I recently did a survey of current clients asking them what percentage of gross receipts were attributed to credit cards. 35-40% seemed to be the number. Very few patients pay by cash anymore–it’s either a check or credit card. So on a million-dollar practice–certainly a nice practice but nothing unusual these days–that would represent $400,000. The average published processing fee of a credit card company is 3% of the sale. That is the amount the practice pays to the merchant service provider.  In this example, that would be $12,000.

But when I examined expense reports to analyze the total amount of processing fees charged to the practice, it was often more than 3% – sometimes between 4 and 4 and 1/2%. Why should that be? There are a number of potential reasons:

• The true costs associated with processing are not disclosed.

• The electronic processing and merchant service industry is mostly unregulated when it comes to     billing and sales practices.

• There is an extremely complex and cloudy system by which processing costs are determined.

If your analysis shows similar results, I would strongly suggest that you contact Schooley Mitchell. It is the largest independent payment processing consulting organization in North America. Here is how they work. They monitor your credit card statements on a quarterly basis to identify all of the bogus or seemingly incidental fees that creep in. Fees like interchange rates, dues and assessments, monthly access fees, front end authorization fees and back end capture fees.  The cost for the analysis they provide is on a 50% contingency basis: their fees are self funded out of the savings generated from reduced processing expenses. They claim to consistently save their clients 40% if they switch to a new credit card provider or 30% if the client chooses to stay with their existing credit card provider.

Schooley Mitchell has a strong incentive to do a good job. The more they save you, the more money they make. You take no risk. They will either save you money and self fund their fees, or give you a no-cost validation that you are receiving the best overall value for your existing services.

There is another very important reason to revisit your electronic payment processing protocol. In the United States, the migration from magnetic stripe cards to embedded chip cards is underway. The liability for fraudulent transactions is changing along with the switch to chip payment technology. Currently, banks absorb the majority of fraudulent credit card costs. But as of October 2015, if a customer pays for services with a fraudulent chip embedded card–and your practice processes that transaction without a chip embedded terminal–you will be liable for that transaction.

It is a different world out there my friends! Forewarned is forearmed.

I was in a client’s office a few weeks ago and I overheard one end of a conversation where someone at the front desk was trying to explain to a patient why there was a $35 charge for a broken appointment. As you can imagine, the conversation did not end well. This relatively inexperienced staff member broke two cardinal rules: never disrespect or disappoint a patient and never use the word “policy” as the explanation or answer to a question. Dentistry could easily qualify as a business where the average lifetime value of a patient is $15,000. How insane is it to lose that patient over a $35 charge for a broken appointment?

The above situation doesn’t happen when the doctor has created an exceptional workplace culture. That means an environment where employees love their work and are empowered to do whatever it takes to please a patient and make them happy. That means an office where the doctor has built a team and not just a group of people that work together.

I recently wrote about how difficult it has become to assemble that team. The value of building that team was reinforced in a recent article in Dentaltown authored by Howard Farran.  “When we plot highest net income with all the variables that can be associated with it, we don’t find it related to where you went to school or what institute you did some training at; we find it linked to longevity of the average staff member”. Interesting.

I don’t want to sound like a broken record. You need to do whatever possible to build that team. One of my mentors – the incomparable Seth Godin – says this so eloquently. “Building an extraordinary organization takes guts. The guts to trust the team, to treat them with respect and to go to ridiculous lengths to find, keep, and nurture people who care enough to make a difference”. Amen.

Discussions about staff continue to be an ongoing part of practically every monthly meeting or telephone call with my clients. This is not something new, but it seems to be on the rise. Staff performance, staff incentives, bonus plans, job descriptions, complaints, HR issues–the list is endless. Our conversations are happening because of the critical nature of these issues. Building and maintaining a quality, customer-service oriented, loyal, and talented team continues to be the biggest challenge–and a key ingredient–for the establishment and growth of the superb dental practice.

In preparation for this blog post, I re-read an article about staffing that I published in the Spring of 1997 in the Journal of the Massachusetts Dental Society. I had just started my consulting business, and my thoughts for that article were solely based on my 29 years of experience running my own dental practice. To my surprise, there was not much of anything that I would change. But 18 years later–and over 650 dental client relationships later–I realize how much more difficult it is today to mold that perfect staff.

1. Our society has become extremely mobile and transient. In the world of today, both spouses working is the norm and not the exception. If one spouse gets a promotion, it may involve relocation of the entire family unit. So you can lose a great staff member through no fault of your own and you are suddenly back to square one.

2. A competitive benefits package has become quite costly. Healthcare costs have skyrocketed and bear no relationship to inflation. So offering employees a good medical insurance plan is absolutely essential if you hope to attract quality people. Combine that with the costs of pension, vacation pay, holiday pay and sick time/personal days (now often mandated by State employment laws), and you realize that the dollars start to add up.

3. Terminating an under performing employee has become much more complicated. Over the past five to ten years, there has been an exponential increase in the number of lawsuits accusing dentists of harassment, discrimination, and improper firing. This fear of litigation may paralyze the doctor and prevent decisive and necessary actions. There has never been more of a need for an exquisite and well-written office policy manual. There also needs to be a sophisticated understanding of HR issues, especially the necessity for meticulous documentation.

Fortunately, there are some positive to offset these negatives.

1. The power of the Internet is amazing! Google, Facebook and Twitter have made it infinitely easier and quicker to find qualified staff. Our world has become incredibly connected.

2. Doctors can now purchase EPLI insurance and greatly reduce or eliminate the fear of financial ramifications from frivolous employee lawsuits.

Over the years, my favorite ad for finding great employees is what I call an “in your face” ad. It used to be placed in the Classified Ads section of your local newspaper. Now it gets posted to craigslist and you get replies instantly. It is designed to attract the very best people. These people are most likely working in another dental practice in your general area where they no longer feel challenged or appreciated.

” Busy general practice seeking the absolute best dental assistant in the Metrowest area. If your clinical skills, team building skills, and communication skills are not excellent, please do not respond to this ad. This is a full-time position with benefits. Money is no object. Compensation will be commensurate with ability and experience. All resumes will be kept in strictest confidence. E-mail your resume to______________.”

In spite of how difficult team building may seem, please don’t settle for average. Strive to build an exceptional workplace culture in order to attract, motivate, and retain top talent. Culture attracts, culture retains, and culture drives performance.