"Rewarding Results" - Bonus Plans for Dental Teams (feat. Dr. Mayer Levitt)

In this episode of "The Dental Domination Podcast," host Dan Brian speaks with Dr. Mayer Levitt about the significance of bonus plans for dental teams. Dr. Levitt shares his journey from clinical practice to consulting, emphasizing the importance of a motivated team in achieving practice success. He discusses common pitfalls in existing bonus structures and presents an effective bonus plan model that encourages teamwork and accountability, ultimately leading to improved practice profitability. For more information, please check out the show notes. 

Transcript

0:01

to the Dental Domination Podcast from Dentalscapes, a full service digital marketing agency for dentists hosted by Dan Bryan. Visit dentalscapes.com for a free strategy session and take your dental practice to the next level. All right, welcome back to the Dental Domination Podcast. Thank you so much for joining us today. My name is Dan Brian and I am the co-founder of Dental scapes. We're an online marketing agency. for dental practices, primarily GPs, pediatric and ortho. ah But today I'm not here to talk about that. uh As always, I am here to really dig into what I think is a cool and pertinent topic for dentists, and that's bonus plans for dental teams. And joining me for that conversation is a very special guest ah who has become a friend of mine, Dr. Mayer Levitt. And Dr. Levitt is the president of Jodina Consulting. He also is the prior owner uh of a dental practice himself. He started and grew a large dental practice in Providence, Rhode Island. And the last few years of his career, he actually got into coaching, or of his clinical career, I should say, he got into coaching other dentists and specifically was focused primarily on how to schedule patients. But today, He is working with clients across the country as a consultant and coach for dentist owners, helping them grow their practices, become more profitable, and has actually done some interesting work with, uh know, helping with selling practices and acquisitions. And so I'm really excited to have you here today, Dr. Levitt. Thank you so much for joining the podcast. And before we get into bonus plans for dental teams, I want to give you an opportunity to just say a little bit more about yourself and your experience and How did you get into all this? Well, Dan, thanks so much for having me. It's a real pleasure to join you. I sort of stumbled into this consulting thing because I had always realized that I was going to stop working clinically at 55 because my dad, who was a dentist, died at 61. And when he died, I was 30 years old. And I said to my wife at the time, hey, you know, I'm going to retire at 55. So maybe I can have six years with my kids. maybe grandkids. And so that was sort of the way that they had done it. And the last few years, um I had started to reach out to other dentists who had found me and explained to them one of the reasons I thought our practice had been so successful. And that was the way that we scheduled patients. So I did that for like three or four years. um When I stopped uh my clinical practice, I found that I had a little bit more time to spend, because I was almost sort of like a used car salesman at that point. mean, people were coming, seeing me, how I worked, and uh then I would help them, and then on to the next one. So I did that maybe probably 40 or 50 times over four years. Now I had a little bit more time, and I sort of came to the conclusion that what I thought everyone knew about running a dental practice, they really didn't. I dentists are very into uh becoming the best clinicians they can be and they really don't get a lot of information about how to run their business. A dental practice is a business. So that's what my consulting becomes. I don't teach them how to do root canals. Having done thousands, I can speak that language. But what I really do is try to talk to them about the business of growing a practice and how to give great customer service or how to get more patients or how to become more profitable. So that's what I... That's sort of what I do and I've been doing that now for about 29 years. That's awesome. Do you miss doing root canals by the way? No, not at all. I really don't. Fair enough, fair enough. Okay, well, uh you know, that all sounds great. And I'm just, you know, again, so thrilled to have you on today. And you've got a really interesting topic that I know you've consulted with a lot of your clients about. And that is bonus plans for dental teams. And, you know, in this era in which staffing is so uh challenging for practices in terms of both recruitment and retention and compensation, quite frankly. uh What do you want to start with in terms of bonus plans? Like, let's say a client comes to you and is having difficulties with staffing and is interested in, you know, a potential new compensation structure or bonus plan. Where do you start and what's the value of that? Well, here's what I would say. Let's talk about just sort of basic philosophy about running a dental practice. I don't care what kind of a practice you have, how big or how small it is. You really can't be successful without a great team. You have to have loyal customer service oriented people, talented people who really want to be able to help you because you just can't do it yourself. my philosophy has always been that you want to pay staff at the top end of the scale, not the middle. You'd want to have people looking around all the time to see what they can do and get a better deal somewhere. So you want to be able to pay staff well. You want to be able to offer good benefits to them. And you want to make working fun. I mean, I could probably write four books uh about staff and it might be titled, Staff. What have you done for me in the last 20 minutes, you know, because everybody really, you know, they're always concerned about how they can do better and how they can either make more money or be more productive. So I find that trying to be able to attract great staff, you've got to sort of bring them in, bring them into the, conversation about how the practice runs and what we're trying to be able to accomplish and make them understand that, look, you are getting paid well and that if our practice does better, we're gonna do better. Everybody, right, so you can't expect to have a bonus unless the practice does better than where we currently are. So the idea of uh having to give people raises if they're being paid at the top end of the scale to begin with, you know, because they deserve to be if they're talented. um You just can't be continuing to be giving raises over and over again. This kind of an environment, especially now we're in this inflationary environment, people are getting way more than they used to get. So I don't think that that's a sustainable way to be profitable in the dental practice, but If in fact everybody agrees that if the practice does better, we'll uh share some of that money with you, then I think that's great. So what I would like to talk about, I'm probably on my fifth or more iteration of a bonus plan. And what I'd like to be able to explain to your audiences, what I have found through my uh consulting experience working with hundreds in terms of dental practice is what doesn't work. Yeah, okay. Yeah. Let's get into it. So uh what are some of the common mistakes that you see when you come into a practice maybe and maybe there's already a bonus structure in place or you're evaluating the compensation structure? What are some of those common mistakes? Okay, well I think that the plans that don't work, I'll give you a list of them. Okay, the first one, a lot of staff bonus plans are based on the profitability of the doctor. So the doctor says, look, as long as I'm profitable and I take what I'm supposed to make and I can cover my expenses, then I'm gonna share stuff with you. But the staff has no control over that. I mean, the doctor wants to buy a new CT scan and he's gonna send $100,000. Well. his profitability isn't going to be as great. therefore the staff doesn't have money that they can share. They have nothing to do with that. So uh plans that are based on the doctor's profitability, I don't feel uh will work at all. Another one that you see often is that the doctor says, okay, look, if we do 5 % better uh this month, you're going to get$50 apiece. And if we do 10 % better, you're going to get $150. And comes in the practice does 9.8 % better. Well, they didn't get to be 10%. And so it's sort of like having these specific targets of 5 % better or 10 % better with a different amount that you're going to get, I don't think is something that works very well either because people get disappointed. Another I think a kind of plan that I really don't feel works well are plans that reward individuals rather than the group, because everybody feels that they should be getting a bonus. And so if you say that this person's gonna get a bonus, and within 30 seconds everybody knows what they each got. So I feel that individual plans are not nearly as productive as that involve the entire group. I was just going to say to your point, I love that idea of the group plan over the individual plan simply because, you know, at least another reason I think for it is that it really does cultivate that team-based, you know, philosophy. And, you know, that's so important. You said at the beginning of the conversation, you know, how you want people to have fun. You want people to want to come to work, to be fulfilled, to have something that gives them meaning. And that group plan in terms of the bonus structure I think helps cultivate that. feel that the group sort of takes care of each other. In other words, if it's a group play, not an individual, you know, there are certain people are going to say to the both people who are not doing what they should be, hey, get with the program, because if you don't, we're not going to be able to make money. it's sort of what peer pressure can, yes, manage themselves. Another kind of plan that I don't think that works very well is where they say it's like a month over month thing. So we did this in January. Now if we do this in February and do better, we're going to get a bonus. February compared to January, March compared to February. a lot of times, there's differences in the days of the month, there's differences in the weather, there's differences of people taking vacation. So I don't think that a month over month thing is real because A lot of times certain things happen and even with everybody working hard, just because of the way that plan is set up, they're not going to be able to make bonus. I find another bonus plan that doesn't work is when they say, okay, we're going to compare this quarter to last quarter. Like year over year? Are you talking year over year or consecutive? It could be year over year, could be consecutive. The fact of the matter is that 90 days, 100 days is a long time for people to sort of like stay motivated. I think you need instant gratification so that if you have to wait till, okay, we're gonna see how we do in the first quarter of the year or the second quarter of the year, it's a lot of waiting around for people and they'll think that they can stay motivated. I it's just human nature. Are you saying, Dr. Levitt, that the TikTok generation doesn't have much patience? Oh, that's a topic for all other podcasts, Dan, for sure. So those are plans that I've seen over the years um that don't work out very well. So what I thought I could share with your listeners is the plan that um I have devised m that I feel seems to be working pretty well. Love it. Let's get into it. So how does that work? Okay, so what you try to be able to do uh is to take sort of the bumps out of the road, uh situations that happen with insurance not paying on time or this or that or whatever. And what I like to be able to do is to have a target going forward that is based on a four-month rolling average. So if we were, going to be starting a bonus plan in January. It would be based on the numbers for the previous four months, September, October, November, December. And the formula that we use is in the numerator, we would have production for each of these months plus collection plus collection because we weight collections twice because it's hard to pay your bills with receivables. So we have production plus collection plus collection divided by three. And that is a number that doesn't appear in any management report anywhere. And we would do that for September, for October, November, for December. We would get that number, add it up, total it. We'd have four months divided by four. And that would be the target for what we need to beat in January. So that's sort of a rolling average. gives a pretty good idea of where this practice is, not just where it was last month. We had a great month and we had a bad month. It's four months, which pretty much takes out a lot of the uh mystery of what's going on. And this basically, I think, pretty much gives you an idea of where your practice is today. It accounts for a lot of that seasonality you were talking about as well. Yeah, so now we have that number, production plus collection plus collection divided by three. For each of those four months, we add up those four totals divided by four, and that is what our target is going to be for January. So let's just say that that number was uh $100,000, okay? What we're going to be able to say to the staff is, look, any increase over that, any dollar amount, I'm giving you 20%. And you know, what really basically happens if we have a practice with an overhead maybe of 60 % so that the profit to the doctor is 20%. So he's basically sharing equally his profit, 20 % to the staff, 20 % to him, 60 % for overhead. And there is no limit. It's not like, okay, we have to do 5 % better, 10 % better. So if in fact the practice Again, at the end of January, we add up production plus collection plus collection divided by three. And now the number was 110,000. Yeah. So that's a $10,000 increase. We're going to give $2,000 to the staff. You split that up evenly based on uh full time versus half time. So there might be somebody that works two days a week, so she would get a half. Somebody works four days a week, we get a full time. So we have full staff, a full amount for full time people and a partial amount for part time people. so now what happens is, hey, this is great. And what I suggest in order to be able to let people know is that every 10 days, we've got a little whiteboard in the lunchroom somewhere and we put these numbers on there. This is what we produced, this is we collected, we collected. Here's where we are. So if our target was 100,000, okay, we're at 42,000. All right, we've got another 14 business days to be able to do this. This gives everybody insight. Just people who are in the practice, they don't know what's being produced, what's being collected. mean, they're busy doing their own, their thing. Maybe the assistants don't know this. we give update on this and I am... Totally amazed when I see, okay, we've got five days left before the end of the month and all of a sudden we're not where we need to be. Where people are getting on the phone and calling Delta Delta, hey, where's my check? Because they got to light a fire because that money comes in, they're going to be able to get it. So it really, really motivates the staff. And again, This whole formula is based on things that they can control. They can only control what's being produced and all they have to do is just do their job. So if you're in charge of scheduling patients, you know, and at the end of the day, all of a sudden some people cancel for tomorrow morning. Well, we're not going to just come in in the morning and try to be able to fill it. No, we're going to fill it before we go home that night. So that we can be able to get it. Now, again, people are going to be motivated by the fact that, if we miss $500 of production because somebody canceled at that time, you know, we're not going to be able to make bonuses as well. When hygienists, you know, are talking about work in dental procedures that need to be done to their patients, it gives them you know, a real reason to be able to talk. We're not trying to sell anybody something they don't need, but we really want to be able to speak with them about procedures that we think are necessary. ah You know, dental assistants, when they're sitting in the room with a patient, the doctor goes out to go check something, they can talk about, you know, this is really terrific and those new crowns look great. We should think about others. So it just gets everybody involved on things that they can control. What is being produced? in what is being collected. So let's say we make target in January. Now we've got a new target for February. That target for February is going to be based on the last four months. So it's going to be January, December, November, October. So we take September off the list. So it's always the last four months. Now we have a target for February. Maybe we make the target for February. Now we've got one for March. Everybody's getting pretty excited when they see this. Now, as we go forward, it gets harder and harder to make bonus unless we continue to do well. So those are sort of the basics of what I have found to be a very, very effective plan. uh And, you know, a lot of times people can make, you know, each staff member could make a thousand dollars in a month. That's real money. Yeah, we're not talking about, okay, you're getting a check for $88. Now, Dan, there's a lot of little variations that we don't have time to discuss on a podcast of this short amount of time. And I'd be happy if people were interested and wanted to find out more, I could be able to explain some of the things that we still have to be able to modify with this plan in order to be able to make it work. and Dr. Lovett, thank you so much for sharing this. I think it's incredibly valuable for our office, especially like we've talked about, the challenges within staffing right now, and also just the imperative to build a successful practice, and that means cultivating a team that is going to stay long-term and be fulfilled. And so this is just so important, I think, uh and really imperative for practices to consider. To that end, if anyone listening today wanted to consult with you on a bonus plan or other types of coaching, what's the best way to get in contact with you and make that happen? Again, am anybody who ever has an issue with this, whether it's about this particular topic or anything else, I always am happy to do a complimentary call with people to discuss their issues, know, and find out whether or not it's something that I can help them with, because if it isn't something I can help them with, then it really doesn't make any sense. But if anybody does want to get in touch with me, they can email me. My email address is jodina.levitt.gmail or they can call me, 401-524-7252. And I'm happy for any of your listeners, to be able to speak with them. my pleasure. m I love that. Thank you so much for that generous offer. That's great. And I would encourage anyone, I've had the pleasure of getting to know Dr. Levitt over the last several months here, and I would encourage anyone to get in contact with him. He's really done some amazing things for his clients. So thank you, Dr. Levitt, for joining the podcast today. I hope ah that you would consider coming back on at some point because we really just scratched the surface. Like you said, there are so many other intricacies. intricacies associated with bonus plans, but also so many of the other topics that you consult with your clients on. So I'd love to have you back on in the future. If you enjoyed to the listeners, if you enjoyed what you heard today, please take a moment and rate us with a five star rating on Apple podcasts or Spotify or wherever you get your shows would really appreciate it. is the best way for us to meet and connect with other dentists and practice administrators that we can potentially help. So I really appreciate that support and in any case, thank you so much for tuning in. Until next time, thank you Dr. Levitt for coming by again. Mike, really appreciate My pleasure, Dan. Thanks so much for having me. Take care. OK, bye-bye. Thanks for joining the Dental Domination Podcast from DentalScapes. Visit DentalScapes.com for a free strategy session and learn how to generate more leads, drive more new patient appointments, and improve practice profitability. DentalScapes.com.