Dr. John Meis
Hey, everybody. Welcome to this episode of the Double Your Production Podcast. I'm Dr. John Meis here with my partner, Wendy Briggs. How you doing, Wendy?
Wendy Briggs
I'm doing amazing. It is a beautiful day. Ready to get going.
Dr. John Meis
All right, well, we've got a great topic today. And the topic is being prepared for a recession. Now, nobody has a crystal ball. Nobody knows what's going to happen with the economy. I wish we all did. But there is considerable evidence that we may be heading into a recession. Some of the things that I watch is the company's GDP, which is the total value of goods and services produced in the United States is declining.
We have inflation that's staying relatively steady. The Federal Reserve yesterday kept interest rates steady, so they didn't increase them, which I guess is relatively good news. Unemployment is increasing for a variety of reasons. One of them is the topic that we had on our last episode was AI. AI is replacing jobs and there are more unemployed people than there have been. The yield curve. So that is bonds.
the interest rates that bonds are selling at, the long-term interest rates are lower than the short-term rates. And when that happens, that's usually very much a sign of recession. And then the last one is consumer confidence and consumer spending is declining. And so those are some of the main reasons. I've got a whole list of them here, but those are some of the ones that I think are an indicator that we should be thinking about and getting prepared for.
So Wendy, why, even if there is no recession, why are these strategies?
Wendy Briggs
Well, over the years, as you mentioned earlier, no one has a crystal ball. And we often have seen practices experience unexpected challenges, right? We've had 1,000 year floods destroy not only the practice, but everybody's homes that worked in the practice. The entire community was devastated. You've experienced some unexpected floods in your practices, different kind, but building failures, equipment failures.
Dr. John Meis
Yep. Yep.
Wendy Briggs
We've seen doctors that ended up with what should have been a routine surgery have intense complications and they found themselves in the ICU for weeks or even months. We've seen unexpected heart attacks take people out for a period of time. So whether it's the recession, again, depending on who you listen to, even if there's a moderate risk, we should be thinking about how to prepare ourselves. But these strategies are helpful.
in any circumstance where there's an unexpected challenge because it puts your practice in a more steady and favorable situation to whether any storm that comes, whether that's from the economy, whether that's from nature, whatever it might be around the bend, these strategies can help protect your practice and your asset and you from any of these unexpected threats.
Dr. John Meis
Yeah, yeah, for sure. So let's jump into, this is gonna be a two-parter, and we're gonna cover the first three strategies on this podcast. The next podcast will have the next four. And so number one is strengthen financial reserves and cashflow. Okay, so it wasn't that long ago where everybody, COVID, practices are closed, we don't know how long.
initial word was two weeks, and then depending on what state you're in, you may have been closed for two or three months, right? In which country you're in, you may have been closed for a long time. And at some point during that, I think pretty much everybody had the thought of, my gosh, I'm gonna run out of money, right? And so one of the things to do is to strengthen your financial reserves. And to do that, usually, we need to increase cash flow.
So what are some of the ways, when we talk about financial reserves, what are we talking about?
Wendy Briggs
Well, you obviously we have a pretty great system. It's called the cash confidence system that doctors and practices should know about to work on building up their cash reserves. In fact, I believe you have a great video that kind of explains the formula for that. we have a great resource, by the way. We should mention we're going to have a handout that goes along with this podcast. And you're welcome to go to our homepage and download that handout because it's going to have some links and things to other resources that can help support your understanding of some of these principles.
Building up cash reserves is an important thing. Again, like we said, for any type of financial threat, it's important to have a healthy flow of cash. And as you mentioned, some of the practices that really struggled the most during COVID were the ones that didn't have cash. And sometimes we go through cycles where we don't have a lot of cash on hand because maybe we've just finished a practice expansion or maybe we're preparing for a period of growth, which means we've got more team than we typically have. So our salaries may be a little bit out of whack, on a temporary basis, whatever that structure is or wherever your current circumstance may be, it's a good time to take a step back and look at your cash reserves right now because it's going to be important if we do go in to a recession to have a healthy cash reserve that we can tap into as needed.
Dr. John Meis
Yep. And we have a tool and a whole training on exactly what cash confidence looks like, how to build it, where it comes from, where to hold it, all that kind of stuff. So next one is reduce unnecessary expenses. And it's fascinating to me when we do some of our events. So our executive GPS, we do a financial review and we take people's financial statements and we go through and we identify opportunities.
And I have never looked at a financial statement where there wasn't significant amount of waste, enough waste actually to pay for the entire training, the entire executive GPS, which is a five year strategic planning process. So there is very commonly wasted spending that can be reduced very, very easily.
Now, if you reduce a one-time expense, that has some value because that money can be put into your cash reserves. But even better if it's a recurring expense that you can eliminate because that pays off every month or every quarter or every year, however often you pay that, whatever that expense is, it pays off repeatedly.
Wendy Briggs
And often, like you mentioned, sometimes we don't realize that we might have technologies that are overlapping or things that we actually sent a cancellation email for that wasn't actually canceled. I had it just on a personal side, the beginning part of this year, I had three months, three full months where I was actually paying for two health insurance policies. So my cancellation request in November, actually wasn't received by the company. You you love how that happens. And it me a little bit to catch that. Well, that's an example of an unintentional spend of unnecessary cash, right? And as soon as we caught that, now I'm still working to rectify it because these things aren't easy to fix sometimes, but it's incredibly frustrating when those things happen and they happen far more than you might think. even if you have a whole team of people looking for that. So find out what those unnecessary spends are. Certainly any waste, any overlap, any things you have tried to cancel that haven't been canceled, don't let those linger on very long because it can burn that cash unnecessarily.
Dr. John Meis
Yeah. Anything where the cost is greater than the value. You know, those are the things you want to eliminate. And in our company, Wendy, we have been going through a process over the last three months where we're going line by line, every single expense. What is this? Why do we have it? You know, is the the value greater than the cost? And if it is, then great. But if it's not, you have to think about is that something that you want to continue? And the next one, and it may be the very hardest one, and that is monitoring cash flow closely. And most people, most dentists have absolutely no idea what the profitability of their business is. I mean, they have absolutely no idea. And there's a lot of reasons for that. The financial statements that you get from your accountant are for the purposes of generating accurate tax returns and reducing your taxable income. they opt to skate an obscure, what the actual net operating profit of a practice is. So it's very, very difficult for people to get that information. One of the things that we do when we do a financial review is determine as closely as we can what their actual profitability of the business is. So really, really helpful to have clean P &Ls so that you can monitor cash flow closely.
Not easy to do, I understand. And that's why most of us couldn't tell you what the profitability of their practice is. Okay, so that's strategy one, strengthen financial reserves and cash flow. How about number two?
Wendy Briggs
Yeah, number two is the focus on case acceptance. And we have long said that this is far easier to influence than reducing costs, know, focusing on improving systems to elevate the case acceptance, the care that your patients already need. How can we do a better job of helping them understand what they need, why they need it, and why it's important to get it done sooner rather than later? So that's all things case acceptance. And again, we have found it's far easier to focus on growing the top line numbers rather than reducing the bottom line numbers. there's both when you do both together, you can actually make tremendous progress much, much more quickly.
Dr. John Meis
You know, people in a recessionary time, doctors, the entire team hear this drum beat of everything's bad, everything's bad, everything's bad, and it gets into our head, right? And so what we diagnose and how we talk to patients about treatment changes. And so we really have to be careful about that. And that's why it's so important to have treatment planning standards, to have tribal language so that everybody's talking about treatment, so that we don't, the environment may change around us, but we don't change. We keep doing the same thing so that we have great case acceptance. And there are people that are going to not do treatment because of their current financial situation, just like always, right? But there's a lot of people that if there's a recession, it doesn't really change their income very much. And they're gonna move forward with it if we do our job well, part of increasing case acceptance is expanding payment options. And Wendy, we've seen some big changes with this from a technology standpoint and from an ease standpoint.
Wendy Briggs
Yeah, we certainly have. you know, I often found when I was practicing that when people said, how much does that cost? It was a buying signal. They were interested in the treatment. If they didn't ask how much it was, it wasn't something they were considering or interested in. And I think sometimes we lose that when someone asks how much is that or how much would that cost? Instead, we kind of become a little bit afraid or defensive or we pull back a little bit. In reality, it's a positive question. And I think as well, I learned that
people often don't make a buying decision based on the total dollar amount, the total treatment plan costs or what have you. They often will accept it if we talk in terms of monthly payment amount. When a patient would ask me or say something like, I'm worried I'm not gonna be able to afford all of this. I'm like, well, what payment amount is comfortable for you? And let's look at that, let's start there. And so being able to help them fit that treatment comfortably into their budget, but also think about how it can fit into their budget.
is an important part of what we do. And certainly, as you mentioned, the technology has gotten so much better. We used to, know, have people have brochure, have them call the company, get pre-approved, call us back when they were approved. And now it's just a couple of minutes. It's an instant approval. And then we can move forward.
Dr. John Meis
done on their phone in your office. Very, very easy. Yeah.
Wendy Briggs
Yeah, very, very easy. you know, another interesting lesson I learned, Dr. John, was, you know, 2008, 2009, the last, probably most significant recession that many of us can remember. I was worried about what this would mean for our preventive services. You know, I was thinking, gosh, you know, a lot of the preventive services we talk about are not covered by insurance. They're, you know, an out of pocket cash outlay, which we've seen, hey, if you build the value patients will move forward.
And what was interesting is I thought as their budgets or as they became a little bit more cautious with their money, that that would be the first thing to go. And what I found was actually the opposite. I found that they really wanted to focus more on prevention and they were more interested in investing in preventive services because they wanted their dollars to go farther in the future. And so it really didn't have an impact, much of an impact that I thought on the preventive services. They actually were more excited to do that and more willing to invest in that than they had been prior.
Dr. John Meis
Yep. And because they're looking at reducing future expenses, this is a great time if you don't have a membership plan or a discount plan, this is a great time to introduce one. If you have one, it's a great time to re-educate your patients on the availability of it because it's a great way for patients to get the care they need and to reduce the cost. And for practices, we know that when patients are on a membership plan, they accept more care, they
They're retained in the practice more effectively than if they're not on a membership plan. So it makes sense. It's a win-win-win for everybody. so that's strategy number two, which is focusing on case acceptance. Strategy number three, adjust marketing strategies and maximize patient retention.
Wendy Briggs
Yeah, it's so important to make sure we have patient flow dialed in. We did a podcast not too long ago on our practice pillars, the pillars of practice success. And the first pillar is all things patient flow. And, you know, sometimes we go through these periods of emotional reaction when we're frustrated with a certain company or we focus too heavily on the write-offs of the certain company. We're like, okay, get rid of that plan. And we don't always have the best strategic plan for what that's going to do to our patient flow. So it's important when we're heading into any type of disruption or financial uncertainty, it's really important that we right size our patient flow. And so we have some tools that can help with that. We have a capacity and demand analysis tool so that you can evaluate where you are in your practice in regards to patient flow. If you were to see a reduction in patient flow, because the ADA's Health Policy Institute states that over the last few years, we've had less patient visits anyway. That's without a recession happening. We're having patients seek out treatment less frequently than they may have in years gone by. So we should have a good handle on this anyway, right? Where are you with your capacity and demand in your practice? Are you needing more patients? Are you out of capacity? And do we need to make any adjustments so that we can identify how to best weather any coming storms?
Dr. John Meis
Yep, absolutely. And we've always said that if you want to improve patient flow, start first with retaining the patients you already have. They buy more than new patients. They know you. They trust you. They like you. So work on retention first. And we've taught for the entire time we've worked together a system of retaining patients. We call it our seminars. When people really focus on that, that's when we see profitability grow. In fact, patient retention and profitability are highly, highly correlated. So if we're doing everything we can to maximize our retention of patients, then we have less stress and pressure, but we still need to keep an eye on new patients, don't
Wendy Briggs
Yeah, absolutely. And new patients really are the lifeblood that fill in all the gaps on our patients that we are working to retain simply because there's often more opportunities on new patients. There's a higher incidence of perinatal disease, for example. often, depending on the circumstance, obviously, but they may have years of neglect that they're trying to make up for or catch up for. So the treatment options are often considerable with new patients. And certainly we see plenty of our retaining patients as they age and as they continue to have more wear and struggles. It's not like we don't have treatment to do there either. I think that's a very common misconception. I've heard doctors say, everybody in my practice is done. Like they've been fully restored. And I'm like, I don't know that that's actually ever possible. the statistics do show that most new patients do have different needs than our current patient flow. So we need to keep that flow healthy, especially because, naturally, we see practices lose patients now and again. So we want to make sure that we're replacing any patients we've lost with a healthy focus on new patient acquisition as well.
Dr. John Meis
Yeah. And we have a process for that. So our 17 step patient flow generator system. And really, it's the first time I can't believe it that I think we said system on here. all of these things are systems. And in most practices, they're not systems are not done in a systematic way. They're done in reaction to something. Well, these are all things that should be in place. They should be in place all the time. And that's how we generate, greater profitability, greater efficiency, greater satisfaction for doctors, greater satisfaction for team, and healthier patient bases.
Wendy Briggs
Yeah, all super important again to weather any storm, whether it's economic, whether it's health, whether it's facility, whatever it may be. These are the systems that are going to help keep practices moving forward without too much disruption when you weather whatever might be coming in the future.
Dr. John Meis
Yep, very good. So that's the first three strategies on how to prepare for what may be a coming recession. And thanks for listening to this episode of the W Production Podcast. We'll see you next time.
Wendy Briggs
Thanks everybody.
