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Howard Speaks Howard Farran, DDS, MAGD, MBA, Publisher, Dentaltown Magazine

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Employing Equipment
– by Howard Farran, DDS, MAGD, MBA, Publisher, Dentaltown Magazine

We're all still feeling the effects of the turbulent economy – and there's really no way of knowing how much better or worse it could get – but you can weather the storm a bit better just by understanding a little about macroeconomics.

Macroeconomics is made up of three things: people, capital and technology. People (labor) will always be your largest expense. Average practices are running 65 percent overhead – and most of that is going toward labor costs. Sure, you could hire the first five people who walk past your practice at minimum wage, but you're not going to get quality results from them, so the labor variable is fairly static, and big.

On Technology and Efficiency
The one variable that gives you the greatest earning potential, and is easiest to control is technology. I'm amazed how some dentists still operate their practices with the same gear they've had since 1996. Is it the up-front costs that scare you? Is it learning something new? Guys, technology is what is going to make you more profitable and take your practice to the next level!

It blows my mind that there are dentists who don't even have digital X-rays in their offices. Are you kidding me? You're really going to spend 55 percent of your overhead on labor and have a team member take an X-ray by hand (… and then go back in the dark room and develop it, and then when the film comes out an eternity later, someone still has to put it in the trays and mount the film and haul them back in to put on a view box… and that's when you find out if the image turned out?!). If you're still doing this, you really have no idea what your costs are or even what your overhead truly is, not to mention how inefficiently you're running your practice! When you take a film and it instantly pops up on the computer and you miss the apex during a root canal or you didn't open the contact during a bitewing for a flossing cavity, you can just reshoot it right then and there.

By utilizing technology, you can truly know your costs. And you have to know your costs to know how efficiently you're running your practice. My practice implemented a digital charting system years ago. In every dental office I visit that hasn't gone paperless, there is always some receptionist or assistant walking around to every operatory asking the others if they know where Mr. Smith's chart went. It's crazy, and it's a waste of time! If your front desk has access to a digital charting system, when someone calls they won't ever have to put the patient on hold to pull the chart and enter the note. In fact, for the first time in your practice's history you might finally get all the patient notes if you implement a digital charting system. If your receptionist is too busy trying to find or pull a chart, he or she is likely not really listening to the patient on the phone. If your office is paperless, the front desk can just type in the patient's name and jot down notes like, "Patient wants refill on Vicodin." It's such a no-brainer! It's the 21st century – we might not have flying cars, but the technology that's available is incredible, and you need to use it!

Dental Labs and Technology
One of the best examples of a profession adapting to the flow of technology is the dental laboratory business. American dental labs have fought tirelessly for your patronage and have tried to keep up with your and your patients' standards while struggling to keep their doors open in the face of low-cost competition from overseas.

When I got out of dental school in 1987, American dental labs were doing great. Then along came Asia. As we all know, Asia has a massive cheap labor force, so they could do a high-quality restoration for cheaper. Some American labs dropped their prices so much in order to compete that they lost too much of their profit margin and had to shut their doors, while others secretly sent their restorations to China or the Philippines.

American dental labs hung in there not just by marketing themselves better and continually providing quality restorations, but by turning to technology. It's difficult to compete on the labor level, so American labs, with their access to capital, started buying CAD/CAM machines. When a dental lab hires a new employee, it takes the lab about 100 days to teach that person to take an impression out of a box, pour it up in stone, trim the die, wax-up a casting, cast it, clean it out, polish it, stack porcelain on it and so on. And when that person finally learns how to do it he or she can only make about five crowns a day. With a CAD/CAM machine on the other hand, labs can hire a complete stranger off the street, train them in a much shorter time period, and when they're trained they can make 100 crowns in a day instead of five.

CAD/CAM also cuts down on remakes. For 25 years, if we ever needed to do a remake with our lab, I'd always confer with my assistant, Jan, and we'd debate who was going to tell the patient that we had to start all over, take a new impression, and send it back to the lab because what we got won't work. I hated that so much. Currently, when a human being makes a crown, the lab averages around six percent remakes. That's six out of 100 times that you've got to tell a patient that you have to start all over, leaving them to wonder if you're really the right doc for them. When a lab technician makes the crown with CAD/CAM, that percentage drops to about two percent – and that's not because the CAD/CAM machine has a glitch in it, it's because the dentist cut a crappy prep or took a lousy impression. Human error is still the cause. That's why some practices are investing in 3M's LAVA COS chairside oral scanners and some labs are offering price breaks and deals for cases that are sent to them digitally. Labs like Glidewell don't want to receive an impression in a box anymore; they'd rather give you $20 off a crown if you send it in digitally. And think about if you had your own CEREC or E4D milling unit in your own practice! If you needed to remake the crown, you could get it done in 30 minutes right there! Think how efficient your practice could be if you implemented CAD/CAM or a chairside scanner into your practice!

Streamlining
A while ago Dr. Omer Reed suggested scheduling appointments from the operatory. He was on to something. When we get done preparing a crown, for example, because the practice's charting is digital, the assistant can schedule the crown seat right there in the back. There is no need to stroll the patient up to the front desk to do it. The assistant knows more about the patient's situation and treatment anyway. Your front desk probably cannot answer all the questions that need to be answered to schedule treatment – Has the tooth had a root canal? Is it going to take 15 minutes to seat the crown? How long should the scheduled appointment be? Does the tooth need to be numbed? Does the patient have high anxiety? Should we pre-medicate the patient? Your front desk won't know whether it's appropriate to schedule 15 minutes or an hour for the seating. When the hygienist schedules a patient while he or she is in the operatory, the patient is much more likely to commit. If the patient walks out to the front desk when the appointment is over, half the time they'll just keep on walking out the door.

Technology is my favorite macroeconomic variable. It can help us stay afloat. It can help us stay current and make us more efficient. It can help us streamline our daily routine. If we take the time to implement it, learn it and not be afraid of change, it can be widely beneficial to our practices' bottom line. Welcome to the 21st century, gang.
Seminars 2011

Howard Farran, DDS, MBA, MAGD, 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 colleen@farranmedia.com.

Dr. Farran's next speaking engagement is August 20, 2011, at the Tennessee Academy of General Dentistry in Greater Nashville, Tennessee. For more information, please call Colleen at 480-445-9712.

August 20 • Greater Nashville, Tennessee
Tennessee AGD
www.tnagd.org
www.tunica2011.com

September 9 • Minneapolis, Minnesota
Advanced Practice Management
952-921-3360
apm@yorktownoffices.com

August 26 • Manhattan, Kansas
Kansas NW Golden Belt Dental Society
Jillellner@sprint.blackberry.net

September 23 • Houston, Texas
Houston AGD
800-286-1918
www.houstonagd.com
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