Dental Bonus Horror Stories – Season 1 Episode 6

Dr. Chris Griffin Show: Dental Innovations

Incentives can be very powerful, yet they also undermine virtue if not planned out carefully. Since we always strive for a Kaizen Culture where every action makes the world or practice a better place, we must burst the myth of the one-size-fits-all Bonus System once and for all.

The examples of Bonuses Gone Bad should scare even the most confident doctor. Use their example to avoid catastrophe.

In this Episode You’ll Learn:

• How to Avoid the Dark Side of Bonuses and Incentives
• Why One-Size-Fits-All Practice Bonuses are a Ticking Time Bomb (with Examples)
• How Medicine tried their version of Bonuses called P4P and How They Crashed and Burned
• The ONLY Safe Way to Incentivize Your Best Team Players

And Much, Much More…

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Read Full Transcript

The Dr. Chris Griffin Show – Season 1 Episode 6

“When you rely on incentives, you undermine virtues. Then when you discover you need people who actually want to do the right thing, those people don’t exist because you’ve crushed anyone’s desire to do the right thing with all these incentives.” Now who said that?

Welcome to the Dr. Chris Griffin Show. Your resource for leveraging systems and technology to easier workload, increase productivity and provide you with the time off you deserve to live the life of your dreams. It’s time to practice productivity in the passionate pursuit of a better life with your host, Dr. Chris Griffin. The doctor is in.

Okay, I think I got a few of you on that one. That was a, that’s a little bit of a tricky one. I didn’t go into the distant past, the way we go a lot of times when we do these things. But I did actually pull this off a pretty recent tad talk that I thought was pretty awesome. And I’ll be telling you about that too. So let’s tell, let me tell you a little bit about the author of the quote. It’s Dr. Barry Schwartz. Now Dr. Schwartz is a professor of Psychology at Swarthmore College and he is also a, I found out after I’ve Googled him, a frequent New York Time editorial author. And, but the tad talk that I saw that I was so impressed by, and it makes so much sense for so many things in the book he wrote along with that tad talk. The tad talk and the book, they’re called the Paradox of Choice. And this is from about 10 years ago but and it’s a little crazy when you watch it. I mean, he’s on stage but he’s on these shorts but he’s a super smart guy, you can tell. And he’s got so much to say and so many things he says really apply to a dental office. He’s really amazing.

So yeah, Dr. Schwartz gave that quote and not only besides that, he gave another quote that I think is very applicable to what we’re talking about today and that quote is “Too little attention is paid to the dark side of incentives, they are anything but a magic bullet. Psychologists have known this for years and I’m sad to say that I didn’t necessarily learn that as quickly as I have in dental practice. But we’re going to go through that today and we’re going to talk about bonuses. The title of the today’s episode 6 is Dental Bonus Horror Stories. I was thinking about using a like a Vincent Press voice if I could conjure one to say that but I guess I couldn’t really come up with a good person that I thought I could imitate. So we’re just going to use my regular voice. But there are some horror stories out there and today you’re going to learn the upside and the horrible downside to some of the most common dental staff bonuses around. And they all have ups and downs. You will know the potential good you can do for your practice and you’re going to learn the potential destruction that can happen if you’re not careful.

After today though, you’re going to be able to move forward with the bonus structure that you think will give you that highest risk reward for your practice if in fact you do choose to move forward with the bonus structure at all. And I certainly have done and seen almost everything there is out there to do or see in this area. So I feel like I have a little bit of something to say to you that’s going to help you. Now when we talk about dental staff bonuses, I guess mostly everything we’re going to talk about comes from the world of pay for performance because I guess that’s a concept that goes back maybe even to the industrial age. Or for sure as we’re coming out from the industrial age and we start to get into a more corporate structure, businesses and commerce in general, they’ve made this assumption that people really care about money more than anything else. And don’t we make that assumption a lot of our own practices. You know I certainly make that assumption way more than I should. I mean of course, I know that I’ve made that assumption, I’m constantly trying not to make it and we’ve all got stories about the little old lady that you know waddles in and wants to spend 10 grand and you know, you hate to even present her the treatment and she whips aside her coin purse and pulls out silver and gold nuggets. I mean I’m just using hyperbole here but you know, we all know about that and I mean everyone’s got them. I’ve got the personal medic aide who paid me 6 grand for a bridge several years ago that changed my mind on the whole concept.

But I think that most of the concepts in our industry came from these theories that workers in our case, dental team staff members, want money. And they want money worst than they want anything else in their life. You know that’s just the concept and I mean I don’t know, I’m sure those people are out there but I don’t…I just you know, as time has gone by, I’ve seen that that’s just not the case. That’s just not homogenous at least. So however, I have also learned that there are seasons of your practice and times in your practice just when bonuses are very valuable and it would in fact be foolish not to use the bonus in your practice. So we’re going to talk about how when you decide to cross that bridge and offer your staff a bonus. You do need to have a healthy fear of that situation because it can really do more obstruction than you can realize and a lot of people have really wrecked a pretty good dynamic in their practice because they didn’t pay enough attention to this. However, every bonuses of any kind does have a purpose and there is a season. I’m sure there’s a song out there for that that I’m not also going to try to sing for you but every bonus has a purpose and has a season. As long as you as the doctor, understand the positives and there can be positive; there can be a really, really good positives and you understand the negatives. And there can be really, really bad negatives that every bonus exacts on your practice. There is a toll to be paid, right? There is a toll, there is a price and there can be a great reward.

So let’s dive right in, right? The first thing I would like to dispel, if you ever go to a practice management seminar and you hear the person on the stage talking about how this particular dental bonus is the bonus that everyone should be using. I would probably cut my losses, pack up my things quietly as to not be impolite because I don’t want to be impolite. And I would ease out the back door and I would not listen to anything else that that person has to say because that person is an idiot. Okay? It’s just not out there. There is no bonus that fits everybody. And if someone tells you that, they will lie to you about other stuff, too. That’s a fact, I’m just telling you. I’ve been around the game long enough now in my 20th year seeing patients. I’ve been a see junky my whole life. They’re lying. Okay? Sorry, they’re lying.

Now, on the flip side, there’s a lot of people out there that would give you a multiple disdain, a ton of different bonuses. And they’re not liars but they’re confusing. So what happens a lot of times as you hear them you’ll think, “Well I can’t do that. I mean that’s too confusing. I don’t know how to make that decision. They’ve given me too many options. I’m going to have the Paradox of Choice, just like Dr. Schwartz said. And I’m not going to do anything. And so I ended and you think well gosh I’m fine and I’m doing something and it’s better than doing nothing but I try this really simple bonus.” And it’s just not going to work for you. It’s going to work for a while, possibly. It might. Something that they work for a while then let me just tell you, let me just be the mean bad guy that opens up this vault of dental practice management and opens myself up for sure a lot of Chris’ if I’m saying this but these simple bonuses are designed to keep a what’s called in the Industry a quick win. Okay?

Because we all know dental practice management coaches and consultants that if we can get you a quick win then we’re going to think that we’re smarter enough to listen to this other stuff too. And a lot of times, first impression being what they are, we can get you that quick win no matter how it might hurt you later. You know you’re going to stick with us at a certain amount of time. And I’m sad to say that some consultants out there are really only interested in tracking how long you stay with them. And then once you wise up and leave or start questioning them, then they’re more than happy to bring you on to the next consultant that you might find and just try to get in their mind a new patient, if you will; a new client. But there is no one size that fits all bonus system. Now as we’re breaking this down, let’s look at 2 ways that a bonus system might work. Okay?

There are 2 things that people want in life; money being one and some form of rewards or recognition being the other, okay? I will tell you that if you could find a group of people who could be solely motivated by wanting to do the right thing, and being recognized for that in creating significance in the universe or the practice or whatever I mean you’ve got it absolutely made, absolutely made. It don’t happen much though. It’s pretty rare. And the trick is figuring out which employees are those kind of people who can be motivated by those good things and are not so money motivated. And also if they say they’re money motivated, maybe it’s just because they haven’t been educated as to what else is out there that made us don’t know what else to say. Right? They may have heard somebody else say that, and they thought, “Hey that person seem pretty smart, I’m going to try to be money motivated too. Maybe that’ll get me where I want to go but it just rarely ever does. And you got to understand the motivation of your team members. It’s always going to be different, it just is.

And so that’s kind of “Unfortunately doc, that’s your job to fair this out.” I don’t know that you can put this off in office manager or someone else in your practice. Because ultimately if it’s your butt on the line, and you’re the person that signs the checks, you’re kind of responsible to pick the team and to improvise the team the way you want the team to develop. That’s just, I’ve had to rebuild the team, you know for the last few years and I’m so thankful that we did it this way this time because the last time, I did it the wrong way. And I can share so much about what I did wrong. Now if you ever think I’m telling a few things that are right, that’s wonderful. But the way I view this show and a lot of things I do and teach, let me at least help you guys learn what not to do. Okay? I may not be the guy, that’s the genius that has all the answers, but I’ve got a lot of answers to things that don’t work. Okay? Please, please notch those things off your mind. Don’t do them and at least you won’t make those mistakes. Right?

So I’ve at least increase your percentage chance probability to make a good decision that really does a good job for you if you can at least do that much. Okay? Now so you got the money bonuses out here and then there’s other things you can do to create incentives that are more rewards based or recognitions based. Gosh another book, I’m going to recommend here just off the cuff is the Rockefeller Habits by Verne Harnish. And I’ll try to get a link in the show notes to that too. I mean I keep giving you guys books to read, right? I’m so sorry. You know, I know that you guys are busy. It’s a great book too though, it really delves into things that you can do besides monetary recognitions. And I use that book so much when I’m designing my goal setting and my yearly planning and my incentive based stuff like that. I use that all the time.

And one thing you can look to and I talked about this way back in Episode 2 of Season 1. We’ll link that in the show notes too but I talked about these theme adventures you can create. So you get the whole team and pull them together and they’re you know, they’re on the same page looking at this goal. When they get there, you reward them. You can reward them by like sending everyone on a sea trip, you know, to gosh we talked about sending people to New York, send people to the Caribbean. You don’t have to get fancy like that. You can send people to a lot of other places besides that. So they can be just down the street, hey a good friend of mine every year if they ever served a certain goal he sends them in a limo to Nashville and take them to the mall and they do stuff like that. So I mean you go back and listen to Episode 2 again or you know read the transcripts or whatever. You’ll get some of the ideas, I wanted a lot of detail to different things we’ve done in my practice and that I’ve seen other doctors do very successfully, okay?

So there’s a lot, a lot of things you can do in the bonus incentive world right? But now let’s get into more of the monetary stuff. Maybe a little bit of the reward thrown in but let’s talk about the big ones that I’ve seen and let’s talk about horror stories too. And I may or may not withhold names to protect the innocent because I don’t know exactly where we’re going with this. But I feel like if I tell you these stories that really happened it’s going to help you. So I may have to get kind of specific. So the first kind of bonus, let me talk about myself first. Right? So the first kind of bonus that I know that is an absolute disaster if you do it wrong is an hourly pay incentive; an hourly pay incentive. And by the way if I didn’t mention earlier, all of these money type bonuses should really fall under the header “Pay for Performance”. Pay for performance is a concept like we said that came out of the Industrial age probably but it got really popular in the healthcare/medical world a few years ago. But the studies, they’re coming back really negative on how this is affecting the medical world. And you have hospitals that based you know, hirings and firings on these metrics of performance that you got paid on how well you perform. And there’s just a lot of things in medicine that you cannot measure and then also the metrics put on a huge burden on these teams in these hospitals. Just do the metrics and just do the work, the pencil work instead of treating the patients.

And so these hospitals have mega failures recently. If that tells you anything, so I’m hoping we can once again learn from the badness in the medical world to help ourselves and the other you know, the dental world. And if you’re listening to this and you’re a chiropractor, optometrist, whatever; all these worlds, maybe we can learn from our brethren and the medical fields that just seem to get hammered first on everything, don’t they? I mean I feel sorry for those guys most of the time. But the hourly pay incentives, okay? Now let me explain kind of how this works. If you have a team of 5 people or whatever, you create the amount of money that you feel like the practice has to produce or collect or both, to set a baseline, so everyone is kind of getting a baseline of pay. And you give everybody just a baseline hourly pay. I did this myself starting in 2005. And so you’d set this and so they got this base, and as you grow, you’ll increase their hourly pay from their base number, let say from $8 and you increase it by some amount of cents, hourly, as you’re production or collection grows.

And so in my practice, we started this bonus, we were collecting $50,000 per month back in 2005. So I ran into a person that taught me this kind of bonus about the same time that I was coming out of my flirtation with the cosmetic world where I was trying to be this amazing cosmetic/whatever type dentist, right? Just the best cosmetic dentist in the world, we all know that it didn’t work. I was an idiot for thinking I can do that, I know now but I did it. So I was doing about $50,000 a month and we set everybody’s pay accordingly. Alright I have a small team about 5 people and we started growing because not only did we change their bonus structure but I’d also set things in motion where we changed our solid practice and that’s where we changed into more of a high productivity high volume style practice ala Vince Monticciolo, like we talked about last week.

And so there were a lot of things going on, not only that I’ve changed the style of practice, I was really into the practice. I was really motivated, I was hard charging and I was trying everything I could try to get better and do better. I was pulling the staff with me. They were doing more than they’d ever done before and our practice quickly grew from 50,000 a month to 75,000 a month, to a $100,000 a month, to a $125,000 a month, to a $150,000 a month. And those people who have been making, let’s say I set their base to like $10 an hour at $50,000 a month. Well, they’re making $25 and $30 an hour. Right? I don’t care who you are. You can’t earn $30 an hour in Ripley, Mississippi doing the same job you’re doing when you’re making $10 an hour. There’s…I’m all for rewarding team members as your practice grows, there’s nothing wrong with that. That is great, you should be doing that. But you can’t triple their salaries. They can’t be triply effective, they can’t be. It’s impossible. They can’t be doubly effective. If they could be doubly effective, you should fire them for doing a terrible job when they’re making $10 an hour. Okay?

That was so stupid. And now you get all these high paid people, well guess what? When you hire somebody else to help your practice because you went from 50,000 a month to a $150,000 a month, no longer. I mean you got to have more people. Those high paid people can’t see that many more patients. Just because you’re making 3 times the money, you can’t see 3 times the patients. You can’t make temporaries in 3 rooms at a time, it is impossible guys. You cannot do it, okay? So I screwed up. You see you got these high paid people and they’re happy being high paid. They’re trying to help you cope with that idea, so they can keep being high paid. You’re finally losing battle and I fought that battle for years. And I thought I could outrun those numbers and out produce them and I just could not do it. I could not do it because my staff overhead percentage went from 20% to 22, to 24, to 25, 28, it got up to 33%. At that peak I think, maybe 35% before I pulled it back.

But you know, and I’ll be honest, I have relationships with those people