CEO apologizes for 'outrageous' comment about dentists' work habits

http://www.king5.com/news/investigators/CEO-apologizes-for-outrageous-comment-about-dentists-work-151748305.html

And the outrage grows...Washington Dental Service CEO James Dwyer has ignited a firestorm response with his recent interview comment that dentists could make more money by, “Number one, they could start working five days a week,”. Unfortunately, when you review the raw interview footage at the link below it only gets worse as he states that dentists usually work 3 1/2 days a week. Wondering aloud, to no one in particular, just how many days a week does James Dwyer work for his $1.2 million dollar base salary? 

We digress however. The nut of the issue here isn't how many days a dentist works, nor how many James Dwyer works. The issues are:

1. A dentists ability to provide excellent patient care and still make a reasonable profit so they can pay their employees living wages and benefits; and

2. WDS not paying taxes. Last year WDS made $1 Billion dollars in Washington as a "non-Profit" and  provided an infinitesimal "social return" on that profit. (See our May 15th blog on WDS's "return" for 2011).

It's time to address these issues in Washington State to ensure patients are able to continue to receive excellent care. And that business operating as "non-profits" actually provide the social return that their IRS status mandates or the status is revoked and they pay the same taxes their insured and providers are required to pay. Governor Christine Gregoire? Attorney General Rob McKenna? Where are you on these issues?

 

King 5 TV's WDS story

Executive Pay Soars While Dental Patient Care Reimbursements Are Cut

As a follow up to last week's post, here is the video line (see bottom of post) from King 5 TV on the soaring executive pay for Washington Dental Service (WDS) executives and board members all the while the reimbursement for patient care to dentists is cut. Reporter Chris Ingalls left some very important items unasked of Washington Dental Services CEO James Dwyer. Such as:

• How do you justify receiving a 45%  pay increase over the past 5 years, and increasing other key employees pay by 32% as the economy has tanked and WDS has held cost increases to dentists down?

• If WDS had "close to ONE BILLION dollars in revenue last year" ($1,000,000,000 or 1,000 millions) how can funding $5 million or .5% of their income to their foundation considered to be a balanced return on their tax free, not-for-profit status?

•  Dentists treat patients four days a week (40 hours) and on the 5th day they are taking continuing education courses to provide better care for their patients and taking non-patient time to manage their businesses? Is that working too little?

• How does making close to "close to one billion dollars in revenue last year" and not paying Federal taxes on $13.7 of net income help the residents of Washington State as a "social welfare" non-profit?

The bottom line is WDS is making money at the expense of Washington State's patients. What aspects of care will dentists be forced to cut to make sure they can see the patient and still make some margin of profit?
http://www.king5.com/news/investigators/Executive-pay-soars-as-one-of-WA-States-largest-non-profits-makes-cuts--150968095.html

Washington Dental Service and its Economic Impact

Dental insurance changes in Washington State have had a huge impact on Washington State dentists over the past year and those changes have started and will continue to trickle down to consumers. 

Tonight King TV  is airing a story at 11 pm on Washington Dental Services actions in Washington State and may run the story again Friday at 5 pm. The King TV feature is based on this story http://www.kmov.com/news/investigates/Delta-Dentals-extraordinary-executive-pay-and-perks-138584994.html about the excessive "not-for-profit" compensation of Delta Dental executives, board members, and travel benefits for their spouses in Missouri. A similar situation is occurring here in Washington State. And, since its a not-for-profit, WDS doesn't pay federal or state income taxes either. 

For those who haven't followed the Washington Dental Service (WDS) story in Washington, here's a quick summary. In 2011 WDS cut reimbursements to dentists by 15% after holding down care reimbursement increases to dentists for the previous 3 years. Similar to what the average consumer has experienced in our lives, the out of pocket costs (wages and materials) for dentists to provide care have escalated over the past three years. Interestingly, in 2009 though the WDS increased their CEO James Dwyer's pay by 15% to $985,704. In total that’s a 27.5% increase over the $771,792 he made in 2007; an impressive salary bump in two years. (Source: www.thelundreport.org/http://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=2&ved=0CIIBEBYwAQ&url=http%3A%2F%2Fwww.thelundreport.org%2Fsites%2Fdefault%2Ffiles%2Fu6%2Fwashington%2520insurance%2520salaries-2.xls&ei=2fWrT9jbGIiLiALZvYiXAg&usg=AFQjCNF0OopAAmTFXrNcXqKal28Ig6LLNg/washington%20insurance%20salaries-2.xls , Line 86). 

So, how does this impact you and me, the consumer? If the cost of providing care can’t go down for dentists because wages and materials costs aren’t decreasing, and the level your insurance company reimburses dentists for providing care is cut, something is going to have to give. Dentists are turning to their suppliers to cut costs but the supplier’s costs have increased too. So the suppliers are turning to their manufacturers to cut their costs too, but they also have been fighting increased overhead expenses as well. So the manufacturers and suppliers are turning to their employees and cutting their wages, benefits, and jobs. Ironically, that means the very people who use dental insurance either lose their benefits when they lose their job or have their benefits cut and have to pay more out of their pocket which effectively creates a wage cut. These actions are a race to the bottom in the United States that’s been played out in the slow recovery of our economy and is reflected in the dental ‘industry’ much as as it has in the auto, construction, home furnishings, services, and retail industries among many, many others. As consumers we can’t expect to make high wages ourselves but buy everything at Wal-Mart prices. We live in an interrelated economy and everyone has to make a living wage to survive, let alone enough to make our economy thrive. 

What can we do? We can let WDS know that their actions have an impact on all of us and make different choices, if and when, we choose insurance plans. We can  pay fair prices for the services and products we buy, especially if we want to make fair wages in our jobs. And, we can buy US made products so the money we invest stays in the United States. that will support putting out of work people back to work again and have them contribute to our overall economic recovery. Last, we can get active and contact our state Attorney General, our Senators, and Congressmen and let they know the status of a "not-for-profit" really needs to reflect that designation and ask them to pursue removing these for all of the dental and health insurers operating under that tag. Have Washington Dental Service be required to pay the same state and federal government taxes that all other businesses are paying in Washington State.

Competitive Lease Rates in 2010

We have all heard about and/or been impacted by the downturn in the residential housing market, but a quiet downturn in the commercial market has also been occurring. With the downturn suites have been vacated as business downsize, are bought-out, or go out of business. And, with more vacant suites and buildings on the market than in many years, lease rates are highly competitive in virtually every market except  the Rust Belt (North and South Dakota, Colorado, etc.) which haven't been impacted significantly by the Great Recession.

If you haven't taken a look at your lease recently study it now while the market is low, especially if your lease is coming up for renewal in the next few years! Then contact a commercial  leasing agent to open those discussions and rework your lease now! Also, do not negotiate your own lease unless you're the building owner... Leasing for your office is as emotional as buying a home and using an agent for  home purchases is the gold standard. An agent will dot the "i's" and cross the "t's" - plus they're savvy on the rates for the building Class and the type of lease you have. In some cases your agent may need to educate your landlord about the market in their area and, if they aren't willing to renegotiate to a lower lease rate than ask for a Tenant Improvement allowance instead. Then use those funds to make small, appropriate updates to your office like new carpet, vinyl floors, wall covering and paint. Keeping your interior looking stylistically current with well maintained materials is the key to continuing to keeping your practice fresh for current patients while attracting new ones.

Either way, the savings or updated interior will be yours and that is money in the bank!

Affordable Updates. Amazing Results.

So often we are contacted by dentists whose offices are in need of an update but the concern for lost production and income during any level of renovation has stopped them cold. Rightfully so, but inaccurate! The key to having a successful operational renovation is working  with a detailed dental office designer and planner (that would be us, of course) and a knowledgeable and experienced dental contractor. Depending upon the size of the physical office and the scope of the work to be completed, a full closure is usually unnecessary. especially when combined with a motivated Doctor and team.  Whew, now there is cash flow to pay for the updates!

The office pictured here for Drs. Victor Barry and Micheal Mulick in Seattle, WA is case and point. From the picture here (or on our website) you can see the actual physical changes were minimal - while the change to the visual impact was significant. With new carpet, paint, dark stain, and artwork their reception area was transformed into a sophisticated entry for their practice and other updates carry the theme through the office.

Here's how this works. In the same way dentists start with a new patient interview, an exam, x-rays, and treatment planning before  treatment, so does our team. However, we call those steps programming, inventory, as-built measurements, and space planning. With the dentist we determine what the practice's office design and functionality needs are, what the desired outcome is, and-of course-what the budget is. Then we complete a detailed questionnaire, measure and photograph the office and dental equipment, and "as-built" measure the entire office or just the areas to be updated. This process creates the "records" for our "treatment planning" to be built upon.

Then the fun starts! Functional space planning (the dental treatment plan) begins to correct poorly functioning key areas such as sterilization, the business office or lab. The existing equipment from the inventory and any new equipment to be purchased are integrated into the planning so everything flows smoothly. Then color schemes are developed that include new carpet and other flooring, fabrics, wall covering, and paint to blend with any existing materials that need to remain to stay on budget. The dental office space plan or plans are presented to the dentist and team for review and, if needed, further refinements are made. The color and materials schemes are presented next and narrowed to one final option with a lot of happy smiles, a few "woo hoos"  from  the team), and conversation about just how great this will look!

The next step is accurately and completely illustrating the functional and colors updates in detailed drawings (your lab prep). The drawings reflect existing power, data, telephones, lighting, and walls, etc. to remain, plus any added needs. They show the new functional planning and design updates needed to modify the existing office. This process is just like sending your patient out to your specialists as part of your treatment plan before you can begin your care. Working "updates" into an existing office is just like preparing for an implant, braces, or long term health of a mouth. It takes foresight and knowledge, planning, careful execution with specialists. Most importantly a "patient" that understands the value of comprehensive treatment and the investment it takes in the short term for great outcomes that pay for the long term growth and success of the practice!

2009 Business Loss? Recoup the loss from 2007 tax payments!

As the economy slowly recovers some businesses are studying the effects of 2009 on their bottom line. Ideally your practice experienced year-over-year gains but, if you had a loss last year and it flows through to you as a sole proprietor, S-Corp, or partnership, take a few minutes to read this article from CNN Money. At a minimum it's worth a call to your accountant...

Nice Office Environments Improve Team Happiness

This article on  "Happiness is good health" is great! Perhaps with just a little too much attitude but the knowledge gained from the study is still the same. Offices that are designed well and look good pay the business owner back in increased productivity, a happier team, and ultimately - which isn't even touched on here - happier patients.

Scroll down to my April 21, 2009 "Economic Reality..." entry and you can see the outcome of updating the aesthetics at Dr. Robert Spreen's office in Bellevue, WA in the after (upper) and before (lower) photographs. There are no "construction" changes other than new cabinetry, finishes, and furnishings.

Update your office and reap the returns of an investment well made...now, that IS something to consider!