Office Manager: The Secret to Dental Practice Growth

The office manager (OM) is often overlooked when dental practitioners develop their strategic plan. Medical practitioners focus on types of services, clientele demographics, upgrading technology, office relocation and neighborhood selection, associate practitioners, new equipment decisions, and the like. While these technical matters are important considerations, without an effective office manager, these plans can fall flat. One of my Harvard Business School professors once said,

it is better to have an A implementation plan and a B strategy than an A strategy and a B implementation plan.

Simply put, an effective implementation plan is essential for a successful, growing dental practice.

OMs Are Your Practice's Orchestra Leaders

Your dental practice is like an orchestra. The doctors play the instruments, but the OM is the director implementing the practice's strategic plan. Once the owners determine the long-term direction for the practice (e.g, types of services, location, technology), the OM managers and directs the resource to achieve these goals:

• Goals and Objectives. The OM and owners should develop an annual plan for gross billings, spending, capital investments, and staffing. They should review and discuss these goals during the year (see below).

• Human Resource Matters. The OM should manage the hiring, training, and firing process. The OM develops and gets approval from the owners what each staff person's role is, how success is measured, and what steps, if any, need to be taken to correct any poor performance.

• Invoicing and Collections. Cash flow is the life blood of any operation including a dental practice. The OM ensures that invoices are sent timely and correctly submitted for payment, tracks the receivable aging, and quickly resolves any unpaid invoice issues from insurance payers and clients. The OM will prepare and present monthly reports to the owners. The OM should make recommendations for any changes in invoicing practices, collection policies, or both.

• Tracking Practice Spending. The OM should analyze practice spending patterns against historical spending patterns and industry metrics. Where is the excess spending and why? Do alternatives exist to reduce any spending without sacrificing patient care or quality of service?

• Periodic Reporting. The OM should report the practice's net operating profits, balance sheet, and cash flow statement to the owners each month (or at a minimum each quarter year). The owners and OM should discuss key performance indicators (KPI) on the basis of (i) year-to-date performance, (ii) year-over-year comparison, and (iii) actual to plan performance. KPIs should include, at a minimum:

  
  

  • Gross Billings (total and by payer type)

  • Net Operating Profits

  • Cash Flow Statement Analysis

  • Collections as a percentage of Gross Billings (total and by payer type)

  • Client Metrics

    • Existing verses New

    • Percent of Clients with Follow-up appointments

    • Number of No-shows

    • Number of last-minute cancellations

    • Number of referred new clients

    • Gross Billings per Client and why

    • Number of clients referred out

  • Payroll

  • Staffing Changes

  • Overhead Spending

  • Debt (existing, new, and repaid)

  • Equipment Status (e.g., new technology, repair, maintenance, replacement, leasing)

  • Rent and Lease Agreement review

  • Changes in laws or regulation that may affect the practice

A practice's best hire may be the OM.