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Howard Speaks: Talking Monkeys, Reviews Gone Wild, and Valuable Margins by Howard Farran, DDS, MBA, MAGD

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Header: Howard Speaks

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

Why do we get so frustrated by our families, our staff, or a patient leaving a bad review?

When you go to the zoo, you're the only animal in the place that has clothing on. You don't get mad at the rhinoceros because he's standing there naked, with his back facing you. You don't yell at him, "Respect me! Turn around! Face me!" And when you come home from work and your cat's been lying there all day, you don't say, "You're a lazy cat. You haven't cleaned anything!" You have no expectations for these animals, so they never let you down.

So why have we raised these artificial expectations on what are, essentially, talking monkeys? But we don't even call them "talking monkeys." We call them humans, elevate them on pedestals … and then they inevitably let us down. Why do we put such expectations on people, when most of the time we don't even know who they are?

Tell it like it is
I see dentists upset because their overhead is high, they're struggling … and yet staff members still expect a raise every year, based solely on the fact that Earth made it around the sun. No matter if your overhead went up, and insurance companies paid you less.

How could your employees think that? Because they're talking monkeys who don't know overhead—you weren't transparent with your numbers, and didn't show them your daily break-even point. They didn't know that to have 50 percent overhead you had to do $3,000 by noon, then go to lunch and do another $3,000 in the afternoon.

If they don't know what the break-even point is, when a root canal patient cancels an 11 a.m. appointment, your staff will sit around the office for that hour, then get ready for lunch like usual. So if someone calls up with a toothache around noon, there are no openings because it's lunchtime. The office sits empty from 11 a.m. to 1 p.m.

But if everyone had known that the office had to do $3,000 by lunch to pay the bills and that the 11 a.m. root canal had canceled, they'd have eaten their lunches earlier, which would've given them time to see that person who called about the toothache.

Rev up your reviews
Yelp and Google My Business reviews are about to die, and they don't even know it yet. Facebook Live will allow users to post videos, including reviews—going live and uncensored is as easy as updating your status, thanks to the new "broadcast" icon. Once people go to Facebook video reviews, they're never going back to Yelp, where someone might have a good review of a place, but because they're a horrible writer, readers can't figure it out.

With video reviews, if you can tell if the person who left a bad review also happens to be crazy. I see the talking monkey review. Before, if a crazy person left you a bad review, you'd cough up blood clots and want to sue, you're so mad. Now, if someone like that leaves a review, everyone won't take it seriously—they'll say, "Oh, he's just like my crazy uncle that I only see at Thanksgiving and family reunions." People will know crazy when they see crazy.

And if you've done something really well—the patient is all excited and verklempt, and can't even hold back the tears while she's leaving her video review—people are going to see that and get choked up … and they're going to say, "I want to go to that dentist." That's how reviews will go wild.

You should be leaving yourself reviews and doing video—on your Facebook page, you should be saying "Hey, come on down." Remember, most people don't know you. They want to come meet you, to see "the dentist" and, more importantly, they want to feel something, which they don't if they just see some text. A 2-inch-deep ad in the Yellow Pages that says you're a cosmetic dentist doesn't mean anything anymore.

Doing what's profitable
In 2005 the American Dental Association said that our income as dentists peaked at $225,000, and for a decade now it's been sliding down at a rate of basically $4,500 a year. And that trajectory is not changing—it's going down, and down, and down. Why are some dentists making less every single year, while others earn more and more? Talking monkeys set up the insurance fee schedule. If you take all of your overhead and divide it by the number of chairs, let's say each one of those rooms is about $140 an hour. So if a hygienist goes into Room 1 and does a cleaning, exam and bitewing, she's getting $40 an hour, she bills at $140, and the overhead is zero. The profit is zero. Is that fair? Is it "fair" when a black hole sucks in an entire galaxy and spits it out who knows where? I don't believe in fair. I just believe in numbers.

And in the next room I see a dentist doing a filling and he wants to save the tooth. He's conservative. He spends an hour doing an MOD direct composite, and he's in a room for $140 and insurance gave him $200. So he basically did that whole procedure for $60 an hour. The average dentist makes $100 an hour, and now you're working for only $60 because you're trying to do the right thing by being minimally invasive. You're not filing the whole tooth down for a crown or blowing it open for an inlay, onlay or whatever. You did the right thing but you're not making money—is it fair? No. Because it was designed by talking monkeys.

There are only a few procedures in dental offices where you make all the margins. Of the nine specialties recognized by the ADA, endodontists have the lowest overhead—like 38 percent—but all these dentists are saying, "I just don't like molar endo." I don't get that. If you're out there saying, "On Saturday I'm running a 10K," then you'll sign up for a race that's hard as hell, and smiling and doing it for free—or paying to run—but in dentistry you'll only do the easy things, and if it's hard you'll quit. With molar endo, the patient is calling you begging you to fix it. It's $1,000. Insurance pays 80 percent. And what is your overhead? Some gutta-percha, some sealer and a rubber dam? It's nothing but net. So when you tell me you don't do molar endo, what you do have is high overhead.

Taking the time—but not too much
If you're doing fillings, whoever scheduled you for one hour in a $140 room to do a $200 filling doesn't know the numbers. Do you know your cost of goods and services sold—and have you shared them with your staff? If everyone on your team knew the breakdown of that filling, they'd know that you'd make only $60 on an hour-long visit. If that room had been booked for 30 minutes instead, it would be only $70 but that filling would still be $200, so the doc would make $130.

When dentists don't see this data, they'll numb up a patient, then walk back to their office and use Facebook for 10 minutes, then return and only then get to work. But when they start managing people, time and money, and everything is transparent, they know that time is money and start scheduling things in a way that maximizes the profit. The whole game changes.

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
20
MAY		 Southwestern District Dental Association
Tifton, Georgia
10
JUNE		 Gulf Coast Dental Conference
Orange Beach, Alabama
17
JUNE		 MacScot
London

Dentaltown Magazine
April 2024
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