An MBA view of implants
Quality outcomes and maximum productivity are not mutually exclusive, in fact, they are closely linked. The Harvard Reference to Business Termssays the following regarding Total Quality Management (TQM): “quality improvement results in cost advantages and better profit potential.”
Management experts have repeatedly demonstrated that best practices, whether in dental practice or auto making, result in competitive advantage and greater profits.
The Japanese auto industry eclipsed the U.S. industry by investing in a culture pursuing excellence and zero defects rather than accepting a defect rate as part of the status quo. For those of us in dental practice, that means reviewing elements contributing to outcomes, including: diagnostic procedures, products and suppliers, techniques, laboratory support and communications. While true in all phases of dentistry, it is particularly critical for implant dentistry where outcomes are so dependant on planning, communications and technical expertise. It requires ongoing review of process to constantly improve outcomes.
Understand the why
Project management, and understanding the why, is important. This brief article will serve as an introduction to project management and will focus on the consequences of lost opportunity that accompanies a lack of project management.
There are three types of costs that impact income: fixed, variable, and opportunity.
Fixed costs include rent, salaries, utilities, insurance, and any other expenses that you incur that are not impacted by the practice. That means, if you don’t spend a single day in the office you still have these expenses to pay. When you plan your new office or plan your office updates, remember, you’ll pay these bills every week for years before you pay yourself.
Variable costs are those directly associated to practice activities. Every patient visit will incur some variable costs. These costs could be as little as a patient napkin for an exam, or as much as components, Alginate Impression Materials, and lab bills for an Dental Implant Systems prosthesis.
The value of time
The third and most important for the purpose of this discussion is opportunity cost. The Harvard Reference to Business Termsdescribes opportunity cost as the following: “Your time is a resource that is not free: it has an opportunity cost which is the measure of value it could generate if put to productive use.” Opportunity cost is normally measured in dollars, but it’s important to note that it can be measured in a number of ways including lost time with the family or lost opportunity to engage in personal activities.
Most of my colleagues underestimate the value of their time. If a procedure needs to be repeated they’ll say “it’s only my time.” Remember that time is your only resource.
Opportunity costs are generated when clinical activities or a treatment project plan is interrupted for any reasons including: missed appointments, lab work not delivered, lab work not prepared properly, unsuccessful procedures, and unsatisfactory outcomes.
A clinician practicing an average of 26 hours per week, averaging $400 per hour, with an overhead of 45 percent will suffer a loss of 7 percent of personal income with one weekly hour of interrupted productivity. Extrapolate this to three hours in a week of not meeting the plan and you’ve lost 21 percent of you income.
This presupposes that there is a plan.
This illustrates the importance of developing a project plan to evaluate process including: procedures, products, communications, and patient fee schedules. This demonstrates opportunity cost, or the cost and consequences of not planning.