How many butts are in your chairs? It’s a simple yet overlooked question. In this episode of Metric Mondays, Kirk Behrendt brings back Dr. Barrett Straub, ACT’s CEO, to break down capacity and help you identify if and why your chairs aren't full. Stop operating at a deficit — especially without knowing it! To learn how to get capacity to 95%, listen to Episode 883 of The Best Practices Show!
Learn More About Dr. Straub:
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More Helpful Links for a Better Practice & a Better Life:
Main Takeaways:
Quotes:
“When we sit our clients down and we retroactively calculate chair utilization — or what we call capacity — often, we find it's not at the 95% or more that we want. It's often a little lower than that due to, it doesn't take many no-shows or cancellations to plummet chair utilization from 95% down into the 80s or 70s.” (1:26—1:50) -Dr. Straub
“The first thing — before we add days, before we go crazy with adding capacity to do more, and do more, and do more — we have to say, ‘Are my current chairs, in the eight hours that I have them scheduled today, being utilized?’” (1:52—2:06) -Dr. Straub
“Let's take one of the operatories in which your hygienist sees one patient per hour. So, that would be eight patients. It's very simple math. One not-utilized hour, and you're cutting the profit in half. A second not-utilized hour, you're now working for free. A third one, you are now working at a deficit. It would make mathematical sense to shut down the operatory, send the hygienists home, don't pay them, and tell the other five patients you'll reschedule them. But that's silly. The truth of it is that we're operating in a deficit a lot, and we don't even know it.” (2:22—2:57) -Kirk
“This chair utilization, this calculating it, is it retroactive? How many butts are in the chair? I had eight hours available. How many butts are in the chairs? It's super easy and super simple and often overlooked. Here's why it's so important. If I have this emotion that I want to do more, it behooves me to first say, what is the utilization of my chairs? And here's why. If you’re at 85%, you should be at 95%. So, what does chair utilization increased by 10% actually do? It increases your production per day by 10%. When you increase your production per day by 10%, you reduce the days you need to work, you reduce the amount of new patients you need to see, and you reduce all this pressure.” (3:02—3:54) -Dr. Straub
“‘I want to do more! I need to produce more!’ Okay, great. You’re probably right. But let's pull some data. How many days are you going to work? What's your production per day? Are you going to meet your gross production needs? No. Okay, we have to increase our production per day. One of the ways we start is, first, let's know if your chairs are full. We teach all our clients that each hygienist and assistant tracks one chair. It's a simple seven divided by eight — seven hours full, eight available. You do the math, and you keep track over the course of a month. Now, if you're less than 95% and you increase that to 95%, your production per day automatically goes up because that chair is full. You're paying everyone to be there already. You're not adding hours. You're not adding nights and weekends. You're simply filling a chair that you already planned on being full.” (4:10—5:00) -Dr. Straub
“Let's say you do the full capacity study and you're like, ‘I'm at 95%. We are full.’ Okay. Then I'm going to ask you, why do you have a money problem? This is a pondering question. So, ‘I feel like we've got to do more!’ Okay, and you're full. Why do you have a money problem? The answer is one of the following: you're not working enough days, or the profitability model in your practice is off. There's not enough profit margin built in, or it's a scheduling issue. Meaning, the scheduling policies, the scheduling processes, don't allow you to schedule enough production in a day. For instance, if you're taking three hours to do a crown — and I know that's a blatant example — it's going to be hard to reach your production goals. Fourth, is it a patient segment issue? In patient segments, we get into PPOs versus out-of-network versus membership and all of those different patient segments. So, my chairs are full. If they're not full, okay. Great. Now, let's fill them. If they are full, okay. Why do I even have a money problem? Again, decision tree. Am I working enough? Is it a profitability issue? Is my scheduling process jacked up? Or am I seeing the wrong patients? You can see where this is going. It takes this emotion out and guides you down this decision tree. And all of a sudden, one of these options is going to be shining in bright lights, and you're like, ‘I see exactly what I need to do. That wasn't so hard.’” (5:08—6:50) -Dr. Straub
“What I want you to do is when you get to your office today, go onto our BPA. We have a Capacity Tracker right in there for our members. It's super easy to join. It's basically a piece of paper that you can track your capacity. Once you have that number and you're like, ‘I need to do more. I'm at 87%. I want to be at 95%,’ great. Here are some of the numbers you're going to track. Now, the next question after that is like, my chairs aren't full. Now, we need to know why. So, we have to pull some more numbers. Again, we're always suppressing this emotion. We're not going to jump to conclusions like, ‘It's her fault,’ or my fault, or they're saying the wrong thing. We're going to suppress these emotions until we pull more data.” (8:34—9:15) -Dr. Straub
“It's super easy. Every assistant and hygienist in your office has a piece of paper. At the end of the day, they say, ‘This chair was supposed to be full eight hours. How many were?’ Not what it looked like, what the schedule looked like at 8:00 this morning, but what actually happened. We had two cancellations. There were actually two-and-a-half hours without a butt in the chair, so it's 5.5 divided by 8. So, that's how that works. You run it for the whole month. Again, if we're going to want the benefits, we're all about private practice. We're all about making this as successful as possible. If we want to be an entrepreneur, if we want to be a successful private practice dental owner, we've got to pull some numbers. This whole idea of like, ‘That's too hard. I can't do that,’ it’s time to roll up the sleeves and get after it. It's literally a 14-second calculation, at the end of the day.” (10:51—11:46) -Dr. Straub
“Once we determine that the capacity is less than 95%, then we're going to dig into some other numbers. Now, you're going to say, ‘Okay, we need to know our cancellation rate.’ Just track it. We're going to need to know our reappointment percentage. What percentage of patients have another appointment scheduled before they leave the office? We're going to need to know, what's my diagnostic percentage, both in the hygiene chair and in my chair? What's our patient acceptance percentage? What's the treatment dollar acceptance? What's our new patient count? All of these factor in to why we might have holes in our chair. If they're leaving without an appointment, that would be a reason. That's a different reason than if they're no-showing, which is a different reason than if they're canceling, which is a different reason than if we're not diagnosing and presenting enough work, like, ‘There's no one to put in here.’ So, even when we know like, ‘Okay, we're at 85%. I want to be at 95%,’ we still don't know why yet. So, when we pull these five or six KPIs that I just mentioned, now one of those is going to show like, ‘Oh, we have a 22% cancellation/no-show rate.’ There it is. Now, we talk to the right people, we pull out the written SOPs, we dig into why that's happening, and we fix something very tangible in our office. Or if the reappointment rate is super low, okay, verbal skills. Or you might find that, like Kirk said, one of your hygienists has a super high utilization and the other doesn't. Okay, let's figure out what he or she does differently and let's learn best practices. So, again, we're taking all the emotion out and we're truly identifying the cause.” (11:47—13:29) -Dr. Straub
“If you want to be a good businessperson, just pull some numbers. And all of a sudden, it gets super clear, strategically, what you need to do as a leader to help your team. If we stop short of doing it a data-driven way, we're going to make the wrong decisions. We're going to make some assumptions and strategies that don't pan out to the outcomes we want. So, it behooves us to do this the right way. Simple decision tree, lack of emotion, and then we know when we make a decision that we can make an improvement that lasts the rest of our career.” (13:32—14:05) -Dr. Straub
“I would rather see a dentist that's not great with data . . . not track 82 KPIs without the knowledge of what to do with them. I did that for a lot of years. I would rather see a dentist who is just getting in the data say, ‘I'm going to track these six, and then I'm going to actually do something with it because I know what they mean.’ So, if you're overwhelmed, just pick a few and get started.” (15:37—16:03) -Dr. Straub
Snippets:
0:00 Introduction.
0:27 Capacity, explained.
1:51 The importance of chair utilization.
5:00 Identify why you have a money problem.
8:29 Actionable tips.
11:46 Other KPIs to know.
15:33 Last thoughts.
Dr. Barrett Straub Bio:
Dr. Barrett Straub practices general and sedation dentistry in Port Washington, Wisconsin. He has worked hard to develop his practice into a top-performing, fee-for-service practice that focuses on improving the lives of patients through dentistry.
A graduate of Marquette Dental School, Dr. Straub’s advanced training and CE includes work at the Spear Institute, LVI, DOCS, and as a member of the Milwaukee Study Club. He is a past member of the Wisconsin Dental Association Board of Trustees and was awarded the Marquette Dental School 2017 Young Alumnus of the Year. As a former ACT coaching client that experienced first-hand the transformation that coaching can provide, he is passionate about helping other dentists create the practice they’ve always wanted.
Dr. Straub loves to hunt, golf, and spend winter on the ice, curling. He is married to Katie, with two daughters, Abby and Elizabeth.