The best way to eliminate financial stress

Dr. Albert (Ace) Goerig discusses how to get to profits without financial stress

Many doctors continue to experience financial stress that they never anticipated when they chose a “high paying” career like dentistry. Financial stress can take the joy out of life and lead to sleepless nights. Even if you are good at managing stress, there’s always an undercurrent of worry that takes energy and discipline. Here are the four most common types of financial stress:

• Cashflow distress is when every dollar you earn is earmarked for an expense or cost that must absolutely be paid. With little or nothing left over, you barely have your head above water, and you’re in constant fear of sinking.
• Debt hangover is the emotional price of monthly payments on long-term debt. This includes student loan debt, practice acquisition debt, mortgages, and auto loans. Credit cards and consumer debt with outrageous interest rates add to the burden.
• Lifestyle limits is when your obligations are being met, but you are not living the lifestyle you want. You must budget and limit your spending much more than you expect or want, and it leads to general dissatisfaction of where you are in your life.
• Savings squeeze is when spending today is prioritized over saving for major future goals. The obvious example is not saving for the retirement you want. As years go by without making progress, stress can skyrocket (usually around the age of 40).

The first instinct of most people experiencing financial stress is to try to economize on spending. However, unless you are wildly irresponsible with your spending, there are relatively few opportunities to reduce spending in a meaningful way. Scrambling to save a few percent on dental supplies, skipping a daily coffee bar order, or avoiding team raises isn’t going to pay off your mortgage, buy the boat you want, or fund your retirement.

Focus on the true problem

Truthfully, financial stress is almost always an income problem and not an expense problem. In the 25+ years that I’ve been coaching endodontists, I’ve never met a doctor who had unachievable financial expectations based on what is possible in endodontics. I have, however, met many doctors whose practices are underperforming financially.

The math of practice performance is quite straightforward. A recent analysis we performed across 32 Endo Mastery client practices in 21 different states showed practices collected approximately $1,500 on average for every completed case (RCT, ReTx, Apico) over the course of a year. To be clear, that’s not the average fee for treatment. It’s the total collections of the practice divided by total cases completed. Total collections would include smaller procedures, as well as exams, radiographs, and imaging for consult patients who do not proceed to treatment.

Based on this data and assuming 180 workdays per year, adding the equivalent of one more completed case per day on average will generate $270,000 more in annual collections. Adding two cases per day boosts collections by $540,000. Since most expenses don’t increase, almost all increased collections flow to the bottom line as improved profit. That’s a $5 million bonus over a 10-year period. Financial stress? Gone forever.

Most underperforming practices are only completing 3 to 4 cases per day, and 30% or more of the doctor’s time is being diverted into non-productive tasks that the team could perform. It’s no wonder that the doctor has financial stress. Improved clinical team efficiency, scheduling, and marketing are all effective strategies to investigate without delay. Why wait any longer? The payoff — the rest of your life without financial stress and every goal achieved — is worth the effort.