GPNewsFlash Sep 2012

SB694 R.I.P.

It is DEAD! SB694 (Padilla) was the bill proposing the creation of a California Office of Oral Health with a State Dental Director to oversee public health dentistry and to complete a workforce study on Dental Assistants and Dental Hygienists performing tooth preparations for and placement of amalgam and composite restorations, preparation of teeth for and placement of stainless steel crowns, pulpotomies on deciduous and permanent teeth, and extraction of deciduous teeth in children up to the age of 21. Incredibly, not only were these procedures being promoted to be done by non-dentists, but under a variety of levels of supervision including remote supervision, where there would not be a dentist physically present where the procedures were being done. The bill had sailed through the California Senate and was racing its way through the Assembly until it hit the Assembly Appropriations Committee. The bill was not released from the Appropriations Committee which killed it on August 16.

For a year the CAGD has been working to defeat this bill. We have been shouting out the true intentions of this legislation at virtually every dental society meeting and have been at the microphone at the 2011 CDA HOD and the Special HOD on SB694 in March of this year. We have been very troubled with how CDA leadership and their media messages have downplayed the significance of this legislation and worked to make it seem to be a very low keyed topic.

This article is a celebration of the death of SB694 and recognition of most of the people and efforts involved in this battle. The CAGD was resolute in its opposition to the concept of non-dentists performing surgical and irreversible dental procedures on children and held firm to our position in the face of strong pressure from the California Dental Association. We were repeatedly confronted with the question, “how can the Academy of General Dentistry, an organization committed to education and evidence based dentistry, oppose a study?…It is JUST a study…It is NOT a workforce project.” Well…our answer was that this study was to be a political theater whose outcome would be easily controlled from the onset and, as we predicted, IT DID BECOME A WORKFORCE PROJECT!

The bill started out being instructions to the Director of Consumer Affairs to report to the Legislature on access to dental care in California. Later, it was amended to require the Dental Board of California to conduct an analysis on the dental care needs of California residents. It was further amended to order the creation of the position of Dental Director, a licensed dentist, who would first determine if a study of workforce was needed, and if it was determined to be needed the Dental Director would convene an advisory group to determine the design of the study. SB694 was amended seven times over its journey through the legislature and in the end the Dental Director position was made optional, and if it did exist it would only have administrative oversight on the study. The study started as an assessment of access to care for Californians and ended up being a workforce pilot project. At a stakeholder’s meeting with Senator Padilla, I personally brought up my concerns about how the study was being designed while the bill was being pushed through the legislature instead of waiting for the Dental Director, and the senator very boldly stated that it would be much better to have the study determined by 120 sets of eyes (the legislature) than by one set of eyes. Senator Padilla was going to control the study to show what he and The Children’s Partnership wanted…that non-dentists performing surgical dental procedures was safe and effective.

The bill started in the senate in January and was to pass through three committee hearings before going to the floor of the senate for a vote. The first hearing was the Senate Business and Professions committee where Dr. Eric Wong spoke against SB694 on behalf of CAGD. The bill then moved to the Senate Health Committee where Dr. Bill Langstaff and Dr. Stephen Skurow flew up from southern California to testify. The last senate hearing was in Senate Appropriations and CAGD was not able to have a member testify although Dr. Steve Leighty, a Roseville oral surgeon, spoke in opposition to SB694. He spoke as a representative of the California Association of Oral and Maxillofacial Surgeons who had taken a position in opposition to non-dentists performing surgical dental procedures. Interestingly, the California Nurses Association also spoke against SB694 at all the hearings because of non-dentists performing surgical procedures. By January 26 the bill was unanimously approved in all senate committees and went on to the senate floor where it passed 34-2 with 4 abstention/no votes.

CAGD is very concerned about the oral health of all Californians, especially our children. We fully support the concept of a Dental Director in California. Drs. Langstaff and Acheson met with Senator Padilla’s legislative staff two times in an effort to promote alternatives to creating a new dental provider in the effort to address dental decay in children. We used the AGD Whitepaper to argue for ways to improve access to care by using dental residencies, student loan forgiveness, improved reimbursements, and expanded Federally Qualified Health Facilities to facilitate existing dentists providing care in underserved areas. Before the bill was heard in the Assembly there were two stakeholder meetings with Senator Padilla. Drs. Acheson and Langstaff representing CAGD and Dr. Harriet Seldin representing the San Diego County Dental Society spoke against the workforce study and for various methods of utilizing existing dental providers to address the dental care needs of children. Although we had the minority opinions in the room, Senator Padilla invited us to the meeting both times to hear our suggestions.

In June the craziness began all over again as the bill passed through Assembly Committees. Dr. Acheson testified at the Assembly Health Committee. In July, American Student Dental Association leaders Marquis and Hellickson joined Dr. Penumetcha in testifying against SB694 at the Assembly Business and Professions Committee. The California Nurses Association continued testifying against SB694 at both meetings. Finally, in August the bill went to the Assembly Appropriations Committee and was placed on the suspense file and kept in suspense so that it would not reach the Assembly floor for a vote.

In the craziness that exists in the mirrored halls of the legislature, SB694 was defeated in Assembly Appropriations Committee by being held in Suspense with no public testimony and no public votes. We really don’t know what issues or arguments really killed SB694. The unfairness of a two tiered dental system? The degradation of patient safety by allowing non-dentists to perform surgical procedures on children under remote supervision? The reality that there are more dentists per capita in California than any other place in America and that dentists are leaving the state because of lack of business? The several studies that demonstrate that non-dentists don’t make economic sense? Or was it the concern that creating the Office of Oral Health would obligate California to pay for the office and staff when private funds ran out that killed the bill? We really don’t know. But what I do know is…DEAD IS DEAD!

Warning: this issue will be back. Get ready.

Motivating and Managing

“If production in a practice reaches a plateau or falls into decline, the situation must be turned around without delay.”

Prioritizing Production The Key to Stimulating Practice Growth

As a result of the ongoing economic recession, dentistry has experienced profound changes during the past few years. Some dentists seem to think the situation is beyond their control and they try to ride out this recession the best they can. Others realize they must begin doing business differently. However, some of these dentists lack experience in strategic planning so they are uncertain about what to do. They wonder how they can increase their production quickly. An excellent answer to this question is “prioritize production.” You can use this proven, practical business technique to stimulate practice growth immediately in spite of economic pressures.

Putting what counts right up front The concept is very simple. In the business world, it means sequencing actions so that the greatest improvements will be achieved as quickly as possible. The principle applies perfectly to business systems in dental practices. If production in a practice reaches a plateau or falls into decline, the situation must be turned around without delay. This can be accomplished by prioritizing production—implementing production-generating measures designed to jump-start practice growth.

Setting specific targets for production priorities There are a number of effective ways for practices to increase production as soon as possible. Here are several of the best. Note that they are all driven by specific targets.

Keep 98 percent of all patients scheduled at all times In today’s business world, one of the core principles is to do more with what you already have. For a dental practice, that means making sure active patients remain active by scheduling their next appointment before they leave the office. Current patients are obviously the economic engine of a dental practice, and establishing protocols to keep them coming back is relatively easy to do. Scheduling almost all patients consistently is not only the most effective way to retain patients, but it is also an excellent way to ensure their long-term oral health.

Reactivate 85 percent of overdue patients Overdue patients are those who have not been in for an exam in 18 to 48 months. A successful tactic for reactivating these patients is to entice them with a free visit—this would have been unheard of a few short years ago. Now, it can be highly cost-effective, and it is a proven technique used by many businesses outside of dentistry. The practice can welcome inactive patients back with a “return” visit at no cost. The offer could apply to either a hygiene visit or an initial exam. Rather than extending this opportunity only once, follow up with a courteous 3- 3-3 campaign—three phone calls (preferably to cell phone numbers), followed by three emails, followed by three reminders in the mail. Such an approach usually motivates many inactive patients to return to your practice.

Reduce no-shows and last-minute cancellations to 1 percent or less Since the recession hit, many practices are reporting higher rates of no-shows and last-minute cancellations. The schedule openings created by this patient behavior usually go unfilled, and the practice loses potential production. Consider this: A 5 percent no-show and cancellation rate will cost the practice one entire year of production over a 20-year period. Practices can reduce their no-show/cancellation rate by using Value Creation Scripting™ * to train patients to value their appointments. This training process can begin when the patient makes an appointment and then continues with pre-appointment reminders. If a patient is late for an appointment, call him or her immediately to ensure everything is OK. If you are unable to reach the patient, call again within 24 hours. It is also beneficial to explain in advance to all patients that there is a charge for missed appointments. This will reinforce the value of appointments. Even though the practice will end up waiving this penalty as a goodwill gesture, it still helps to underline the value message.

Collect 99 percent of all money owed to the practice In an ideal world, the practice would collect 100 percent. However, realistically, lost revenue of about 1 percent is almost impossible to avoid. Focus on collecting the other 99 percent. Before dental treatment is provided, offer these four major financial options:

1. A 5 percent discount on up-front payments
2. Payment by credit card
3. Payment of half before treatment and the other half upon completion
4. Outside patient financing In addition to these, use Value Creation Scripting to ask for any payments due at the time of service.

Each of the strategies above will increase practice production immediately and often by a significant amount. There are many other techniques for prioritizing production that are proven to increase production quickly. Most dentists can grow their practices by 15 to 20 percent in one year—but this will not happen automatically. Production prioritization has the power to generate substantial gains as quickly as possible. In an era when 75 percent of practices have plateaued or declined in the last four years, an excellent business tool like prioritizing production can have an immediate and impressive impact.
is a scripting tool developed by Levin Group that enables more effective and influential communications with patients.

Published with permission by the Academy of General Dentistry. © Copyright 2012 by the Academy of General Dentistry. All rights reserved.

Roger P. Levin, DDS, is a third-generation general dentist and the chairman and CEO of Levin Group, Inc., the largest dental practice management and marketing firm in the United States. Dr. Levin presents more than 100 seminars per year, has authored more than 3,000 articles and white papers, and written more than 60 books.

What are Dental Practice Management Companies?

I was asked to write an article on this subject. Having worked with UOP and UCSF students for many years, I have observed the difficulty for young dentists to secure a full-time job. I know several dentists who graduated last year still can’t find a full time job.Ten years ago, a new dentist could easily obtain a bank loan for the purchase of a dental practice. With the average dental school debt being over $250,000, these graduates have great financial difficulty opening their own practice. Today, it is much more difficult. Over the past decade, the dental management companies have solicited veteran dentists with well-established practices or recently- graduated dentists to employ. I understand that many of these new practitioners are finding opportunities in the practice management companies. What are they….?

In theory, dental management companies were established to allow doctors the freedom to practice without having to worry about the day-to-day managerial functions of managing their businesses. The dentists were understood the impression that, in addition to the elimination of these daily administrative headaches, the management companies would release their bound-up equity. Further, they would assist them in the development of new revenue streams, diminish and/or control overhead, and protect them from the onslaught of managed care. Allegedly, they build managed-care contracting networks and supposedly negotiate sweeter deals. Many have not turned out that way!

Some public dental practice management companies appear to have moved through the acquisition and operations process at an acceptable pace. They have developed mutually beneficial relationships with the dentists.

Dental Practice Management Companies adopt a competing business model, rather than one of convenience for the practicing professional. The operating costs of one practice are basically spread over all managed practices. Capital costs are shared between practitioners, and referrals from general dentistis to specialist no longer take patient revenue away from the practice. This is the business model behind larger dental group practices, or what is now being referred to as Dental Practice Management Companies.

Because of their size, dental practice management companies (they allege) have more contracting leverage to negotiate more favorable rates with insurance companies. Management companies (allege that they) strike deals with dental insurers that promise higher volumes of patients for lower reimbursement.

To be as profitable as they want to be, production must be raised. This might be done by driving billable services and procedures. To meet the higher volume of insured patients, some (possibly many) dental chains schedule dentists and hygienists to see many more patients per day than is ideal (or in the best interests of the patients).

Dentists who enter into employment agreements with DPMCs need to be comfortable with the compensation package. The terms must be carefully spelled out and analyzed, including the conditions by which a bonus can be earned. Non-solicitation and non-compete restrictive covenants will be included in the asset-purchase, employment, or other agreements. Dentists must consider the geographic and time constraints of any such restrictions carefully, as well as restricted activities that are covered.

Established dentists should think long and hard whether they want to give up ownership of their practices to become an employee. Dentists selling their practice will want to be comfortable with compensation terms. These must be carefully spelled out, including whether a bonus will be paid in addition to a salary. Also, what conditions need to be met to earn a bonus?

If your exit strategy is to retire by selling your practice, DPMCs probably are not for you. Generally, DPMCs want the selling doctor to remain under an employment contract for three to five years. If that’s your goal, fine. If not explore other venues. Many sales result in the dentist giving up some income to exchange for a contribution of stock and notes. So try to compare carefully the current cash flow to the expected cash flow after the potential sale.
A dentist selling his or her practice to a management company will have the same tax consequences as selling to another dentist. Legal representation is critical. In addition to a lawyer, dentists also should have a tax specialist and a financial consultant review all potential contracts.

Caveat emptor: Let the buyer beware….!

Sun Costigan, DDS, MAGD

Scroll Up