everybody out there podcast land,
thank you so much for listening,Thanks for all of the feedback, and
you know something, just make surethat your numbers add up and if not,
(29:30):
please, you know, reach outto David. These guys are great,
their best in the industry as faras what I know, and highly
recommend them do so, so thanksso much again for joining. I appreciate
it. Everybody in podcast land,thank you so much for listening, and
be happy, keep smiling, andmake twenty twenty four best year ever.
Thanks everybody. Kid worth the marketingdot com than sixty degree Digital Marketing Solutions
(30:02):
for your practice
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