DDS, MDS, PHD
Looking at the origin of the word “economics,” we will find that it is derived from the Greek word “Oikonomikos.” “Oikonomikos” is composed of two words: “oikos,” meaning home, and “nomos,” meaning management. The word “economics” implies management of the home, including satisfying a family’s needs, physical and psychological well-being. The Greek definition did not include any connotation of saving and thriftiness, which most people believe is the meaning of economics. The concept of saving originated during the medieval period in Europe, which was characterized by poverty and scarcity in this period, retrenchment and thriftiness were considered important religious and social virtues.
During the Industrial Revolution, the definition of economics evolved and became associated with concepts of wealth gathering, investments, growth and prosperity. The most accepted definition of economics in modern times is that of Paul Samuelson, the first American to receive the 1970 Nobel Prize in Economics. He defined economics as:
“The study of how people and society end up choosing, with or without the use of money, to employ scarce productive resources that could have alternative uses to produce various commodities over time and distributing them for consumption, now or in the future, among various persons or groups in society. It analyses the costs and benefits of improving patterns of resource allocation.”
Most dental practices face business problems due to core economic issues. Therefore, if we use Samuelson’s definition of economics and apply it to the practice of dentistry, we will find that it is the most comprehensive, relevant and applicable definition for the economic practice of dentistry. As a result, dental professionals can use Samuelson’s definition as a guideline to:
- Analyze the best way to manage scarce physical and human resources.
- Analyze your choices by using a cost-benefit analysis.
- Make efficient choices for current and future productivity.
- Analyze current and future consumption plans.
- Analyze the distribution and allocation of resources according to their costs and benefits.
- Manage forecasting and planning
- Increase growth and development.
An example of such an economics study is economic decision making scenario given at the end of this article.
During the 20th century, the science of economics was divided into two categories: macroeconomics and microeconomics. Macroeconomics is concerned with the regional, national or international economy, while microeconomics is concerned with the economy of the household or the smaller units that make up a society, such as healthcare and dental economics.
Many of the business-side problems dental practices face today can be traced to poor economic decisions or practices that have negatively impacted or stopped the growth of a dental practice. In this article, we will discuss how to apply the concept of household economics as a business model for the operation and assessment of dental practices.
HOUSEHOLD ECONOMICS: GENERAL DEFINITION
Household Economics are defined as a land resources that holds a variety of efficient physical resources , that are operated by a group of qualified individuals whose interests are interrelated and goals are aimed to produce services or products needed by society in general or the relevant professionals.
To become an Economic Household, a dental practice therefore, must have four fundamental resources:
- Land resources
- Physical resources
- Human resources
- Product resources
Each resource is rated positively (Positive resource indicators) when the resources are available in quality and quantity and negatively (Negative resource indicators) if shortages and scarcities are prevalent.
DENTAL PRACTICES IN TRANSITION
The teaching of clinical skills in dentistry occupies the major portion of dental student time. The 2014 survey of 59 US and 10 Canadian dental schools shows that dental students spend 3,743 clock hours or 76% of their dental education time learning clinical dental skills, compared to 60clock hours or 1.2% dental practice management skills and 49 clock hours or 0.9% human behavioral skills.
Unfortunately, the mastery of clinical skills alone does not guarantee success practicing dentistry. Many dental schools graduates feel unprepared to start a dental practice upon graduation. Therefore, Some resort to enroll in business management continuing education courses, while others seek professional advice to help in the management of their dental practices.
Many dentists faced academic difficulties while were in dental college, but later became successful in their professional carriers, because of the personal skills they used in treating patients and managing staff.
In the Middle East, the heavy emphasis of the dental colleges on the clinical skills has led to the lessening of the importance of preventive care skills and human behavioral skills in the mind of the dental student.
The majority of private dental practices in Middle Eastern countries includes the traditional solo practitioner, which will continue in developing area and the modern group practice that are becoming more prevalent in the developed populations. These modem dental practices are going through a period of major transition, therefore an observer may encounter a variety of practice trends, which can be described in the following observations.
Fortunately, this observation is limited to a few dental practices where the location is ideal and the physical resources are state-of-the-art, however the practice treatment services are provided by a mediocre team of dental clinicians. It is difficult to understand the reasoning behind spending excessive amounts of capital on physical resources while not hiring the qualified medical and paramedical staff that can provide high-quality services consistent with the practice’s excellent resources and demographics.
The dental practice medical teams include a team of competent general practitioners and dental specialists, however the practices lack the appropriate paramedical and administrative staff necessary to provide quality treatment and services.
There are dental practices who are allocating large budgets to purchase computer management systems and state-of-the-art equipment; however, they neglect to provide the needed funding to hire the staff needed to operate and maintain this equipment. Furthermore, some dental practices expect their existing already unqualified dental receptionists and dental assistants to operate new technology with little or no training or compensation.
There are many dental practices owners and managers who believe that technology is the best way to boost the practices’ image, and increase production. They purchase expensive equipment and run costly marketing campaigns to bring new patients.
Todays’ patients are more demanding, have high expectations and difficult to please. Their high expectations turn into anxiety and frustration the moment they experience treatment discomfort or sense the doctor’s or the dental assistant’s incompetence.
Likewise, is the situation when upon arrival to the practice, the patients are ignored by an insensitive receptionist or disrespected by an arrogant front office staff. The enthusiasm, efforts and monies spent on acquiring new technologies, are not matched in budgeting for staff hiring, training, and promoting.
Apparently the demand for dental services has been so great in some areas that it allowed many bad dental practices to be profitable and remain in business in spite of their substandard services, medical errors and patient dissatisfactions.
In addition to the decline of patient care services in these practices, it is common to find a decline of professional values that allows staff subgrouping and prejudice. A gossipy staff is not busy staff. The worst example is when there is subgrouping between the front office staff and the dental assistants’ staff. A serious problem, if allowed it will drain the practice resources and result in unhappy patients and stressed clinicians.
HOUSEHOLD ECONOMICS: A BUSINESS MODEL FOR DENTAL PRACTICES
These observations are occurring because the dental practice owner or manager failed to study and analyze resources, cost benefits, distribution and allocation of resources.
Below is a listing that outlines model household economic resources with their positive and negative indicators. The positive resources indicators components listed should be considered as benchmarks to be used either to establish Household Economics dental practice or evaluate an existing dental practices’ compliance with the proposed model. The negative resource indicators, represent detrimental performances that should be avoided, shortages that must be remedied or problems to be resolved.
In terms of improvements and allocation of resources, Household Economics requires that the enthusiasm and monies spent on technology, for example, should be matched with the equal enthusiasm and budgeting to spend on staff hiring, training, and promoting. Improvements in one household resource area and neglecting others will not increase productivity but may complicate the dental practice problems. Improvements should be introduced collectively and gradually, otherwise the benefits gained by improving one resource will be negated by the shortages in others.
“The three most important considerations in real estate are location, location, location.” This statement continues to be true and fundamental to the establishment of successful dental practice.
- Ideal geographic location
- Ideal demographics
- Lack of severe professional competition
- Real estate ownership
- Plenty of available space
- The demographics are inconsistent with the dental practice’s vision, goals and services.
- Improper geographic location
- Presence of severe professional competition
- Limited space
- Unrealistic Real estate renting or leasing contract terms
The dental practice design should meet the requirements of modernity, safety and efficiency, all of which are planned to promote patient comfort and excellent quality care.
- Modern facilities
- State-of-the-art medical and dental equipment operated by competent and trained staff
- Brand-names dental instruments, materials and supplies
- State-of-the-art practice management systems operated by trained staff
- Availability of written protocols standardizing patient care procedures from the admission phase and the starting of the treatment to the end of the treatment and patient dismissal.
- Availability of mini dental laboratory
- Central sterile services department (CSSD)
- Central medical and dental supply dispensary
- Patient communication and education room
- Outdated general infrastructure (i.e., facilities and furniture)
- Outdated or unmaintained medical and dental equipment
- Shortage of quality dental instruments , materials and supplies
- Outdated patient record keeping methods
- Lack of written operational policies.
- Lack of written patient care protocols in patient admission, monitoring patient complaints, clinical treatment ,preventative treatment and follow-up care
- Substandard instruments sterilization methods
- Unacceptable infection control practices
- Lack dental laboratory facilities
It can be concluded from the observations, that the areas of human resources are where most improvements are needed. The human resources requirements in dentistry have changed significantly from the simple needs of the solo practice model of one dentist and one or two assistants to the more complex needs and demands of the dental group practice model. The Household Economics model requires that the human resources of a modern dental practice to include, on a full time basis, four professional staff teams:
- The medical team of clinicians.
- The paramedical team of dental surgery assistants DSA’s, defined here as the back office team
- The practice administrative team defined here as the front office team .
- The co-ordination team
The Medical Team: Composed of a core of tenured, experienced general dentists who provide and coordinate all patient care. The general dentists’ team is supported by a full-time team of certified clinical specialists, dental hygienists and dental technicians. Subspecialties such as aesthetic dentistry, same-day dentistry, are becoming an important part of the modern dental practice. Specialists in these areas should be an integral part of the team.
The Back Office Team: This team is the paramedical staff and should be composed of certified dental surgery assistants, DSA, assigned to the following duties:
- One DSA is assigned to each dental operatory as supervisor and chair side assistant
- One DSA is assigned to each dental operatory as a rover
- One DSA is assigned to manage the central sterile services facility
- One DSA is assigned to manage the central dental supply dispensary
- All DSA patient care staff should be trained to operate the new technology equipment
The Front Offices’ Team: Should include a team of certified staff assigned to the following duties:
- Dental practice general management
- Patients’ reception affairs
- Patients’ records affairs
- Patients’ scheduling affairs
- Insurance and finance affairs
- Marketing affairs
The co-ordination team should include:
- One DSA assigned as Patient care treatment coordinator. Her responsibility is to monitor the patient care progress from start to end
- One DSA assigned as Practice flow coordinator. Her responsibility is to monitor the work flow between the medical, the front and back offices teams and avoid conflict and resolve problems
- There is evidence of continuing self-development courses and on the job in-service training programs
- The general dentists’ group backgrounds do not meet the requirements of tenure and clinical experience
- There is a lack of full-time, qualified dental specialists to support the general dentists, a situation that causes the general dentists to refer the patients to outside specialists or perform treatments beyond their clinical skills and capabilities
- There is a lack of full-time, qualified dental hygienists and dental technicians
- The back office is understaffed
- The front office is understaffed
- An unhealthy work environment is characterized by subgrouping, prejudice, and indifference
SERVICES & PRODUCTS RESOURCES
The collective performance of the medical, front and back office staff will ultimately determine the economic and professional success or failure of the dental practice.
- Recognized professional reputation of the medical team
- The practice has large patient database or patient waiting lists
- The practice has formal periodic dental hygiene programs
- The patients records are monitored for follow-up care or assessment
- Patient care records show clear documentation of diagnosis and treatment notes
- Availability of multimedia oral health promotion and education programs
- Availability of patient satisfaction surveys and feedback
- Evidence of patient neglect and abandonment
- Lack of patient dental hygiene and preventive dentistry programs
- Substandard patient records. Characterized with disorganization and poor documentation
- Evidence of formal and legal patient’s complaints against the practice
ECONOMIC DECISSION MAKING SCENARIO
To illustrate the application of Samuelson’s approach to economic decision-making, the following scenario is given.
A suggestion was made to convert an administrative office to dental treatment operatory. According to Samuelson’s definition, such a decision should be made only after a thorough study of the items listed to answer the following questions:
What are the effects of losing the administrative office on the dental practice’s operations and financial affairs?
What is the cost to convert an office space into a dental treatment operatory?
Will the dental treatment operatory be used for the treatment of emergency patients, primary care patients, dental hygiene patients or comprehensive dentistry patients?
What is the expected income from each one of these treatments options?
Does the practice patient database contain patients who need comprehensive dental care, and have these patients accepted the proposed treatment? Can they be scheduled for treatment as soon as a treatment operatory is ready?
If the database does not have such patients, will there be a need for a marketing campaign to bring new patients, and how much will the marketing campaign cost?
Does the medical practice team have clinicians who specialize in comprehensive dental care? Does the clinician’s time permit scheduling him or her on a full-time basis? How will these clinicians be compensated—salary or a percentage—and what is the percentage if such apply?
There is no doubt that, if the practices’ medical team includes a comprehensive dentistry specialist and the patient database has the needed number of patients, the conversion will increase profitability and enhance the professional reputation of the practice thru attracting patients who need comprehensive dental treatment.
Once made, the conversion decision should be supported by the allocation of the necessary budget and follow up personnel for implementation. The decision made in this scenario is an Economic decision based on numbers and accurate information; it is not an administrative decision.