Howard Speaks: Key to Success: Transparency by Dr. Howard Farran

Transparency for Dental Practice Management 

by Howard Farran, DDS, MBA, publisher, Dentaltown magazine

You need to have metrics on what you’re doing: If you can’t measure it, you can’t manage it. If I ask a dentist, “How was your day?” and he replies, “Great,” I don’t know what kind of great he’s talking about. Does that mean he outperformed every other dentist in his practice? That all his blocks worked? Everybody needs to be on the same page, and for that to happen, you need key performance indicators.

I recently podcasted with a company called Jarvis Analytics, which provides backbone KPIs for dental service organizations. During our talk, Jarvis founder and CEO Steven Maroulis shared some interesting analytics..

For example, the average monthly net production per DSO location is $120,000, with a variance between $80,000 and $180,000. So if you’re practicing in the same town, the same production numbers are not only possible but also provable, right in your own backyard. If you’re only doing $60,000 a month and saying it’s because of the economy, I might say that maybe you’re just making excuses for not executing well.

Another statistic: The average doctor and hygiene net production per working day at a DSO is $6,353, with a variance between $4,700 and $9,100. Which, again, means your practice should be able to do that!

Share the wealth … of knowledge

But to get into that profit zone every day, KPIs like the ones above need to be known—and hit. There should be no entitlements until you pass the break-even point, which always comes down to same-day dentistry. If a patient with a toothache calls at 4:30 p.m., why are you and your team rescheduling her down the road if you’re still down $300 for the day? You could’ve done a root canal, buildup and crown for $2,000—but everyone just had to leave by 5 p.m. instead of staying until 7.

Look at your KPIs on sundries: Does the office know if your supply budget is too high? (I can guarantee that your supply rep knows!) I tell dentists all the time how they can lower their supplies from 7% to 5%, but they want to have three different kinds of gloves and four different kinds of bonding agents.

Howard Speaks: Key to Success: Transparency

Dentaltown founder Dr. Howard Farran podcasts conversations with the industry’s leading executives, most interesting clinicians and experts who discuss everything from ridge buildups to retirement planning. Some recent installments:

Shaping the Future of Dentistry with AI
Dr. Farran is joined by Ophir Tanz, the founder and CEO of Pearl, an artificial-intelligence company focused on solving fundamental problems in the dental industry; Dr. Bruce Lieberthal, the chief innovation officer for Henry Schein who advises the company’s medical and dental business units about emerging trends; and Dr. Markus B. Blatz, a professor of restorative dentistry, the chairman of the department of preventive and restorative sciences and assistant dean for digital innovation and professional development at the University of Pennsylvania School of Dental Medicine.

Achieving Financial Goals by Reducing Your Taxes
Dr. Farran spends an hour with Tom Wheelwright, a certified public accountant and the host of two popular podcasts: The WealthAbility Show with Tom Wheelwright CPA and The WealthAbility for CPAs Show. Wheelwright’s goal is to help people achieve their financial dreams faster by permanently and legally reducing their taxes. He is a contributor to Entrepreneur magazine, and his work has been seen in Forbes, The Wall Street Journal and The Washington Post, and on Fox and Friends, NPR’s Marketplace and ABC News Radio.

Saving Strategies & Creating Passive Income
Dr. Farran learns from Dr. John Soforic, who was a chiropractor with $200,000 in student debt at age 25 but retired at 49 with $20,000 a month in passive income. Soforic wrote a book called The Wealthy Gardener: Lessons on Prosperity Between Father and Son, which became an Amazon bestseller, hit #46 worldwide on Audible, and has been translated into six languages. 

Being Mentally Prepared for the Challenges of Dentistry
Dr. Farran sits down with Dr. Steffany Mohan, who owns five practices that employ nine associate dentists and 40 team members, and holistic health practitioner Leah Roling, who has a master’s degree in exercise physiology and sports nutrition and is certified by the board of American Association of Drugless Practitioners.

To view these podcasts and more, head to

They’re also available on the Dentaltown app,
iTunes and YouTube.

But if the whole team knows they need to cut costs, they can work together on that. It puts a lot of pressure on your supply rep—someone who doesn’t work in the office—to lower your supply bill; meanwhile, you’re actually the person in control. You’re just not transparent in your accounting.

Your staff needs to know what the break-even point is, and the overhead. A lot of dentists say, “I don’t want my team knowing how much I make.” People understand why dentists make more than assistants, just like NBA players make more than equipment managers. It does no service to anyone to be opaque about the accounting, and if anyone on your staff looks at the numbers and thinks, “I think the doctor earns too much money!” then you can encourage them to buy their own dental office.

(Plus, in my experience, sometimes knowing doctor wages vs. staff wages can actually be motivational in other ways, too: Two of my former dental assistants are now dentists themselves, and a third one just got accepted into dental school in late November. Two other assistants have gone on to hygiene school.)

Be open and honest

When you have any sort of big problem, unless you’re transparent with your spouse, your family, your loved ones, your office team or whoever is important, you’re on your own … and the odds aren’t in your favor. I’ve been to too many dental funerals that involve death by suicide.

Pretty much the only thing that causes dentists to go bankrupt is losing their license, and that in turn is almost always because of a substance disorder. And when you talk to the people the doc lived and worked with, they usually were all aware of it. At one time or another, everybody in those offices probably came in and saw a problem, but looked the other way.

They knew there was a massive problem but ignored it, because they worked for a “successful doctor” who was making money and they didn’t want to believe it. Humans always start with what they want to believe, and then fill in the blanks, instead of working like a doctor or scientist who looks at the observations, then measures them to see if they fit inside existing known models. Sometimes the models prove to be very trustworthy, and sometimes an observation destroys the existing model and your back to the drawing board—but you know what the observations are and the models they’ve been seen in.

You want to nip your problems? It needs to be a team effort. If numbers are bad, it’s going to affect the whole office. If substance abuse is bad, it’s going affect the whole office. So get your whole team together, and set a culture of transparency and checks and balances.

I promise, you’re going to have a lot of fun playing this game together!


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