Ep. 75: 4 Actions for a Successful Practice in the 2020’s
With everything that has happened in the past 3 years and inflation growing at an unusual rate, what direction are you going to take your practice in the next 5, 10, or 15 years and beyond? In this week’s episode, Jeff dives into 4 points that we go over with our clients to ensure that their practices are successful and stay successful in the years to come.
Topics:
3:02 – Adjusting your Fees
9:30 – How PPO’s affect your new patient acquisition cost
15:05 – The importance of building your hygiene department
20:45 – Bread and butter dentistry vs. specialized cases
24:30 – Stabilizing your staffing situation
Links:
Wasserman Guide – https://wasserman-medical.com/shop/product/ndas-medical-dental-coding-fee-guide-2023-11th-edition
PPO Exit Strategy Session – https://www.mgeonline.com/ppo-exit-strategy
Hygiene Formula - https://www.mgeonline.com/hygieneformula
US Population by Age - https://www.statista.com/statistics/241488/population-of-the-us-by-sex-and-age
Our Online Team Training Platform - https://ddssuccess.com
Learn more about MGE - https://www.mgeonline.com
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Questions From This Episode
Why does controlling your own fees matter more now than it used to?
With inflation running far above the negligible 1 to 2 percent practices lived with for over a decade, fees that aren't reviewed regularly quickly fall behind what it now costs to actually run the practice, labor, lab, and marketing have all climbed. Waiting a year or two to make one large fee jump creates a jarring price shock for patients, while smaller quarterly or semiannual adjustments let a practice keep pace with rising costs without anyone really noticing.
Why does heavy PPO participation matter more during a period of high inflation specifically?
A PPO fee is essentially a fixed acquisition cost paid on every single visit, not just once like marketing, and that fee doesn't move with inflation the way actual expenses do. As costs climb and reimbursement stays flat or even drops, the gap between what a plan pays and what it actually costs to deliver that care keeps widening, and only a business that controls its own pricing can keep pace.
Why is hygiene one of the most underperformed departments in a typical practice, and how do you check where you stand?
Most practices run around a 30 percent hygiene compliance rate, meaning only about 30 percent of the patient base is actually showing up for regular recall visits, even though the built-in expectation that patients return twice a year is something almost any other business would love to have. A downloadable tool called the hygiene formula lets a practice calculate exactly how many recall appointments it should be seeing each week based on its total chart count, and compare that against what's actually happening.
Why is it risky for a practice to build its identity around a single high-end procedure like full mouth reconstruction cases?
If 80 percent of production is coming from a handful of large cases a month, the entire practice becomes dependent on that specific funnel continuing to work, and if it ever dries up, there's no stable base left underneath it. The healthier structure is building strong, profitable revenue from everyday bread and butter dentistry and hygiene first, then treating specialty procedures as additional revenue on top of that stable foundation, not as the foundation itself.
Given that demographic projections show the labor pool holding flat or even shrinking over the next 15 years, what can a practice actually do about staffing?
Two things: build a core of a few genuinely capable, ambitious people given real ownership over specific areas of the practice, so a single departure doesn't turn into a crisis, and create a fast, reliable way to train and onboard newer staff, since some turnover in junior positions is simply going to keep happening regardless of the broader labor market.
Episode Transcript
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This is a big picture episode, meaning it has to do with future planning, specifically the direction you're taking your practice over the next five, ten, fifteen years and beyond. It would be an understatement to say a lot has happened since January of 2020. Beyond everything directly tied to the pandemic itself, we're living with the aftereffects in areas we may never have expected, inflation, a distorted labor market, higher interest rates, and the on again, off again threat of a recession nobody seems able to agree on.
What's the net result of all this for the average dentist? Among other things, you're seeing higher costs across nearly every part of the practice, lower reimbursement if you're participating in plans, and hiring challenges like never before. The average MGE client is a private practicing dentist, and as you'd expect, our clients look to us to understand what's happening at that bigger picture level and how it might affect the dental industry, so we can help them chart a path to success. With that in mind, I put together this episode covering four action items or areas of focus we've been discussing with clients for the last six months to a year, in light of everything that's happened, to make sure their practices are successful, and stay that way. My name is Jeff Blumberg, and I'm your host.
Let's start by defining what we actually mean by success. Does it mean working 90 hours a week across five operatories essentially on roller skates, netting $300,000 or $400,000 a year, technically landing you in the top 1 percent of income earners while completely stressed out? No, that's not our definition of success. A few of the basic components of real success: you're in private practice, so you get to call the shots. Your hours are manageable and largely under your own control. You're getting paid what you're actually worth, not $500 for a crown. And you have a genuinely high level of career satisfaction, doing the treatment patients need and that you actually enjoy doing, with little to no stress coming from the business side. You're having fun doing what you love and getting paid fairly for it, that's how we define success.
So when we talk about how to get and stay successful, that's the direction we're headed, not simply how do you jack up the numbers. Numbers matter, but it isn't just about how much you make, it's about how much you actually get to keep, and what it costs you personally, your work life balance. So we're looking for a genuinely good work life balance alongside real financial success.
So what are these four areas? There are obviously plenty of areas worth focusing on, profitability, case acceptance, and so on, but these four represent the big picture items given everything that's been happening lately. Let's get into them.
Area of focus number one: if you want a successful practice long term, you have to be able to control your own fees, now more than ever. What does that mean? First, it means keeping your fees genuinely in step with what's happening economically. I won't pull out a mountain of charts and numbers here, I genuinely enjoy them, but I won't bore everyone with them, just the basics. We know inflation has been running hot. Last month was actually good news, a 6.4 percent year over year increase in the consumer price index, meaning the cost of a basket of goods rose 6.4 percent from the prior year. That's down from 9 percent at points last year, and over 5 percent back in September of 2021 when I recorded my first episode on this subject. This has become an ongoing fact of life, whereas for the ten-plus years before that, it was largely negligible. Prices are rising in the practice too, labor, lab, marketing, all of it. Your fees have to move in step with that, or you risk pricing yourself out of being able to afford what your business actually needs to survive.
Here's what's become genuinely interesting about this. Raising fees used to be something we'd advise clients to do once a year, a routine two to three percent bump to track inflation. Some clients would do it, some wouldn't, and it wasn't a huge deal either way, that held true from roughly the early 2000s right up through a year or two ago. Now the situation looks quite different. That 6.4 percent overall figure is an average across categories like food, labor, and rent, and food specifically is up over 10 percent, which is exactly what your employees are paying too, and what you're paying. Your fees have to march upward at that same pace, or you'll eventually price yourself out of the market.
So, you have to raise fees regularly. The tricky part is that we used to point clients toward something like the Wasserman guide, I'll link it on the episode webpage, which shows roughly where your fees stand by zip code across different procedure codes. I'm not affiliated with it in any way, I just find it genuinely thorough and I've used it a long time. The issue right now is that I don't believe it's fully caught up with current inflation yet, we likely won't see updated figures until next year. I've noticed something similar on sites like salary.com, where you can look up expected pay for a position in your zip code. In the San Fernando Valley in California, for instance, that site recently showed the high end of hygienist pay around $48 or $49 an hour, while what's actually being advertised and paid out there runs $60 to $65 an hour, with some corporate offices even offering a $4,000 signing bonus. Reality has outpaced the reference site.
So if you're using a guide like Wasserman to figure out where your fees should sit, here's how it works: you look up your zip code and procedure code, and it tells you what percentile you fall into. If you're in the 30th percentile, 70 percent of offices in your area charge more than you do, and 30 percent charge the same or less. At the 50th percentile, half charge more, half charge the same or less. You have to decide what percentile genuinely feels right for you, personally I'd want to be at least in the 60th, and I know doctors who prefer the 70th.
Here's the real problem though. Say you pulled the Wasserman guide and adjusted your fees at the start of 2022, landing your crown fee at $1,200. Over the course of that year, prices overall rose 8 to 9 percent. You need to be adjusting that fee more frequently while inflation is running this hot, I'd recommend reviewing it quarterly right now, or at an absolute minimum every six months, making small incremental adjustments. Why? First, it simply keeps you in step with what's actually happening. Second, small, frequent adjustments are far less jarring than one big correction. If you wait a year or two and suddenly discover you're sitting below the 30th percentile, which is as low as most fee guides even report, since there's essentially nothing meaningful below that, that's a real shock, both to you and to your patients. If a patient's prophy fee jumps from $110 to $185 in one visit, they're going to notice. If it moves gradually from $150 to $155, they won't. And frankly, you're unlikely to find a better moment in modern memory to raise fees without pushback, the last time inflation moved this fast was back in the late seventies and early eighties, and right now there's broad public awareness and acceptance that prices are going up everywhere.
So, part A is being able to raise your fees. Which brings us to part B, a subject I clearly enjoy repeating, maybe because repetition helps it land: there are certain arrangements where you simply cannot control or adjust your own fees, specifically PPO, HMO, or any other discount plan participation. I know a lot of practices have 60 to 70 percent participation, and the idea of dropping those plans might sound genuinely alarming. I won't go deep into that here, I've covered it in other episodes, but consider why you'd join a PPO in the first place: you need patients coming through the door, which is exactly the same reason you'd do any other marketing. The real difference is that with marketing, say a postcard or pay per click campaign, you pay once to acquire that new patient. With a PPO, you're effectively paying that same acquisition cost every single time you see that patient again, through the 40 or 50 percent write off on preventive care, or doing an $850 crown instead of your normal $1,400 fee.
The professional solution for the last decade has simply been to see more patients, crank up volume. That can work to a degree, plenty of people make a living that way, but it gets old, and meanwhile PPO fees themselves have been quietly eroding further. Look at Delta, how many new Delta Premier providers are there these days? You start with a decent fee, bring people in, and the fee gets lowered over time, since you're locked into accepting it, and even a negotiated fee rarely comes close to what you'd pay just once to acquire a genuine fee-for-service new patient through marketing. So a lot of practices end up carrying heavy PPO participation and developing a kind of apathy about it, sure, it'd be nice to get out someday, but it's never actually going to happen. That's simply not true, I've seen plenty of clients successfully get out, and it starts specifically the moment you actually begin the process. Until then, it stays a vague someday wish.
How involved your exit needs to be depends on your contract and how many patients are on a given plan, if 80 percent of your patient base is on a single plan, that's going to take real time to unwind properly. But it's a genuine business principle worth stepping back and recognizing: if you run a business, you have to be able to set your own prices. A furniture store sets its own prices, a grocery store sets its own prices, a restaurant sets its own prices. Sure, price yourself too high and you might lose some customers, if a hamburger at my restaurant costs $12 while everywhere else charges $5, I'd better have a genuinely great hamburger. But the point stands, you need control over your own fee schedule. Heavy PPO participation strips that control away entirely, and in an environment where inflation is moving faster than plan reimbursement is adjusting, that puts you at real financial risk.
So anything limiting your ability to set your own fees needs to be eliminated, intelligently and, if you're heavily participating, gradually. Alongside that, make sure your new patient flow and sales skills are solid enough that you're not dependent on insurance to keep the schedule full, otherwise it's easy to slip into that same apathy, well, there's no way out, so if a PPO patient only wants what insurance covers, I guess that's just how we operate. There is a way out, I promise. If you're genuinely ready to explore this but aren't sure where to start, we offer something called a PPO Exit Strategy Session, where one of our practice management specialists reviews your specific situation and outlines concrete steps to start moving in the right direction. That's area of focus number one, controlling your own fees matters more today than ever.
Area of focus number two: make building your hygiene department a genuine priority. My background before dentistry was purely in business, and I've stayed involved with other types of businesses since. I can tell you honestly, any business would kill to have what you already have with hygiene. Any business at all, a mechanic, a restaurant, anyone. If you asked the average person how often they're supposed to see a dentist for a checkup, they'd say twice a year. Now imagine if every business had that kind of built-in expectation of return visits, that's an incredible asset, and it's largely underused.
I've said before that the two areas that consistently underperform the most in dentistry are hygiene and case acceptance, across the industry as a whole. Think about the actual purpose your hygiene department serves. If I do restorative work on you and send you off, there's no built-in reason for you to come back specifically for more dental work. But if you're coming in every six months for a checkup, you're being monitored not just for current health but ongoing health, and anything developing early can be caught and addressed before it becomes a much bigger problem. Hygiene fits directly into the core purpose of your practice, keeping patients healthy. It's also a genuine profit center, and it's how you actually retain patients long term, and where do you think retained patients keep showing up? Hygiene. Yet it's consistently, badly neglected.
I covered this at length in episodes 45 and 46, but the average hygiene compliance rate across most practices runs around 30 percent, meaning only about 30 percent of the patient base is actually showing up on their recommended schedule. We have a downloadable spreadsheet called the hygiene formula that lets you calculate exactly where your own office stands, I'll link it on the episode webpage.
Here's a realistic example, close to what we regularly see with actual clients. An office with 4,000 active charts should be seeing roughly 96 recall appointments a week, assuming everyone's on a standard six month schedule and the office is closed the typical two weeks a year. At an average recall visit of $200, and likely more if you've dropped some plans, that's over $80,000 a month just from hygiene. Ninety-six recall appointments a week works out to about 12 full hygiene days weekly, so a six or seven operatory office might reasonably need three full-time hygienists, possibly even an associate just to keep up with hygiene demand alone. And that 96 figure doesn't include soft tissue management patients or new patients seen initially through hygiene.
What we typically see instead in an office with 4,000 charts is closer to three or four hygiene days a week, with little to no real growth in that area. If there's one key statistic worth actively tracking for growth, it's your number of recall patients per week or month. If that number isn't climbing, your practice isn't actually retaining patients, you're bringing people in the front door and quietly losing them out the back. Download the hygiene formula and see exactly where you stand, this is an area we're pressing hard on with clients right now precisely because it's handled so poorly industry-wide, yet it can genuinely transform a practice when done right.
Keep in mind, those hygiene visits aren't just cleanings, they represent the dental treatment those patients need too. Which brings up a pattern we see constantly: a new client with 2,000 to 3,000 charts running only a three-day-a-week hygiene schedule will often insist their case acceptance is excellent, everyone's already had their work done, hygiene comes up clean. Think about that for a second. With that many charts, you should reasonably be seeing 40, 50, or 60 recall patients a week. If you're only running three days of hygiene, including new patients and soft tissue management, you're likely seeing closer to 10, 15, or maybe 20. What's actually happening is that your most naturally compliant patients, the ones who show up exactly when they're supposed to without any nudge, are the only ones still coming in. The other 60 percent of your patient base, the ones who need a follow-up call or reminder, simply aren't being reached at all. So it looks like everyone's healthy and treatment-complete, when in reality, you're just not seeing or calling those people.
Which brings us to area of focus number three: your office needs to be genuinely profitable on basic, bread and butter dentistry, fillings, standard crowns, the everyday work, not talking about insurance classification here, just ordinary, run of the mill procedures. I bring this up because newer procedures have become genuinely popular lately, sleep apnea treatment, clear aligners, full mouth reconstruction cases, new technology, continuing education you may have recently completed. Full mouth reconstruction cases are great, genuinely, you should absolutely be capable of doing them, we're actually co-sponsoring a course on it starting in April. But you don't want to live off them entirely.
We've seen this play out with clients directly, and had to help retool the practice as a result: a client running some kind of funnel specifically for full mouth reconstruction cases, doing five, six, seven cases a month, we've even seen larger offices doing fifteen a month, and their production numbers looked great. But when 80 percent of total production is riding on that one type of case, that's a real danger signal, because your entire practice is now effectively dependent on a $30,000 to $50,000 case pipeline. If that funnel ever slows down, you're in real trouble. In one case, we worked with a client doing roughly $100,000 a month in regular dentistry and hygiene alongside $400,000 in full mouth reconstruction cases, and helped shift that balance so their base of regular dentistry and hygiene grew to $300,000, with the specialty cases layered on top of that stronger foundation, rather than being the foundation itself.
I'm not saying don't do these procedures, absolutely keep doing them, but your practice should be profitable and sustainable on the basic dentistry and hygiene alone, with everything else functioning as additional revenue on top, the icing on the cake, not the cake itself. This matters because, purely from a business standpoint, take the clinical and doctor hat off for a second, the amount of time required to generate $40,000 from a single large case versus generating that same $40,000 through individual crowns is completely different, single crowns take considerably more cumulative time and effort. So there's a natural pull toward the bigger, faster case, assuming clinically the patient genuinely needs it, which quietly shifts focus away from the steady, foundational work. It's similar to what happens with hygiene, nobody's tracking whether the actual number of recall patients is growing, only whether the hygienist stays busy in general, regardless of the patient type filling that time. Same principle here, monitor your practice by procedure type. Your everyday, ordinary dental work should be what makes the office profitable on its own, with everything else adding on top of that stable base, not replacing it.
Which brings us to area of focus number four: stabilizing your staffing situation. This one's genuinely interesting. Staffing has felt strange ever since lockdowns ended and people started returning to work. Unemployment last month sat at 3.4 percent, the lowest in at least twenty years, the last time it was close to that low was January 2020, right before lockdowns began, at 3.5 percent. Right now there are roughly two open jobs for every available worker in the United States, a ratio last seen in September of last year. So the labor market remains genuinely tight.
People naturally ask when this will actually improve, so let's look at the demographics driving it. This data comes from Statista, using 2021 US population figures broken down by age, and I'll link the source on the episode webpage. I capped the working age range at roughly 20 to 64, understanding plenty of people work outside that range, but using it as a reasonable baseline. As of 2021, there were approximately 193.91 million people in the United States between ages 20 and 64. Project that forward five years to 2026, accounting for today's teenagers aging into the workforce, and that figure only grows to about 194.24 million, an increase of roughly 300,000 people over five years. Move forward to 2031, ten years out, factoring in today's 55-plus population aging out of the workforce as today's 10 to 14 year olds age in, and the total actually drops slightly to about 194.12 million. Move forward again to 2036, fifteen years out, and the working age population drops further still, to roughly 193.51 million, actually lower than where we started in 2021.
This comes down to how unevenly distributed generational population sizes actually are in the US. There are more people alive today from the baby boomer generation, roughly 1947 to 1964, than from Generation X immediately below it, my own generation, roughly 1965 to 1980. Millennials represent a fairly sizable generation too, but Generation X specifically was comparatively small, and Generation Z below it, born through about 2012, is smaller still. So the incoming workforce simply isn't large enough to meaningfully ease this labor shortage on its own, which is exactly why you're seeing so much experimentation with robotics in fast food and elsewhere, businesses are genuinely running short on people to fill these roles.
I'm not trying to paint this as hopeless, plenty of things could shift over 15 years, a major economic slowdown could trigger layoffs and temporarily ease the labor market, nobody predicted half of what's happened just since 2008. But absent a significant shift like large scale automation, the underlying demographic trend points toward a flat or even shrinking labor pool over the next decade and a half, with natural ups and downs along the way.
So what do we take from all this? Staffing has always been a challenge, by survey, even before any of this, but it's become more pronounced, and the other real takeaway is that you can't simply wait for external conditions to change and fix it for you. So what's the broad approach we're actually discussing with clients? Two main things.
First, build a core of a few genuinely ambitious, capable people who really want to work hard, scaled appropriately to your practice size. A staff of five might mean one such person, a staff of ten might mean two or three genuine executive-level team members. If I have a smaller office, that might be my office manager alone, in a ten-person office, maybe my office manager and my lead assistant. The idea is that these executive-level people, paired with a solid organizational structure, a subject worth its own episode, take real ownership of specific areas of the practice. If something goes wrong in their area, you're not the one who has to drop everything to personally fix it. Say I have someone overseeing overall production, handling scheduling, patient satisfaction, and making sure assistants have what they need, while my office manager handles the broader administrative side. If we lose our hygiene coordinator in a larger office like that, it's not a crisis the office manager has to personally absorb, the person already responsible for that area sorts it out, perhaps with the office manager's help on hiring, but it isn't an emergency requiring both feet in immediately. That's genuinely how we've built our own company, a group of competent executives each responsible for their own area, without that structure, it simply doesn't hold together. You need at least a couple of these people, scaled to your practice size, and a real organizational structure to support continued growth.
Not everyone on your team is going to be that kind of person, and that's completely fine. You'll have someone who genuinely enjoys being a receptionist, stays a couple of years, and eventually moves on to something else, relocates, changes careers, whatever the reason. They're still a valued team member while they're with you, simply not a twenty-year fixture, and that's just how staffing naturally works. To manage the disruption that comes with that kind of turnover, you need two things: the core executive team I just described, and a fast, reliable way to train new personnel. On having strong key people specifically, if you want genuinely capable people who stick around long term, there has to be real upside available in your business. If someone joins as a junior scheduler but is clearly capable and wants to build a career, and there's no room to grow, no path to more responsibility or income, they'll eventually find that opportunity somewhere else. So growth potential has to genuinely exist if you want to retain strong core people.
You may also have staff who are simply happy staying in one role indefinitely, and if you've had a fully stable team for the last ten years with no turnover at all, that's genuinely great, I'm not suggesting you need to shake things up unnecessarily. But realistically, some turnover is simply part of how things work today. I'd rather concentrate any turnover toward what I'd call, using a sports analogy, the bottom of the roster, not my best long-term people, meaning newer staff in less critical positions turning over somewhat more than my core, long-tenured executives.
So if some turnover in lower-responsibility roles is going to happen regardless, that's exactly why those key executive people matter, so it doesn't all land on your plate, and why you need a genuinely fast way to train incoming staff who may not be with you forever. That's exactly why we built our online platform, DDS Success, which includes full positional training for various roles in the practice. You'll naturally need to adjust some specifics to match your own office's procedures, but the goal is being able to onboard someone and get them genuinely productive quickly. I'll link that on the episode webpage too, along with a free demo if you'd like to check it out.
So those are the four main areas of focus we've been discussing heavily with clients. There are obviously other things we work on individually with each client, case acceptance, marketing, overhead management, and more, and other growth opportunities I've covered in separate episodes. But as far as keeping your practice genuinely successful long term, resilient enough to weather any economic slowdown while also thriving in a strong economy, these are the four areas worth your real focus.
I hope this helps. If you'd like further help or want to talk with someone directly, we're always happy to offer a free practice consultation here at MGE, you can find us online at mgeonline.com or call us at (800) 640-1140. And if you have specific questions about anything covered in this episode, feel free to email me directly at jeffb@mgeonline.com. Folks, have a great week, and I'll see you at the next episode.