 
The New Way

A Story about an Industry in Transition

The New Way

Copyright 2014 William Jackson

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Table of Contents

Introduction

Chapter 1: Coffee at Athena's

Chapter 2: It's Going to be a Lot of Work

Chapter 3: The Mind Reader

Chapter 4: The Mysterious Jack

Chapter 5: Learning to Master a New Skill

Chapter 6: Opportunity Knocks?

Chapter 7: Not All Corporate Groups are Created Equal

Chapter 8: What Management Skills Do You Need?

Chapter 9: A Peek into the Future

Chapter 10: More to Learn

Chapter 11: Meet the One Hour Dentist CEO

Chapter 12: Done Deal

Chapter 13: How Do I Get Started?

Chapter 14: Jumping in with Both Feet

Chapter 15: The Other Side of the Story

Chapter 16: Don't Buy a Screwdriver to Pound a Nail

Chapter 17: Don't Build a House One Room at a Time

Chapter 18: The Obvious Need for Change

Chapter 18: The Keys to the Kingdom

Chapter 19: Write These Down

Chapter 20: Socially Acceptable

Chapter 21: 20 - 20 Vision

Chapter 22: My Way

Chapter 23: You Don't Need to Look Too Far

Chapter 24: The Diamond in the Rough

Chapter 25: I've Never Hired Anyone

Chapter 26: The First Step in a New Direction

Chapter 27: Revenue Cycle Management

Chapter 28: Searching for a Theme

Chapter 29: Snake Oil?

Chapter 30: Understanding the New Way

Chapter 31: The Cloud and RCM

Chapter 32: The Challenge of Change

Chapter 33: Leading the Industry

Chapter 34: Pass It On

About the Author

Introduction

To quote the American Dental Association, dentistry is a profession in transition. While most of us understand that the only constant in life is change, the manner of running a dental business has seemed immune to significant change for several decades. A dentist or office manager of a solo practice, who was frozen in time in the 1990s, could walk into a dental practice in 2014 and find that little in the business flow had changed.

However, several factors are emerging which are forcing the industry to reassess itself. The complacent will likely be in for an unpleasant shock. Demand for dental care has been flat since 2008 and is predicted to remain so into the foreseeable future. The Affordable Care Act is likely to cause a decrease in the number of adults with dental insurance, while placing more children into low paying Medicaid plans. Dental insurance providers are likely to use smaller, more selective networks. The trend towards consolidated multi‐location practices will continue, fueled by changes in practice patterns of new dentists, a need for efficiency, and increased competition for patients.

Simultaneously, the number of dentists who want to sell their practices already exceeds the number of potential buyers. It is projected that by 2018, there will be only 6 buyers for every 10 available solo practices. Dentists who anticipate selling their solo practices need to understand the components that will make a dental practice attractive for acquisition and adjust as necessary, or they may be forced to simply walk away from their asset.

Nonetheless, the changing environment will bring tremendous opportunities for those with the foresight to be proactive. The pressure to reduce costs has already driven innovation, including the use of new business management tools that have never before been considered in the dental industry. The innovations, when used correctly, give the small practice owner many of advantages typically only thought available to large groups. The innovations also give the solo practice the ability to link remotely with others to form virtual clubs or groups, without losing any control.

While the discussions of so-called corporate dentistry are frequent, it became obvious to me that most dentists are unaware of the activities or structure of many of these entities, and hence, have no idea how to compete. They are unaware of the universe of available, innovative business tools, and even when they are made aware, they don't know how to employ them.

This book is intended to help the solo practitioner to better understand the unsustainable business model of the past, to compare it to the emerging multi-location group models, and to get a glimpse of how to not only survive a changing industry, but to thrive. The New Way also attempts to connect the dots among various information and management technology tools, so that a practitioner can get a better view of the big picture. Too often, a dentist is only shown individual pieces and is left to his or her own to figure out the best fit.

All of the information technology solutions mentioned in the book are available and in use in the dental industry today. Very few practices have begun forming virtual clubs or groups as implied in the book, but they are emerging.

While this is a fictitious story, anyone associated with the industry is likely to recognize a bit of him or herself in The New Way. I hope you enjoy Peter's adventure.
Chapter 1: Coffee at Athena's

Peter made a mental note. The God Save the Queen ring tone for Karen had been cute initially, but it was getting old now. Her British accent was a sufficient reminder of her heritage. He'd change it after this call.

"Hi, Karen, what's up?"

"Peter, I just heard of a new listing that might be exactly what you've been looking for. It's the right neighborhood, good location, and an eager seller. I spoke with him, and he'd like to meet with us. He is available after he finishes with his patients today – sometime after 5:00." She went on to describe the location and some of the other specifics. "He hasn't told his staff yet. So, he'd like to meet at the cafe across the street. It's called Athena's. Let's meet there about 4:45, and we'll have a chance to chat before he arrives. Ciao."

Peter hung up feeling ambivalent. "I suppose I could have said that I was busy," he thought. After seeing 10 or 11 offices that he didn't really like, he was getting increasingly discouraged. His preference right now was to go the gym to work out. "I suppose looking at one more won't hurt."

On the drive over to meet with Karen and the dentist, his ever-present dilemma began to replay itself. Peter had been in practice for almost 6 years now. He was comfortable in his clinical capabilities. In fact, he knew he was as good or better a clinician than anyone he worked with, and he really liked the clinical part, unlike some of his colleagues. He was making decent money, but like most dentists, he'd always wanted to own his own business, and now was a logical time. He was getting married to Jenna in 10 months, and if the hoped-for family was just around the corner after that, it would be good to have the practice already established. He also really liked the idea of being his own boss.

But, what did he know about running a business? Other than what he'd observed in the practices where he had worked, he didn't have a clue. What if he wasn't good at it? He'd need to learn it on-the-go, which was intimidating, but isn't that how almost every dentist has done it? What if he wasn't able to reproduce or exceed his current income with his own practice? He still had a substantial student debt. Did it make any sense to go deeper in debt? There are more dentists selling practices right now than there are dentists buying, and it's projected to get worse before it gets better. What if something happens and I need to sell in the next few years?

Peter wasn't even half way through his now too-familiar litany of fears when he arrived at his destination. He laughed to himself, "No problem. I'll pick up the questions again tonight when I can't get back to sleep at 3:30 am."

He was pleasantly surprised at what he saw. The office was in a building on the corner of a busy intersection. The first floor dental office was visible from the street. The signage was very good. He turned the corner to see an easily accessible, spacious and free parking lot. He parked his car in an adequately-sized parking spot, and he noticed the lot was clean and had what appeared to be good overhead lighting. On his way to the diner, he walked through the building. Again, he liked what he saw. It was very clean, light, excellent décor, handicap-accessible.

"So far, so good... I guess," he thought as he walked across the street.

Athena's was part coffee shop, part café, part art gallery, and apparently, part artist's studio. It even had a little stage in the corner. Peter figured it was used for poetry reading. Although he'd never been to Greenwich Village, he imagined that Athena's was an attempt to re-create the Bohemian image.

Karen was already seated at a table. "I just ordered you a regular coffee. Would you prefer decaf?"

"No, that's OK, answered Peter, "I don't seem to be sleeping much anyway these days." Karen stood up, and as they finished a greeting hug, the coffee arrived.

"You know, of course, that I don't like buyer and seller to meet this early in the process, but he insisted. He said the sale will be dependent on his feeling about the buyer. I think he's afraid a corporate dentistry group will want it."

"Do you know how old he is approximately?" Peter had mixed feelings about buying a retiring dentist's practice, but then, he was also concerned that a younger dentist would only sell if there was something wrong with the practice.

"I'd guess he's in his mid-30s, but if you're worried about why he's selling, it's because he's moving," answered Karen. "You have to admit that the location is brilliant, and it's basically the neighborhood you wanted. We'll go over the financials later, but from what I've seen, it looks like a solid practice. The negatives are the dentist to population ratio around here isn't great, and within the last 12 months, two corporate practices have opened within five miles."

Peter was going to ask her to elaborate on the negatives, when the he heard the server say to a man who just walked in, "Hi, Dr. P."

Karen stood and strode to the youngish-looking man with her hand extended, "Hello, doctor. I'm Karen."

"It's nice to put a face to a voice, Karen. Please, call me Paul."

"Hi, Paul, I'm Peter." Peter thought of making a biblical or singing group quip, but decided not to. Instead, he just smiled as he shook Paul's hand.

"Can I bring you something Dr. P?" called the server from behind the counter.

"I could use a decaf, Athena," Paul replied." Thanks."

Chapter 2: It's Going to be a Lot of Work

Paul didn't wait for any small talk or other amenities. "Thanks for meeting me here. I haven't told all the staff yet. They're not really good at handling change – who is? So, I decided to wait until I was further along in the process. I'm sure you have questions. Where should I start?"

"The beginning is always a good place to start," smiled Karen. "Why don't you walk us through the practice's history? We'll jump in with any questions."

Paul described how he started the practice from scratch about 4 years ago. "Not sure I'd do it again, but at least I ended up with things the way I wanted them. But, adding the debt from the practice loan to my already exorbitant student loan debt was tough." Paul continued to tell them how he'd grown the practice mostly by accepting every DHMO and PPO insurance plan available. "My schedule is probably 70% full now, and I've been able to drop all the DHMOs."

"Have you done any other marketing?" asked Peter.

Paul shrugged, "Not really. I pay a company every month to keep my website optimized and keep me high on local search-engine searches, but I have no idea if it makes much difference. I try to stay active in the community, and that has helped. I tried a couple direct mail campaigns, and they were pretty much a waste of money."

Paul went on to describe how he had made a concerted effort to have the best technology possible in the practice, and how he felt that it was both personally satisfying and valued by his patients.

"Will you buy an existing practice after you move, rather than do another startup?" asked Karen.

Paul responded, "I really haven't decided. The reason we're moving is that my wife was given a sweet promotion. At least for now, anything I make will just be gravy. Frankly, my income has always been the second income in our family, mostly because of the debt payments. As you know, the practice of dentistry is stressful enough without adding in the financial worries. I think I might just look for an associate position.

"I know that I'm not sounding like the best salesman right now, but I want to be honest. It's why I wanted to meet with you, Peter. I'm proud of the practice, and I know it has a lot of potential upside. It's great to be your own boss. It's great to know that your destiny is basically in your own hands. It's going to be a lot of work, though, and I want the person who buys my practice to understand what it's going to take. You're not likely to get rich – at least not right away."

They talked more about the office's financial results and the rationale for the valuation, which Peter felt was fair, based on other practices he had seen. He'd leave the final negotiations to Karen, though.

"Well, the staff is long gone by now. Let me show you the office." Paul and Karen talked a little about the difficulties in moving, especially out-of-state, while Peter paid for the coffees.

As they were walking across the street, Peter asked about the staff. Paul responded positively, "They're really good. They're mostly upbeat and seem to like working here. I always get positive feedback about them from the patients.

"Michelle, the office manager, pretty much runs the show and does a great job. I realized early-on how important it is to have a strong office manager. There are only so many hours in the day and only so much fuel in the tank to do dentistry all day. By the end of the day, I have just enough energy to finish my clinical notes, and then, I just want to go home. Without Michelle, the business side of things would definitely suffer – actually, it would be a disaster. If you end up buying the practice, you'll definitely be happy to have Michelle."

The physical layout and state of the equipment were impressive. Peter was beginning to get excited. They talked a little more after the office tour, and they all agreed to keep the discussion moving.

"Two last questions," said Karen as they were leaving. "Do you have a time frame for the transaction, and how long do you plan to stay around after the sale?"

"My wife's new job starts at the beginning of next month. She's already been apartment shopping. I'll follow as soon as it's practical. We've also just put our house on the market, although her company will buy it within 60 days, if we're unable to sell it.

"So, while there's no particular deadline, I'd like to get out there sooner than later. That said, I'm committed to making the transition go smoothly. I'll stay a few extra months, if the buyer wants me to."

As they walked to the parking lot, Peter remembered that Jenna was having dinner with a friend tonight, and he was on his own.

"I'm going to catch an early dinner. Are either of you interested in joining me?" Both Karen and Paul declined. "Can you recommend someplace around here?" asked Peter. Paul answered, "Athena's serves dinner, and she makes a killer meatloaf, if you like meatloaf."

Chapter 3: The Mind Reader

"It's normal, you know."

"Excuse me?" Peter's mind was a universe away, and he was caught by surprise when Athena talked to him.

"It's normal to be scared to take a step as big as buying your first dental office. After all, how were you supposed to learn how to run a business? Not in dental school. That's for sure. And, if you're going to borrow that much money on top of your student loans, won't you be locked in forever?" She never stopped smiling sympathetically.

"How...?"

"I'm a mind-reader. Do you want me to go on?" Peter nodded. "You're going to get married soon, and you're afraid that buying a practice could hinder your ability to buy a house, which might slow down your ability to have a family. You're worried that the new corporate dental offices in town are taking away patients from all the local dentists, and it's going to be just that much harder to grow a practice. How am I doing?"

"Amazing, are you really...?"

"No, I'm not a mind-reader – just observant. Paul has already told me that he's selling his practice. By the behavior and wardrobe of the woman that you were with, I assumed you are the dentist and she's a practice broker. Your age tells me that it's probably your first practice. Your face and posture are the map of Worryville, and Paul has told me enough of the struggles of young dentists to pinpoint your worry on debt and competition. I heard you talking sweetly to someone on the phone, but you're not wearing a wedding ring, and I saw you scanning the real estate listings on your phone. Two plus two still equals four."

"You're good," said Peter, "and, by the way, your meatloaf is outstanding."

"Why, thank you! I'll pass your compliment on to Efrain. He's the chef."

"You're welcome, and if you were a real mind-reader, you'd know that I've decided against buying the practice. It's just too big of a step right now, and like you said, I have no idea how to run a business. From what I've observed, most dentists make it up as they go, not admitting that they don't know what they don't know. Things are changing now, and if my hunch is right, the dentists whose egos won't let them admit that they don't know something will go the way of the woolly mammoth."

"So, you don't think solo dental practices will survive?"

"Certainly, there will be solo practices, but not as many, and I may just be one of the ones who can't do it."

"OK, here's what I think," smiled Athena. "The mother of four grown men learns a few things along the way about making snap-decisions on someone's character. Here's my hunch," Athena's sympathetic smile returned, "you are exactly the type that will make a solo office of the future succeed. Honey, the only thing you are missing is the right direction and support."

"And," she continued, "if you're like me and believe things happen for a reason, then it's no accident that you are in here and that I stuck around for closing tonight.

"I have a customer who comes in for coffee almost every morning that I would really like you to talk to before you make your final decision. His name is Jack, and he has taken the meanings of direction and support to a new level for me. He's made a huge difference for my business.

"He's a retired business consultant, I think, and to top it off, I've heard him talking to dentists – or managers of dental offices – about running their businesses. I think he could help you a lot."

Peter shook his head, "Oh, I can't afford a consultant right now, and I wouldn't even know where to begin or what to ask."

Athena's face was animated now, "No, no, Jack refuses to take any money for his advice. He won't even let me give him free coffee. He always mentions something about paying it forward. And, his magic is how well he guides someone through things. You don't have to worry about taking the lead."

"Is he a dentist?" asked Peter.

"I don't know, and I've known him for almost 5 years. I don't even know his last name. He changes the subject whenever anyone tries to find out more about him. It sounds kind of weird, but he's a wonderful guy with incredible insights. Look, at least think about it. What have you got to lose? He comes in at 8:30 like clockwork. I'll make the introduction."

"Did Paul ever speak with him?"

"They know each other, but Paul's not the type to seek advice, and Jack doesn't push himself on anyone. Paul is a dear young man, but your woolly mammoth description fits him pretty well."

"Thanks, Athena, I have to work tomorrow. So, if I do stop by, it will be Thursday. You certainly do make him sound interesting."

"He definitely is interesting, and by the way, what's your name?"

Chapter 4: The Mysterious Jack

"I think you should go just to meet the mysterious Jack," said Jenna. "If nothing else, it could make for a great story."

"I don't know. Tomorrow's the only morning that I'm not working all week, and there are a couple of things that I need to get done before the weekend. Besides, I don't think I want to buy the practice anyway."

"Oh, go for it. I want to hear more about this guy."

"For you, my dear, I'll do anything. Alright, and you're right, it is kind of intriguing."

Peter didn't want to seem overly anxious, but arriving at 8:20 am was a give-away. "I told Jack about you yesterday and that you'd be here today," said a smiling Athena as she brought a cup of coffee to Peter."

"What made you so certain that I'd be here?"

"I just knew, and here's Jack now."

Jack was a few years younger than Peter's father and as non-descript as is imaginable. He was the kind of guy that someone sitting next to him on a bus wouldn't be able to describe ten minutes after he was gone. He had a great smile, though, and there was always a look in his eye like he knew more than he was letting on.

After the usual amenities, Jack asked Peter to describe what was going on, and he listened attentively, only occasionally interrupting to ask a question.

After Paul finished, Jack started with a question, "So, something still seems to be calling you to have your own practice, Peter. You've already identified the valid reasons not to buy, and yet, you're still here looking at Paul's practice. What's the draw?"

Peter had thought about this question a thousand times, and he still didn't have a good answer. "I guess, if I'm honest with myself, I want to be the guy with the power. Nobody can tell me what to do. I get to be the head guy by virtue of my position."

Jack was visibly impressed. "That's a very insightful answer from someone who has never been in business before, and while you make it sound like it's a selfish or egotistical reason, it has the potential of being the beginning of a very strong foundation. Let's leave that thought on-hold.

"Let me ask you another question: why do you think there is so much investment money pouring into funding dental businesses?"

Peter had heard the all the invectives against greedy Wall Street wanting to take advantage of dentists while forcing poor patient treatment for the sake of profit, but he hadn't completely accepted the premise of evil. "I suppose they think it's a good business opportunity."

"Well put," said Jack. "So, assuming for a moment that the investors aren't banking on high profits through the delivery of poor quality care, which would be a really stupid investment, where do you think they see the opportunity?"

Peter hadn't really given it much thought. "Volume? Consolidated marketing? Better purchasing power?"

"Those are a few of the trees, but it's important that you see the entire forest. I apologize, but I need to leave in a few minutes, and I'll be out of town until next Wednesday. If you'd like, we can have coffee again on Thursday, and I'll be able to spend a little more time.

"For now, here are my thoughts on your purchase consideration:

  * Think about the forest question, and if you come back, we can talk about it more next week. It's the key to a solo office's surviving and thriving over the next several years. Also, remember that the most important word in the question is opportunity.

  * Your fear about not knowing business basics is valid, and it's really good that you acknowledge it. It's not a show-stopper, though. If you understand the phases of developing a skill, you'll see that there is a pathway to development of those skills, and lot of your fears will fall away. Fortunately, you have a master right here at Athena's, who is very knowledgeable about the phases, and she's always happy to explain the concepts. I'd strongly recommend that you talk with Athena when she has some time.

  * Your insight into the power of position is an important one. I think you described it as being the head guy. If used correctly, it's a very powerful tool. If abused, it's horribly destructive. We can talk more about that, too.

"So, maybe I'll see you next week, and it was a pleasure to meet you," said Jack as he shook Peter's hand.

"It was a pleasure to meet you, too. I'll definitely be here next week. Let me buy your coffee for you this morning."

"No, thank you for the offer, though. Got to run!" and Jack was off in a whirl, paying Athena as he walked out the door.

Chapter 5: Learning to Master a New Skill

"Sometimes, talking with Jack is like trying to drink from a fire hose." Athena sat down next to Peter.

"Yeah, even though we didn't talk too long, I wish I would have taken notes," replied Peter.

Athena laughed, "Actually, when he was giving me some advice on my business a few years back, I did carry a notebook and pen with me."

"Jack mentioned something about phases of developing a skill, and he said you were an expert. I'd like to hear more, if you can find some time."

Athena swept her arm around the room. There was only one other person in the café, sitting at the counter and lost in her laptop. Two of the servers and the chef were talking at a table in the corner. "Now is a good time for me. It'll be another hour or so before the lunch crowd arrives."

"It's good for me, too," said Peter. "So, what are the phases of developing a skill?"

She cleared off a paper placemat in front of her and pulled a pen from her apron. She drew four boxes.

"We all go through specific stages when we are learning a new skill, and when we run a business, there are a number of skills that we need to have. The whole idea behind understanding the phases is to identify every skill you need and to identify what stage of development you are in.

"Let's see if I can give you an example. Have you ever tried to learn a software program, but you gave up out of frustration?"

Peter nodded and smiled, "Photoshop. I must have sat down 10 times with the manual and worked my through the first few lessons. To this day, I can only use it to crop a photo, and even then, I don't always immediately remember how to do that."

"OK. That's a perfect example, and it's one that I went through, too.

"So, you started off being excited about learning something. In fact, you were excited enough to spend $100 or so to do it." Athena wrote the word EXCITED in the first box. "Then, reality settled in. It wasn't enough just to spend $100. You realized that you needed to invest considerable time and effort to learn something you weren't familiar with." She wrote DISCOURAGED in the second box.

"It's at the discouraged stage that most people give up. It's painful, and it's natural to want to avoid the pain. So, people never end up developing the new skill. It's also the reason people hate to change from a skill that they know.

Athena continued, "Now, let me tell you how I learned Photoshop. My initial experience was very similar to yours. I sat down with it twice, and each time I stopped trying after about ½ hour. The next day a friend, who I paint with here, told me she used Photoshop all the time, and she started to show me. I worked on one project with her for a long time, with her guiding my every move. In time, I began to get comfortable, but I was still very CAUTIOUS." Athena wrote the word in the third box.

"My friend worked with me through about 10 projects, and each time, she would give me specific learning goals. Eventually, of course, I finally was able to comfortably work on my own." Athena filled in the last box with the words SELF ASSURED.

"Knowing the phases that we go through when we are learning is important, but it's equally important to understand the best ways to progress. My friend's step-by-step directions during the discouraged phase made all the difference. As I progressed through the cautious phase, I needed less hand-holding, but I still needed her expert support when I ran into a problem."

Athena continued to draw. "If I graph it like this, you can see that a high level of direction is required in the EXCITED and DISCOURAGED phases. The DISCOURAGED phase also needs a high level of support. The need for direction then drops off as you start to gain your sea-legs.

Athena was focused now. "Another way to look at this is that during the hardest times are when you are on the right side of the graph – when you're discouraged and cautious. You need people who know what they are doing to support you. If you try to do it all alone, it's likely you'll never make past the discouraged phase.

"That's where I was when I first met Jack. I hadn't developed many business skills beyond the discouraged phase. Basically, I was winging it, creating more problems than I was solving, and I was too damn egotistical to admit that I didn't know everything. I was the boss, right? I was supposed to know the answers, right?"

"What did Jack do?" asked Peter.

"Jack helped me sort through the most immediate skills that I needed to develop, define where I was in the development pathway, which was pretty easy in my case, and most importantly, he helped me get the support I needed. Equally as important, he helped me set learning goals for the DISCOURAGED and CAUTIOUS phases.

"Understanding this learning process is not only important for you, Peter, but it will be critical when dealing with your staff. Undoubtedly, you are going to ask them to learn new skills, and when they hit the discouraged phase, you are likely to get resistance. You'll need to make sure that they have the support and direction that is necessary."

Just then a group of 6 people walked into the café. "Well, it's time for me to get back to work," said Athena as she stood up. "Feel free to come back anytime, and if I have some time, we can continue the conversation. Anytime between 4:00 pm and 6:00 pm is usually good for me. Let me give you some homework, though. Write down a list of the skills that you think you'll need to get started running a dental practice. I still have my original list. We can compare."

Chapter 6: Opportunity Knocks?

"Wow!" said Jenna as she simultaneously finished eating dinner and listening to Peter recount his morning at Athena's. "It sounds like she should rename it to the Magic Business Consultant Castle. Do you get the feeling that it won't be there when you go back, that it was just a mirage or a dream?"

"No kidding! I can't help but wonder where this is going."

"So, what do you think is the answer to the forest question?" asked Jenna.

"I was thinking of taking to social media to do some research. Some of my classmates work in these large groups. I'll ask them what happens there. I know that I'll just get more trees, but I'm hoping that if I see enough trees, I'll see what's common to the forest."

Jenna continued, "What do you think Jack meant by the power position?"

"At first I assumed he meant that it's better to be a nice boss than a mean one, but I think that is too simplistic. Something tells me that he has a lot more to say on the topic. I guess I'll find out soon enough."

"Are you feeling more confident now about buying a practice?"

"Well, I haven't officially said 'no' yet. Karen is still gathering information. I still have a few days before I say anything. Anyway, it's not like it's entirely my call. I'm sure others are looking at it. Maybe someone will make Paul an offer he can't refuse."

Trying her best not to sound patronizing, Jenna smiled and said, "I have no doubts that it's going to work out."

Peter was looking down at his phone and seemingly didn't hear Jenna, or at least, took no note of hearing her. "Great! My friend Mark, who works at a corporately-managed practice, is available for lunch tomorrow."

Then, after a few moments, he looked directly at Jenna, "Sweetheart, I really appreciate your confidence in me. The truth is that I don't have the same confidence, and I'm afraid that if I fail, I won't have lived up to how I try to portray myself to you. I know in my heart-of-hearts that it doesn't matter to you, but it does matter to me. So, if I get frosty about any of this, it's because of my fears, not anything you've done or said."

"Peter, first of all, my being proud of you has nothing to do with your career success, and I should have been clearer. I think based on what you heard today, you're going to buy a practice – whether it's Paul's or someone else's, and Jack told you something that makes me think it's the right choice.

"Whatever the answer to the forest question is," continued Jenna, "he's right about one thing. Investment bankers and equity investors are almost uniformly very smart people. They don't make investments carelessly. Their research and analyses are thorough and detailed. If they see an upside in the business of dentistry, there is probably one there. My guess is that they have uncovered opportunities most dentists don't see, and I'm confident that you can figure it out."

Chapter 7: Not All Corporate Groups are Created Equal

Peter hadn't seen Mark in probably 2 years, but they had stayed in touch on Facebook. It wasn't long, though, before they were laughing and joking apropos of the common bond produced by 4 years of going through the trials of dental school together.

"I'm afraid I can't help you much to find any magic sauce on the business side," replied Mark to Peter's question about what might make corporate organizations run better than solo offices. "I work for the DSO, or dental service organization. The DSO hires the MSO, the management service organization, which handles all the business tasks. The DSO deals with the clinical side of things and employs the clinical staff. Most of my day-to-day is with the other dentists and hygienists. I don't really get involved on the business side. People complain that things aren't managed well, but I think complaining about management is the case in every big organization. It seems to me like things work pretty well. It's likely at some point that I'll become one of the practice owners, and I assume then I'll get more involved in business, but for now, I don't really pay attention."

"Practice owner...? I thought the corporation owned the practices."

"Almost all organizations called corporate dentistry are some variation of an interaction between a DSO and an MSO. At one end of the spectrum, and probably illegal, the DSO exists in name only, and the MSO calls all the shots and basically hires the dentists. It's likely illegal because in most states only licensed dentists can own a dental practice, and only licensed dentists can collect money for the practice of dentistry. If the management company gets involved in how care is delivered, it's against the law, but I hear it happens. I sure wouldn't want to work for one of those organizations.

"On the other end of the spectrum is an organization like the one I work with. The dentists in the DSO are the owners of the practice. In our case, the organization was started by a group of dentists who formed a DSO. They started by trying to do the management functions themselves, but realized that they needed to bring in professional managers. So, they sought out the MSO, and to this day, it's the dentists, the DSO, that calls the shots.

"So, no business person has put any pressure on you about production?" This was one of Peter's fears about corporate dentistry.

"No one on the business side has even talked to me about production, much less pressured me. Some of the dentists have helped me get more efficient, but even they haven't pressured me. It was really more mentoring than anything else," answered Mark. "I've heard the same horror stories that you have about how in some corporate organizations the business people demand the dentists hit certain production goals. That isn't the way this organization works, though."

"Anyway, the way the DSO and MSO expand into new locations is for the DSO to identify an owner-dentist who will own a new practice. Sometimes, it's an existing owner-dentist who wants to own multiple offices. Sometimes, it's a new dentist – like me - who wants to own one. Sometimes, the DSO buys an existing office, and the selling dentist remains as the practice owner..."

"Wait," interrupted Peter, "how does a dentist sell, yet still remain the owner?"

"I'm not exactly sure of the legal specifics, but it's been explained to me that it's like merging any small business into a larger one, where the small business owner is compensated for the value it brings to the larger business. In all cases, though, the owner-dentist still maintains professional value – I've heard it called blue sky or the intangible asset value – of the practice within the DSO. That value can be later sold, kind of like stock, to the DSO, if the owner-dentist wants to leave. It's simpler for me to think of it as being a partner in a large group, where I can sell my partnership, if I want."

"Interesting," said Peter with his hands folded and the tip of his forefingers on his lips, "but it sounds complicated... and a little overwhelming."

"I'm still interested, though," Peter continued, "in how the bottom line works out. I've heard older dentists say that there isn't enough profit in dentistry to add another layer of profit-taking – the investors. They say the only way it could possibly work is to increase production by performing unnecessary treatment, or they need to lower expenses beyond the ability to offer a good patient experience and/or decent materials and good lab work."

Mark responded, "Like I said, I don't get involved in the business side, but I can introduce you to Jan, who is the regional business manager. I'm sure she'll be glad to explain things, but you'll probably have to put up with a recruitment pitch."

Chapter 8: What Management Skills Do You Need _?_

On his way to Athena's to continue the discussion about the phases of developing a skill, Peter reflected on his conversation with Mark. While he hadn't been able to gather much about how they run the business, he had learned and later, written down a couple of things.

As he had suspected, generically labeling corporate dentistry as evil, labeling solo practice as good, and hoping that in time good would conquer evil was simply the equivalent of sticking your head in the sand. Mark's organization seemed to meet a need and deliver a good service. The unethical organizations would inevitably fade, but organizations like Mark's would continue to grow. In other words, they weren't going away.

The discussion and observations had also raised another important question, "Why not just get involved with an organization like Mark's?" For Peter, the answer was clear, and getting clearer all the time, "I want to do it myself!"

Peter arrived at Athena's slightly after 5:00 pm, and as she had predicted, things were slow enough for her to talk.

"Here's my list of the skills that I think I need," said Peter, opening his notebook.

Peter looked a little sheepish, "To be honest, this isn't even my list. I asked a friend, who bought a practice about 2 years ago, what she had needed to learn. These were the things, according to her, that she as the boss needed to be comfortable with. She said there are other things necessary to run a dental business, but the office manager that she hired already had those in control. The last 2 seem the same to me. She seemed to think they were different. She didn't tell me, but I'd guess that she has had to hire and fire a lot."

"This list seems a bit short," Peter continued," but since I don't know what I don't know, I thought this would be a good start."

"I'll share my original list with you in a minute," said Athena, "but first, did you get a chance to ask her if she had reached the SELF-ASSURED level with any of these skills?"

"I didn't use those words," laughed Peter, "but she told me her knowledge level on any of them is woefully wanting. She basically defers it all to her office manager, who apparently is very good."

"Hmm," mused Athena, "I wonder. Anyway, my original list was a lot like yours. I thought I was clever and called it the 3 M's

"Jack helped me refine it quite a bit, as I'm sure he will with you, too, but something interesting to me is how similar my situation was to yours. I was five years out of culinary school, which I attended after the kids had grown and gone, and I had worked my way up to chef in one of New York City's better restaurants. I got tired of the constant stress and the hustle of the big city. So, I moved here with a little money and the idea of opening a place of my own.

"To make a long story short, I opened this place with no real knowledge of how to run the business. I hired a few employees who claimed to have experience, but as you put so well, I didn't know what I didn't know. So, we set sail, based on my employees' previous experiences – which turned out to be very inadequate – and my arrogance of believing that since I was the owner, I was somehow anointed to always figure out the right call.

"Fast forward: after about 6 months, I was ready to call it quits, and then, Jack started to come in every morning for coffee. Now, almost 5 years later, Athena's gets rave reviews, my employees really like working here and barely a month goes by without someone offering to buy Athena's at an outrageous price. At the same time, I love my work, and the business is financially solid."

"Wow!" said Peter. "Was it Jack's magic that made it work?"

Athena shook her head, "No, and Jack would be the first to say that the magic was my abilities and commitment to succeed. Jack simply gave me the guidance to quit tripping over my ego – I mean my feet – and to step back and re-evaluate my business differently."

Looking down at his notebook, Peter noticed the skills he had written down. "How did he suggest that you modify your desired skills?"

"I'm going to guess that he will suggest different changes for you than for me. While there are some similarities, our businesses are quite different, but I can predict the first 2 additions will be the same.

"Go ahead," smiled Athena while handing Peter a pen, "you can write those down. I did, and if I sound like I'm doing a rote reading, it's because I read them so many times that I memorized them."

Chapter 9: A Peek into the Future

Peter had written down some questions that he'd thought about to ask Jan, the Regional Manager of the organization that Mark worked for, but while waiting for her in her office, he decided against coming across like a reporter. Casual conversation was probably a better approach, and once she arrived and they starting talking, he was certain is was a better approach.

"Mark mentioned that you were interested in learning how our MSO works," said Jan, finally getting down to business. "I'll gladly go over anything, but I'm interested in why you want to know?"

"Mostly, I'm curious," replied Peter. "I'm thinking of buying a practice, and I'd like to understand how an investor-owned organization can produce the financial returns necessary to justify such large investments. Mark assures me that it's not at the cost of quality treatment, and I believe him."

Jan was truly surprised, "Why would you want to buy a solo practice? As part of a DSO, you can focus entirely on clinical care, and not worry about running the business. Financially, you'll probably do just as well, or better, and when you want to leave, your buy-out is guaranteed."

Peter smiled, "Mark said you'd be a strong proponent of this model. All I can say that I think I can do it myself, and I need to prove it."

"OK," Jan responded, "I guess I understand, but the reason I'm such a proponent is because it makes so much sense to me, and I see first-hand how well it works. Anyway, let's talk MSOs from my perspective, and realize that I'm not privy to what the big chiefs are up to."

Jan spent the next hour talking about the day-to-day activities of an MSO. Peter took copious notes.

On his drive home, Peter reflected on how sorely inadequate his required skills list had been. Generally, he was pretty discouraged, too. How was he going to be able to compete with such fire power? His interest into why Jack seemed to feel that opportunities existed for solo offices had now increased immensely.

On the positive side, he was pretty sure he had learned the answer to Jack's forest question. It was the 'efficiencies' that a big organization could leverage. But, the answer gave him no practical insight as to how it could translate to an opportunity for a solo practice. Again, he was anxious to hear Jack's insights.

Chapter 10: More to Learn

On Thursday, Peter was running a little late. Jack was already having coffee with Athena when Peter arrived.

"How was your trip?" asked Peter, as he sat down.

"Other than the fact that I hate business travel, it went fine," answered Jack. "I understand that you've been busy doing some research."

Peter gave a little frown, "Yeah, but other than realizing that I'm in over my head, I'm not really sure I learned much that I can apply practically."

"Oh," said Jack, "my guess is that you learned a lot of practical information. Let's sort through some of it, and use it as a foundation. Did you figure out the forest from the trees question?"

"I think so. I think the big guys use their huge resources to find efficiencies in everything they do, but again, how does that apply to me?"

Jack sat up and looked directly at Peter, "You're mostly correct, and this is important. They do, in fact, leverage the reality that most dental offices are run anywhere from slightly inefficient to highly inefficient. Where you are wrong is that they don't use a lot of resources to identify and correct the efficiencies. Through the use of professional management, they work smarter, not harder. You will have most of the tools that they use for efficiency available to you as a solo practitioner on day one, and if you learn to use them well, you can handle all the professional management aspects yourself.

"Alright, then, moving on...," Jack continued. "Did you come up with a required skills list?"

Peter laughed, "Well, I thought I had one with just 4 skills, which were really just 3 – financial, marketing, employee management. Then, I talked with Jan. Now, it feels like the list should be longer than my arm. Also, Athena suggested that I add 'strategy' and 'leadership.'"

"I think your initial list, including Athena's additions, are good enough for now. I'll add one more: using cloud technology in dentistry, because until you understand that, you'll be unable to get the efficiencies.

"You don't need to worry about being an expert in most of the things Jan mentioned to you about corporate dentistry. You'll need to have experts in those things around you, and you'll need to know how to lead those with the expertise. But, that skill falls under leadership and employee management.

"We can talk about leadership next time we get together. In the meantime, let me give you the contact info of a local solo dentist who runs her business better than any corporate practice. She's also my personal dentist. She has the cloud technology thing down pat. I've already let her know that you'd probably be contacting her." Jack clicked something on his cell phone, and within seconds, there was a sound of receipt on Peter's.

"See you next time...," Jack left just like the previous time. He walked away quickly and handed money to Athena as he was leaving.

Chapter 11: Meet the One Hour Dentist CEO

Peter placed Jack's dentist at about 45 to 50 years old. She was pleasant, but quite matter-of-fact. He doubted there was much small talk in her presence. She introduced herself as Laura and showed him around her practice. It was a very comfortable office, but not what Peter had expected. He joked with Jenna that he had visions of a Star Trek kind of office: the office of the future that can outshine and outsmart corporate dentistry.

"Jack tells me that you have the cloud-thing down," Peter started speaking as he sat down in her private office, "and without it, there's no hope for solo office survival."

Laura laughed, "Well, I don't think we can definitively publish the cloud survival guide just yet, but seriously, I don't see how a dentist can be both a practitioner and a CEO without it – unless he or she is willing to work 18 hours a day."

Peter had heard the term dentist CEO before, but beyond the obvious, he didn't really understand what it meant. Wasn't every business owner a CEO?

"Is a dentist CEO any different from any other owner-dentist?" wondered Peter out loud.

"Absolutely," replied Laura. "A CEO sets the direction for a business and makes sure things don't stray too far off course. The CEO needs to be a leader and help the staff to flourish.

"Most of my colleagues abdicated the role of CEO many years ago. At the end of a tiring day at chair side, they understandably just want to get away from the stress. They don't want to put in the extra time that is required to evaluate the status of their business and the effectiveness of their employees, assuming that they even know what to look at. I don't mean to trash my colleagues. It's tough. You need accurate and timely information to be an effective CEO. Given the way most practices gather data, it can take up to 2 extra hours every day just to gather the necessary reports that someone needs to be a true CEO. Then, all you have is a pile of paper with a massive amount of numbers. The dentist needs to understand all the key components of running his or her business to identify potential problems. So, when you add in the time traditionally required for evaluation, planning, and assessment, you can double the amount of time - and that's required every day. Even if the time could be found to do it, most practices don't have the personnel capable of gathering the necessary data for analysis. So, it falls to the dentist to be both data-gathering analyst and CEO, which soon becomes hit and miss in most cases, and eventually it gets ignored.

"The result is that the dentist ends up depending on the office manager to handle the business health of the practice. While dentists will look at production and collections reports, they really aren't convinced of their accuracy, which is a valid observation, and the only measure that they end up consistently following is how much money is in the bank. If they begin to notice that there's not enough money at the end of the month, there's rarely enough expertise in the practice to diagnose the problems. Also, the problems may have been months in the making and a good business person would have anticipated the issues and solved them before they caused the cash flow problem.

"Isn't it obvious that a system like this is full of inefficiencies? So, abdicating the role of CEO is the equivalent to walking around in a dark room and hoping you don't bump into something. Historically, though, dentistry has been profitable enough to absorb the inefficiencies and the dentists didn't often bump into things in the dark, but as Bob Dylan said, 'the times, they are a changing...'"

"But, almost every dentist I talk with says his or her office managers are great and do a great job of running the business," said Peter when Laura paused.

"Undoubtedly, some office managers are capable," replied Laura, "but too many are in over their heads. That statement by the dentists is one of hope, more than one of knowledge. For many dentists, if they are truthful, they don't know enough about running the practice to make a capable evaluation."

At this point, Peter was just staring at Laura and nodding. "Wow! This is astonishing, but like you say, it's understandable. So, where does the cloud fit into all of this?"

"I teach a workshop called The One Hour Dentist CEO, which is a how-to guide for a dentist to be an effective CEO in 5 hours per week. In short, it requires effective management tools that are delivered inexpensively over the internet. It also requires completely revamping how the dentist works with staff and the types of activities required by the staff. Again, use of the cloud to do this well is almost mandatory.

"I'll get into this in more detail at some point, but I know Jack is going to go over some things with you that will make what I talk about be much more meaningful.

"For now, let me show you one thing to whet your appetite." Laura turned a large LED screen towards Peter.

"Here's a report on my accounts receivables." She clicked on an icon on the screen and a graphical chart appeared. "Here's the amount in patient balances; here's what's in insurance balances." She clicked on the insurance balances graph and another graph appeared. This one showed how much was owed by each insurance company, how many claims were outstanding, how old the claims were, and the status of any claim older than 30 days. "Let's see what's going on with Aetna." She clicked on the first bar graph. Another report appeared with the detail of all the Aetna claims. "Now, let's see how things are trending." She clicked on another icon that brought up a graph that showed her insurance receivables had been increasing over the last 3 months. "I don't like this trend, and it's worth keeping an eye on it, but the software will automatically flag me, if the trend is getting into the danger zone"

"If you are familiar with traditional practice management software," she continued, "you know that it would take you 15 minutes or more to run the reports that I just looked at in 1 minute, and the data wouldn't have been as concise. If you want to look at another carrier besides Aetna in the traditional software, you can plan on doubling the time to run the necessary reports. So, seeing where you stand with each insurance company could take a couple of hours just to run and compile the reports.

Also, looking at a pile of numbers on printed reports is only valuable if you have the ability to spot bad trends and warning signs. That takes time and analytical skills that not everyone has. My software does most of the analysis for me.

Now, let me show you the other half of the equation necessary for good business intelligence. The status of my accounts receivables is an important assessment of my business based upon past activities. They are called lagging indicators. I'll show you an example of a leading indicator, which gives me a look into the future.

"Here's how my monthly production looks against my monthly goal?" She clicked on another icon, which brought up another screen with bar graphs. This screen also had a picture of a stoplight which was green. "This screen tells me that I'm on target to hit or exceed my monthly goal, even though today is only the 9th. Without even looking at the details, I can see by the green light that I have enough treatment scheduled through the end of the month. The light can also show red or yellow, and then, if need be, I can drill down into the report to get specifics.

"Again, traditional software doesn't have the drill down capability and running the necessary reports would be very difficult and time consuming. In short, it doesn't get done in most offices."

"Quick question," said Peter, "what happens if the light is red?"

Laura smiled and answered, "I have a cloud solution for that, too. I'll show you some other time. I'm running late right now. So, I've got to head home, but we'll speak again, if you like."

Chapter 12: Done Deal

Peter looked at the text from Karen: He accepted our counter offer. Call you in a few to talk next steps.

"Well, it's for real now," Peter read the text to Jenna.

"Woo-hoo! Congratulations! I know it's scary," said a visibly happy Jenna, "but you have to admit that it's exciting, too."

"Yeah, but it's kind of overwhelming to think of everything that needs to be done." Just then, Peter's phone started playing God Save the Queen. He'd forgotten to change Karen's ring tone.

"I didn't think he take our first counter," said Karen. "I guess he really is anxious to move.

"Anyway, here's what we need to do: with your permission, I'll get the paperwork over to the lawyer. You need to contact the bank to get the loan process cranked up. You should also call your CPA ASAP. Now that you know the purchase price, you need to decide on the necessary working capital to finalize the loan amount. She's also going to want to set up the books sooner than later.

"Anything else can wait for now. I'll re-send you the check list of the things you'll need to do over the next couple of weeks.

"Paul has blocked off some time tomorrow morning, so that you and he can talk about the transition. He also wants you to meet and spend some time with the staff. He'd like to meet at the office at 9:00 am, if you can make it."

"Yes to the lawyer; yes to the 9:00 am meeting; I'll make the other calls as soon as we finish," replied Peter. "Karen?" Peter paused, "I don't know how to thank you for all your support. I'd have been lost without your guidance."

"All in a day's work, Mate. Ciao." Peter could hear the smile in her voice as she hung up.

Karen's help had truly been valuable. She had introduced him to 3 different banks to evaluate the best terms available for a purchase loan. She had walked him through the things he should consider when looking at a loan. She had set up interviews with 2 local attorneys who worked with dentists. Peter thought the choice was obvious, but he appreciated the opportunity to evaluate more than one option. The process was similar with the CPA, although Karen was a good friend of one, the one Peter finally chose, and had heard the raves of several local dentists about her.

Karen also took Peter several times through the steps that would be involved in the process from beginning to end, including what to look for in a practice. At some point, Peter wanted to say, "Enough! I'm not in grammar school," but in the end, he was very comfortable with what was happening and appreciative of Karen's repetition.

Chapter 13: How Do I Get Started _?_

Since the meeting wasn't until 9:00 am, Peter would have ½ hour to spend at Athena's. He was really hoping that Jack wasn't traveling. He had a couple of questions that he needed advice on. He had no idea how long to ask Paul to stay at the practice before he moved, and he had no idea what to say to or ask the staff.

"I can tell you how I would handle the transition with Paul," said Jack after he heard Peter's questions, "but there's really no wrong answer. Mostly, it depends on your comfort level in learning how he handles patient flow and how he uses the fancy technology he bought.

"If it was me, and I was reasonably comfortable with the gadgets – excuse me, technology – I'd make the transition as soon as possible. The staff has been his employees for a long time. Who do you think they are going to look to for direction, even though you are the boss now? You are going to need to make some changes, and some of them might not be received well initially. Who will they complain to, and what happens if Paul agrees with the staff? Why risk a revolution in your first 2 months?

"The main reason to have him stay is to introduce you, face-to-face, to some of his patients. You can accomplish that and more with a well-thought out marketing campaign. By the way, while I'm thinking about it, ask your CPA to include extra cash into your initial operating capital for this task and other foundational marketing expenses – I'll go into foundational marketing expenses when we have more time. Your CPA might give you some pushback, but it will be money well spent."

Peter threw a hand in the air and said sarcastically, "Shoot, what's some more debt at this point?"

Jack smiled in response. "As far as the staff meeting goes, I'd say that it depends on whether Paul leaves you alone or not. If not, treat it like a party where everyone is getting to know each other. If he does leave you alone, it can be an excellent opportunity to take an important first step with them.

"You need to get across the street in a few minutes. So, I'll cut to the chase. You need to embrace a new way of running a dental business to survive and thrive in the not-too-distant future. The old way just won't work. You will need to be patient driven, cost effective, nimble, and continuously improving. Practices that are inefficient and inflexible simply won't make it.

"At the core of the new model is employee empowerment – true employee empowerment, not just lip service like you see in a lot of businesses. But most dental offices are managed with a very hierarchical structure – if the office manager says jump, everyone else says how high. Transitioning employees from a tightly structured environment to one of self-empowerment won't be easy – think of your discussion with Athena about the phases of developing a skill. They are going to need to develop new skills. Also, it's very common for employees who are tightly managed to feel powerless and victimized.

"Anyway, to get the ball rolling, you need to show that you are a boss who will listen, and – here's a much harder task – they need to learn how to break out of the comfort-zone of powerlessness. It starts with communication. Most employees want bosses to read their minds without taking the risk of speaking it. Most bosses think it's unnecessary to know their employees' minds. Until the cycle is changed, the concept of empowerment, or self-management, is just that, a concept.

"Here's a simple exercise to get things started. Have them write these 5 things on a piece of paper:

Peter scribbled these down in his notebook.

Jack continued, "Then, ask them to rate 1 through 5 what would most motivate them in their ideal job. Make sure they understand that it isn't a test, that there isn't any right or wrong answer, and that you just want to get to know them. Great employees are motivated by different things, and by the way, diversity of motivations among a team isn't a bad thing."

Looking at his watch, Jack said, "You're late. You'd better get going. If you have the chance to do the exercise, I think you'll be surprised."

Chapter 14: Jumping in with Both Feet

"In that case," replied Paul to Peter's thoughts on the transition period, "assuming no glitches in the sales process over the next 2 weeks, I'll make the end of the month my last day, and of course, I'll co-author a letter with you to all my patients. It'll be nice that I will be with my wife when she starts her new job. Also, I'm just a phone call away, if you have any questions.

"OK, let me introduce you to the staff and bring them up to speed. They are anxious to meet you, and I know that they have a lot of questions."

Everyone was waiting in the break room. They were seated around 2 of the 3 tables in the comfortably spacious room. Paul introduced him to Michelle, the office manager, Brittany, the insurance biller, bookkeeper and generally, jack of all trades, Marcie and Jayne, the registered dental assistants, and Deborah and Christine, the hygienists.

Paul described the aspects of the legal transaction, even though he had discussed it with them earlier. He also told them of the recently decided transition time table. "Wow, that's soon," was the general, somewhat plaintive, response.

Paul continued, "Peter, why don't you tell everyone about yourself and any thoughts you might have about the future of the practice? Then, I already know that everyone here has questions, and with that, I'm going to leave you to yourselves. I may be a little late, Michelle, for Mr. Peterson's appointment this afternoon, but it will only be minutes. Bye."

After Peter described his background and a little about himself, in response to the question of the future of the practice, he said, "I think solo practices are entering a time of competition that is going to re-define how a solo practice is run. I think the ones who survive will in fact have the opportunity to thrive. I intend for me, for us, to be on the thriving-side of things. I think it will be an interesting journey that has the potential to be beneficial for everyone involved."

When there was a pause, Michelle was the first to speak, "The question on all our minds is, 'what's going to change?'"

Peter had anticipated this question, "This is my first practice, and I'll be the first to admit that I don't know much about how the business works. I don't yet have the knowledge or the skills to come in and make many changes. Like I said, though, I think change will be necessary to compete for the future, but I can't say what it will look like just yet. I'm sure I'll have some differences from Paul in the way I do things clinically, but it won't be a big deal. In the short run, I don't see much changing for any of you, and if change happens, it's my intent for us all to participate – I have no desire to dictate from on-high unless it's necessary."

After answering a few more questions, Peter said, "OK, now it's my turn for a question." He could tell that they were all prepared to talk about their backgrounds. "Actually," he continued, "it's a little exercise. Please grab a piece of paper and pen."

While no one physically rolled her eyes, Peter could sense the general feeling as they shot each other glances. "What have we gotten into?"

To relieve the tension, Peter continued, "And for putting up with my perhaps silly first attempt at being a manager, lunch is on me at Athena's afterward." He immediately sensed a release from everyone.

There was a white board in the room. So, he wrote down the motivators that Jack had given him and wrote the question, "In your ideal job in your current role, what would most motivate you?" He went on to give the disclaimer that there was no correct answer, nor would the answer affect their positions.

"I can save us all the time, Peter, and get us to Athena's earlier," said Michelle, "It's the money. I should know, since I'm the one that gets everyone's requests for raises."

There was a chilly pause. "Whoa," thought Peter, "this could be a problem."

Then, Jayne, one of the RDAs, spoke up, "That's not true for me, Michelle. Money is important, but it's definitely not at the top of my list. For me, training and growth are the biggest. I love my job now, but I don't want to be an RDA for the rest of my life. I'd really like some opportunities to learn other things."

Christine, one of the hygienists, chimed in, "Money isn't at the top of my list, either. I am very motivated by how much my patients appreciate the work that I do. I'd be really unhappy working at a practice where I was asked to sacrifice the quality of my work, no matter how good the money was."

A lively, but friendly, discussion ensued. "Well, I guess that people are motivated by more than money," said Michelle, as the discussion ended. "Is that the idea?" she asked.

Peter pondered his answer, "I think the idea is that managers aren't mind readers, and ultimately, it's up to the employee to create her own success. My goal is to create an environment and make the tools available, so that staff can manage their own successes, which will inevitably result in the success of the practice."

Peter was looking down when he said this. When he looked up, everyone was staring at him in amazement. He had even surprised himself with the insight. "OK, so why don't you show me around, and show me what everyone does?"

Michelle walked Peter to the front desk and started showing him the practice management software. "Have you ever considered a cloud-based system?" asked Peter.

"Oh, no," answered Michelle, "this is the best software on the market. The cloud stuff isn't very good, and if you use the cloud, they have your data. Think of the risk!"

Peter didn't know enough to respond, but something told him that Michelle had no idea whether what she had just said was accurate – that she was just parroting what someone else had told her, probably the vendor of the software she was currently using. Laura would not be using it to run her office, and Jack would not have made such a big deal about it, if it was a bad solution.

"Can you show me how the software analyzes your accounts receivables?" asked Peter.

"Sure thing. I'll just run this report." After generating a report, Michelle clicked on print, and out came a report with some summary numbers. A/R was one of the summary numbers.

"Thanks," said Peter, "and can you break it down between patient A/R and insurance A/R." He was trying to mimic what Laura had shown him."

"Umm," Michelle responded thoughtfully, "probably, but I'm not familiar with that report. Let me do it this way." She generated another report that showed just insurance A/R. "I can subtract the insurance total from the overall, and then we'll know the patient total."

"Thanks, and can you determine what the A/R is by insurance company?" Peter was beginning to see the value of the kind of cloud reporting capability that Laura used.

Again, Michelle wasn't sure. "Now you're into Brittany's territory. She handles all the insurances, but I can't see any value in having summaries at the payer-level. Knowing how long a claim hasn't been paid is important, but even then, it's tricky, because insurance companies string out payments as long as they can. So, the age of a claim can be misleading. At the end of the day, insurance companies are going to pay you whatever they want, whenever they want. The best you can do is to keep the process flowing as smoothly as possible.

"The important number to keep your eye on is the relationship between production and collections. If collections are close to production, it means you are managing you're A/R well. Nobody is going to collect everything, but we're consistently above 97%, which means we're only adjusting off 3% of the A/R, which I understand is above the norm. So, even with the insurance companies' games, we're still eventually collecting almost everything owed to us."

It sounded logical to Peter, but he kept hearing Jack's voice talking about inefficiencies. He was pretty sure that there was another side to the story.

Thinking of Laura's red light, yellow light, green light graphic, he asked, "Assuming you have production goals, how do you know how well you're doing this month? Do you have a report that shows you?"

Michelle ran a month-to-date production report. "I'd say it's looking OK. Paul likes to shoot for $45,000 production each month. We're a little over $20,000 now, and it's the 16th." She then brought up the appointment schedule. "I don't see any major production cases before the month is out, but the schedule is reasonably full. We may not make it to $45,000, but we'll probably be close."

Even though he didn't know enough about the process, Peter's inefficiency radar was up now. "At what point do you know if the month is tanking, and do you do anything about it?"

Michelle shrugged, "Not much you can do. We'll know by the 20th or so if things are bad, but there's limited options at that point. In the past, we've tried calling up some of the next month's patients to reschedule them into the current month, but we found that we were just robbing Peter to pay Paul." She giggled when she realized what she had said.

Peter laughed, too. "I wonder why no one ever says, 'robbing Paul to pay Peter?' OK, everyone, are we ready for lunch?"

Chapter 15: The Other Side of the Story

"I'm proud of you, Peter," smiled Jack. "The connection between motivation and empowerment isn't overly obvious. Athena might be right that you're a natural."

"Thanks, but I was woefully lacking in how to evaluate the things that Michelle was telling me about the cloud and the other reports," replied Peter.

"Don't worry," Jack responded, "there are plenty of resources to help you learn. You would have gotten similar answers from probably 9 out of 10 office managers in the country. It's not that they are wrong answers, but it's that they're inadequate. They don't dig deep enough, and it's very likely that the data is inaccurate.

"Let's start with using the 97% collections ratio as a surrogate for evaluation of good A/R management. She was really talking about 97% AFTER adjustments, a.k.a. write-offs. Write-offs can be legitimate, but they are also where lots and lots of problems can be buried. Let's say your monthly production is $50,000, but $10,000 is written off. The 97% collections would be on $40,000, which may be OK, but $10,000 likely went into an unexamined black hole where inefficiencies are likely to abound."

Peter was a little lost about how $10,000 could disappear, but he would circle back later and try to get clarification. "What about the inability to project the production to the end of the month? Michelle seemed awfully hang loose, but Laura seemed to have the ability to know almost exactly."

"I'll let Laura go over that with you. She showed you only one key performance measure, or KPI, of the many that she uses to be the one hour dentist CEO. The use of the KPIs relate to a relatively new technology called business intelligence, or BI. I can't overstate how important the use of BI will become to you." Jack now wrote BI in big letters in Peter's notebook and circled it multiple times.

"I had the sense that Michelle didn't know much about the cloud, but what about the concerns she expressed?" asked Peter.

"Again, Laura can answer the data security questions better than I," answered Jack, "but suffice to say that the only practical way for a solo office to be fully HIPAA compliant is to be in the cloud, and over 80% of the medical world is in the cloud.

"However, Michelle's comment about the software she uses being the best on the market should potentially be a big red flag for you. It's could be that's code for, 'I'm comfortable using this software, and I'll fight any attempt to change,' or worse, it could be, 'I know how to hide things on this software, and I might not be able to, if we change.' I don't mean to imply she's stealing, but it's not uncommon for an office manager to sweep mistakes away without anyone noticing.

"Another really important point about cloud technology is how easily it can interface with other valuable cloud applications. For example, Laura's practice management application interfaces with the BI, application. She also interfaces with a sophisticated patient communications and marketing software, and on and on. I think she utilizes 9 or 10 different cloud applications.

"Won't I be able to do the same thing with Paul's software, asked Peter?

"The short answer," replied Jack, "is 'not really. Once more, I'll defer to Laura to demonstrate the difference between doing it the right way versus making compromises. I should also add that this is an example of where doing it the right way is considerably more efficient and less expensive.

"It's time for me to go, but I'd suggest that you spend some more time with Laura. The sooner that you understand what she does in her office, the more you'll be able to figure out your next moves.

"I also think you and Athena should spend some time talking about the subject of strategy. She not only knows the subject, she lives it. By strategy, I mean defining the vision of what you want your practice to be. Without it, you have no target to shoot for. You'll end up without any direction, and money will be the only measure to define your results. Let me give you something to consider when you and Athena discuss the topic of strategy.

Peter scribbled it in his notebook.

"Next time we talk," Jack started to leave, "I'd like to build on what you learned about leadership and empowerment."

Jack departed in his usual fashion.

Chapter 16: Don't Buy a Screwdriver to Pound a Nail

Laura met Peter in her reception room, "Congratulations on the new practice, Peter. Now is when the fun begins!" She led him into her office, while asking about some of the specifics of the acquisition.

"I'm free for the rest of the afternoon," started Laura as they sat down. "So, where do you want to start?"

"I'd really like to learn as much as possible about cloud technology," answered Peter, "but Jack really emphasized asking about business intelligence, and I'm very interested in the dentist CEO topic."

"They're all interwoven. Real time key performance indicators are an important tool in the box for the dentist CEO, and the only affordable and practical way to get true business intelligence is through a cloud application." Laura continued, "I anticipated your question about the cloud. So, I asked my husband Henry to join us. He's going to stop by later. We've been married for almost 3 years, and before I met him, I tried being the dentist CEO with old technology, and in retrospect, it was almost impossible unless you were superman – or in my case, superwoman.

"Henry is an engineer – used to work for Google – and he's the one that opened my eyes. He laughed the first time I showed him my practice management software. 'When was the last time you heard of innovative desktop or client server software development,' he said? 'Everything is in the cloud now, and there's a reason for that.' Once I understood what he meant, the one hour CEO became a reality, attainable by anyone."

"Paul's practice management software looked good to me," said Peter. "Maybe you can help me understand why I can't use it to do the things you do."

Laura nodded, "We'll definitely cover that, but let me first step back and talk about how most dentists use, or don't use, their existing software.

"When I start my dentist CEO workshop, I ask

  * How many dentists have logged into the software within the last two weeks to look at reports. Usually, only about 20% raise their hands.

  * I then ask about what reports they review, how frequently, and who runs the reports. The answers are all over the map.

  * I ask how many are comfortable that the data they review is accurate. Typically, very few hands go up in response.

  * When I ask what percentage of their staff knows how to use their software correctly, it usually generates a laugh.

  * When I ask what percentage of the functionality of the software they think they use, I phrase it as multiple choices. The category of '20% or less' generates the most hands.

  * Finally, I ask how many enter their treatment plans into their software, and again the answer is very few. You see, without entering treatment plans into your software, there is no practical way to know how much potential treatment has gone untreated or why it's gone untreated or for how long it's gone untreated or how to reach out to those who need further treatment. In other words, no one who is in the dark about some of the most important information about their business – the status of potential revenue - can truly call herself a CEO. She simply doesn't have enough information to make informed decisions.

"In short, most dental offices don't correctly utilize – or utilize at all - the most important business tool available to them to truly be a CEO, the information that should be available to them in their practice management software. Instead, it's use and upkeep is relegated to the staff, which due to frequent turnover is likely inadequately trained, and overseen by an office manager who may or may not understand how to use the software correctly. Even if the software is used correctly, the data goes wasted. It's very infrequent that anyone applies intelligent analysis to the data.

In addition, I've yet to find a practice where anyone evaluates the accuracy of the data input. Most businesses that do heavy data input have a quality assurance, or QA, process to evaluate and improve on accuracy, but not dentistry. So, data input errors are rampant and only discovered when they create a problem.

Basically, I would guess that, for as much as 75% of the industry, computers and practice management software don't produce significantly better business results than the manual peg-board system and paper appointment book that were being used when I first started practicing. I think it's valid to wonder why some dentists purchase software at all."

"In that case," said Peter, "how do dentists decide what software to buy?"

"Some dentists will ask for their office manager's advice, and most office managers will choose based on what they are comfortable with, which as we'll talk about in a minute, is one of the many wrong reasons to purchase," answered Laura. "Anyway, despite the fact that they don't end up being users, it's typically the dentists who make the software choice. Did Jack discuss the concept of power of position with you?"

Peter nodded, "He referred to it and said it was important, but we haven't talked about it yet."

"It's kind of like the saying, 'just because he's standing on 3rd base doesn't mean he hit a triple.' Too many dentists feel that since they are in the position of boss, they automatically have the power to magically evaluate software," she emphasized the words position and power. "I'm being overly harsh here, but the result is that they end up buying for all the wrong reasons. They'll ask friends. They'll ask their supply salesperson. They'll listen to so-called gurus, whose advice routinely comes from ulterior motives. They'll ask their IT hardware and network consultant, who knows very little about software, but will pretend he does, and who potentially stands to lose business if the cloud replaces the network that he set up.

"During the software selection process, they'll ask what they consider pointed questions, but in reality, the questions are obvious, and the salespeople have prepared, canned answers. Then, they'll buy for reasons like the most expensive must be the best, or since they are all the same, I'll buy the cheapest, or my new office manager used this one before and liked it. I've yet to hear about a dentist who asks a software vendor, 'show me how it will make my run my business better?'"

"In the workshop," continued Laura, "I help dentists understand that their choice of software is mission critical. So, the choice needs to be strategic, meaning a direct consequence of the goals that are derived from their vision. I give examples of how dentists frequently fall into the features trap, which leads to disastrous decision making."

Peter thought he understood what Laura was saying, but he didn't have enough experience to put it in context. "What do you mean by buying strategically, instead of buying features?"

"That is a really important question, Peter. I give a hypothetical example in my class. Imagine your office vision is to steadily increase the oral health of your patients. Perhaps, one of the goals related to your vision is that 80% of all patients 13 years or younger will receive fluoride twice every year. Your software needs to be able to help you attain the goal and to measure that you are attaining it. So, your software requirements would probably include

  * The ability to identify the target population

  * The ability to show the status of the target population

  * The ability to alert you in advance of key dates by patient

  * The ability to help contact and educate parents

  * The ability to assess and even predict your progress

"Of course, this is a hypothetical case, but hopefully, you get the idea. All the fancy tooth charts in the world won't help you run your business. Yet, you can bet that as we speak, a dentist is buying software because of fancy tooth charting, without considering the requirements of running his or her business."

"I think I get it," said Peter. "So, I can't possibly know whether Paul's software will work for me until I know what goals I'll have for the practice."

"That's the idea," said Laura smiling. "Then, you need to think through what information requirements are necessary to assess the goals. By the way, a good software vendor should have the expertise to help you define and clarify the requirements. A helpful hint that I always throw in: keep focused on what you need. Too often dentists go directly to how they want to see it, trying to play designer. Requirements are all about what you need.

Chapter 17: Don't Build a House One Room at a Time

Peter understood intellectually what Laura was saying, but he kept on thinking of Paul's office and staff, and at this point, he really couldn't even see the first step to take.

"What were your software requirements?" Peter asked Laura, hoping the answer might bring the theoretical into the practical.

"Oh, don't use the past tense, Peter," answered Laura. "One of the major tasks of a CEO is to relentlessly drive continuous improvement. As processes continually improve, you need new information tools to support them and to measure them. It's one of the great advantages of the cloud. Software can be altered quickly, without requiring a major upgrade and installing new software. Good luck trying to get a big desktop or client server software vendor to move quickly on your needs, if they will make your requested changes at all."

Peter smiled, "Alright, what are your requirements?"

"First," started Laura, "the software must give me the ability to evaluate my key performance indicators in near-real time. I'll go over my dentist CEO course materials with you later, but accept for now that without this capability it's impossible to be a CEO in 5 hours a week."

She continued, "Next, I work with an outside company to handle my revenue cycle management, or RCM, tasks. The company's activities and output must interface seamlessly with my software. RCM is the norm in the medical world, but it is little known in the dental industry. I also cover RCM in my workshop. I'll go over it with you later. The better corporate dentistry players are really good at managing revenue cycle management. In fact, there are titles in their organizations like VP of Revenue Cycle Management. You'll need to learn the intricacies of managing the cycle, if you intend to compete.

"I need software that can accurately calculate insurance payment estimates at the time of treatment planning, which gives the patient the necessary information to make an informed decision at the time, instead of waiting weeks to know their financial commitment before deciding on a treatment plan. Very few software applications can do this, except in a very rudimentary and unacceptable way.

"I also need sophisticated software to handle my patient nurturing activities."

Peter didn't understand, "Patient nurturing...? Do you mean like emails and phone calls?"

"It's much more than that," replied Laura. "The rest of the world calls it marketing software. Since marketing is all about communications and client nurturing, I understand the evolution of the title. Anyway, the important thing is to be able to target which patients are to receive which communications.

"Do you remember when you asked what I do if my monthly production is trending poorly?"

Peter nodded.

"The last time that it happened," Laura went on, "I made a decision on the 12th of the month to offer an Invisalign promotion – a 20% discount. I sent a customized combined email and traditional mailer out only to the patients that we had identified as interested in Invisalign. If we had an email address on file, they received an email. If not, it was dropped to regular mail. If the email bounced or was not opened in 5 days, the mailer was again dropped to regular mail. I had 8 Invisalign starts that month and blew through my production goal, even with the discounts."

"Wow," said Peter, "why don't you do that every month?"

Laura smiled, "It's not a good idea to go to one well too often, but there are other wells. Offering a discount on whitening around prom time to families with teens is one. Offering a free denture cleaning to my denture patients inevitably identifies someone who needs a repair or new dentures, but I don't want to send that campaign to young families. So, you see, the ability to target is the key, and the ability keep a history of who got what and the subsequent responses is mandatory.

"Maybe, you can begin to see the value of this software, and how it is necessary to be integrated with my practice management software. Everything I just described is fully automated, except my decision making on the offering. Without the automation, I would need at least one – probably two – full time marketing people to perform the segmentation, handle all the mailers, etc. Also, without cloud automation, I could never customize the mailer. It's too expensive to customize small quantities, and it takes too long."

Peter shook his head. He had so much to learn.

Laura was reading his mind, "Don't worry. I have templates that lay all this out for you. The most important point is to make your software purchase decisions based on the big picture. In other words, make sure your plans are drawn up before starting to build the house. The majority of the dental world makes its software decisions in response to a slick sales presentation, but the result is that the house gets built by adding one room at a time, and we all know how that approach turns out.

Peter had already taken several pages of notes in this meeting with Laura. "I'm guessing you have other requirements for your practice management software."

"I do," answered Laura, "I have a membership club – others call it a concierge club – for my patients that don't have or want dental insurance, and I have an in-house financing program. I have cloud software that runs both of those, and they both require seamless integration with my practice management software. Otherwise, I'd need to hire someone just to keep the billing and payments straight. I also have an online scheduling capability and a patient portal for patients to view their accounts, make payments, and view any HIPAA covered emails.

"But, let's leave that discussion until later. I just heard someone come in. It's probably Henry, my husband."

Chapter 18: The Obvious Need for Change

After introductions and a brief discussion of the weather, Peter got back on topic with Henry. "In talking with Laura, I've picked up a better understanding of the improper use of information technology in the dental industry. I keep hearing from others, though, that changing to the cloud isn't really necessary. Don't get me wrong, I can see how you and Laura have done something special, but most of the rest of the dental industry seems to be doing fine without it, and adopting it requires such a major change."

Henry laughed, "I guess it depends on your viewpoint. I see it as a competitive advantage for those solo practices that are willing to break from the past. Most will keep their heads in the sand and keep doing things the way they've seen it done for years. It's easier and less scary. In my opinion, though, the practices that don't change will be most vulnerable to corporate dentistry. The ones who are doing it the smart way will be the survivors, and there won't be enough room for every solo office to survive."

"A lot of people agree with your view of the future. How do you see it happening?" Peter asked. "Will they just dry up and blow away?"

Henry laughed again, "Some will, but I think the writing is already on the wall, and we're already seeing the early results. There's a supply-side issue of fewer dentists graduating and an ever-growing number of those opting for different patterns of practice, like corporate dentistry. The baby-boomers are retiring in record numbers. The number of existing practices being purchased will continue to decline, because of the reality of the market, which is that there are many more sellers than purchasers. Within 5 years, there will only be 6 buyers for every 10 solo practices. Which practices will be most attractive to buyers? Practice efficiency will undoubtedly be one of the benchmarks for the more attractive acquisitions. The others just won't sell."

Peter took a deep breath, "You realize, of course, that you are saying this to someone who just bought a practice."

"Yes," replied Henry, "but now you know one of the keys to the kingdom – be the practice that everyone wants to buy. By the way there are 2 others. One relates to staff and the other relates to patients."

Peter had heard something like that before, but he couldn't remember where. Then, it hit him. It was Athena's description of the café. She said, "Now, almost 5 years later, Athena's gets rave reviews, my employees really like working here and barely a month goes by without someone offering to buy Athena's at an outrageous price."

"This is the second time someone has told me about the keys," Peter replied. Changing subjects, Peter asked Henry about Michelle's comment about cloud data security.

"Based on your question, I'll assume you're unaware of the data centers that offer hosting services for secure cloud applications."

Peter shook his head.

"Think of Pentagon-level safety and security. The data centers that our vendor use are shared by some of the country's largest banks and securities brokerage houses. The data is geographically redundant, meaning that the data is backed-up in a separate location every 15 minutes, and there are 3 servers in the primary facility that run simultaneously, so that if one goes down, there are 2 others to pick up the load. I could go on, but I'm sure you get the idea. In short, no dental office – even those owned by the big guys – have the same physical and network security as these data centers.

"Data backup is handled horribly in most offices. I won't go into specifics, but I would be surprised if even 25% do it correctly, safely, and securely. Backup is not an issue for us with our cloud vendor.

"The cost and effort of HIPAA compliance makes owning your own software and data storage hardware impractical for almost any solo office. The costs and efforts of physical security, computer maintenance and security, firewalls and hacking security, network security, encryption of data and so on, exceeds what we pay for all that and the software, too. And, we don't have the headaches of keeping it all functional and current. The cost of a data breach, if all the above isn't in order, is up to $1.5 million, including notification of all your patients of the breach. Why would anyone want to risk it, just to house their own data?"

"I knew there were some recent changes to HIPAA, but I was unaware of what they meant," said Peter. "I wonder how many dentists understand the risks."

"HIPAA aside for a moment," he continued, "I'm still not clear on why I can't just hook the cloud applications that you use into my existing software?"

Henry sat forward, animated, "This is a good question, and one that comes up at every one of Laura's workshops.

"Almost every desktop or client server dental software is written in proprietary programming. So, what data goes in is completely controlled by the software vendor. Your options to interface with other programs are limited to those chosen by your vendor. There are several applications that can extract data from your practice management application, but now you have the issue of synching up two disparate applications, which can create all sorts of problems. Also, when there are upgrades to your practice management software, it can easily break something in the synching logic.

"Basically, why would you want to put yourself in contortions to make different technologies work with each other when you don't have to? A few years back, when Microsoft was getting hammered for not having an internet strategy, they proposed that desktop and internet could co-exist. They developed the interfaces for the newer versions of Windows to work with external internet applications. Any Windows user who downloads the security updates can attest to the tediousness and inconvenience of the interface. Who of us hasn't experienced at least some problems, sometimes significant, with downloads of updates from a number of our desktop programs? Microsoft's new CEO has already announced that they will migrate entirely to the cloud."

Chapter 18: The Keys to the Kingdom

Athena listened with interest to Peter's description of his meeting with Laura and Henry. "The restaurant runs on the cloud. I switched about 5 years ago at Jack's suggestion. At this point, it's hard for me to imagine doing it the old way. It's so much easier, and it saves me a gang of money."

"I can see how the use of outdated technology just perpetuates in dentistry," said Peter. "It never would have occurred to me to use any other software than what was already in the office, especially with Michelle telling me that it was the best in the market. If I needed to change, I'd probably get advice from someone who has no skill or knowledge on evaluating software, especially cloud software. Also, since most dentists only view their software as a front desk tool and not something to truly manage their business, there isn't much impetus to change.

"Henry put it best I think. He said, 'if you ask most dentists what software is best, you'll hear that it's the one that they use.' Their egos won't let them admit otherwise.

"I told the staff that I wouldn't make any changes right away, but I don't see how I can wait on this change."

"Slow down, cowboy," smiled Athena. "First, you haven't even defined your vision, which will define your software requirements. Second, why not involve them in the process. Even if some of them don't agree with your final decision, at least they'll understand why you made the decision."

Peter seemed relieved, "Makes sense."

"Speaking of strategy," he continued, "Henry alluded to the 3 keys to the kingdom of solo dental office survival, and they sounded very similar to the 3 you enumerated when you described how well Athena's was doing."

"I'm impressed that you remembered," said Athena, raising her eyebrows. "So, what do you think they are?"

"I'm sure there is better terminology, but I think it's something to do with clients loving coming here, employees loving working here, and for anyone looking to buy, loving how successful you made the business," answered Peter.

Athena nodded emphatically, "Good, and yes, let me re-phrase it by saying that you need to have 3 goals to be

In your and my case, 'preferred investment' best translates into the 'most preferred acquisition' or 'most desired partner.'

"Jack's theory is that all businesses have these same 3 common goals. At first, I was skeptical, but I haven't thought of an exception yet. The way to attain these goals will vary, of course, but they are core. So, your strategy adventure begins by writing down 3 questions, 'how will I become the most preferred provider, etc.'"

"Now, I'm getting overwhelmed again." Peter's expression matched the statement. "Until now, almost everything I have been researching is how to make the business run better operationally. Now, you're adding whole new dimensions. You are right, of course, but where do I begin?"

Athena smiled, "Take a deep breath. It's not so overwhelming, and everything you've been working on is all connected. Let's start at the beginning. What do you envision that you might need to do to become the city's most preferred dentist?"

"I have to admit," said a discouraged looking Peter, "that it never occurred to me. I guess I just assumed that if I'm a conscientious clinician, people will want to come to me. It sounds a little foolish when I say it out loud, though."

Athena nodded, "It's a start, and I think the word 'conscientious' is a good building block. It's a great personal value to start with. Come on, let's continue this over here." She led him to the studio area of the café and pulled out a large sketch pad.

Chapter 19: Write These Down

"Well, Peter, it's time to start uncovering the hidden leader in you." Jack hadn't given any greeting or even finished sitting down when he said this. "What do you consider the traits of a good leader?"

Peter started listing the qualities that he thought were the correct answer, "... thoughtful, decisive, intelligent, considerate, humble, risk taker, observant, energetic, good communicator, consistent, loyal," and he kept going.

"Wait a minute," laughed Jack, "I didn't ask for the traits of a saint. I asked for a leader."

Peter shook his head, smiling. "Alright, wise guy, what are traits of a leader?"

"We talked before that a leader someone who empowers others to succeed at their jobs," answered Jack. "Study after study has shown that high performing organizations have the highest level of job satisfaction and employee commitment to success. Leadership styles vary based on the life experiences of the leader. So, you'll have your own unique style, but there are some common things that successful leaders are able to accomplish. Their organizations have an environment of:

So, some of the traits that you see in a successful leader are

In short, leadership is more about serving than being served."

As usual, Peter was writing ferociously, "Do you have a cheat sheet hidden somewhere? How do you know this stuff off the top of your head?"

"It's really pretty logical once you've lived through it few times," smiled Jack.

"A few times...," asked Peter?

Jack immediately changed the subject. "I'll bet you're wondering how to implement everything that I just said."

Peter nodded. "Well," continued Jack, "it starts with formulating a compelling vision. After that, I recommend that you print the list that you just wrote and read it frequently. You'll find in time that the organization's business activities will start to reflect them."

"Athena started helping me define how I can start attaining the 3 key goals to be the preferred provider, employer, and investment," said Peter. "Isn't that the same as my vision? Can't we just say that our vision is to be these 3 things?"

Jack shook his head. "A vision talks to who you and your organization are striving to be, the values you have, and maybe even how you want to shape the future. If it's good, it should compel your entire organization. By the way, a vision statement isn't something you need to have in place when you take over next week. You might want to discuss it with your new staff – after all it's an important decision that affects them all."

"I suppose you have an exercise that I can use with the staff," Peter said.

Jack winked as he got up and exited.

Chapter 20: Socially Acceptable

Peter had almost completely wound-down his current job as an associate, spending as much time at Paul's as possible. He started treating all the new patients and any existing patients who were willing to see him. He wanted to meet as many patients as he could, of course, but mostly, he just wanted to observe.

In addition to his leadership discussions, Jack had started talking to Peter about developing his management skills. Even though Peter wasn't officially in charge yet, Jack had given him his first learning goal. Jack had described 4 personality types, or social styles.

He had drawn a square with 4 quadrants and labeled the corners. Driver was in the upper right quadrant, Analytic in upper left, Amiable in the lower left, and Expressive in the lower right. Jack described how everyone could be categorized into a dominant personality type, but hardly anyone was purely one type. For example, someone who is a Driver might also have Analytic traits, which would move her toward the center of the square. She might also have some amiable traits, which would simultaneously move her toward the amiable corner.

He then drew some arrows to indicate that the upper 2 quadrants were less responsive and the lower two were more responsive. The right 2 quadrants were more assertive than the left two quadrants. In other words, a pure Driver was highly assertive and had low responsiveness. A pure Amiable was highly responsive and had low assertiveness.

He explained that the importance of understanding a person's social style for a manager is how it helps in approaching and communicating with that person. For example, a manager who has strong driver traits may feel an amiable employee is indecisive. The amiable employee may view the manager as overpowering, a bully, which can easily create dissonance or friction between them. By trying to mirror the traits of the employee, an atmosphere is created that is much more conducive to open communication. I think neuroscientists call it activating the mirror neuron receptors."

Jack went on to say that it was very important for Peter to understand and assess his own social style. How the staff responded to him, and how he responded to each staff member would likely be defined by it. Jack suggested a book to learn more about social styles and management styles. He also suggested that Peter try first to use his instincts to determine his staff's and his own styles.

The first management learning task that Jack then gave to Peter was to try to figure out the social style of each staff member.

Paul was right that Michelle ran the show. She was very professional. She was very engaging with the patients. She guided all the movements of the office. She was forceful when it was needed, and she was sympathetic when necessary. There didn't seem to be question that anyone asked – dentist, patient, or staff – that she couldn't answer. She definitely knew her stuff, and she was definitely a driver, with some amiable.

Brittany stayed mostly in her office in the back. She seemed to spend most of her time on the phone with insurance companies. It was Brittany who suggested that Peter begin the credentialing process as soon as possible with all the insurance plans that Paul currently dealt with. Peter was thankful. He knew nothing about insurance. He assumed he'd eventually have to learn more, but fortunately for now, Brittany seemed to have it under control. Peter assumed her to be analytical, given her job, but he hadn't spent enough time with her to make a good guess.

Deborah and Christie, the hygienists, didn't seem to need much direction, except for their schedules. Apparently, they only worked when they had patients. So, sometimes they might work a full day, and other times they might work for only 2 hours. Paul had said that they were paid based on their production. So, in a way they kind of ran their own business, but Michelle definitely worked closely with them on scheduling - when to stay, and when to go home. Peter's take on Christine was expressive with some analytical. It was just the opposite for Deborah. She seemed more analytical with some expressive.

Marcie and Jayne, the assistants, were primarily focused on clinical delivery and everything supporting it. They performed all the tasks that typical RDAs perform. They also seemed responsible for keeping the supply closet up-to-date. If they noticed something was in need of re-order, they let Brittany know, and she took care of it. Peter's assessment of their personality types was, as with Brittany, inconclusive because he hadn't spent much time with them. His initial assessment, though, was that their dominant traits were both amiable.

All of the staff members seemed to get along with the patients very well, but Peter didn't sense much of a common bond among each other. It was as if they were doing what needed to be done – and with competence – but they'd rather be someplace else. At the office where he had been working as an associate, he could feel a connection among the staff members. "I'm not sure I know what commitment feels like," Peter thought, "but I don't feel it here." Since everyone treated the patients quite well, he didn't know that the lack of connectedness affected the practice, but it was something he would need to change as he attained his 2nd goal of being the most preferred employer.

Chapter 21: 20 - 20 Vision

The day finally arrived. Peter was officially the new owner. Things had been such a whirlwind over the last two weeks that it seemed he had barely blinked his eyes, and yet, here he was, walking into an office with his name on the door.

He had blocked off the first 2 hours of the schedule with no patients. He was going to have his first official staff meeting, which included both hygienists. His goal for the morning was to begin developing a tangible vision for the future of the practice.

Both Jack and Athena had emphasized that a compelling vision was mandatory for business success. Whether it is in writing or not, every high performing organization has a common theme that clarifies to every stakeholder in the business – team members, clients, banks, investors, associates, other professionals, etc. – what to expect when working with the company.

After everyone was settled, Peter started, "I have one goal for today – to start the process that ultimately ends with everyone understanding where this practice is headed. In other words, I want every one of us, including me, to have a clear vision of what we are trying to attain and how we are going to attain it."

"So, you want us to create a vision statement?" asked Michelle. "We've done this before. Do you want me to get the one we already have?"

Peter immediately felt how problematic this situation was. Without knowing, he strongly suspected the vision statement Michelle was referring to was composed mostly, if not completely, by her. Peter envisioned a tired and stressed-out Paul, having heard or read about the importance of a vision statement, mentioning it to Michelle. As with everything related to running the office, Michelle would have told him not to worry. She'd handle it, and Paul would have appreciated not putting another task on his to-do list. If she had created it, however, she was now unfortunately very invested in the content.

There was no doubt that he needed Michelle. He couldn't afford to alienate her, but he needed her to buy into the new process. "How am I supposed to handle this," thought Paul, "especially with everyone else in the room?"

After a few moments, Peter answered, "Maybe, we'll end up with the same result, but I'd really like to go through this process together. Consider it part of my learning curve."

Michelle gave him a shrug that implied 'whatever.' It wasn't hostile, though. It was more like, 'this is the kind of thing that you can have me do for you.'

"OK, let's get started." Peter had spent a considerable amount of time with Jack in preparation for this meeting. He opened his notes. He then wrote on the white board the 3 goals.

"These are the 3 goals that I want this office to attain. For now, let's put aside any perceived limitations that we might have. Let's pretend that we can eventually figure out how to overcome any limitation. There's no reason to shoot for anything but a bull's eye, right?"

Peter walked to a corner of the break room and picked up a roll of butcher paper and some masking tape that Jack suggested he purchase. He threw the tape to Michelle. "Help me get this up." They taped a strip of blank paper across the longest wall in the room. Then, he threw a marking pen to Brittany. "Would you mind being our scribe?" He didn't wait for an answer.

"Now, let's map out the process of what happens from when a patient is looking for a dentist all the way until they leave the office after their 2nd appointment – let's say the 2nd appointment is a crown prep." He pointed to the left side of the hanging butcher paper, "Brittany, please draw a box with the words 'looking for a dentist' in it, and then, draw an arrow to the next box that says 'choose a dentist.'"

They spent the remainder of the meeting mapping out all the steps that happen for the patient and for the office until the patient left the office after treatment. The wall ended up with 2 ½ strips of butcher paper filled with writing.

At the end of the meeting, Peter handed an unopened pad of stick-it notes to everyone in the room. "Thanks for the effort, everyone, but this is just the beginning. Let's continue the exercise, same time and place, next Monday morning. In the meantime, I'm going to give you some homework. As you have time during the week, I'd like you to review each of these steps on the butcher paper with the goals in mind." Peter pointed to the 3 goals on the board. "Look at each step that we do in the practice, and if you can think of any idea that can help us better attain the goals, write it on a sticky note and put it under the step. No idea is a bad one, and remember, for now don't let potential restraints get in the way. Think big. Any questions?"

Michelle spoke up, "I love this energy, but I'm a little lost. I thought we were supposed to come up with a vision statement?"

"That's right, Michelle, and it's a process. The next step is to clarify and finish with the sticky notes next week. The following Friday, I'd like us to close two hours early and continue – only this time with maybe some wine and cheese. I'd also like to invite others, and you're welcome to invite others, also. It's important to get some outside views. I have some friends with unique insights that will be there. Basically, it will be a working party."

The idea of a party seemed to please everyone, except Michelle.

Peter continued, "If you haven't guessed by now, I have been working with a friend who is a business consultant, who has helped develop vision statements for several organizations, including dental offices. He's the one who recommended this process. He tells me that although the process is the same, every organization is unique. By combining the organization's personality to the desired goals, he tells me the unique vision becomes obvious. I guess we'll see."

Chapter 22: My Way

"When we first met, I thought you said that nothing would change." Michelle had been quite all day, but it was obvious she was not happy. She had waited until the last employee left, and then she walked into Peter's office. Peter was almost 2 weeks into being the new owner. He was thinking about the wine and cheese party at the office tomorrow, and he was generally feeling pretty good about things – until now.

"Michelle, we just began a vision statement process. Nothing has changed, nor will it change immediately, but it's inevitable that we'll need to evolve. You'll have a major say in any changes we make, though, and any changes will be for the better."

Tears welled-up in Michelle's eyes. "Peter, every business process in this office was put in place by me. If there was a better way to do things, I would have made the change already. If you ask the staff for what they want, you're only going to hear the things that make their lives better, not what makes the office better. My entire focus has been on how to make the office better, and for a startup, it's done pretty darn well. I left a good, stable job to prove that I could make a startup succeed, and I have."

"Uh-oh," thought Peter, "there were way too many 'I's' in that soliloquy. Be careful here, Peter, you can't afford to lose her." Out loud Peter said, "Michelle, you're obviously a superstar. Very few people could have accomplished what you have done here, and why not use your skills to help take us to the next level? We're going to be the best office in town, which will make you the manager of the best office in town."

"I would've gotten you there anyway, Peter," replied Michelle. "Everything that you're doing now just makes me look like I'm not good enough to do it myself. I'm sure you don't mean it, but it looks like you have no faith in me, and the rest of the staff sees it. I can see that I've already lost their respect, and I can't manage if they think they can take advantage."

The full meaning of power by position all of a sudden hit Peter like a two by four across the head. "She doesn't think she can manage unless the staff unequivocally sees her as 'boss,'" thought Peter. "That's a big problem."

Michelle immediately helped him solve the dilemma. "I called my old boss today and told him I could be available, if he needed an office manager. He said that he'd give his current manager a two week notice today. So, I'm giving you a two week notice right now, too."

"He cut her loose just like that?" It wasn't the statement that Michelle was expecting, but she answered, somewhat self-righteously, "Yes, he said that I was the best manager he'd ever had and wouldn't pass up the opportunity to get me back."

"Unbelievable," thought Peter, "what a jerk." When he came back to reality and realized he wasn't following the appropriate social norms, Peter said, "Michelle, of course, I want the best for you. I think we could make it work here, but if you see a better opportunity elsewhere, I would never do anything to hold you back."

"I think it's better this way, Peter. Two weeks from tomorrow will be my last day." Michelle turned and left.

Peter took in a long breath and exhaled audibly. Then, he smiled.

Chapter 23: You Don't Need to Look Too Far

Next day, Jack listened as Peter told the story. "There's a term that maybe you've heard before - the toxic employee. It doesn't mean she's a toxic person. It means she is toxic in the team setting. Personally, I ascribe to the theory that toxic employees are a result of bad managers, but making it work with Michelle would have been an uphill and time-consuming battle for you. In the meantime, you would have had to live with the effects of a toxic employee, not of your making."

"So, now what?" asked Peter. "Do I take out an ad?"

"Possibly," answered Jack, "but I don't think you'll need to look very far."

Peter was confused.

"I've met your staff – when they were Paul's, of course," whispered Jack, like it was a secret, "and I think you have one of those rare diamonds in the rough."

Peter again looked confused. "Oh, don't look at me like that," admonished Jack. "Go figure out who it is."

As he was leaving in his usual fashion, Jack turned and said, "Because of this, you'll need to learn another skill sooner than I had expected. It's revenue cycle management, RCM. Go talk to Laura."

"Yeah," answered Peter, "Laura mentioned something..." Jack was already out the door before Peter finished the sentence.

Peter had learned Jack's ways already. "Obviously, there's a connection between the diamond in the rough and revenue cycle management. I guess I'll find out soon enough." The party was later that afternoon. Maybe, he could pin Jack down a little.

Chapter 24: The Diamond in the Rough

At Athena's insistence, she catered the party. "Just pay my servers. Consider the hors d'oeuvres a house warming gift from me."

As people entered the office, Jayne passed out packages of stick-it notes and explained about the flow chart on the butcher paper in the break-room. At their leisure, they were encouraged to go in and write their suggestions.

Besides the staff with spouses and/or boyfriends, all of Peter's newfound friends were there: Athena, Jack, Laura and Henry. Mark showed up and there were other friends and a few patients invited by the staff. Noticeably absent was Michelle.

Jack also brought a newcomer, Christie, who he described to Peter as a marketing guru. Christie laughed, "Guru is not the word that I would use, but I have a boutique agency in town and some experience in dental." Peter welcomed her and offered her a glass of wine, which she took with her to the butcher paper where she immediately started reading, writing and pasting the stick-it notes.

Jenna was delighted to finally meet everyone. "I was beginning to think you were both mythical," she said when she met Athena and Jack. "I'm not, but he is," and "I'm not, but she is," they said simultaneously and laughed.

Peter walked up at that point. "Alright, Jack, you've stumped me again. What's the connection between the diamond in the rough and revenue cycle management?"

"Why do you think there's a connection?" asked a straight-faced Jack.

"... because I've learned your ways."

Just then, Laura and Henry joined the conversation. After introducing them to Jenna, Peter couldn't let up on his quest. "Laura, Jack is driving me crazy. What does revenue cycle management have to do with anyone on my staff?"

"That's easy," replied Laura. "Just go read my stickies on your flow chart."

"Oh, come on," grimaced Peter. "You're as bad as Jack is. This is serious. I've only got 2 weeks to hire a new office manager."

Just as she was getting ready to respond, they heard, "Hi, Dr. Laura. It's so good to see you. I saw some of the suggestions about revenue cycle management that you put on the flow chart. I hope that we'll get a chance to implement some of them.

"Good to see you, too, Brittany," smiled Laura. "I think you have a receptive audience now, and certainly, I'll do anything that I can to help."

Chapter 25: I've Never Hired Anyone

As people were leaving the party, Peter asked Brittany if she could make some time over the weekend to talk about the best way to fill the office manager's job. Brittany seemed a little hesitant, but she agreed. "I need to come into the office tomorrow to catch up on some of my work, anyway," she said. "How about 10:00?"

Jack heard the interaction, and as Brittany left, he walked up to Peter smiling. "Go for it, champ."

Peter was somewhat panicked. "I've never even done an interview, much less offer someone a job. Don't I need applications, papers, forms, and probably 20 other things? I don't know the first thing about salaries."

"Relax," answered Jack. "First, see if you feel that she's a good fit. Instinct is a very powerful tool. Talk about change, and see how she responds. Talk about employee empowerment, and see how she responds. You and I have talked enough about your emerging leadership style. Talk to her openly about that, and get her feedback. Think about what you've learned about personality types. Accommodate her style. Don't make her accommodate yours. Remember leading is about serving, not being served.

"Normally, you would need to evaluate her experience and skill level. You would want references, and you would need to check the references. In this case, though, don't worry about it. I'll go out on a limb and vouch for her.

"Don't worry about the paperwork stuff tomorrow. In fact, you may mutually decide that it's not a good fit. In other words, don't put the cart before the horse. Paperwork can always be handled later, and I'm sure Brittany will be fine with putting off the salary discussion until you get a better handle on things.

"You'll do just fine. It's like putting a newborn into a swimming pool. Swimming comes instinctively."

"Thanks for leaving me with that image," frowned Peter. "First, I'm not sure I believe it. Second, I'm already feeling like I can't keep my head above the water."

Jack laughed, shook Peter's hand, and left.

Chapter 26: The First Step in a New Direction

"I gathered from your comment to Laura last night that you have felt somewhat constrained in doing your job," said Peter after setting down the coffee cups and muffins.

"Look, Peter," Brittany started with something she had obvious considered very closely, "you need to know that Michelle and I are good friends. Our kids play together, and our families see each other socially. Very few office managers are as capable as Michelle. Paul would never have survived without her. He was incredibly lucky to find her. She almost single-handedly built this practice."

"Uh-oh," thought Peter, "This doesn't sound good."

"Nonetheless," Brittany continued, looking down, "I don't think she would have been a good fit for how you want to move forward. She and I talked a lot before she made her decision. This practice is her baby. She put a lot of herself into it, but I told her that in my opinion there would be constant conflict if she stayed.

"Michelle is a shining-star example – well, her need for total control is a bit problematic, but otherwise, a shining example – of an old model office manager. You need a new model office manager, and there's not a chance in high-heaven that she was going to change."

"How do you know about the new model?" asked Peter.

"A few years ago, when I first moved here, I went to a dental temp agency looking for work. My first temp job was filling in for Laura's Revenue Cycle Manager while she was on maternity leave. It's how I ended up here. Jack is Laura's patient, of course, and when it came time for me to leave, Laura asked Jack to help find me a permanent job. He asked Paul, and the rest is history. The big difference was that Michelle wasn't going to have any revenue cycle management voodoo talk – my words – in her office. I simply became the insurance biller. It's been a little frustrating to know there's a better way, but hey, having a comfortable job is better than the alternative."

"I know this is probably a stupid question," said Peter, "but what's a revenue cycle manager?"

Brittany laughed and gave him a brief overview. "Laura, and even more so Jack, is much more qualified to talk about RCM. You really should have them give you the overview."

They talked for about another hour. Both asking questions of each other about leadership and management styles, both speculating about the future, and both agreeing that the old model was only one generation from being extinct.

Finally, as things wound down, Peter asked, "Have you considered stepping into Michelle's role?"

Brittany looked surprised and then laughed. "I've been rehearsing the look of shock to that question ever since Michelle made the decision to leave. I called Laura, and she told me to approach you directly. I told her I'd rather be asked – just in case you had other ideas." She stopped for a moment and giggled. "You didn't actually offer it to me, did you?"

Peter laughed, too, "If you want it, then I'm offering."

"Thanks for letting me have a graceful recovery." Then, she became serious again. "I've thought about it a lot, and I really don't know, Peter. I'm not sure if I'm the right person. I'm open to change, but this is pretty much a new frontier, and you know what they say about pioneers."

"Yeah, they're the ones with the arrows in their backs," answered Peter.

"Exactly," nodded Brittany, "and I'm not even worried too much about myself. Everybody else's future here, including yours, will be dependent on doing it right. I usually shy away from that kind of pressure."

"For what it's worth," Peter looked at her intently, "I don't feel any differently. I don't have a crystal ball, but I know that with the right support we'll find our way through the maze. Also, what's the alternative? As they say, 'denial isn't just a river in Egypt.'"

There was a silence while Brittany continued to look down. When she looked up, Peter reached out his hand across the desk, "Deal?"

After another few uncomfortable moments, Brittany reached her hand out and smiled, "Deal!"

Chapter 27: Revenue Cycle Management

Peter was surprised to see that Laura was calling him. In her typical no-nonsense fashion she started, "I just talked to Jack, and he said you need a crash course in revenue cycle management. I finish with patients at 4:00 today, if you are free. Oh, and you should bring Brittany, if she can make it."

Peter had reviewed the butcher paper over and over again. He'd seen the notes – many by Laura, some by Brittany – referencing RCM. It all seemed related to insurance, and he was a total novice about insurance. So, he really wasn't clear what RCM was all about.

"Assuming it's OK with Brittany, I'll rearrange my schedule, and we'll see you at 4:00."

On the drive over to Laura's office, Peter wondered out loud, "I wonder why Jack thinks I need to have a crash course in this. There are a lot of topics that I need to speed-learn. I can't imagine that insurance is the most important. You already seem to know everything anyone needs to know about insurance. I assumed you wouldn't have much difficulty hiring your replacement. I can't imagine that I'll ever work hands-on with insurance – I don't know of any dentist that does. So, I'll be interested to see where this goes."

Brittany answered, somewhat sheepishly, "I think I know the answer. I don't want you to think that we've been plotting behind your back, but Jack, Laura, and I were talking at the party. Jack said he thought you would offer me the office manager job. He asked my thoughts about a replacement, if I were to get the job. I told him that I knew some potential candidates, when Laura jumped in and asked why did we need a replacement? She then laid out a scenario where a replacement wasn't necessary."

"Do you agree that it's possible?" asked Peter. "I don't want to see you trying to do 2 jobs and burning out before we even get started."

Brittany answered, "The way Laura outlined it, I wouldn't be doing 2 jobs, and the result would be far superior to the job that I'm doing now. Thankfully, here's Laura's office, because she'll be able to describe it much better than I can."

As usual, once they were seated in Laura's office, she got right to the point. "Revenue cycle management, or RCM, is one of the most important aspects of running a dental business, yet one of the least understood. At my workshops, when I ask who is familiar with RCM, it is rare to see even one hand raised. Yet, done correctly, it can increase cash flow by 10% - 15%, and more importantly, give them invaluable insights to the business health of their practices.

"The concept is simple: you are owed payment as soon as treatment is rendered. Except for the rare few practices that are able to collect everything at time of treatment, there is a delay in the payment of some portion, if not all, of the amount owed. It's simply the nature of the industry in this country, and it's not likely to change in the foreseeable future.

"The whole idea of RCM is to shorten the collection cycle. The end result is that as I shorten the cycle, my cash flow increases, and a positive side effect is that I have fewer bad-debt write-offs. Here's an unrealistic example to help you understand. Let's say that every month you collect $50,000 of the money that is owed to you – from a combination of both insurers and patients. Let's also say that the average amount of time between when the treatment is rendered and when the account is fully settled is 3 months."

Laura was drawing this on a piece of paper as she was talking. She had scribbled a sine graph, where one cycle equaled 3 months. She drew the months on the x-graph and dollars on the y-graph. The top of the graph was at $50,000.

"Now, let's assume you undertake some initiatives to shorten the cycle from 3 months to 2 months. What happens?" She re-drew the graph. "You just collected $50,000 more over the next 2 months. Essentially you squeezed $50,000 out of your accounts receivable and turned it into cash flow. Does that make sense?"

"It kind of makes sense," Peter didn't want to sound as confused as he really was, "but you make it sound like I'm collecting more, even though I'm not producing more. If it's in accounts receivable, I'll eventually get it, right?"

Laura persisted, "Perhaps the example was too simplistic, but there are a couple of important points to understand. First, every time that you shorten the cycle, you'll get the one-time cash flow bump. If it helps, think of taking the cycle from 120 days to 90 days to 75 days to 60 days. Each time, you will squeeze more from A/R, and it will be a higher collection month. Second, and maybe more important, there is a direct correlation between the age of an account and how much you will end up writing-off. With insurance balances especially, old accounts often get swept under the rug, because they get very difficult to collect as time goes on."

Peter was finally starting to get it. He also noticed that Brittany was openly nodding in agreement with Laura.

"I see now why it's called revenue cycle management. Since a lot of the stick-it notes about RCM were around the insurance processing, I'll bet a lot of the management is around insurance activities."

"You would win that bet, Peter," answered Laura, "although collecting patient balances is an important component, too, especially insurance copayment balances. In most dental practices, upwards of 2/3 of their revenue is insurance related, both directly from the insurers and from patients' insurance copayments. It's a huge portion of most dentists' business, and yet, it is probably the least managed aspect of any office. Brittany, why don't you describe to Peter how insurance works in most offices."

Brittany went on to describe an eye-opening story to Peter. Typically, just as in Paul's office, there is only one person in charge of the insurance process. In many smaller offices, the office manager doubles as the insurance person. Also typically, no one else in the office, especially the dentist, knows enough about the process to assess whether the insurance person is doing a good job or not. So, the person in that role is not reviewed or answerable to anyone. Mistakes or oversights or outright incompetence are only occasionally noticed. Given the complexity of insurance plans – there are easily more than 100,000 different insurance plans in the US, many paying according to different rules – adjustments, or write-offs, of what was billed versus what was paid are common. In most offices, insurance adjustments go unquestioned, which can create a black hole where all kinds of mistakes or poor work habits or even worse – maybe embezzlement – can be covered up.

Laura continued when Brittany finished talking. "While most dentists will never get involved in the nuts and bolts, it's really important as a CEO to understand how the process flows, how to recognize potential problems, and how to troubleshoot, if necessary. Again, it might well account for 2/3 of your practice's income. You can't afford to ignore it."

Laura went on to enumerate all the steps in the insurance revenue cycle management process. Peter was drawing a flow chart as she spoke. When she finished, he stopped and counted the boxes. "You just described 35 possible steps. Is that right?"

Brittany spoke up at this point. "Not many claims are going to flow through each of the 35 boxes, or steps, but at any given time, there are some claims figuratively sitting in any of the several boxes, waiting for some further activity to take place.

"In any day, I submit claims to 5 or 6 different insurance carriers, all of whom have different criteria for payment. Think of it this way: in any month we are throwing upwards of 200 claims into the maze you just drew, and there are still probably 100 claims or more that hadn't yet been resolved. So, I have to stay on top of all 300 or more claims, most of which are probably different plans and representing 15 or more carriers."

Laura continued the thought, "The permutations can be mind boggling. It's no wonder there are so many mistakes, even by conscientious insurance billers, and as we talked about before, rarely is anyone looking over the insurance person's shoulder to see if she is doing things accurately.

"Tom, the VP at the company that I work with to manage much of this process – I'll explain more in a minute – only hires ex-office managers or ex-insurance managers. All claim to be experts in insurance. He says out of the hundreds that he has hired, he can't remember 5 who really were experts. It's not that they are liars, according to Tom. It's just too complicated. They honestly think they are experts, but their self-proclaimed expertise is usually based on limited training and narrow experience, with no one to point out the errors they were making. The dentists believe them when they say they're experts, because the dentists don't have a frame of reference to evaluate their skills. The end result is a system that remains blissfully ignorant, while thousands of dollars are being wasted every month."

"Kind of like the blind leading the blind?" Peter asked rhetorically.

Peter looked at Brittany, who nodded in agreement. "I like to think that I'm as conscientious and knowledgeable as they come, but under Paul's and Michelle's system, I found unintentional mistakes all the time that either Michelle or I made. It's just too much for one or 2 people to handle manually, and Paul's – I'm mean your – office is small right now. Think of how hard it is for a larger practice."

"Is it safe to say that this is one area that corporate dentistry is able to exploit for better efficiencies?" asked Peter.

Laure relied, "The good ones do, but it's interesting how many still just turn it over to the office managers, who continue to do things the way the always have, only to continue with the same mistakes. It's a case of a lot of people simultaneously not knowing what they don't know."

"Or," interjected Laura, "the corporate business managers, who probably know little about dental insurance, are uncomfortable challenging the incumbent office managers' ingrained way of handling insurance. Instead of thinking out of the box, the office managers double down on the processes that they are comfortable with, and simply demand their insurance billers work harder, which increases the numbers of mistakes."

"I see it as a great opportunity for efficiently run small practices," added Laura.

Peter returned to a comment that Laura made. "You work with a company who manages all this for you?"

"Yes," replied Laura, "but it requires the cloud. If you are planning to move to the cloud, which I strongly recommend, I'll have Tom contact you and go over how everything works.

"Also, if you use the cloud and Tom's company, I don't think you'll need to replace Michelle's position. Why don't you explain, Brittany?"

Brittany explained how Tom's company had a cloud application that interfaced seamlessly with Laura's practice management application. The company's technology and employees gathered all the necessary information and did any required data input. She explained that her role, when she worked at Laura's, was to manage Tom's results. Tom's software had robust reporting. So, Brittany was able to see, in real time, the status of every insurance-related activity. The company even has ongoing quality assurance audits to keep the accuracy of the data input near 99% – something unheard of in a dental office.

"I was able to be a revenue cycle manager, not just an insurance biller. My role was to keep the cycle as short as possible, and to look for further ways to shorten it.

"I'll be able to do that for you in probably less than one hour everyday by working with Tom's company. Also, the cost of working with Tom's company is probably half of my old salary. You'll be able to get a better result at a lower cost."

Peter seemed a little perplexed. "Why doesn't everyone do this? Why didn't Paul do this?"

Laura and Brittany both started to answer at once. They laughed and Brittany nodded to Laura to continue. "First, cloud technology is relatively new to dental, and it's been dismissed off-handedly as not-as-good as traditional software, not safe, and unnecessary. You can't do what we just described without the cloud. So, a large majority of the industry doesn't even have the option. Second, this approach contradicts 30 years of how most dental offices have handled insurance. As you have probably figured out, change in this industry doesn't happen easily. Third, and maybe the biggest barrier, the office manager or insurance biller can feel less important, and even worry about job security, if Tom's company does the work. Given that mindset, what do you think their assessment of Tom's company will be when asked by the dentist?"

"It sounds like I need to move on installing cloud technology as soon as possible," concluded Peter.

"And talk to Tom," added Brittany. "I can do 2 jobs for a while, but it won't be easy."
Chapter 28: Searching for a Theme

"I hope you're treating that butcher paper and stick-it notes like gold," said Jack while sipping his coffee at Athena's on Monday morning. "Most dentists have to pay upwards of 5 figures to get that kind of data, and you somehow squeezed it out with a couple of bottles of wine."

Peter smiled. He was feeling pretty good that things were coming together. "It's tucked away in a safe place, but what do I do with it now?"

"It's a treasure-trove of practical ideas from a number of incredibly smart people - staff, consumers, and business people. In other words, you have an incredibly valuable tactical checklist. By looking at it, you should be getting a good sense of some of the things you need to do to accomplish your goals, but there is a big piece still missing. How does your personality, and ultimately the personality of the whole team, play into it?"

Peter shook his head. "I'm still confused. I'm comfortable with the goals, and although we have enough ideas that will take two lifetimes to implement, I can see some very practical things that we can start doing right away to attain the goals."

"Sure," answered Jack, "but you still don't have an overarching theme that will drive you. Will it be to maximize revenue? With you, I don't think so, but it is with a lot of dental offices. Will the practice be a means to maximize your non-working hours? Again, it's probably not you, but are you beginning to see what I mean?"

"I am beginning to see, but I still don't know where to start."

"Fair enough," nodded Jack. "Let me help. Knowing you and those around you, I think your vision will derive from personal values, meaning some subset of always doing the right thing. For example, perhaps honesty is a theme that you might want to incorporate into your vision. Your vision statement might reference how honesty will be reflected in all patient care. It might reference treating staff honestly and honesty in all dealings with any vendors, and the honesty in all financial transactions. Realize though, that this is just an example. You have to look inside yourself to get the real answer.

"The last piece of the puzzle then is to determine the strategies that will link your vision and goals to the tactics. As you mentioned, there aren't enough hours to implement all the good ideas, and I'll add that there isn't enough money, either. Think of strategies as the gates that only allow the entrance of the tactics that fit.

"You've already been somewhat exposed to 2 strategies that I strongly recommend - the cloud and revenue cycle management. If you choose at adopt them, it will allow you to focus your technology choices and the various processes of how to deal with insurance and patient collections. I can't tell you how many dentists end up buying products and services - in other words, tactical tools - based upon a sales pitch. They end up fitting into no strategic framework. The result is predictable: they either end up never being used, or they are used awkwardly, like trying to pound a square peg into a round hole.

"It's time for me to get moving. You should have enough now to get started. I understand that you're meeting with Christie this afternoon. She'll never admit it, but she's forgotten more about marketing than most of us will ever know. So, listen carefully. She'll be able to give you the framework to make decisions on another very important strategy."

Chapter 29: Snake Oil?

"I've got to admit that I really have no idea what marketing is. It's not something you learn in dental school," Peter told Christie as he was looking around her spacious high-ceiling office with huge picture windows looking out over a forest. "One thing that I do know: from all the email flyers and other advertisements that I get and the forums like LinkedIn that I'm on, I'm pretty sure there are more dental marketing companies and consultants than there are dentists. Some of them seem to be still-practicing dentists. All-in-all, even though I don't know anything about marketing, I have to assume there are a lot of snake oil salespeople out there and a lot of gullible dentists, who are willing to buy the snake oil."

Christie laughed, "Your instincts will serve you well. At least you're willing to admit that you don't know much about marketing. Most dentists are clueless, but they won't admit it. They've heard that they need marketing to attract to patients, but don't know where to start. They can be easy prey for a single channel vendor, selling a single channel solution."

"Single channel?" joked Peter. "Is that like a broken TV? Sorry, I'm not familiar with the terminology."

"You're not far off with the 'broken' analogy," replied Christie. "Marketing is simply a set of processes for communicating the value that you deliver to your customers and for managing customer relationships in ways that benefit your business. A channel is the means of communication. For example, if you are offering a discount on whitening, you may send your message via a postcard. In that case, you conveyed your message via a single channel. If you add email, social media and the radio you now have 4 marketing channels."

"Are more channels better?" asked Peter.

"Not necessarily," answered Christie, "and with that question, you have entered the world of marketing."

She went on to explain that successful marketing begins by setting the right strategic framework, or foundation, followed by lots of work and lots of measuring results. "I joked earlier that one channel equals broken, but, depending on the strategy, it may be that one channel is sufficient. Ultimately, though, you need to test to find out what works best. An overly simplistic example might be that a combination of 80% direct mail and 20% social media will get you the best ROI, but the exact opposite may get the same result for someone else. It depends on your target market and the message that you are trying to convey. Ongoing measurement is the only way to know."

"I know that ROI means return on investment," observed Peter, "but please tell me how you measure it when you do marketing for a dental office."

Christie nodded, "Great question! Just so we're on the same page, let me start with marketing ROI in general. If you spend $100 marketing widgets, and as a result of the marketing effort, you sell $150 of widgets, then you made $50, or 50%, more than you invested. In other words, you saw a 50% ROI. The measuring part can be tricky, though. You need to make sure that the $100 investment was responsible for the $50 increase in sales. Maybe, there was a news story on TV the day before that caused the increase in sales. So, one of the tasks of a good marketer is to quantify results accurately."

"Like I said," responded Peter, "I don't know anything about marketing, but I always thought it was about fancy, attention-getting things – creative art, catchy jingles, viral videos, or whatever."

"That's an important part of the service that we offer," answered Christie, "but the creative people that work for us need a strategic framework, including the anticipated channels, to give them a direction." She went on to briefly explain how the creative aspects of a campaign are developed by an entire marketing team.

"Anyway, let me get back to your question about ROI and a dental office. Widgets are a lot simpler than dental treatment, because widgets are a one-time sale. Dental treatment revenue often needs to be measured over a series of appointments, covering perhaps years." Christie was looking closely at Peter to gauge whether he was following. He kept nodding. So, she continued.

"Our agency utilizes sophisticated software that can measure ROI, even when the target is moving, like at a dental office, but we need to be able to have access to the results data - how much treatment was rendered and how much money was collected based upon a specific advertising campaign. It's completely impractical for a solo office to continually feed us those results manually. So, for the most part, any marketing company that works with a solo dental office guesses at ROI, using surrogates on the return - like a new patient is worth $750 or $1,000 or $1,200 – I've heard each of those with the supposed proof to back them up. That's a horrible compromise, but it's often the best that they can do. Almost no practice management applications interface with marketing applications like ours.

"We work with a large dental group from out-of-state. In fact, Jack referred us to them. They have their own practice management application and a full programming staff. They did the necessary programming to feed the revenue, or production, data to our applications. We are able to review the results of every campaign on an ongoing basis. We are able to rapidly beef up the marketing efforts that are working and eliminate those that aren't. The result is that we can maximize their marketing budget with reasonable predictability."

"In other words, there is really no way for a small guy to compete." Peter couldn't imagine a solution to this problem. It seemed obvious that this was a situation where bigger wins.

"Not true. There is a way for the small guys to get basically the same analytic tools as the big guys," said Christie. "Have you seen Laura's technical setup?"

Peter nodded, "She made mention of cloud marketing software, but I haven't seen it yet."

"It's not just the marketing software, although it's a great application. It's a combination of her practice management software, her marketing application, and her analytical, or business intelligence, software. She doesn't feed the data into our application, but she doesn't need to. From here in my office, I can access her BI software – oh, did I mention that she's a client – and have basically the same data as if I was looking into my analytics application." Christie continued to explain to Peter how it all worked and why Laura was able to reproduce at a fraction of what corporate dentistry was spending.

"Sounds like another reason that I need to get into the cloud sooner than later," concluded Peter.

"Changing topics," he continued, "Jack said that I should talk to you about putting together a marking campaign ASAP with the goal of retaining all of Paul's existing patients. He also said that I needed you to help me put together the marketing foundational materials, whatever that means."

"Should I assume you're hiring me, then?" Christie smiled with the look of don't-worry-I-know-you're new-at-this. "And yes, you should get on the cloud sooner than later."

Chapter 30: Understanding the New Way

Peter held off having any more staff meetings until Michelle left. It would have been too awkward. The first Monday after she was gone, though, he again blocked off 2 hours to pick up where they had left off. The staff arrived to a break-room where the butcher paper was re-hung on the walls.

Peter started once everyone was settled, "I can't tell you how long I have been staring at this flowchart with its great suggestions trying to figure out what to do with it. We obviously can't institute this much change all at once. My friend, Jack, suggested that the first step was to use this to stimulate a vision statement, which would then help us prioritize what actions to take first."

The staff looked as confused as Peter was, when Jack had first explained it to him.

"I didn't really understand at first, either," smiled Peter, "but after looking at this for a long time, I did begin to see some overarching themes.

"First, it's obvious that we all want to be proud of working here, and the desire for pride extends beyond offering the highest quality of clinical care. It includes infusing integrity into everything we do." Peter wrote it on the white board. "It's also obvious that we want to cater to patients who appreciate going to an office that is proud of its efforts."

"Second, there are a lot of suggestions on how to minimize stress, both for patients and staff." He continued to write on the board.

"Next, there are a lot of good ideas about how to better cater to our patients' needs. I apologize for my poor wording, but we can polish it up later." He wrote on the board, "Doing business with them the way they want, not the way we want."

"Finally, I'll summarize in my view what so many of the notes described about efficiencies, patient communications, and cost effectiveness." This time he wrote, 'We want to be an honest and effective alternative to corporate dentistry for cost-conscious patients who are serious about their oral health.' "Again, I'm not sure how to best word it, but I think it means at least 3 things," and he wrote, '1) be honest in our treatment planning, 2) keep our pricing as low as possible by keeping our overhead expenses as low as possible through relentless use of technology and partnering, 3) be obsessed with patient satisfaction.'

"So, here's my very rough-draft take on our practice's vision, but I'd really like all of your thoughts. Don't worry about the wording right now. We'll refine it later."

Peter continued, "Remember, the purpose of a vision statement is to make it very clear where we are headed. I'm told that it acts like a beacon for any decision that we make."

"I'm still not clear," said Marcie. "Can you give me an example of how it would guide a decision?"

"Sure," replied Peter, "let's talk about doing things our way versus the way the patient wants to do things. In most dental offices, when and how are appointments scheduled?"

Marcie answered as if it was a trick question, "During office hours and on the telephone?"

"Exactly, and that's because it's more convenient for the practice to make appointments at its convenience, rather than at the patient's convenience. So, if a patient wants to schedule an appointment after the office is closed, the best he or she can do is to leave a message and wait until the office contacts them."

Marcie shook her head, "When Paul first started, he had the developers put a request appointment button on his website. Someone can request an appointment from our office anytime they want."

"That's what I thought at first, too, Marcie," replied Peter, "but if you think about it, it's just an extension of doing business the way that best suits us. An appointment has been requested, not made. We still open the email request at our convenience, we still contact the patient at our convenience, and we still schedule the appointment at our convenience.

"We need to figure out a way to make appointments that best suits the patients' needs. I have some ideas, but the point is that our vision compels us to look at changing the way appointments are scheduled. Does that make sense?"

Marcie nodded, "It makes sense, but I can't think of a better way."

"Perceived limitations are not allowed," laughed Peter. "I have no doubts that we can come up with some solutions.

A lively and productive discussion followed, with Peter needing to stop the discussion several times to bring it back to the topic of the vision statement. It was obvious to him that this was a group with a lot of pent up thoughts about what a dental practice should look like.

Deborah, one of the hygienists, was the first to address the topic of competing with corporate dentistry. She repeated what Peter had heard many times from his colleagues. "I don't think we need to waste much effort on being an alternative to corporate dentistry. From what I hear, they are all about selling a bunch of unnecessary treatment, using low quality supplies and crown and bridge labs, and over-loading everyone's schedule which results in lousy work. It's only a matter of time until people wise up and stop going to them."

Peter responded, "You may be right, Deborah, but if you're not, and we're not prepared, we could get washed away in a flood. There are an awful lot of credible sources that predict rapid growth, and there are a lot of external factors that look like they could fuel the growth – lots of private equity money, lots of student debt, the decreasing value of a private practice, and lots of dentists who only want to work part-time.

"I think you are right that a lot of the older corporate entities were focused more on profits than on quality – that business people, not clinicians, drove the treatment decisions. The newer players understand that investing in poor quality care is a bad investment. So, an emphasis on the quality of care is already beginning to arise from the newest generation of so-called corporate practices.

"Even as the quality continues to improve, I can still see some opportunities for us, though. First, big organizations can never be as flexible or nimble as smaller ones. If we identify a patient need that can be fulfilled by changing a workflow process, we'll be able to turn on a dime. They won't.

"Second, while I think the treatment produced by their dentists and hygienists will be good, there's still going to be a motivation gap. When you're primary motivation is mostly a paycheck, self-motivation is difficult to maintain, which means over-and-above service is harder to deliver. It doesn't mean it's impossible, but it does make it harder. That can work to our advantage."

Peter concluded the meeting ten minutes before the first patients arrived. "By the way, we will start to convert to a cloud-based practice management software application this week. I've learned how important it will be for us to attain our vision and focus on our goals. As of today, that really only affects Brittany, but we'll all eventually need to become involved."

Chapter 31: The Cloud and RCM

While waiting for Tom's call to discuss his company's revenue cycle management services, Peter reviewed the notes from his meeting with Laura and Brittany. Everything seemed to be at the 50,000 feet, fly-over level. There were no specifics. So, he was looking forward to learning about how RCM actually worked. He had also written down a direct quote from Laura, "Don't think of Tom as just a salesman. He has deep industry knowledge and contacts. He's an invaluable resource that you should tap into."

At the allotted time, Peter signed into the online conference that Tom had set up and called into the conference number.

"Good to virtually meet you, Peter," Tom started. "Laura has said glowing things about you."

"Thanks," replied Peter, "and you as well. I'm interested to hear more about revenue cycle management, and don't take this the wrong way, but I'm also interested in why I hadn't heard about it before I met Laura."

Tom laughed, "No offense taken. Revenue Cycle Management is huge – and well-marketed – in the medical world, but what is done in medical RCM doesn't translate well into dental. So, any medical RCM players, who attempted to venture into dental, found that their systems and infrastructures didn't work and that the revenue potential didn't justify the adjustments necessary to adapt. Since basically no one sells RCM in dental, there is no one marketing it, and dentists are unaware of it."

"So," Peter asked the obvious question, "if there's no money in it, why are you doing it?"

"Because," answered Tom, "the cloud has changed the playing field."

"Laura mentioned that you only work with cloud practice management applications."

Tom responded, "Our services would be impractical for a solo practice – too expensive, if we didn't work with a cloud application. We do work with some large groups who don't have cloud systems, but their volume makes the work-arounds affordable to them and profitable to us. With the cloud, though, we can offer the same service to the solos that we offer to the big guys, at basically the same cost.

"We built a cloud-based dental RCM application and developed a virtual workforce. The RCM application is dedicated to gathering and managing insurance information. The application captures as much information as we can obtain from the carriers via electronic data exchange, and our stay-at-home workers fill in what can't be gathered electronically by calling or using the carriers' websites. The data is then seamlessly transferred into the cloud practice management application. Sometimes, direct entry into the practice management application is required. Our representatives can directly access the application remotely, since it's in the cloud. Reporting is done through a business intelligence dashboard application. In short, the cloud allows for efficiencies that couldn't have been imagined even 5 years ago.

"But, before we get into the 'how' of our process, let's talk about 'why' it's important.

Peter responded that Laura had showed him the value of shortening the collection cycle and that Brittany seemed completely on board. "They didn't give me any specific examples, though."

"OK," started Tom, "let me describe to you one of the first steps in our RCM service versus how it's done in a typical practice.

"When a patient with insurance makes an appointment at a typical dental office, he or she is asked about the insurance specifics – carrier, group number, and so on. A few of the better offices will call the carrier to verify eligibility, and maybe, they'll ask a few questions about the coverage. It's often a very frustrating call for the staff member that can last, on average, over 30 minutes per patient, and no one else in the office is checking on the accuracy of the information gathered."

Peter interrupted, "Paul, the dentist that I bought the practice from, used a service that loaded that information directly into his practice management software. Is this the same?"

"Far from it," answered Tom. "The information that you're referring to is view only and not patient-specific. Ours feeds directly into your insurance calculations, is requested on-demand, is targeted to specific patients, and is a lot less expensive. Anyway, I'll get into specifics in a few minutes."

"Getting back to the new patient with insurance," continued Tom, "few dental practice management software applications have the ability to calculate anything but rudimentary estimates of what the patient's insurance will cover for any given treatment plan. So, typically, a staff member – front desk or treatment coordinator – estimates the patient payment portion on a piece of paper, often guessing because of inadequate information. The typical result is that maybe the office collects the deductible, bills the insurance, waits for insurance payment, resolves the insurance payment, bills the patient, and waits for the patient to pay. If everything works smoothly, which is infrequent, the cycle I just described is 90 – 120 days before the account is settled. With any problems at all, it can easily extend to over 120 days. Our process is designed to keep the cycle under 60 days, give you the tools to evaluate the status of every transaction, and give you action-able data to analyze all your insurance company relationships."

"What's the magic?" asked Peter.

Tom answered, "The magic starts in knowing everything about the patient's insurance at the time of treatment planning. Your ability to get treatment acceptance goes up dramatically, if the patient knows his or her financial commitment when making the decision. Additionally, since you know what the insurance is going to pay, you can collect the patient copayment at the time of treatment. Let me show you how it works. Can you see my screen on your computer?"

Tom went on to show Peter how the 3 different cloud applications – the practice management application, the RCM application, and the business intelligence dashboard – all interacted to produce the amazing result. He described how representatives from his company made sure that all the necessary insurance information – over 80 fields of insurance plan data information – was accurate and up-to-date.

He showed how the practice management software was able to calculate the expected insurance payments of even the most complicated insurance plans. "Another huge benefit of accurate insurance estimates is the knowledge that your insurance accounts receivables are accurate. Since most practices bill the insurance at their full fee and then adjust after payment is received, their insurance AR may be inaccurate by 30% – 40%. I'm unaware of any other industry where the majority of the businesses are as clueless about how much they are owed."

Tom also showed how his company automatically contacted the insurance companies on claims that had been submitted for payment 31 days prior. He showed how Peter and Brittany could view the status of each claim by carrier using their BI dashboard.

He also went on to describe 5 or 6 other things that his company did to help shorten the insurance payment cycle.

Peter was impressed. "How much does all this cost?"

Tom re-iterated, "Without the cloud, it would be prohibitively expensive, I wouldn't have a business, and – excuse my editorial – only the big guys could take advantage of RCM tools, giving them yet one more advantage over the small guys.

"The cost depends on how many of our services you use and the volume. We charge by transaction. An average size solo practice, using all our services, which of course I recommend, will spend less than the cost of one full time employee, and our services typically allow a practice to hire one less full time employee. In your case, Brittany can oversee our services instead of overseeing the work of an insurance biller, and you'll be able to do something that most dentists never even attempt: you'll be able to see an accurate picture of your insurance business. Also, you'll get the intended benefits of RCM: increased cash flow and decreased write-offs."

Chapter 32: The Challenge of Change

"Do we really have to change software?" asked Jayne. "The one we're using now is so much better."

The team was meeting in the break room. They had just finished their first training session on the new cloud practice management application, and Peter was anxious to get their feedback. It only now occurred to him that, other than Brittany, none of the rest of the team understood the need for change.

Brittany answered before Peter had a chance, "I'm familiar with this application, Jayne, and the one we're using right now really isn't better. In fact, there are a lot of important things that the new software can do that our current one can't. It's normal that you like what you're familiar with, though, and once you're familiar with this, you'll like it, too.

Peter continued the thought, "My consultant friends have taught me that there are 4 steps involved in learning something that is new and kind of complicated. It's common to start out excited about the new experience, but once we realize that it's going to take some effort, we get discouraged. As we start to learn, we get cautiously comfortable. Eventually, it becomes second-nature.

"Getting from the first step to the fourth takes varying amounts of direction and support, and I'll do everything that I can to make sure that they are available to you whenever you need them. The discouraged stage, which is where you are right now, is the most difficult to work through. It's the phase where, if you're doing it on your own, it's easier to just quit doing it. We all need to help each other through this phase, which may last as long as a couple of months. Attaining learning goals is another big aspect of going through each phase. So, please take time to do the homework assignments that the trainer suggested."

He continued, "I apologize for not doing a better job of explaining the reason for the change. In short, cloud software is a necessary tool for us to attain our vision, while our current software would be a hindrance. Our ability to be an alternative to corporate dentistry requires that we get more efficient in everything that we do, or put differently, we need to be able to do more. For a typical dental practice, the usual way to do more is to require the existing staff to work harder or to hire more people. Either of these solutions is basically taking one step forward and two steps back.

"Fortunately, I've met some very smart people – including the dentist that Brittany used to work for – who have showed me how to leverage cloud software to become significantly more efficient without increasing anyone's work load.

"Also, it's not just the cloud practice management application that we will utilize. There are others, but the practice management software must be the hub of the entire system. For most practices, the practice management software is something used mostly by the front desk to help keep things kind of organized. For us, our practice management software will be the core management tool of our business."

He went up to the white board and drew a circle in the center. He wrote PMA for practice management application. Then, around the circle, like a hub and spokes, he started writing and describing other applications:

  * Revenue Cycle Management: "There is no practical way to utilize an RCM service without using a cloud application. It just can't work unless there is a seamless interface between the RCM service and the practice management application. Our cloud practice management application is the only one that has the capability."

  * Business intelligence dashboard: "This application gives me access to reporting data in a way that's impractical in most traditional software applications, like our current one. I'll be able to use drill-down reporting capabilities to see in minutes what would take hours to produce using typical practice management reports. There is another dashboard cloud application on the market that hooks into a lot of the traditional applications, but it's one-size-fits-all, and it's expensive. There's no ability to customize it, which makes sense because any changes requires a retro-fit into all the practice management applications that they hook into."

  * Benchmark data: "This is actually part of the dashboard, but I think it's important enough to talk about separately. I'll have summary data of all the customers of our cloud software vendor. For example, we'll be able to see the average hygiene production across thousands of practices. No traditional software vendor has that capability."

  * Email alerts: "I'll receive daily alerts that highlight the important business issues in the practice, with warnings about potential trouble spots."

  * Patient communications: "Is there any doubt that we need to start communicating with our patients the same way they communicate with the rest of the world? They use email, text, and social media. We need to extend beyond the telephone as our primary communication tool. Again, there are some cloud vendors who offer this capability that hook into traditional software, but like the dashboard, they are expensive and offer take-it-or-leave-it functionality. Our cloud practice management application will allow us much more flexibility."

  * 24/7 appointment scheduling: "I'm not talking about an answering service that simply takes messages or a request an appointment button on our website. I'm talking about actually scheduling an appointment whenever the patient wants to contact us. Our cloud application vendor has a service that does this, but it requires the cloud application."

He went on to describe other cloud applications that were integrated with their new cloud PMA. He had seen them in action in Laura's practice, and he was interested in using them eventually: concierge club management for patients without insurance, in-house patient financing, online referrals and collaboration, and online patient payments.

"I hope this makes some sense. Can you see why the cloud platform is basically a prerequisite to do all these things efficiently? While individually some of the things are workable with traditional software, adding all of them would become a hodge-podge, requiring impractical work-arounds, and in some cases forcing us to do business the way the vendors designed the software, not the way that we want. Some of the services – like revenue cycle management – aren't possible at all without the cloud. Does the decision to move to the cloud make some sense now?"

They all nodded, but not all seemed convinced.

"Let me see if I've got it right," answered Deborah. "Our vision and goals can be accomplished only if we do more business-related tasks and offer more flexibility to our patients. The only way we can do more and offer more without going bonkers or hiring more staff is to use available cloud technologies, and the only practical way to take advantage of the cloud technologies is by using a cloud practice management application. And of course, if we go bonkers or hire more staff, we can't attain our goals."

"Bingo," smiled Peter, "I couldn't have said it better myself."

Chapter 33: Leading the Industry

"I feel a little guilty, Jack," Peter said as he sat down.

Jack looked up from his coffee quizzically.

"The stuff you've taught me and the people you've introduced me to have been invaluable. Yet, you've gotten nothing out of it. You won't even let me buy your coffee."

"Near as I can tell," Jack answered, "the only thing that I have done is have coffee in the morning with a friend a few days a week and kicked around a few ideas. Hopefully, you've enjoyed it as much as I have."

Peter had offered to pay Jack, but Jack would hear nothing of it.

"Seriously though," continued Jack, "I think that you're at the forefront of a major industry change. Being even a small part of a revolution can be fun."

Peter became animated, "But, you should be leading it."

Jack shook his head and smiled, "No, no, I'll leave that to people like you and Laura. I've been involved in similar things before, and I honestly don't have the energy to do it again."

"What other major industry changes have you been involved in?" asked Peter.

"Nothing worth talking about anymore," Jack answered. "By the way, I got your voice message that Marcie is asking for a raise."

Peter was used to Jack changing the subject whenever anyone asked about his past. Maybe, someday he would push it, but not now. "Yeah, she said that Michelle had promised her a raise before Paul announced the sale, but Michelle wanted to wait until after the transition."

"Well," began Jack, "you have to assume that she was, in fact, promised a raise, and you can't go back on the promise without causing ill-will. Other than social styles and management styles, we've not talked a lot about management skills. This is a good entre point.

"Did she happen to mention the reason for the raise?"

"She said that she'd been working here for over a year and hadn't received any increases, even though she felt she had been doing a good job," answered Peter.

"That approach – only giving salary increases when people complain – is so common, and yet, there is probably no worse way to handle it."

As Peter took notes, Jack talked about his philosophy of compensation at small businesses like dental practices. "More important than salary raises to increase an employee's income, however, are bonuses and other perks, like better benefits and educational opportunities. I'll give you some specific examples, but in short, you want to design a bonus scheme that allows the staff to do well when the business does well. In other words, they all get more pie if the size of the pie increases. Sorry, I occasionally get carried away with trite analogies. Anyway, one of your goals should be that your lowest paid employee makes more than the highest paid employee of any other office in town."

Jack offered some examples of bonus formulas and the timing of bonus payments. "This can only work, though, if you're doing a stellar job as a leader and manager."

Peter looked at him blank-faced.

"It's up to you to make sure that everyone deserves her bonus. If someone doesn't deserve a bonus, it's because you've fallen down on your job as a leader and manager - in other words, as a CEO."

"Both you and Athena have mentioned that there's a difference between leadership skills and management skills," interjected Peter.

"There is a big difference," nodded Jack, "and it's an important one to understand. By the way, I love that you created a poster for your office listing the traits of a leader with a sunrise in the background."

"That was Jenna's idea," mumbled Peter.

"Anyway, excuse a naval analogy – but it works to a certain degree. Think of a leader as a captain at the helm of a ship, looking at over the horizon, making sure the ship is headed in the right direction, and constantly evaluating whether the ship is performing at its maximum capability.

"Think of a manager – say a lieutenant – who is constantly evaluating the day-to-day performance of the sailors. He or she praises where appropriate. He or she corrects where appropriate. He or she teaches. He or she looks for ways to help the sailors grow. In short, he or she is a coach.

"Because of the size and nature of your business, you'll occasionally need to play the role of the captain and coach simultaneously. Brittany will need to learn coaching skills, also. Laura talks about this a lot in her workshop, and her workbook has a lot of helpful exercises."

"Can you give some examples of coaching, or managing?" asked Peter.

"I can and I will, and Laura's workbook does a good job of walking you through some scenarios. First, though, we need to circle back to something we started talking about a few weeks ago. Do you remember the discussion on power of position?"

Peter nodded. He recalled it vividly. He especially remembered when Michelle told him – in so many words – that she couldn't manage without it.

"If I remember correctly," continued Jack, "you said one of the reasons that you wanted to own a practice was something like, 'I want to be the guy with the power.' Let me tell you an obvious secret: everyone wants to be 'the guy with the power.' A great manager finds a way to give employees areas where they do have power, and they have the freedom within their area of power to make things happen through their own efforts. Fortunately, there are many spheres of power in any organization, even a small one.

"Can you give me an example?" asked Peter.

"Sure. Maybe someone is good at communicating. Let her be in charge of patient communications, like a newsletter or social media or handle your promotions or whatever the two of you determine. Set some measurable objectives, make sure that she has the necessary resources and support, and then, turn the 'communications' department over to her. Make sure, of course, that she is rewarded for success based upon how much more revenue her efforts generate.

"Maybe someone is really organized and would be great at managing your 'supplies' department. Even with Laura's buying club, a well-organized and efficient 'procurement' department will easily pay for the additional bonuses she might get.

"Cool," said Peter, "it's like they get to run their own business."

"That's right," answered Jack, "and even though you'll always maintain the power by position, use it sparingly – only when needed, like if someone is heading in the wrong direction or to resolve a conflict.

"Now, let's continue with management skills. First, I strongly recommend the book, One Minute Manager. It's worth the investment." Jacks went on to highlight some of the skills that Peter needed to learn and become consistent with. Here are the notes that he took.

Chapter 34: Pass It On

Peter and Jenna had just finished dinner when he realized that he hadn't received a call since he left the office, which was about 4:00. He removed his phone from his pocket and realized he needed to recharge the battery. "Uh-oh," he mumbled, "I hope I didn't miss anything important."

As he plugged in his power cord, he responded to Jenna about why he was talking to himself. "I've got to be more careful. If I do this again, we may need to get a landline." Once his display was lit, he breathed a sigh of relief, "Fortunately, there are no emergency calls, but I do have 7 voice mails."

Voice Mail 1

"Peter. Hi, it's Christie. The foundational stuff came back today. The logo looks great, but I think we can tighten up some of the messaging. We also got a draft design of the website. I like it. Also, I think we're ready to go with the getting-to-know-you campaign to the existing patients. Your short video turned out really good, and the social media stuff is even better than I expected. Call when you get a chance. I'm around."

Voice Mail 2

"Hi, Peter. It's Athena. I just wanted to tell you something I heard today that will warm your heart. Three of your staff members came here for lunch today. I'm really bad with names. So, I don't remember who they are, but they were raving about working for you, how good they felt about the direction the practice was going, and how they were beginning to get confidence that the vision was possible. They also talked about how great it was to get the one minute praises – they didn't use those words, though. Anyway, no need to get back to me. I just wanted you to know. Bye."

Voice Mail 3

"Peter, it's Tom. I noticed that your first few insurance plan information requests went through. Everything looks good. If you can remember how to login and see what's happened and the status, you might want to see what the live data looks like. No need, though. I'll call you on Monday, and we can go over it."

Voice Mail 4

It's Laura, Peter. I just wanted to confirm that you'll be at the workshop tomorrow. I'll pass out the workbook and other materials then, but I just emailed the patient communication templates and diagrams to you. If you have any questions, we can go over them tomorrow, after the workshop."

Voice Mail 5

"Peter." Peter recognized Jack's voice. "A dentist, who is good friend, is coming into town next week. He's one of the founders of a one of the largest and most successful DSOs in the country. I volunteered that you would take us out to dinner on Thursday. Let me know if that's a problem. He's a treasure trove of information, but most importantly, I think you'll be interested how his organization works with their hygienists, who he considers some of their most valuable assets."

Voice Mail 6

Hi, Peter. It's Brittany. I didn't get a chance to talk to you before you left for the weekend. I just wanted to let you know that I spoke with Marcie and Jayne. They were more than excited about taking on the communications and supply management tasks. I'm available this weekend, if you want to go over the specifics. Otherwise, enjoy your weekend, and we'll talk on Monday."

Voice Mail 7

"Hello, Peter. My name is Frank. I met a friend of yours, Jack, yesterday, and he gave me your contact information. I'm a dentist, who graduated almost 8 years ago, and I'm just starting the process of deciding whether I should start or buy my own practice. Jack though you might have some helpful insights. So, I'd really appreciate talking with you for a few minutes, if you have the time."

Peter smiled and shook his head. Indeed, even though it had only been a few months, he had gained a lot of insights that he could pass on. And, he suddenly realized another one: he now realized how Jack would like to be thanked.

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About the Author

William Jackson attended the University of Southern California undergraduate program with a major in mathematics. He continued at USC to receive his Doctor of Dental Surgery in 1976. Shortly after buying his first dental practice in Los Angeles, Dr. Jackson was involved in the startup of a small dental insurance company in Los Angeles. It began a career that placed him in a number of roles that gave him a unique perspective on the role of President/CEO.

After almost 10 years of clinical practice and running the dental insurance company, Dr. Jackson took a position with Prudential Healthcare. He ultimately achieved the goal of President of the dental division.

He later moved to Wellpoint Health Plans, where he was also in the role of President/CEO of the dental division.

During the dot-com boom, Dr. Jackson left Wellpoint, and with the support of a venture capital firm, started Dental Connect, the first real time dental claims clearinghouse in the industry. The company later merged with the dental internet giant, Dentalxchange.

Dr. Jackson then was involved in starting up Planet DDS, Inc., where he is currently Vice President of Business Development. Planet DDS is the largest provider of cloud-based practice management software in the dental industry.
