That was the start of a phone call to me. The associate went to the doctor for a raise. When the owner calculated what the associate was currently being paid he was surprised to find that he was already being overpaid by $6,400. That is pretty big difference in favor of the associate and now they were asking for a raise. The owner Dr. felt trapped because he genuine liked the associate but giving more money to a doctor that was not making their salary could result the owner making less. This would create a multitude issues much greater than the salary increase itself.
The first thing is affects your sales price. It affects net income, decrease your net income and: Less profit = lower sales price. If this was a 2 Dr. practice, it could lower the sales price between $22.500 and $32,500.
The second thing it affects is your staff and the number of staff that each doctor has available to them. This clinic runs the model of an exam room tech that preps many rooms before the Dr. comes in. Great model for some clinics but not the correct model for this clinic. This clinic ran lower staff percentage than national average and when the associate needed someone to hold a pet; he was shorthanded if the room tech was not available. Great model for some clinics but not the correct model for this clinic.
The third thing it does it create stress on the owner. The owner is keenly aware that when the associate sees the patient, there is a difference in what the total bill is. Rarely, and I mean RARELY does the owner know how to discuss the situation with the associate. Most owners’ discussions with their associates are to review their own numbers, IF THEY HAVE ANY COMMUNICATION AT ALL.
I want to reiterate that the Associate in fact had a lot of strengths. Clients bonded, the staff trusted her and she took care of all their pets! It was a fit in every aspect except they did not produce their salary.
The owner Dr. hired me and I did my analysis and flew down see the clinic. The Drs. mark off time on the schedule and I take a tour, meet a few people and we go out to lunch. At lunch, I show reports and ask for clarifications. Numbers without the patient do not work!! This is the main difference between what I do and what everyone else does-I am walking into the clinic and I am meeting you.
We go to lunch and I start asking questions:
First questions-Are the doctors doing the same level of medicine? I would get the answer, one Dr. would say the other Dr. does more surgery and he/she sees more office appointments or Dr. J does more X-rays etc. The Drs. agree that they can increase X-rays and do more blood work. We review a report that I created comparing the doctors and how the practice is doing in comparison to the other 150 practices I have consulted for.
Usually by the time we discuss their definition of hospitalization the Drs. are very much a part of the conversation and they begin to realize they charge different fees and treat patients similarly – but not the same. The difference is in the ACT. That is the proof that the level of medicine.
Next topic is fees-I have both doctors together so let’s discuss fees. First question-What fees are either one of you not comfortable with. The associate says I think our dentals are too high, if our dentals were lower, I could do more. My next question was do you like dentistry? They says yes, I smile. If the owner agrees we will send the associate to a dental conference and possibly look at new equipment. We discuss whether their dentals include anesthesia or not, grades, digital X-ray. Overall, the net effect will be, more dentals =more income. The best part, the owner’s not doing it.
The conversation continues with my interpreting the numbers of the practice and asking questions.
Next I pick out some topics on the profit and loss statement and ask questions. I am not there to discuss if the clinic is profitable at this meeting and what the practice is worth. I actually talk money at that meeting. Does the clinic have enough staff? The differences of STYLE of medicine begin to show. The owner does a lot of things without a tech and the associate looks for a tech when doing anything with the pet. One Dr. has the client hold the pet or they a super quick about doing anything and the other Dr. is concerned about the owner getting bit.
Now the Drs. are aware that they treat a cases differently and work at different efficiencies and need different staffing. This is easy to fix. This is not rocket science. Remember the associate enjoys the job and the only difference is the they do not produce their salary.
The Owner is going to give the associate a raise and the results are, “Who is going to see more clients?” The owner. Is this what the owner wants? Perhaps but I didn’t become an owner to see more clients and work harder. I became an owner to make more money than I did as an associate, practice the level of medicine I wanted, have something to sell down the road and hire someone that would buy in or have associates so I could work less and spend time with my family.
I ask you to pause and tell me a game plan that it is not based on “Hope”. At least 80% of clinic run this way. Very few clinics can do their own CBC/Chem screen and if you are over 60, you get a T4 (Practice valuation). That is what I do and I do it well. I interpret the reports in your practice and explain and ask questions so there is an understanding.
The next thing I do is show my report with the potential amount of money that is left of the table. As we go through the practice the doctors will see on paper a report that shows what they are doing and what is off how much money is left on the table. It is staggering and the effect on the P&L that effects the bottom line AND SALES PRICE.
Next Question; I ask the associate how much do they need to produce to pay for themselves in DR. DRIVEN services. The associate doesn’t know how much they need to produce to pay for themselves and asked the owner for the reports about a year ago. The owner asked the office manager that ran off some reports and gave them to the dr. and they are somewhere on his desk.
This clinic is now one of my clients. 60 days after hiring me the associate paid for themselves. Magical? Lucky? Scared they may lose their job if they did not meet the numbers? No-not even close.
We got the team excited because we were going to look at different modules of efficiency and we needed their help. We did some fee standardization, created an inventory budget, worked on scheduling and increased their reminders, rechecks and recalls. This is the amazing part, the associate was given a spread sheet showing what they produced and how much she need to produce and she took PRIDE in doing her share. Remember, they were part of the team in every way except producing their salary.
I guarantee if you own a clinic there is money being left on the table and this comes as a surprise to know one.
If you have questions about this article or general questions, call me 469-867-3647. I do not charge to answer questions.
