News & Tech Tips

02:Whalen Wisdom Hub – Exclusive Interview With Dr. Michael Pappas

Summary

In a recent interview with Dr. Michael Pappas, a seasoned dentist and practice owner, we uncovered valuable insights into the keys to success in the dental industry. Here are the main takeaways from our discussion:

1. Building a Winning Team:

  • Dr. Michael Pappas emphasized the importance of hiring team members who align with the practice’s values and culture.
  • Creating a positive work environment fosters team cohesion and enhances patient satisfaction.

2. Navigating Practice Ownership:

  • Owning a dental practice comes with its challenges, but strategic planning and perseverance are crucial for success.
  • Dr. Michael Pappas shared their journey through practice ownership, highlighting the importance of adaptability and resilience.

3. Embracing Industry Shifts:

  • The dental industry is evolving, with the rise of Dental Service Organizations (DSOs) and technological advancements.
  • Dr. Michael Pappas stressed the importance of staying informed about industry trends and adapting practice strategies accordingly.

4. Prioritizing Patient Care:

  • Amidst industry changes, personalized, relationship-based care remains paramount.
  • Dr. Michael Pappas emphasized the significance of building trust with patients and delivering exceptional care experiences.

5. Fostering Professional Growth:

  • Continuous learning and skill development are essential for staying competitive in dentistry.
  • Dr. Michael Pappas shared insights into their approach to professional growth, including attending conferences and seeking mentorship opportunities.

6. Balancing Work and Wellness:

  • Maintaining a healthy work-life balance is crucial for long-term success and well-being.
  • Dr. Michael Pappas discussed strategies for managing stress and prioritizing self-care amidst the demands of dental practice ownership.

In conclusion, Dr. Michael Pappas provides valuable guidance for navigating the complexities of the dental industry while prioritizing patient care, team satisfaction, and personal well-being. Their insights serve as a roadmap for success for both established practitioners and those aspiring to enter the field.

Check out our last podcast here  –  01:Whalen Wisdom Hub.

5 Signs Your Dental Practice Needs a Makeover (and How to Fix It!)

Is your dental office feeling the squeeze? Rising costs and staffing woes are plaguing practices nationwide. But fear not, you’re not alone! Here are 5 key signs your dental practice needs a refresh, along with solutions to get you back on track:

1. You’re Struggling to Find Staff:

  • Having trouble filling hygienist, assistant, or even front office manager positions? You’re not alone. The 2023 Dental Economics survey found hygienist shortages are at a staggering 79% in the Midwest! This can seriously impact your practice’s efficiency and production.

Solution: Rethink your recruitment strategy. Offer competitive salaries and benefits, and consider flexible scheduling options.

2. Patients Aren’t Coming in as Often:

  • Short staffing can lead to longer wait times and a decline in patient care timeliness. Additionally, inadequate front office coverage can lead to communication breakdowns and missed appointments.

Solution: Streamline your scheduling and communication processes. Invest in technology that can automate tasks and keep patients informed.

3. Your Profitability is Taking a Hit:

  • DeStefano (2023) reports that practices with staffing shortages experienced a 10% drop in collections in 2023. This could be due to reduced patient flow, inefficient billing processes, or outdated fee schedules.

Solution: Analyze your current fee structure. Consider raising fees by 5% annually to keep pace with inflation. Don’t be afraid to renegotiate with insurance providers, and consider alternative payment models like membership plans.

4. You’re Stuck in a PPO rut:

  • While PPO plans offer predictable patient traffic, they often come with limitations on fee increases. This can leave your practice struggling to maintain profitability.

Solution: Explore alternative payment models like fee-for-service or membership plans. These models often offer more flexibility when it comes to setting fees. Also, make sure to contact your PPO payers and request a fee audit for your area. Use these ADA resources for help. This link will open to resources on renegotiating a contract and how to terminate relationships with payers. ADA Insurance Contract Support

5. Your Fees Haven’t Budged in Years:

  • Inflation is a reality, and your fees need to reflect that. The 2023 Dental Economics survey found 65% of practices raised fees in the past year.

Solution: Conduct a thorough cost analysis and update your fee schedule accordingly. The survey provides a fee table by region as a helpful reference point.

Bonus Tip:

 

Update on retirement account minimum distributions : SECURE 2.0

If you have a tax-favored retirement account, including a traditional IRA, you’ll become exposed to the federal income tax-required minimum distribution (RMD) rules after reaching a certain age. If you inherit a tax-favored retirement account, including a traditional or Roth IRA, you’ll also have to deal with these rules.

Specifically, you’ll have to: 1) take annual withdrawals from the accounts and pay the resulting income tax and/or 2) reduce the balance in your inherited Roth IRA sooner than you might like.

Let’s take a look at the current rules after some recent tax law changes.

RMD basics

The RMD rules require affected individuals to take annual withdrawals from tax-favored accounts. Except for RMDs that meet the definition of tax-free Roth IRA distributions, RMDs will generally trigger a federal income tax bill (and maybe a state tax bill).

Under a favorable exception, when you’re the original account owner of a Roth IRA, you’re exempt from the RMD rules during your lifetime. But if you inherit a Roth IRA, the RMD rules for inherited IRAs come into play.

A later starting age

The SECURE 2.0 law was enacted in 2022. Previously, you generally had to start taking RMDs for the calendar year during which you turned age 72. However, you could decide to take your initial RMD until April 1 of the year after the year you turned 72.

SECURE 2.0 raised the starting age for RMDs to 73 for account owners who turn age 72 in 2023 to 2032. So, if you attained age 72 in 2023, you’ll reach age 73 in 2024, and your initial RMD will be for calendar 2024. You must take that initial RMD by April 1, 2025, or face a penalty for failure to follow the RMD rules. The tax-smart strategy is to take your initial RMD, which will be for the calendar year 2024, before the end of 2024 instead of in 2025 (by the April 1, 2025, absolute deadline). Then, take your second RMD, which will be for the calendar year 2025, by Dec. 31, 2025. That way, you avoid having to take two RMDs in 2025 with the resulting double tax hit in that year.

A reduced penalty

If you don’t withdraw at least the RMD amount for the year, the IRS can assess an expensive penalty on the shortfall. Before SECURE 2.0, if you failed to take your RMD for the calendar year in question, the IRS could impose a 50% penalty on the shortfall. SECURE 2.0 reduced the penalty from 50% to 25%, or 10% if you withdraw the shortfall within a “correction window.”

Controversial 10-year liquidation rule

A change included in the original SECURE Act (which became law in 2019) requires most non-spouse IRA and retirement plan account beneficiaries to empty inherited accounts within 10 years after the account owner’s death. If they don’t, they face the penalty for failure to comply with the RMD rules.

According to IRS proposed regulations issued in 2022, beneficiaries who are subject to the original SECURE Act’s 10-year account liquidation rule must take annual RMDs, calculated in the usual fashion — with the resulting income tax. Then, the inherited account must be emptied at the end of the 10-year period. According to this interpretation, you can’t simply wait 10 years and then drain the inherited account.

The IRS position on having to take annual RMDs during the 10-year period is debatable. Therefore, in Notice 2023-54, the IRS stated that the penalty for failure to follow the RMD rules wouldn’t be assessed against beneficiaries who are subject to the 10-year rule who didn’t take RMDs in 2023. It also stated that IRS intends to issue new final RMD regulations that won’t take effect until sometime in 2024 at the earliest.

Contact us about your situation

SECURE 2.0 includes some good RMD news. The original SECURE Act contained some bad RMD news for certain account beneficiaries in the form of the 10-year account liquidation rule. However, exactly how that rule is supposed to work is still TBD. Stay tuned for developments.

Building a Thriving Dental Associateship: A Three-Part Guide

So, you’re considering adding an associate dentist to your practice. You’re not alone! Many dentists explore this path to expand capacity, grow their practice, or plan for succession. But how do you know if it’s the right decision, and how do you ensure a successful outcome?

This three-part blog series examined the critical considerations for building a thriving dental associateship.

 

Part 1: Reasons to Hire 

We began by examining the common reasons dentists consider adding an associate. We also discussed evaluating your practice’s capacity before adding another provider. This evaluation involves both operational efficiency and the number of active patients you have. Industry experts suggest a dentist can typically manage 1,000-2,000 active patients.

 

Part 2: Timing Considerations

In Part 2, we explored the financial considerations of hiring an associate. Determining your practice’s profitability is a crucial first step for timing your hire. Your break-even point, the minimum revenue needed to cover your costs, is a key metric to master. Sufficient resources, including space, equipment, and staff, are also essential for a smooth transition.

 

Part 3: Finding the Right Associate

Part 3 focused on finding the perfect fit for your practice. We emphasized the importance of carefully crafting a job description that outlines the desired skills, experience, and personality traits, then explored the critical compensation component. Several compensation models exist, including salary, commission, or a combination. Clearly defining the associate’s compensation avoids future misunderstandings.

 

Next, we explored associate contracts, which are complex legal documents. We advise consulting an attorney to address all aspects of the working relationship, including compensation, benefits, termination clauses, and restrictive covenants.

When you are ready to interview, develop open-ended questions to delve into the candidate’s goals and work style. Be alert for red flags that might indicate a mismatch in expectations, and be careful to ask lawful questions.

 

Finally, we explored the offer and negotiation phase when the owner presents a formal employment offer. Provide a written offer outlining the job description, compensation package, and contract terms. Expect negotiation and be prepared to discuss and compromise on some terms.

 

Overall, careful planning is vital to a successful associateship. By evaluating your practice, developing a clear hiring strategy, and negotiating a well-defined contract, you can increase your chances of finding the right associate and building a thriving partnership.

 

Ready to take the next step? Consider referring to the resources provided throughout this series for additional guidance or contact us when you’re ready. We have also created a step-through graphic guide to assist you on your journey to successful associateship.

Strengthen Your Cash Flow: Mastering Accounts Receivable Management

Managing accounts receivable can be challenging, especially in an uncertain economy. To keep your company financially fit, it’s a good idea to occasionally revisit your billing and collections processes to ensure they’re as efficient and effective as possible. Consider these helpful tips.

Resolve billing issues quickly 

The quality of your products or services, and the efficiency of order fulfillment and distribution processes, can significantly impact collections. When an order arrives damaged, late, or not at all, the customer has an excuse to question or not pay your invoice. Other mistakes include incorrectly billing a customer or failing to deliver on promised discounts or special offers.

Make sure you resolve billing mistakes quickly and ask customers to pay any portion of the bill they’re not disputing. Once the matter has been resolved and the product or service has been delivered, ask the customer to pay the remainder of the bill. Depending on the circumstances, you also may consider asking the customer to sign off on the matter by making a note on the final invoice. Doing so will help protect you from potential future claims.

A lengthy cycle time for resolving billing disputes can have ripple effects on finance and accounting processes, such as reporting and forecasting. For instance, if you prepare your first quarter financial statements with numerous outstanding adjustments, management won’t be able to evaluate first quarter results until the adjustments are made. Delays in financial reporting can lead to missed business opportunities and postpone detection of impending financial problems.

Send timely invoices

If you haven’t already done so, implement an automated collection system that generates invoices when work is complete, flags problem accounts, and produces useful financial reports. Consider sending invoices electronically and enabling customers to pay online. You can still send statements out monthly as a routine reminder of outstanding balances.

Delays in invoicing can impair collection efforts. Familiarize yourself with industry norms before setting payment schedules (whether they’re on 30-, 45- or 60-day cycles). If your most important or largest customers have their own payment schedules, be sure to set them up in your system.

It’s also important to regularly verify account information to ensure invoices and statements are accurate and they get into the right hands. Set clear standards and expectations with customers — both verbally and in writing — about your credit policy, including pricing, delivery and payment terms.

Consider rewards for early payment and penalties for delays

Despite your best efforts, you’re still likely to encounter slow-paying customers. Here are some ideas to encourage timely payments:

  • Request payment up front with deposits or service retainers,
  • Reward timely payments with early-payment discounts, and
  • Provide incentives to customers that improve their payment practices.

If positive reinforcement isn’t working, consider implementing late-payment penalties. For instance, you could assess fees on past-due accounts. You might also put a credit hold on extremely delinquent accounts or adjust their payment terms to cash on delivery.

Stay connected with high-maintenance customers

Make regular calls and send e-mail reminders to customers who haven’t settled their accounts. If necessary, the manager who works directly with the customer should try to resolve the payment issues with the lead contact at the company — or even the owner. Consider executing a promissory note to prevent the customer from disputing the charges in the future. If your efforts aren’t fruitful, get help from an attorney or collection agency. Keep in mind, though, that third-party fees may consume much of the collected amount.

If an outstanding debt is uncollectible, you can write it off as an ordinary business expense. Be sure to document customers’ promises to pay and your collection efforts, as well as why you believe the debt is worthless.

We can help

Solid billing and collections strategies are integral to a company’s financial health. Contact us for more ideas for improving your company’s approach to accounts receivable.