There was a man who lived by the side of the road and sold hot dogs.
He was hard of hearing, so he had no radio.
He had trouble with his eyes, so he read no newspapers.
But he sold good hot dogs.
He put up signs on the highway telling how good they were.
He stood on the side of the road and cried: “Buy a hot dog, Mister?”
And people bought.
He increased his meat and bun orders.
He bought a bigger stove to take care of his trade.
He finally got his son home from college to help him out.
But then something happened.
His son said, “Father, haven’t you been listening to the radio?
Haven’t you been reading the newspapers?
There’s a big depression.
The European situation is terrible.
The domestic situation is worse.”
Whereupon the father thought, “Well, my son’s been to college, he reads the papers and he listens to the radio, so he ought to know.”
So the father cut down on his meat and bun orders, took down his advertising signs, and no longer bothered to stand out on the highway to sell his hot dogs.
And his hot dog sales fell almost overnight.
“You’re right, son,” the father said to the boy.
“We certainly are in the middle of a great depression.”

The above story, which many of you may have seen before, was sent to me the other day by my friend Reid Simmons from Cloud9Ortho.  I thought I would reprint it here simply because it made me think of the doctors who have called me during the most recent six years who were convinced their decline in case acceptance and/or their decline in new patient exams, was directly related to the depressed economy our country has seen since 2008.  I have heard the same excuse more recently when I discover that some doctors have not raised their fees in 2-3 years and again when I have discovered doctors quoting “moderate” degree of difficulty fees on the exact same cases that one or two years ago would have been quoted as “difficult” and “minor” degree of difficulty on cases that would have been “moderate” a year or two ago.  None of you need a consultant to interpret for you or to determine the lesson from the story.  Stay the course, market aggressively, and pay no attention to those around you who would bring you down to their level.

Paids In Full

A reminder.  No more than 20% of your new starts should be paying in full and no less than 10% should be paying in full.  The discount you offer for paying in full should be adjusted, sometimes once or even twice in a year, in order to maintain paids in full at a perfect level.  The typical Zuelke client is currently offering a 3% discount for cases with treatment time of 13 months or longer and a 2% discount for cases with treatment time of 12 months or less.  In this economy, a discount greater than 3% is simply throwing money, and net profit, out the window!  A few of our clients who tend to be in more affluent areas have even cut their paid in full discount to 0 and still have more than 15% of their new starts paying in full.  A paid in full ratio of between 10% and 20% of starts keeps cash flow steady while also keeping the Accounts Receivable at a level to ensure strong cash flow even during months where starts and production are lower.

Delta

Another reminder to the majority of our clients who are non par with Delta and with other PPO’s.  Delta and a few of the other PPO (network) insurance plans have sub policies that will continue to pay normal benefits and will honor an assignment of benefits and pay your office directly, even though you are not a participant of their plan.  Remember though that a single PPO insurance company such as Delta, MetLife, Cigna, etc., typically has multiple different insurance plans sold to different employers.  Some of those plans will not pay the practice directly and instead pay the patient/responsible party.  Some of the plans have a 50% reduction in benefit if the patient goes to a non-participating doctor and a few of the plans, mostly Delta plans, provide $0 benefits if the patient goes to a non-participating doctor.  It is up to the Insurance Coordinator in your office to conduct the proper, if onerous, research and to maintain the proper insurance records so you can properly estimate insurance benefits when speaking with a prospective new patient.

ZACC

ZACC is the Zuelke Automated Credit Coach.  It is an internet based tool or application that allows an orthodontic or dental practice to enter basic patient information into a website which then evaluates that person’s maturity and stability to establish a credit risk “grade.”  The tool then obtains a credit report and reads and interprets every line and column of information on the report and presents a 100% accurate credit grade along with recommended down payment and contract length limits.  ZACC has been on the scene now for a number of years and makes many thousands of credit decisions for doctors each and every month.  The entire process of entering information and obtaining a credit grade takes less than 90 seconds and, again, is foolproof, easy for any staff person to use, and is 100% accurate.  The best part of using ZACC is that a ZACC credit inquiry does not impact your patient’s credit score or in any way their credit worthiness, and does not show up as an inquiry when another creditor obtains a credit report.  Go to www.getzacc.com to see how it works.

Seeing More Adults?

I have seen more than a few orthodontic practices with an increasing percentage of their new exams consisting of adults.  There is little, perhaps no, good news here!  Do you know, for certain, the ratio/percentage of adult patients to your total new patient flow?  Do you know what that was a year ago, and two years ago?  Adult case acceptance tends to be under, and often well under, 50%.  Pay attention to how you market and to whom you market!  No less than 80% of your total new patient flow should be age 17 and lower.

Mandatory Third-Party Financing

This simply has to be the dumbest and most dangerous idea to come on the orthodontic scene in 50 years!  Since OFP entered the marketplace many years ago, followed by Capital One, Chase HealthCare Advantage, CareCredit, and at least two dozen other patient financing companies, almost all of which have failed, dentists and orthodontists have learned that “A” patients almost universally reject any form of third party financing of their treatment plan.  Now there is a new company marketing to the profession, sucking in the weak, the gullible, and those who believe that financing every patient who does not pay in full off site by a third party company is somehow going to improve case acceptance and make the practice more profitable.  Beware!  As my old boss used to say to me, “A word to the wise should be sufficient!”

Orthotrac

If you are an Orthotrac user, contact your salesman and ask about the “Zuelke Module.”  This new module, only available to those using version 12.1 or above, is a significant rewrite of the Orthotrac financial, security, and marketing packages.  No space here to describe the tremendous features of this new module but I promise that you will be impressed!

Credit Ratings

According to Equifax, the nation’s largest credit bureau, 67% of the population in the country is an “A” patient, with 18% in the “B” risk category and 15% in the “C” category.  Why then are so many orthodontic practices requiring large down payments?  Why are so many general practices requiring cash only and even requiring auto debit?  Why do any of this, which always results in reduced case acceptance, when 67% of your new patients are completely trustworthy?

Bentson Clark & Copple

Chris Bentson, of Bentson Clark & Copple is conducting a full day seminar on June 19, 2015 that I believe will be interesting.  I have known Chris for a very long time and besides operating what I consider to be the best Transition and Valuation service in the orthodontic industry, I know Chris to be a person of high integrity and trustworthiness.  I have referred our clients interested in transition/valuation services exclusively to Bentson Clark & Copple with total confidence.

This is a “first-time” seminar for Chris and it will focus on “Building A Lifelong Orthodontic Partnership” with a focus on the increasing popular model of Orthodontists partnering with Pediatric dentists.  There is a lot of talent presenting in this seminar and you can read about it at http://www.bentsonclark.com/events.cfm or call Chris directly at 336.379.8822.