How to educate team members about practice economics

2016 05 24 14 35 52 802 Mc Kenzie Sally 2016 400

Your team members likely think they have a pretty good handle on where the practice stands financially. They know what they make, and some are even aware of what the practice brings in each month. In their eyes, there's plenty of money to go around -- which is why they get upset when you tell them you can't afford to give them a raise.

Sally McKenzie, CEO of McKenzie Management.Sally McKenzie, CEO of McKenzie Management.

We both know they're not factoring in overhead costs and how much writing those monthly checks can eat into practice revenue, skewing their perception of the practice's financial health. Unfortunately, because they don't realize you're telling the truth when you say the practice can't afford raises right now, they start to resent you. They feel like you don't value their efforts and that they're not being fairly compensated for all the work they do. This leads to a negative working environment that could affect performance or prompt once-loyal team members to start looking for a new job.

So how can you help employees see that their perception is not realistic? You have to educate them about practice economics. Talk with them about what it takes to build a profitable practice. Don't let them fill in the gaps with what they believe to be true. Embrace your role as practice CEO and build trust with your team members by giving them insight into practice financials.

Monthly meetings

What's the best way to do this? Discussing practice financials during performance reviews right before you tell employees there aren't going to be raises isn't the best way to handle the situation. I tell my clients that they should hold monthly meetings.

“A monthly meeting gives you the opportunity to go over a practice's overhead and expenses.”

A monthly meeting gives you the opportunity to go over a practice's overhead and expenses with everyone present, so all your team members are on the same page.

These meetings also give you the opportunity to incorporate your team members in solutions. If revenues are down, you can use these meetings to determine why and then devise a plan to get them back where they should be. Look at the areas that have the biggest impact on profitability, including new patient numbers, collections, recall, case acceptance, production, and unscheduled time units. Determine the problem areas and work together to find a solution.

Get your team involved

Keep in mind this isn't just your responsibility. Every team member should be prepared to report on their system and talk about ways to improve any shortfalls.

For instance, have your scheduling coordinator give an update on the practice's monthly production compared with the number of unscheduled time units and the number of broken appointments. Together, you and the rest of the team can discuss how to improve these numbers.

Address other issues

There are many challenges that can keep a practice from meeting its full potential, and these meetings offer a great time to address them. Encourage team members to bring up any concerns they have and work together to come up with solutions.

Too many holes in the schedule? Maybe it's time to start reaching out to patients with unscheduled treatment, identifying patients with unused insurance benefits, evaluating the practice's treatment financing options, and examining case presentation techniques.

Develop a stronger team

Educating team members about practice economics will keep resentment from rearing its ugly head and will encourage them to do what they can to move the practice forward. Your team members will better understand practice financials and will know what it takes to earn a bump in pay -- which may lead to increased production and a more robust bottom line. Team members will earn their raises, and you'll be able to afford to give them the extra pay they deserve.

Sally McKenzie is the CEO of McKenzie Management, a full-service dental practice management company. Contact her directly at 877-777-6151 or at [email protected].

The comments and observations expressed herein do not necessarily reflect the opinions of, nor should they be construed as an endorsement or admonishment of any particular idea, vendor, or organization.

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