Richard Low (00:21):

Welcome to the Shared Practices Podcast. I am joined by my co-host today, Dr. Scott Leune, after seeing each other in person yesterday, right before recording this, Scott, a long time oc.

Scott Leune (00:32):

Yeah. Yeah, we flew in. I flew in from San Antonio to Scottsdale and flew home and I had just about every flight issue you could wish for in one of your nightmares. That was my day yesterday, but I am good to go. I'm home. I slept well. I kissed my kids good morning and sent them to school and here I am.

Richard Low (00:50):

It's a better day today. I love it. The best was the three of us, you, George and I, figuring out how to pose to make the photographer happy and all the things happy. I think we got some great stuff out of it, but yeah, it was Scottsdale photo shoot.

Scott Leune (01:03):

We had to pose and move models so uncomfortable, but the three older guys doing our best. We'll see how it comes out.

The Three Pillars of a Dental CEO

Richard Low (01:14):

We made it through. Well, we're going to continue the conversation that we've had around the three pillars of a dental CEO and we've really dived deep into the first pillar of managing operations and the metrics and the application of that, and now we've got a couple more pillars. So Scott, do you mind just framing that outline of what a dental CEO is? What does that mean to be a dental CEO and then we can get into this pillar today?

Scott Leune (01:43):

Yeah, I mean if you are listening to this and you haven't listened to the last few episodes, you need to stop and go and listen to the last few episodes, but in those episodes we talked about the fact that there's three main pillars to being a CEO in dentistry in a dental office or dental office group. The first pillar is we've got to manage the day-to-day operations and those are the things we see people do that is presenting finances and reappoint patients and getting case acceptance and diagnosing. Those are the day-to-day operations. There's a whole couple series we did on that. The second pillar, which maybe we'll talk about today, is managing the financials. The financials. That's really how we spend our money. The operations, the first pillar that creates the collections, the financials is mainly how we then spend the collections and of course what's left over is our profitability or our EBITDA or our net income, our cashflow, so we need to create as much collections as we can and we need to spend as little as feasible and then we're very profitable. That's the second pillar, the financials. The third pillar, which maybe we'll save for another episode, is managing the people and there's a whole list of things we could talk about there, but the people of course are the ones that are creating the collections. They're the ones we're spending our collections on, and we as a CEO need to have the right daily habits so that we're the glue that holds all three of these pillars together so that we've got

Managing Financials - Supplies

Richard Low (03:11):

This very strong dental practice set up. The financials today is one where I think dentists fall into one of two camps naturally, but both fall prey to what I see very commonly. Either they're naturally kind of tight-fisted or they're naturally spenders, but I think that for most dentists, looking at how much we're spending controlling that is not natural. Whether you're tight-fisted, it's just like I am panicked and so I am going to try and minimize costs, but often they don't have a comprehensive picture of what's going on or let's just make more and then we can spend more and I don't have to worry about it, so that's my perception, but I'd love to hear what you think.

Scott Leune (03:52):

From my experience, we as dentists get caught up a lot in the day-to-day operations and we don't focus on how we spend money. We're like we spend money when we need to. We hire someone when we need to hire someone, we buy supplies. When we need to buy supplies, we go order stuff from the lab. We like that does good work. We kind of lose sense of budgeting, lose sense of really what I might call boundaries. We don't have boundaries and whenever you don't have boundaries, you have kind of a yes person, but you don't have the no person. Then over time obviously you start spending a lot more money and many times it takes someone like me, like a coach or a consultant to come in, look at the financials and say, oh my lord, we've kind of gotten out of line a bit with some of these categories.

Richard Low (04:43):

Sometimes we need someone to look and hold us accountable because we're not always great at doing that ourselves. I think especially when it comes to finances, this is one where there's always justification. There's always like, oh, well we needed this, or, oh, well this is the thing I really like. This is how I like to do dentistry, and I think while there is an element of choice and style and what you want, I think having these pictures or these examples of categories and how to set up a budget and the discipline to actually just look at this and be consistent. So where do you start?

Scott Leune (05:22):

Well, I mean the very first thing that's easy to dive into is something that doesn't change the quality of our dentistry. It doesn't disrupt our day to keep healthy, and that is how much we spend on supplies and when we look nationally, it's very common for dental practices to spend eight, nine, maybe even 10% on supplies, but let me define supplies. Supplies isn't just dental supplies. Supplies is dental supplies and office supplies combined, and when we look at that number eight, nine, 10% is normal, although when we can put controls on it, we can get below 4%. Now, let's make this significant. If we've got a one and a half million practice, I'll get out my handy calculator right now. If we got a one and a half million dollar practice and we go from 9% to 4%, just to put this into perspective, that's $75,000 of extra profit every single year for the rest of our career. That's a lot of money. That is significant. That's your entire, that's your retirement plan. That's your kid's college fund. That is a cruise vacation for the whole office once a year and something for you and your wife or husband. That is so much money, but most dentists spend it, they don't even look, they don't even understand or know that it could be a lot smaller

Richard Low (06:55):

And to reemphasize, I know this might be obvious for some of our listeners, but 70 5K of extra profit without increasing collections and variable costs and patient flow and staff costs, those every dollar of true profit versus having to actually collect more to make more. There's a big difference. So it's like if your overhead is 66%, this is like an extra 220 5K of production that just appeared out of nowhere and then led to 70 5K of, but then you'd have to actually do all the work for that extra the production.

Scott Leune (07:35):

Yeah, yeah, for sure. And so to your point, the fastest way to make more money is to stop spending it because there's no added cost associated with that added profit, right, so you're absolutely right. When we look at a practice model, we should all be below 50% overhead. When you look at the traditional owner operator dentist take home pay, if you use that terminology, we should be taking home half or more of what we collect as a solo owner operator dentist. So when we look at, okay, how do we get below 4%? First of all, most people listening to this that own their own practice probably have no idea what they're actually spending when you combine dental supplies and office supplies, so don't catch yourself making an assumption right now. Go look at your profit and loss statement from your CPA add dental plus office.

That should be less than 4%. Now, a little fine print here, it's dental supplies plus office supplies, but subtract out implant parts. So implant parts are not something that's going to be kind of budgetable. It's going to be based on your patient flow and how many implants you're kind of doing. So that is not something we're going to look at. Of course we want to spend less money on that as opposed to more money if we can, but that is not part of the 4% number. So it's dental supplies plus office supplies, but not including implant parts. That also means that we've got to tell our CPA to track implant parts separately and we've got to tell our CPA to combine office supplies and dental supplies in one category. How do we get it below 4%? It's not changing the brand typically. It's not even changing where you buy it from typically, although if you buy it from a lower cost source, yes, you save money If you change the brand, yes, you can save money, but for the most part, my experiences in helping offices, it's mostly about implementing a budget, just having the controls in place.

The controls say that we will never spend more than 4%. That's our budget, so I can go deeper into that if you want.

Implementing a Budget and Inventory Management

Richard Low (09:51):

I would love to and I would love to understand when I think about this, the three parts of this that I see that I would like to give some relative weight to, and maybe they're all equal, but I see there is the budget on the front end, the actual discipline of creating a number, sticking to it, being proactive, thinking about that, having that baked into your culture. There is the process of ordering whether through buying groups, suppliers, formularies, switching brands, and then there's the physical inventory management to then kind of accurately be able to assess our needs and order just what is needed to stay in budget but still stay operational, and some of that involves physical rearrangement of supplies and consolidation and organization. In my mind, those are the three parts of fitting these together. Do you have any sense on the weight? You're saying the budget is where we really make our money here, and then maybe these are secondary and tertiary things to do once you've implemented that budget?

Scott Leune (10:57):

Yeah, the budget's the result, the budget tells you, did we win or not? Are we less than 4% or not? So if we can put controls in place and say, Hey, we'll never spend more than 4%. I don't care if you're ordering Gucci gloves and Pradas and you're storing things in a horrible way where it's just really hard to find stuff. If we could still stay under 4% on what we order, we've won. Obviously though, if we can store things in a better way, it's easier to stay on budget. If we don't order Gucci gloves, it's easier to stay on budget for sure. Those are good things to do, but the first thing to implement in my mind is the ability to even have an act on a budget, the foundation of having a budget actually operating on a budget that once we have that in place, then we can try to tweak and optimize the other components to make it easy.

Our budget should be 4% of last month's collections is this month's goal, but I don't want to place one order every now and then. Whenever I get a sticky note or something and I kind of need something in order to enforce a budget, not only do we need to know what the budget is, but we have to have a process that makes it easy to stay on that budget. What I mean by that is we need to be ordering once a week, once a week, small orders. It's like a drip coming out of a faucet. We can control how big each drop is. We can control the speed of that. It's very predictable. It's the same day every week and no orders in between that day, those days, no orders because then we'll break budget. See when we do it every now and then we lose the ability to control it, but if we can do it every week systematically have a specific amount we can't go over, that's great.

And the way you do it is you kind of fill up all your shopping carts with wherever you're going to order from, but before you send anything, you go add it all up and figure out, okay, are we below the number or are we unfortunately above budget? And if we're below the number, great, we can send the order out. If we're above though, if we're in trouble like that, what we need to do is reduce the quantity of boxes that week. So instead of ordering 30 boxes of gloves, we're going to order 20 and it's okay, we're going to order again in a week, so it only has to really carry us to that next order, but this way we never order more than our budget, and because it's frequent consistent orders, we get a frequent consistent flow of supplies coming in and we don't fall victim to the temptation of the buy three get one free offers that cause us to over purchase overstock and blow our budget. Remember, a win is, did our final number get below the budget or not? A win is not, I got an extra bag of this for free. No, that's not a win. A win is did we stay below 4%? Let's get that first and then we can get a little more advanced. Do we change where we buy from or do we buy new brands or do we store our supplies and tip out bins and shelves and track it properly? Let's start with the budget. Does that make sense?

Lab Costs and Aligners

Richard Low (14:18):

Yeah, and to be honest, people are like, well, how are we going to implement the controls of this and how are we tracking it? It's like you could do a Google Doc, you could do a post-it note system, you could have it on the whiteboard, this is our number for the month, and then you cross out and then put where we're at next after that order. It seems like it doesn't have to be particularly sophisticated. As long as you have that target,

Scott Leune (14:43):

We can make it even easier than that. So you've got one person that's placing the orders, but they don't have the authority to actually it, so they're going to create the order, but in order to place it, they've got to have a second set of eyes approving it. So you've got your dental assistant maybe that does all the work to run inventory once a week, has all the orders ready, has add it all up. Yes, it's under budget. Well, the office manager, the owner's got to look at it, do the calculation real quick for one minute to make sure it's correct and then it's approved. Now you've got kind of this accountability, this audit really, it's kind of like an audit, right? The other layer to this is what I call the accountability moment. Every month you're going to get a profit and loss statement from your accountant.

You need to look at that supply number from this month and make sure it was 4% of last month's collections because even if you're approving the orders once a week before it's placed, that doesn't prevent someone from placing another order you don't know about. So we want to be able to look at the final score, the profit and loss statement, and have this accountability moment where we go to the assistant, say, Hey, I just looked at the financials for the month and you were under budget. Thank you so much. Great job. Or I looked at the financial for the month and we're over budget. How is that even possible? Because I approve every order. Are you placing orders in between our ordering day? How did we get over budget? That accountability moment needs to happen so that this sticks in place that it doesn't revert back to the old way of overspending.

Richard Low (16:24):

That's where the rubber meets the road is are we checking, do we have the steps in place? Are we auditing? Are we going back and having that conversation

Scott Leune (16:32):

As a CEO? Absolutely. As a CEO, a whole lot of what we do is audit and have accountability moments.

Richard Low (16:38):

I'll go back to the original conversation we had on the first episode of shared practices originally eight years ago. The thing that was the most surprising to me was how often you said the word audit. In that episode, I thought we're going to be talking about all these other systems, and that is what it came down to is systems don't matter. If you're not auditing, you're not holding people accountable. There isn't a way to ensure that we're actually doing these things. So we've given people the basic outline of do you have a budget? Here's how you set it, here's how you check it, here's how you follow up with that. Then those secondary things of what we order from how we organize the supplies, that's all what you would do next to continue to fine tune and streamline, make this easy for people. There's software solutions, there's ways people can get organized. There's a lot that can go from there, but I think we've hit that category overall pretty well. Is there anything else as part of the supplies conversation that comes with this pillar of being a financially responsible dental CEO?

Scott Leune (17:47):

Yeah, I used to be someone that was kind of promoting some of the major buying groups out there today. I'm incredibly disappointed with the buying groups out there. One specifically is even using my name improperly in my opinion, to act like I'm promoting them. So let me just be very clear right now. As of today, September, 2024, there isn't a buying group out there right now that I agree with, but there are some privately owned supply companies that have a nationwide presence that have better pricing than a bunch of these buying groups. And so if you're looking for the lowest price, I'd say look past the publicly traded multi-billion dollar middlemen companies that I've kind of spoken against in the past and look past kind of the bigger buying groups that are basically being funded and controlled or have very important relationships with some of those middlemen anyway, and start looking today at newer companies.

Maybe in a future episode we can kind of go through examples of companies like that that kind of fall in this newer way of doing things, but I just encourage you to do a little bit of research, but again, it's not the most important thing. That's not the most important thing in saving money. The most important thing is having a budget. Also storing things in tip-out bins and shelves and having it labeled sounds pretty common sense. It's just so interesting how common it is for people to not use common sense. So having it labeled and stored properly is going to make sure that you're wasting the least amount. So that's something else to think about. Now, there's other kind of expenses obviously that we need to control, and the ones I look at commonly are supply costs lab and aligner is not part of lab, but aligner costs as well, staffing costs, and then we've got miscellaneous costs like it costs, software costs and merchant fees. Those are all areas that we can positively impact through better decision making. And then if you own more than one location, oh my lord, do you need to be a master of this? Because the decisions start getting added zeros to the end of 'em, it becomes very, very important.

Richard Low (20:10):

I think we definitely would've to table that for a future episode. But the principles here, it's a matter of are we doing this well at multiple offices? So anything we talk about here is can we replicate this over and over? So I think lab would be another discussion to have right now if you're okay with it around for some reason, there's a lot of emotions sometimes tied up in which lab you use and the decision or the ability to kind of explore and try new labs. You get burned, you have something come back that isn't the way that you want it to be, or maybe the communication isn't there, the speed isn't there, you wanted it or all these different things. It's hard to, I think it's disruptive to a workflow of a typical dentist to switch labs. So I think there's a lot of hesitancy to shop labs. So I'd love to hear your opinions on how to control this expense, how to think about this expense and how to find the right partner for a dental practice.

Scott Leune (21:10):

Yeah, I think there's little buttons we can push that help the expense side out, and some of us dentists want to push a bunch of those buttons and some want to just kind of tweak it up and push a few. But first obviously choosing labs with lower pricing that give you the clinical quality you're still happy with is important. And if you haven't looked at new labs in a few years, let this be your signal to, Hey, maybe try out a couple new labs that are lower price to see if you're happy with clinical quality because that decision will last you years and we'll impact you financially in a big way. In addition to that, using scanning instead of impressions, labs sometimes give us discounts for that. The failure rates are lower when we scan. That has been studied and proven. And then once we start scanning, we might realize, well, milling is something we could do to save money.

Printing is something we could do to save even more money and maybe we're not milling or maybe we're not printing because we just haven't taken the time to learn. So if we just take the time to learn, this is a big category of expense. I mean, there's offices spending nine 10% on lab as well. That's 150 grand a year. I mean, that's a big expense for the rest of your career. It might make sense to take some time and a handful of thousand dollars and learn how to mill, learn how to print and get that equipment to then permanently save money on this. Another example of what to do is to look at your lab cases a little bit differently. Some of us order from the same lab no matter what the restorative case is, what crown on tooth number 30 gets the same technician as crown on tooth number eight, but obviously there's different aesthetic needs.

We maybe could save money on some types of restorations or back teeth instead of just having a master trim to everything. So that's something else to consider. The material choice is something to consider, and that doesn't even get into the aligner side yet. So the way we measure lab costs is without aligner fees, just like supplies are measured without implant parts, the aligner fees can completely skew our lab costs and our lab cost analysis. We should be at 5% or less than lab costs. Most of our practices are below 4%, but some are going to be a little bit higher depending on the makeup of their services. If you're higher than that, you need to hit some of these buttons. I just said

Richard Low (23:52):

It's funny, there was one point in my two year residency I did in the Army where I got big into 3D printing, figured out how to print guides and really get into some of the fun stuff there. I realized there are some dentists and some people just in general, no matter what generation there are, including my generation younger that are not computer people and there is a hesitancy to dive into technology and my managing complex 3D file types, it's getting more and more streamlined. But what I would say is if you take the time to educate yourself, see what you can do with in-house milling, in-house printing, and also educate some key team members that are wanting to step over to the plate, you need to be familiar enough with all these workflows, but train some great team members. If this isn't something that you personally like pushing that button, maybe there's someone else in your office who would like to learn this with you and together they can carry the load, but at least what's going on. So I would also tell dentists that even if this is not your cup of tea, you're not a computer person who enjoys learning software and programs like this, it is worth it and you can involve your team in the process.

Scott Leune (25:10):

Yeah, it's the wave of the future happening right now in dentistry. It's irresponsible of a dental CEO to not go at least learn about it. So to go to formal training, there's several places you can go where you'll get formal training on exactly how to do this, including support for your team. It's almost to the point where it's irresponsible because this is the next 10 years of dentistry and there's a lot of arguments saying that there's certain moments where milling and 3D printing is actually in the best interest of the patient ethically. So it is just irresponsible to not learn. We got to learn and once we learn, we can decide, okay, does it make sense for us now? How does it make sense? Does it make sense later? And the result will be saving money on the lab fees. So that's really cool. When it comes to aligners, one way to save money is to also utilize 3D printing, whether it's out of house or in-house, that's a massive savings and the software that's available is now going to give us a clinical result that is good.

So no longer are we kind of held hostage to just one company, one software program, one aligner fee situation. We have the ability to use 3D printing and open source software in-house or out of house and have these things made for fraction of a cost. And even if we don't do that, there are now kind of these pseudo buying groups out there just for aligners that have started popping up and in the decade past the aligner companies weren't working with people like that. But now it's kind of opened up. So even if you're going to do it the old fashioned way, you might find an aligner group to enable you to save some money on that. Or of course you could do it the old fashioned way and just use a brand that you haven't used before, A brand that costs less but still gives you the clinical result. Why would you not go through the research now to figure this out? Every month, every quarter, every year you wait is just another month, quarter or year. You spent thousands of dollars more than you have to. So as a CEO, it's our responsibility to make sure that the decisions around how we spend money is always updated and healthy. It can't be grandfathered in from the past and ignoring today, it has to be reset. It has to be the right thing to do today.

Technology and Software Costs

Richard Low (27:44):

Well, and I love how you've reframed the problem, the pain point that I started with, which was it sometimes is difficult or emotional for dentists to switch labs or it's a bigger disruption. You're saying this is an ongoing savings of a large item. It is worth it to go through whatever changes or experimentation or trying of new companies required for the result on the other side. So I think now shifting into the topics of it, service providers, tech stack, being fiscally responsible when it comes to that and finding what works, what's efficient, and it's hard. It is funny talking about tech stack in particular. There are times where I love it where a company sticks to one thing because they do that extremely well and they keep it low cost. And then so many tech stack companies within dentistry want to just kind of bleed over into everything. So everyone does seven to eight to 10 different things and they do a few of them extremely well, and then these other things maybe they don't do at the same level. It can be overwhelming, I think for dentists to make the decision of which software do I use, where do I trim or what's overlapping, what do I need? What do I not need? So any recommendations on the thought process on the technology and the subscriptions, the software that dentists use?

Scott Leune (29:14):

Yeah, I think earlier in our careers there were big differences between these tech companies and how they did things. There was for sure a winner on getting online reviews. There was for sure one of the best at online scheduling or confirming appointments or metrics tracking. I mean there were the clear winners in all these different categories. So it was very difficult and frustrating to say yes to one company that did five things, but only one of 'em was the winner and then feel pressured to use the other four when they were kind of subpar. Today it's changing. So today, when you look at the companies that have a stack of services, for the most part, those services are on par with the best. So technology's gotten to the point where, yeah, we figured out how to do automatic confirmations. There's not a one company's the best, everyone else sucks.

No, they're all pretty darn good. So the strategy that I kind of use when I think about this is on one hand I've got the practice management software that needs to be chosen, and on the other hand, I've got the adjunctive softwares that need to be chosen. We start many times we start with the practice management software, although the larger groups may not, but we start with the practice management software. And if that's a cloud-based software, then the benefit we have is that we get rid of the vast majority of our IT costs, our unlimited IT support every month, our online data backups, our security costs, firewalls updates, all of those costs kind of get shed away when we have an online based practice management software. So that might be 10 or $15,000 a year of costs that we shed by going with something versus something.

But a downside to the cloud-based programs sometimes is that you can't pick any other adjunctive software, tertiary kind of company to connect with it. So if you want a metrics tracking platform or a specific online scheduling platform, many times they will not connect with an online based practice management system. But the good news is that the online platforms now, their online scheduling, their appointment confirmation, automatic appointment confirmations, their text to pay and all that is on par with some of the best kind of outside programs there are. So I think you start with an online based practice management system, you save a fortune on it, and then you look at the other kind of nuts and bolts, you need to screw onto it that can hopefully talk to it and you try to save money there as well by going with all-in-one companies as opposed to the Frankenstein approach of putting on a whole lot of nuts and bolts to try to create your setup.

So let me back up a little bit. The old way of doing it was getting something like an open dental that was good at a base level of things but was missing a whole lot and then frankensteining it screwing on this nut that bolt, this arm, this leg, and you end up with something that works very complicated to maintain. You got 15 different logins and you're spending a lot of money a month, 1 99 a month here, 99 a month there, 2 99 a month here. Just really expensive to do it that way today. No, we need an all-encompassing practice management solution. And we may have a little bit of the Bolton, but those Bolton companies typically have a comprehensive offering that is good to great in everything they do. Of course we're going to have preferences, but let's not get confused by the fact we might prefer one thing slightly over another, but it doesn't mean we need that thing. What we need is a kind of holistic setup, an approach like all encompassing approach that saves us money and gets us the result we want.

Merchant Fees and Service Providers

Richard Low (33:28):

It's like when I've taken out teeth at offices that are not my office or in a setting that I'm not used to. I tell dental assistant, I'm pretty low maintenance, just hand me an instrument, I'll probably take a tooth out with it. That might be a little bit more do the r and d. But there are a lot of ways to do this well, and there's a lot of ways to bundle things together and save a lot of money. And ironically, companies like Open Dental are at times disincentivized from developing anything further because now there's all these third party applications that are bolted on to their platform and if they do any development or they add anything, now all of a sudden they're in competition with these people that have added all these services in. So I do think that what was the common practice five years ago, 10 years ago has shifted significantly and I've loved how you've walked us through that. Moving on to this last side of other service providers as well as merchant fees, any low hanging fruit on areas where dentists just have not thought about a certain expense in a while and there is fruit to bear by reevaluating their relationship with that.

Scott Leune (34:50):

Well, yeah, I'm going to say something very unpopular right now, but it's not fair that it's unpopular. It's unpopular because of assumptions people make. It's not unpopular because of facts, but I'm going to say it anyway. It's something very unpopular is we definitely could. We should be getting rid of paying credit card fees and dental practices. It's gotten out of hand. One way to cut down credit card fees is to not take insurance payments through your credit card processing. I am just so shocked at how many axes do that, but you're losing three, three and a half percent on everything you collect through that method. And that's not something we should be doing, but kind of expanding from that, we shouldn't be paying credit card fees for patient's, credit card payments. Patients should be paying their own fees. Now there's a fear. There's this kind of illogical fear that I hear when I kind of talk about this to people and I read it online, the fear that if you charge credit card fees to patients, they will post bad reviews.

They won't say yes to treatment, they'll leave your office. But those things, they're valid kind of feelings to have when you don't know. But it's not actually what happens. So when you implement passing credit card fees over to the patient in the right way, you have hardly anyone ever say anything negative about it. And the few that do are kind of like your go-to jerk patients anyway. These are just people that find things to complain about. Maybe last time they were in, they complained about some scheduling issue or running behind a bit and they're going to complain. Some of them are going to complain about this as well. But the reality is when you pass credit card fees along to the patient, let's say they owe you a hundred bucks, they're going to pay you a hundred dollars with cash or check or they're going to pay you 103 if they use a credit card and you can have the credit card terminal set up exactly that way.

And what most patients do when they see a terminal is they just pay. They don't say they don't ask, they just pay the ones that do ask, well, why is this 103? You just say, well, if you'd like to use a credit card, there's a small fee or you can use cash or check, that's it. And most people just pay. And then every now and then someone's like, ah, you didn't used to do that. I don't like that. They'll say something negative, don't get sucked into what we commonly get sucked into thinking that the one jerk patient represents the 300 others you saw before that jerk patient. That's not how it works. That jerk patient's going to say something jerky and you do the best you can. What I would say is, well, I'm so sorry Mrs. Jones and I just repeat myself. If you'd like to use a credit card, there's a small fee or we could just take cash a check and you don't have to defend. You don't have to over explain and vomit knowledge all over the patient about an office policy. It is the policy. It's set up to protect you. And for the vast majority of patients, it's going to be just fine.

Credit card fees for small office are about 15,000 a year for these larger groups, I shouldn't say larger groups for these multi-location privately owned practices, you're looking at a hundred grand or more a year. That is a ton of money. I can think of so many good things to do with a hundred grand for the practice that's better than giving it to the credit card processing company. We could do buy new equipment that we need. We can go to training we need, we can have annual crews for the staff. We could have health insurance benefits so much better than just losing it three and a half percent at a time. Picking up the tab for the patient just because they wanted to pull out what was easy in their purse or wallet, a credit card. And it's funny, when you pass it on to them, they start behaving differently.

So they will write you a check or get cash more often when they are responsible for their own fee. And sometimes it's a big fee. They will go to the bank, get a stack of cash and give it to you because they don't want to get hit with that fee. But they got no problem with you getting hit with that fee in the past. Now they do something that's a lot more cost efficient. I know this is not popular. I know there's all kinds of people that have done it the wrong way or most people have never tried it and they just assume bad things. And unfortunately that's a weakness of them. That's as a CEO assuming things, you need to try it for three months and then make a decision. You need to learn how to pedal on this brand new bike and then ride the bike for a few months and then look back and say, okay, do I like riding this bike or not? And then you make a decision. And I have never seen a practice go backwards on this decision. They've always kept it

Richard Low (39:51):

A quick little reinforcement of this. I mean, there are so many rising costs yet fees are not rising in the same level as inflation or these other things. So the few areas where we can reevaluate what we've always assumed we need to pay, have to pay and recoup some of that. This is one of those areas. I recently had my basement finished and the builder is in my neighborhood and is a friend of mine now at this point. And I asked him, I was like, Hey, we're saving up credit card points to go on a trip next year as a family and we're going to go try and live in Switzerland for a month. And so I was like, can I run my credit card limit to pay part of this? And he's like, well, I'm going to get hit with merchant fees, so I'm going to have to invoice you for that extra amount. And it's like these credit card points don't come from nowhere. That's what these merchant fees are. And so when I was faced with the choice of I have to pay more to get those credit card points, I just wrote 'em a check and moved on, and I think our patients are in a similar boat that if we drive behavior and we appropriately allocate the costs that allow them to get points, then they're going to make decisions how they prefer, whether they'd prefer the convenience or whether they'd prefer to save a little bit of money.

Scott Leune (41:09):

Well, I prefer to not be hit with their cost. So I will take cash and check because that is a true form of payment that I actually get the a hundred bucks that I'm charging. But if I only charge a hundred bucks on a credit card, then I don't get a hundred bucks. My ledger never matches my bank account. I basically gave a discount and I decide in my practice, no, we don't need that discount if they can pay many different ways. And if they choose a way that's more expensive to us, we choose in this specific instance to say, okay, well you have to bear that added cost for this convenience. And again, I know that rubs a lot of people the wrong way for whatever reason, but I get to sit here having done it more than a hundred times and get to speak from experience.

And that's what I'm trying to do right now. I'm trying to speak to those listeners that have wondered they're on the fence. Should I? Should I not? I'm saying yes, try it based on my experience. Those listeners that are adamantly, oh no, I hate it when they do it to me at a restaurant. I would never do that to my patients. Great, fine. I'm not trying to convince you, but the people that are truly interested and they're just unsure because they haven't had the experience, let me be your experience and tell you you can do this. It's not going to be damaging to the practice.

Richard Low (42:29):

This has been a great set of very specific, applicable systems and thought processes to apply when looking at how we're spending money in our dental practice. I think these need to be done no matter what the elephant in the room that we haven't addressed today. And I think we can do a whole set of episodes or a future episode on staff costs and in larger category expenses in the future that are much more disruptive and difficult and strategic as we're expanding or contracting or growing whatever direction the practice needs to go to have appropriate costs. But these need to happen anyways. And so this has been a great conversation. Anything to wrap us up with this thought process of a dental CEO in the financial realm?

Scott Leune (43:16):

Every decision we make from a cost standpoint is going to be repeated over and over and over and over and over again. So this isn't just like a little decision, how do I run my supply costs or what lab do I order from? No, what lab you order from is going to be repeated 500 times a year in your career. So this is a really big decision. And even the smallest percentages of savings times 500 become a big number. It's very important that we look at this strictly with a lot of discipline to say, okay, what's the very lowest cost I can go to and get the clinical result or the patient result that I want? And let's not go above that. We definitely need to be a no person when it comes to this. We need to say no to more costs. We need to look at our current costs and pretend like we just bought this practice. Would we repeat those decisions or is there a better decision today? Let's go with the very best decisions.

Richard Low (44:22):

I love it. So to tease the next episode, we're going to take the same application of thought, and I think this next episode is going to show us where the rubber meets the road on a lot of different aspects of operations, finance, how do we help our team actually implement the systems and be successful and manage a whole team as a dental CEO? And this will wrap up these three pillars, this framework of thinking about our role, and we'll have to decide if it fits into one episode this next time or if we need another episode to then talk about the checklist to keep ourself accountable. Because you've mentioned this, we've talked about it a little bit, but I'm excited for that. Any tools that we can have to not only lead a team, but lead ourselves and create ease within being a dental CEO. So just a little teaser of what's to come. I'm excited for this next episode.

Scott Leune (45:20):

Awesome. Well, thanks a lot. I'm excited as well.

Richard Low (45:23):

We'll talk to you next time on the Shared Practices Podcast.