On today’s episode of the Millionaire Dentist podcast, Casey Hiers is joined by Four Quadrants Advisory's COO Brogan Baxter to discuss reopening a dental practice in the wake of the COVID-19 shutdown.
Announcer:
Hello, everyone. Welcome to The Millionaire Dentist Podcast brought to you by Four Quadrants Advisory. On this podcast, we break down the world of dentistry finances and business practices to help you become the millionaire dentist you deserve to be. Please be advised, we do speak with an honest tongue, and may not be safe for work.
Casey Hiers:
Hello and welcome to The Millionaire Dentist Podcast. This is Casey Hiers. As many practice owners around the country are reopening, we wanted to spend some time discussing how to best restart your practice post-lockdown. Today we have a special guest in studio, Brogan Baxter. Brogan is the Chief Operations Officer of Four Quadrants Advisory. Brogan, thank you for joining us today.
Brogan Baxter:
Back in the saddle here.
Casey Hiers:
Absolutely. Let's just jump right in. Before a semi-normal flow of patients even comes to a practice, what does a practice owner need to do to properly prepare? And let's start with their physical office. They go back to the office, they're dusting everything off, they're getting ready. What things would a practice owner need to do or be aware of, in terms of reopening the physical office?
Brogan Baxter:
Well, that's a loaded question, definitely. First off, they've been out of the office, they've been watching a bunch of continuing education and seminars online, there's a ton of stuff from OSHA and their state dental associations talking about what they want to do for standard of care and guidances. I'm not going to get into a whole lot of that, but generally speaking, there might be some issues with capacity, how many people they can have in a specific office. They want to do the social distance thing. You obviously want to do some screening when it comes to patients. When they come in, you don't want to just open the office to the huddled masses to come through. You want to test people, ask them questions, things like that, just to protect your patients as well as your employees. And so, that's a big part, as well as some of the PPE stuff that they've came out with, that they're suggesting masks and evacuation systems for aerosols and things of that nature.
Casey Hiers:
Well, and as restaurants are reopening, everyone is seeing the signs, stay six feet away, there's Xs everywhere you go. And a lot of those things, I think, are easier for a practice owner to potentially implement into their practice. Let's take it a step further. How about, if you're a cosmetic dentist, let's say, and you do a lot of high end procedures, and you have a beautiful consultation room, it's pretty big, let's say you're waiting room is a very large waiting room. And this post-pandemic situation, these grand waiting rooms with a lot of patients in them are probably going to be evolving. And so I guess my question is, Brogan, if somebody is looking at this and trying to plan maybe six or 12 months out, how do you see the physical practice layouts potentially changing regarding consult rooms, waiting rooms, things of that nature.
Brogan Baxter:
Sure. So, we're in Indiana and our dentists were able to start practicing elective procedures at the beginning of May. And so they're a little bit into it. There are states that are open, some with restrictions, some without. There are states that are still completely closed with no end in sight. So, political comments aside, there's different ways to handle that. I think there is going to be some evolution.
Brogan Baxter:
In Indiana, we were on a strict 10 person gathering rule until they just started loosening things up a couple of weeks back when dentistry could start reopening. Now the number in Indiana is 25. Do you want 25 people in your waiting room? Yeah, probably not. And what we generally are seeing, there's different ways to do it, but we're seeing with a lot of practices where they're doing virtual waiting rooms.
Brogan Baxter:
So they'll post a sign on the door that says, "Hey, please wait in your car, text us at this number to let us know that you're here. We will text you or call you when we're ready," then they'll maybe call and do some of the COVID questionnaire stuff, shoot them with the thermometer to see if they've got fevers and all that stuff to try to keep people out of the waiting room. Over a period of time, I think that's going to loosen. So, then maybe we actually might allow people to wait inside, though it might just be six feet away or eight feet, or whatever the number might be at that time.
Brogan Baxter:
And I think what we'll find is the gradual loosening of some of those restrictions, it's going to be a trial and error. That's the way all this is going to unfold. And I know that doesn't generally sit well with dentists, they're very good at wanting to know the finite rules and regulations and sticking specifically with that. And when something, you just have to roll with the punches, it's a little harder to wrap your head around.
Casey Hiers:
Well, that's a good point. Everything's going to be very fluid. I was speaking with my wife the other day, and even planning things out much more than a couple of weeks can be challenging because it's ever changing. And so I think people being able to be flexible and have the ability to adapt is going to be key. You had mentioned taking the temperature of patients. So that transitions us into staff. A staff member most likely is going to be doing that.
Casey Hiers:
As a practice owner, what advice would you give them in terms of working with the staff, bringing them back, making sure psychologically, and from a health perspective, they are in a good place, the additional duties they're going to have to perform? Staff and team are very big issues with practice owners. So with this reopening, how would you tell a practice owner to effectively communicate with their staff or their team and help to prepare them?
Brogan Baxter:
Well, we'll just opened Pandora's box with that one. So I'll try to keep it concise. First off, there are going to be regulation, suggestions, CDC, ADA specific state dental associations, state specifics. It's up to the business owner to understand what is, and is not able to be done for their specific state. And so they're going to want to set their own regulations within what they have the ability of being able to do. Some might take it to the extreme, some may not. It's suggested. I think it's probably a good order to do thermometer checks and fever checks for all staff every day until this calms down quite a bit. I think that makes sense.
Brogan Baxter:
Something else that plays into this too, is the recent government funding, the PPP, the EIDL loans, the EIDL grant, all those different things. Because essentially with the PPP, the whole intent of having that out, to begin with, was to get your staff off of unemployment and back on to payroll. So that's a step you're going to have to take, you're going to have conversations, if you've not already. If you've got the PPP, how are we going to reengage staff? How are we going to prep the office to get back up and running? A lot of those things ultimately play into some of those conversations that somebody wants to have with their staff.
Casey Hiers:
Have you heard of any staff members being comfortable with collecting unemployment and being hesitant to get back in to the workforce, and potentially trying to dictate a little bit with the practice owner, what that looks like, and I'll just spell it out, that double dipping mentality or desire to potentially collect unemployment, not have to work or work in a manner in which they can still collect unemployment?
Brogan Baxter:
Yeah, I'm smiling as I say this, just as a lot of the listeners out there that are dental practice owners are smiling as they're also listening to this as well, because that does happen, it is happening, and there are people that are losing staffers over this. Honestly, the number's not as high as I thought it was going to be just from the polls that I've taken with some of our clients as they've tried to reengage staff. I actually anticipated it to be a number as high as maybe a quarter of all staff that would dig their heels in and say, "Hey, I'm making more on unemployment, I don't want to come back to work." But actually it's less than that. But it does end up being about, one staffer in every office or every two offices that somebody has some sort of issue with.
Brogan Baxter:
And depending on the state, depending on where you live, the break, even on what someone's actually paid, where they can make more money on unemployment fluctuates. Here in Indiana, the number's about $50,000. So that pretty much covers everybody at the dental practice, aside from the dentists and maybe some full time hygienists, generally.
Casey Hiers:
Let's talk about hiring new staff or potentially addition by subtraction, staff members who, from what we just talked about, are maybe reluctant to want to start to work, talk to the listener about the opportunity to add staff, take away staff, help the culture and build.
Brogan Baxter:
There's a lot of opportunity. As it pertains to staff right now, there are a lot of unemployed people in the United States, definitely. 14.7% was the number that just came out last week for the labor market as far as what the unemployment rate currently sits at. For dentistry, that's even higher, because the pockets aren't as deep for a general dentist as it is for say like, Amazon or something.
Brogan Baxter:
So what we have is a lot of people in dental that are unemployed. And there's a big opportunity for people to be able to upgrade their staff now, or if they have somebody who is digging their heels in, we're encouraging all clients to post-ante if necessary, ultimately to be able to get additional staff if they can, upgrade in areas, if necessary. If you offer someone a position to come back to work and they say they don't want to do it, technically, that could disqualify them for collecting unemployment. If you're offering them to come back at the same rate, at the same pay, at the same hours worked, whether you want to fight that battle or not, that's up to you individually.
Brogan Baxter:
But if you've got somebody doing that, then what we're suggesting is you need to get an ad up and try to tell that person, "I don't know if I'm going to have a position for you when you're comfortable enough to come back, but I've got a business to run, we have patients that need to be seen, and we have health that need to be taken care of."
Casey Hiers:
Again, I hear people talking about staff and team, and trouble, and it's a slippery slope like you had said, if technically they're being offered work back, but are reluctant and want to stay with unemployment. It could almost be viewed from the practice owners perspective of helping educate them and letting them know you're putting yourself in a very precarious situation. And at first look at it through an education standpoint, then if they dig their heels in and clearly are just in it because they enjoy receiving compensation without doing work, then that goes on to another step, which you gave the remedy, post ads, see what's out there, see if you can upgrade staff and things of that nature.
Casey Hiers:
We're a financial firm. As a practice owner, and I talked to one yesterday and they're a successful practice, but they're in a state that is very reluctant to open back up, and they tossed around, "Is this time to get out? Is this even going to be worth it?" There's a lot of sentiment on that regard. And so as we're talking to these practice owners and trying to bounce back from this, and trying to reopen, financially speaking, what advice would you have for our listeners as they go to reopen, and financially is a broad spectrum, but in terms of income and practice account balances and paying staff, anything financial related, what tips would you give them as they go to reopen and start to bring in revenue again?
Brogan Baxter:
So, that's also an interesting question. We've seen states, like I said, that have been open now for a couple of weeks, we've got other ones that appears to be no end in sight. Those states aren't going to run everyone into the ground, they might not be doing them any favors. And I think what you see, and where you get a lot of the questions about bankruptcy and selling the practice and all, I think you're seeing that more with the older generation, because they're so close to retirement. They don't have time to be able to recover from this. The younger folks, there's a great opportunity. And quite frankly, another podcast for another time is an opportunity in mergers and acquisitions that's going to come out of this, because there's going to be a huge amount of opportunity for anybody with some business acumen that has a little bit of a risk appetite to be able to do that.
Brogan Baxter:
Generally speaking, this is what the government's coming out with, with a stimulus. They came out with the EIDL loan, the EIDL grant. So, they had this wonderful program where you could go in and apply for a $10,000 grant that would hit your account in no more than three days. But as what generally happens when the government becomes involved, it took about four weeks for that to happen. And the second part of that, EIDL grant was that there was a loan part attached to that. So a lot of people that have applied for that grant just now, as they're hearing this, or within the previous week or so, have been getting emails from the SBA regarding, "Do you want your EIDL grant? And if so, how much money do you want? And what are your options?"
Brogan Baxter:
The EIDL grant's meant to be a working capital loan, and can really be used for a pretty broad spectrum of different usages. Aside from, it cannot be used for the same thing your PPP funds are used for. You can't double dip. Once your PPP funds are used up, you can use it for those expenses, just PPP has to be used first. You cannot use it to restructure debt, you cannot use it to expand. And aside from that, you pretty much have carte blanche for whatever else you pretty much want to use it for.
Brogan Baxter:
And then, there's the highly touted PPP that blew out of money in about three days the first time around, and a couple of weeks, the second time around. But generally speaking, the PPP funds are really meant for you to be able to reengage your staff, get them back on payroll, off of unemployment. And ultimately it gives you a little bit of fluctuation with how you can use those funds. At least 75% has to be used on payroll specific sort of funds, with the remaining 25% to be used for some specific carve-outs, as it comes to utilities, rent, a couple other items.
Casey Hiers:
Brogan, you've been at this for 15, 16 years, and you intimately know and are aware of some of the issues that dentists and specialists struggle in. From a financial standpoint, what has the past couple months exposed or magnified with practice owners, areas financially in their practice or in their personal life where potentially they've just kicked the can down the road or not addressed some areas like overhead or practice account balances. But what areas, from your perspective, has COVID-19 and office closures exposed or magnified that a practice owner should really take some time and look at?
Brogan Baxter:
Well, one, I think, is dealing with poor staff. They say that someone's true colors come out at a time of crisis. And so we're finding out that there's a lot of issues with staff. Yes, somebody has staff they weren't terribly excited about. Well, if you're not terribly excited about them, they're not going to be terribly excited about wanting to reengage and come back to work when they're getting paid more to sit at home and watch Netflix. So, that's something I think came out of this.
Brogan Baxter:
I also think, it's something I hear from dentists all the time, that they don't have enough cushion. They run their bank accounts down to very, very low amounts, they don't keep the amount of money in there that they ultimately need to keep, they don't have lines of credit. If you don't have a good amount of money as a cushion in your practice account, and you don't have a line of credit, these are the people that are talking about bankruptcy right now. And it's because they didn't plan ahead of time, they didn't take care of their overhead, they didn't focus on getting that down. They were too busy, focused on the here and now then to deal with the short-term needs as well as the longterm needs. And those longterm needs became short-term needs with this COVID-19 crisis. And a lot of those problems are coming home to roost with a lot of dentists right now.
Casey Hiers:
Yeah, it is unfortunate. And we're seeing that more and more. Let's talk about the patient. Let's talk about scheduling. As a practice owner is looking to successfully reopen, what advice do you have to them around scheduling their patients, and touch on, leading, not just your staff, but the patients and the vibe or the message you would suggest a practice owner have within their practice.
Brogan Baxter:
I am of the opinion with that, get while the getting's good. You only have a very finite amount of time to keep your patients, that could sound callous, but folks, is the reality. You have been out of work anywhere between one and a half to maybe two and a half months, by the time this whole thing's said and done, you've got a backlog of patients. If you're GP, you get tons of hygiene patients to see, Perio has got a lot of perio maintenance patients they need to get caught back up on. What's that going to mean for your schedule six months down the road? How do we balance that out? How are we going to balance out the needs of the patients with safety in the office and also hitting some of the regulations that come from the different specific states? You're going to have to potentially stagger your schedule.
Brogan Baxter:
Hygienist sees a lot of patients, ortho sees a ton of patients, a huge patient flow throughout the day. You might need to stagger shifts if possible, where you got a morning shift and an afternoon shift with a little overlap, maybe even working on a Friday, God forbid, in the short-term, just to actually get caught back up with these patients. And you need to be prepared to see new patients too, because the other dentists that aren't doing this are also going to be having patients that are going to be looking around. So you want to be first in line there.
Brogan Baxter:
I think something else too, just more logistics, you need to ask yourself, "How much of my practice is tied to insurance? How much of my practice is tied to fee for service?" You want to see those fee for service patients first. Why? Because you want to have a whole line of insurance-based folks coming through, where you have, you're incurring costs now on bank accounts that are already relatively depleted that have to wait multiple weeks to get your checks back. You don't want to mess with that. Deal with a lot of your fee for service patients first, or try to maintain a balance, allowing a certain amount of insurance in but not everybody. I would also consider changing some of your payment policies, short-term to help deal with this, to help infuse a lot of that capital, get you up and running as quickly as possible too. I think it's also a good strategy.
Casey Hiers:
Free dentistry is an interesting topic. If a practice owner does it on their terms, that can be fine. But I was about to ask that question, and you must have sensed it, in terms of the fee for service patients versus the insurance patients. And a practice owner shouldn't feel guilty for that. This is probably not the time to give away a lot of free dentistry. And unfortunately, you have to make sure you're looking out for yourself so that you can better help others and stacking your scheduling with your fee for service people, a practice owner shouldn't feel guilty about that.
Brogan Baxter:
No, they shouldn't. You've got to remember, sometimes as a business owner, and I'm speaking to you as one, that as a business owner, sometimes you have to make decisions that are unpopular, better in the best interest of the company and your patients collectively. You are responsible, potentially, for the livelihood of, not only your employees, but their families. So some of your decisions and how you deal with this doesn't impact just you. And though that's very, very important, you have to make yourself stronger so you can make your staff stronger, and their families and everything further down the road there. But as a leader, as the owner of the business, you need to keep those decisions in mind when you're trying to figure out how you're going to re-engage and restart here.
Casey Hiers:
Brogan, if you had one pearl of wisdom that you wanted to share with our listener today, one pearl of wisdom around reopening, reopening successfully in this climate. What would that be?
Brogan Baxter:
The staff is something that I hear from all dentists all the time. Nobody's in love with their staff, or if everybody's in love with their staff, they're in love with their staff, except for this one person. Use this opportunity when the unemployment rate is the highest it's been in-
Casey Hiers:
In recorded history.
Brogan Baxter:
... Multiple, multiple decades. So, I would use this as an opportunity to upgrade staff, where you can, and at all costs, even though it might be a little uncomfortable for a month or two, do whatever you can to maintain the patients that you worked your butt off to get to begin with.
Casey Hiers:
Brogan, you've been generous with your time. I appreciate you joining us today. And for our listeners, there's a lot of variables and a lot of questions around reopening and what to do. But we would just encourage you to be that leader that your team, your staff, and your patients need, and be strong. And we'll leave it there. Thank you Brogan.
Announcer:
That's all the time we have today. Thank you to our guests for their insight and for sharing some really great information. And thank you to you, the listener, for tuning in. The Millionaire Dentist Podcast is brought to you by Four Quadrants Advisory. To see if they might be a good fit for you and your practice, go on over to fourquadrantsadvisory.com and see why year after year, they retain over 95% of their clients. Thank you again for joining us, and we'll see you next time.
