An interview with Dr. Howard Farran

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 Dr. Howard Farran on PRACTICE MANAGEMENT:

• Some tips to identify delinquent patients.

When you go to a McDonalds, you order the hamburger, then they ask you to pay two dollars for the hamburger, then they give you the hamburger. Businesses that extend credit are insane – that’s why we have banks and credit cards and finance companies. There is no banking skills taught to a dentist in dental school. With Visa, MasterCard, AMEX – why in the world would you need to identify a delinquent patient? You’re not a bank; you are a dentist. If a person needs dental services then they need to pay you cash, or they need to arrange their own credit and come in and do that. You are a dentist, not a banker. You have no training to identify delinquent patients and you shouldn’t be doing banking.

• Male dentist – female staff. Any particular hints to manage female staff.

I would say that in watching dental offices for 25 years, you see what doI’ve watched what the most successful dentists do more of, and what do the least successful dentists do less of.? For instance, dentists who advertise have much bigger practices than dentists who don’t. Dentists who utilize technology are much more successful than those who don’t. As far as management, I think that the dentist is the most expensive person in the office and they have the capability of producing the most revenue by doing dentistry, root canal, fillings and crowns. The most successful dental offices don’t manage any of their female staff; they get an office manager whose skills are excellent in HR, in job descriptions, in performance evaluations, and start every day with a team huddle, and then wire everyone up to Motorola office walkie-talkies, and then finish the day with a wind-up recap of the day. I just don’t see any reason in the world that the dentist should be doing any of that – the dentists should be in the operatory doing dentistry. So get an office manager.

• How do you scold female staff!!!

Scolding people is not effective. All relationships are built on love, trust and respect. I think that you have to have effective communications, you have job descriptions, you have regular, quarterly employee evaluations. Again, while you are obsessed about dentistry during a root canal or pulling four wisdom teeth for an hour, you should have an office manager who excels as a people person, as a leader. I would compare it to sports coaches. Yes there are some sports coaches who are known to scream and yell and to have a lot of drama, but those are usually male coaches with male staff. I think it would be incredibly unprofessional to have a male dentists doing this with female staff. Again I would get a female office manager, and if they are really, really good there should be no drama, no scolding, no yelling, screaming – your office should run like a Swiss clock.

• Common mistake made by new comers.

Newcomers are going to make a lot of mistakes and basically it takes about 10 years for the average dental student to have successful dental skills and a successful office. Dentists are book smart, they all went to college, they know how to read books. But the most successful dentists are a combination of book smart and street smart. Street smartStreet-smart people learn information a lot more cheaply. You see some dentists, and if they want to learn anything they need to go spend $5,000 at some weekend course half way around the country. Then you see the street- smart people just get online and pay 18 dollars and take an online CE course on Dentaltown and watch it with all of their staff. That’s a bargain. You are going to learn every lesson one way; you are either going to learn it the hard way or the easy way. All leaders are readers and getting on dentaltown.com when you get out of school, reading the most posts, taking the most online CE, doing all that stuff at the beginning, you’ll learn everything the easy way, which is by learning from other people’s mistakes. If you decide that you don’t have a time to take a lot of CE and spend a lot of time reading and talking to other dentists, then you will learn every lesson the hard way, which is also the expensive way, and might involve some lawsuits or more. All leaders are readers. Be street smart. Learn the most information for the lowest cost.

• What should be the profit margin in a general dental practice?

Most dentists don’t understand what a profit margin is. They include their wages in the profit margin, which is not generally true. For a true profit margin, to know what you are actually being, what you are earning from doing dentistry, you would be paid what other employee dentists in your area are. Like in Phoenix, Arizona, the average associate dentists who works as an employee earns 25 percent% of their production. So in my dental office, when I do dentistry I pay myself 25 percent% of production because that is the true value of a dentist in Arizona doing dentistry. Profit is owning a business from having money or capital employed in a dental business. And I would say the profit margin for a dental office, I see that the really healthy ones are running somewhere between a wide spectrum of eight and 16 percent%.

• What percentage of the professional receipts could be the auxiliary staff salary ?
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Again, I see two markets. In the United States, there are 117 towns that have more than 100,000 people, and staff salaries are usually anywhere from 25-27 percent%. Now that is being the total cost of having that staff in there, whether that’s health insurance, 401K, uniforms, whatever – all the money it takes to pay those people to work in your office. It’s a much lower cost structure in the rural cities, so in the 19,033 towns in America under 100,000, that percentage of labor is 20 percent%. When you ask, how much to do you pay your hygienists to work there – in a very high cost setting like San Francisco or New York, that can be as high as $50 per hour, whereas in very small town rural cities in the south, that can be as little as $12-$14 per hour.Dr

        

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