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Howard Speaks: What Do You Need in 2016? Another Operatory by Howard Farran, DDS, MBA, MAGD

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by Howard Farran, DDS, MBA, Publisher, Dentaltown Magazine

You have to get an extra operatory. End of story.

I've been saying this for almost 30 years, and most of the time people agree with this idea from the beginning. But then there are the people I have to convince. If you don't believe me, believe the data. There are accounting firms that only do dentistry, and—long story short—the data they collect shows that if a dentist has three operatories and he or she adds a fourth, the total revenue usually goes up by at least 25 percent.

There are several reasons why adding an operatory adds to your bottom line, and the main reason is that the extra operatory gives you the space you need to treat emergency patients.

You can go to any hospital in the world and find an emergency room. Why do they all have an emergency room? To save lives, of course. But in most cases, it's also a business decision, because emergency treatment equates to big bucks. Saving lives is the most important factor, but the financial numbers matter too. If you go to a hospital with a heart attack, that could be $100,000 for a coronary artery bypass graft. If Grandpa goes in there bleeding out his back door and he ends up needing colon surgery, that could lead to a $70,000 procedure. This is big money.

CPR for your practice
Emergency procedures at your facility are lucrative too. It's a business. It's a business in which we get to help people and improve their lives, but it's still a business. Let's say your receptionist is getting a call and the person on the line says, "I have a broken tooth and my gum is bleeding—can you do something? Can I come down?" Well, maybe you don't have an extra chair. So the receptionist says, "We can get you in tomorrow or the next day." So tomorrow or the next day comes around and that person doesn't show up. And you say, "I can't believe she never showed up!" Well, that patient asked if she could be seen today and you said, "No, but I'll get you in here tomorrow," and then you're shocked that she didn't show up?

If you can't provide a solution for a patient who has an urgent or emergency need, that patient will find someone who can. Yes, accommodating these patients can throw a wrench into things, but if you have the space and your staff knows how to handle the situation, it can be well worth the trouble.

The emergency patients who come in almost always equal or offset the patients who no-show or cancel or didn't bring their money. Let's say you have someone in the emergency room with a broken tooth, and by the time you finish the bitewing and the exam, you realize you need to do a root canal or an extraction. When you figure all that out, your assistant comes in and tells you, "Oh by the way, your patient who was supposed to be in room five never showed up." Well, that news doesn't hurt your bank account as much when you have an emergency patient who has already more than made up the loss.

What's it about? Numbers.
We have decades of data from thousands of dental offices showing that almost every time a dentist increases the number of operatories, revenue goes up significantly. If it's four operatories to five, revenue will go up about 20 percent. If it's five to six, revenue will increase about 17 percent, etc.

The bottom line is that you need an extra operatory so the receptionist doesn't have to worry about whether there are enough chairs. Chairs are not your cost. We continually see labor as your top cost. Things like payroll, uniforms, health insurance, 401(k)s, etc., are about 24 percent to 28 percent of your overall cost. Next is going to be labs, which for most of us is up to 12 percent of our overall cost. Next you have supplies, but where the heck is the ongoing cost of an extra operatory? It's not even on the Richter scale.

Once you buy what you need, another operatory won't even rival your electric bill. You don't go into a dental office and see a lockbox over the thermostat. Why? Because hardly anyone cares about utility costs in the overall scheme of things. They care about other costs more. An extra operatory is not an expense you should worry about. Not putting in that extra operatory is what you should be worried about.

Again, your cost is not the operatory. Your cost is labor. And when your labor is slowing down and trying to fit everything into a limited number of operatories, you end up with confusion and poor service.

When you build a facility where no one is making bad decisions based on a lack of space, that's when labor (your highest cost) starts running efficiently, production goes up, and overhead comes down.

Just go get another operatory. If you absolutely cannot fit another operatory in your current building, consider a bigger building. It's that important.

Howard Live
Howard Farran, DDS, MBA, is an international speaker who has written dozens of published articles. To schedule Howard to speak to your next national, state or local dental meeting, e-mail rebecca@farranmedia.com
2016
28
FEB		 DSS Academy
TBD, Singapore
11
MAR		 Dr. James Crouse Brace Place Event Wicomico Civic Center
Salisbury, Maryland


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