Dental Office Organization: a proposal for change

SHM 710 Integrated Capstone Project 1

DENTAL OFFICE ORGANIZATION:

A PROPOSAL FOR CHANGE

JONATHAN D. RICHEY

A.T. STILL UNIVERSITY – SCHOOL OF HEALTH MANAGEMENT

28 JULY 2005


TABLE OF CONTENTS

Title Page.............................................................................................................................1

Table of Contents.................................................................................................................2

Abstract................................................................................................................................4

Dental Office Organization: A Proposal for Change...........................................................5

Introduction..........................................................................................................................5

The Future of Dentistry........................................................................................................5

Organizational System.........................................................................................................6

Open Systems...........................................................................................................6

Subsystems ..............................................................................................................6

Suggestion #1...........................................................................................................6

Organization Culture: Mission.............................................................................................6

Culture........................................................................................................................

6

Mission Statement....................................................................................................7

Suggestion #2...........................................................................................................7

Contingency Approaches.....................................................................................................7

Goal approach..........................................................................................................7

Operative goals........................................................................................................7

Subjective goals.......................................................................................................8

Suggestion #3...........................................................................................................8

Traditions, Rites, and ceremonies........................................................................................8

Traditions.................................................................................................................8

Rites ......................................................................................................................8

Suggestion #4...........................................................................................................9

Organizational Structure......................................................................................................9

Inconsistency............................................................................................................9

Consistency of purpose............................................................................................9

Horizontal Structure...............................................................................................10

Functional Structure...............................................................................................10

Suggestion #5.........................................................................................................10


Suggestion #6.........................................................................................................10

The External Environment.................................................................................................11

Independence.........................................................................................................11

Suggestion #7.........................................................................................................12

Legitimacy.............................................................................................................12

Isomorphism..........................................................................................................12

Areas for Improvement..........................................................................................12

Suggestion #8. .......................................................................................................13

Information Technology....................................................................................................13

Computers can help................................................................................................13

Outsourcing can save money.................................................................................13

Suggestion #9.........................................................................................................13

Conclusion.........................................................................................................................14

Bibliography......................................................................................................................15


ABSTRACT

Organizations as diverse as a church, a school, and a dental office have characteristics in

common. They are social entities that are goal oriented, are designed as deliberately structured

and coordinated activity systems, and are linked to the external environment. They are open

systems, subject to the trends of the economy, needing a strong mission statement and

organization configuration, and strategy. In the dental office, the design, information

technology, inter-organizational relationships, and leadership can make it an entity which is

attractive in the declining market for dental offices. The dentist should carryout specific designs

to make his office marketable to the increasingly small number of prospective buyers. Starting

with a mission statement, the office will be able to establish their purpose and goals. They can

then make a long-range plan to become independent and acquire resources in a way which makes

them marketable in the shifting economy. As the office implements their mission-derived goals,

they can accomplish much more as they use measurable goals, practice consistency, and work in

an effort to establish legitimacy and loyalty in all areas of interaction. Developing and

accentuating traditions, rites, and ceremonies will help develop unity and loyalty among staff

members and the dentist. As the hired manager, I examine these issues and construct

suggestions for the dentist.


DENTAL OFFICE ORGANIZATION: A PROPOSAL FOR CHANGE

INTRODUCTION

Twenty one years ago, a small town dentist bought a practice, opened his door, and began seeing

patients. Starting only with a secretary and an assistant, he gradually expanded his practice to

include hygienists, financial secretaries, and additional dental assistants. Six years later he

moved to a new building and his practice continued to grow along with the burgeoning city.

Now that dentist is thinking about working fewer hours, selling his practice, and retiring with the

profits. He joins the increasing number of dentists retiring at a time when dental schools are

closing their doors – decreasing the pool of new dentists available to buy practices.

To achieve his objective, the dentist has hired a business manager to assist in the desired

transition, as well as fix current problems and prepare the practice for success in the 21st century.

The office manager must assess the office as an open system, subject to the trends of the

economy, appraise the mission, configuration, and strategy of the dental practice, and review the

design, information technology, inter-organizational relationships, and office leadership. As the

hired manager, I am examining these issues and will construct suggestions for the dentist.

THE FUTURE OF DENTISTRY

The ADA's recent report, "The Future of Dentistry," asserts that the United States population is

outdistancing the number of dentists that serve it. The number of dentists per 100,000 persons

declined from 60 to 59 between 1995 and 2000, and is expected to decline more dramatically —

from 59 percent to 54 percent between 2000 and 2020. This decline could result in a shortfall of

16,046 dentists by 2020 (Pride & Morgan, 2003). The shortage has already begun in rural areas

and is expected to worsen. To add to the concern, aging baby boomers, the largest segment of the

U.S. population, are expected to desire and require more dental care than any previous

generation. This has spawned the quick movement of some dentists to find partners and get out

of dentistry quicker than originally planed, including my boss. I was hired and given the task to

bring a successful dental office to maturity quickly in order to sell it and provide the founding

dentist a little retirement fund.


ORGANIZATIONAL SYSTEM

Open system. A dental office is an open system which must interact with the environment to

survive; it consumes resources and exports resources to the environment. It cannot seal itself off

and must continuously change and adapt to the environment. Supplies come into the office daily

in order to provide the appropriate procedures required in the office. Items are also shipped off

to other companies which make crowns, retainers, and other oral appliances. If the system of

receiving and shipping is ineffective, the necessary procedures will not be able to be carried out

and thereby diminishing productivity of the office. In addition to being an open system, there are

various subsystems within the practice.

Subsystems. The technical core includes those who assist with the technical aspects such as

doing the actual procedures of dentistry. The technical support system helps the office improve

effectiveness by developing procedure protocols and patient flow ideals. The administrative

support function is responsible for the smooth operation and upkeep of the organization,

including the physical and human elements. Management is the last subsystem which is

responsible for coordinating the other parts of the organization. They lead in providing direction,

strategy, goals, and policies for the entire organization or major divisions. Until recently, the

managing was done by the dentist. Finding a happy medium between the dentist leading the

practice and the staff accepting my leadership role may prove to be difficult as there is much

“tradition” within the practice. My hire is a large step for the dentist and the office as a whole.

Suggestion #1 Define staff responsibilities and stewardship.

ORGANIZATIONAL CULTURE: MISSION

Culture. Culture is the set of values, guiding beliefs, understandings, and ways of thinking that

is shared by members of an organization (Daft, 2003). It provides employers and staff a sense of

organizational identity and generates a commitment to beliefs and values that are larger than

themselves. The culture appropriate for a dental office is a bureaucratic culture. Such a culture

has an internal focus and a consistency orientation for a stable environment. The dental office

needs a consistent and methodical approach to doing business.


Mission statement. The dental office developed a mission statement twelve years previous and

included it in the New Employee Handbook (McAuliff, 1993). None of the employees can say

what the mission of the office is, nor do they have any idea what their underlying purpose is.

The mission is not discussed as a part of staff meetings, interviews, or hiring. Many

organizations have a mission statement, but typically people are not committed to it because they

are not involved in developing it; consequently it is not part of the culture. The lack of shared

vision and values is the seed bed of almost all other problems. Updating the mission statement

with the help of staff members in the dental office will help new associates and office veterans;

they will be able to center their efforts on a common goal and principles of service and consistent

work.

Suggestion #2 Update an office mission statement with the contribution of staff members.

CONTINGENCY APPROACHES

Goal approach. Contingency approaches, to measure whether or not the organization is

realizing its mission, focus on different parts of the organization. The goal approach is

concerned with the output side and whether the organization achieves its goals in terms of

desired levels of output – this is the best way for the dental office to evaluate its effectiveness.

For example, an important measure in the dental office is number of new patients in a month.

An operative goal for the office is 10 new patients. This goal is measurable and reflects

activities which the office can perform in order to accomplish it. Once the mission statement is

reevaluated and updated, operative goals can be well defined.

Operative goals. The dental office will benefit from goals concerning overall performance,

resource acquisition, market share, employee development, innovation and productivity.

Targets to reach for communicate legitimacy to the internal and external stakeholders. As a

manager I want the dental office to look good to patients, competitors, suppliers, and the local

community. I also want to develop within the office a sense of pride and commitment within

the office staff. Goals give a sense of direction to organization participants, and are a powerful

way to motivate – especially if everyone is involved in selecting the goals. For example, if the

secretary desires to have each patient begin treatment within 20 minutes of arrival, the office


staff can discuss it’s relation to the overall mission of providing quality care and define ways to

accomplish it. A mission statement and operative goals are a powerful first step in

communicating legitimacy to external and internal stakeholders and creating a positive

impression.

Subjective goals. An issue to resolve with the goal approach is to identify operative goals for

the organization and how to measure goal attainment. Not all goals are objective. U.S.

corporations indicate top goals as being (1) profitability, (2) growth, (3) market share, (4) social

responsibility, and (5) employee welfare (Shetty, 1979). Dental office goals requiring subjective

assessment might include patient satisfaction and employee loyalty. I have to learn what the

actual goals are by talking with the office staff. Once goals are identified, subjective perceptions

of goal attainment have to be used when quantitative indicators are not available. I will have to

rely on information from customers, competitors, suppliers, and employees as well as my own

intuition when considering subjective goals.

Suggestion #3 Establish operative goals.

TRADITIONS, RITES, AND CEREMONIES

Traditions. An important part of organizational culture includes traditions, rites, and ceremonies

– planned activities that have a purpose of demonstrating company values. One medical office

had the tradition of putting together birthday baskets. Each time an employee has a birthday,

each member of the office staff contribute a gift, or something of meaning to a basket for the

individual. No names are given as to who is the giver of the gift. The person receiving the gifts

opens them in front of everyone during the lunch break with everyone in attendance. The basket

also includes a note declaring a reason why they appreciate the employee. In this tradition and

ceremony, co-workers are drawn closer together and anticipation for each event breeds

excitement and unity.

Rites. The dental office can benefit from two specific rites – rite of renewal and rite of

integration. A rite of renewal would reflect the training and development activities that improve

organization functioning. Monthly, during staff meetings, those who are principle players in


office performance should be recognized and congratulated. The scheduling staff can be

celebrated for diminishing the number of no-shows. The financial staff can be rewarded and

recognized for decreasing the accounts receivable. Such ceremonies are highly visible and

communicate to all employees the value of diligent work. A rite of integration might include a

spotlight at staff meeting for a new employee. This will contribute to staff unity and

collaboration.

Suggestion #4 Develop and accentuate traditions, rites, and ceremonies.

ORGANIZATION STRUCTURE

Inconsistency. An area of weakness in the dental office is its organizational structure. Office

staff does not have a procedural guide for daily activities and so each situation is dealt with

differently. When questions arise, with regards to office policy, staff collaborate with confidants

within the office and decide what they think is best at the moment instead of following good

practice guidelines. For example, if a patient cancels with less than 24 hours notice, sometimes

the patient is given a charge for not keeping the appointment and sometimes the patient is told,

“Its okay.” This has lead to conflict among office staff and patients who disapprove and revolt -

discrediting the professionalism of the office. After such an episode, everyone denies

responsibility for what occurred because no well established guidelines are set up and no

structure is established for reporting, follow-up, and employee questions. An ideal structure for

a health care office is that of functional structure with horizontal linkages.

Consistency of purpose. For the solo practitioner, consistency of purpose is simple: Be

consistent. If you stop taking new patients over age 60 to keep the practice balanced, that

includes the dentist’s next-door neighbor; otherwise, his employees may wonder if he will make

an exception for others, too. If you do not prescribe narcotics over the phone, ever, then there's

no question when a patient on Friday afternoon swears to my staff that the dentist said he would.

And we don't need an office manager to interpret the vision of the boss to the nurses or to shield

the boss from the receptionist's complaints. We do not have to periodically re-establish an open-

door policy so employees feel comfortable talking directly to the doctor. They're in the dentist’s


face all day long. If he have offended or confused or exasperated someone, it does not take long

to straighten things out.

Consistency makes it easier over the years to train patients, too. If the dentist consistently sees

patients within fifteen minutes of their appointment time, patients will be readily on time unless

there are justifying circumstances. If the dentist indicates that everyone who is going to have a

crown done will be required to make the ½ down payment at time of tooth preparation and ½

payment at the setting of the new tooth, and actually follows up with it, will collect the money

from the patients or those patients with the intention of not paying will weed themselves out of

the office. These would be very difficult goals to achieve in a practice that is regularly

rescheduling patients because the schedule was overbooked and patients who are told they can

make payments when they want (with no contractual agreement). The blame lies with the

system.

Horizontal structure. In today’s society, there is a shift toward flatter, more horizontal

organizational structures because the fragmenting which vertical structuring causes. Managers

improve horizontal coordination by using information systems, direct contact between

departments, full-time integrators or project manager, task forces, or teams. In the dental office,

workflow should be centered on patient care. Instead of bouncing patients from room to room,

bringing services to the patient can provide a more effective office visit with minor detours to x-

ray or surgery. A patient coordinator/educator can serve as a liaison between patients and their

care ensuring their questions are answered and they are taken care of in a timely manner,

dramatically improving patient satisfaction, thereby diminishing no-shows as well as accounts

receivable. I believe patients are willing to pay for good care.

Functional structure. Particularly for a one dentist office, functional structure is beneficial

because you only need one financial department, one dental assistant department, and one

hygienist department. There is no need to have a secretary and a marketing specialist for each

provider. Functional structure also provides for stability in a relatively stable market. There is

not a need for decentralized decision making which a more divisional structure would provide.

Suggestion #5 Be consistent!


Suggestion #6 Fortify a functional structure; establish protocols and lines of communication.

THE EXTERNAL ENVIRONMENT

We have evaluated some of the measures which will help buffer the dental practice against

internal ebbs and flows. Now let us turn our focus to the external environment. All the elements

that exist outside the boundary of the organization have the potential to affect all or part of the

organization (Daft, p.30). It is this external environment which prompts the dentist to seek help.

As was mentioned before, the economy has been progressing toward an unfavorable market for

retiring dentists. Careful planning in response to the developing uncertainty is necessary in times

of change. When the environment is stable, organizational focus generally shifts to current

operational problems and day-to-say efficiency. Long-range planning and forecasting are not

needed in a stable environment because the demands in the future will be the same as they are

today. This stability is rarely seen in our world today. There is an increase in environmental

uncertainty which makes planning and forecasting essential. Planning can soften the adverse

impact of environmental shifting and anticipate potential changes by different organizations and

environmental sectors.

Independence. Independence is an essential key to stability in a shaky economy. The US

government recognizes its reliance upon foreign oil and has made steps to try and become more

independent. The dental office can do the same. As it provides additional services such as

yearly checkups, in-house retainer molding, x-ray, and imaging, it will be less dependent upon

other providers of these services. Providing these services, and perhaps monopolizing on such

arrangements can be very attractive and lucrative. The dental providers have attempted to

educate themselves in a way which provides unique services. For example, many people are

interested in cosmetic dentistry. The dentist already does orthodontia and with some additional

training he is able to offer Invisalign® (a clear retainer series which straightens teeth) to his

patients. Being the only dentist in town which offers this service, he has become more

independent of the external environment shift toward invisible cosmetic dentistry. Becoming

resource independent is another area of focus in the dental practice. Manufacturers of dental

crowns and bridges can increase prices beyond reason if they know they are the only firm

available for the service. I believe the office can save more money as it petitions other


companies for their manufacturing services to drive the prices down. Being an office with a lot

of patients, the bargaining ability is there, it merely needs to be utilized.

Suggestion #7 Make a long-range plan, become more independent and acquire resources

smartly.

Legitimacy. Legitimacy is defined as the general perspective that an organization’s actions are

desirable, proper, and appropriate within the environment’s system of norms, values, and beliefs.

Organizations must fit within the cognitive and emotional expectations of their audience. For

example, I saw a billboard on the side of the road advertising financial planning advice and

savings and retirement options. At the bottom of the billboard however, a statement immediately

turned off my interest in the ad. It said, neither FDIC insured nor bank secure. That statement

does not fit into my concept of good financial advice or savings planning. It did not appear to be

a legitimate offer for financial security. I wondered then, do companies attempt to appear

legitimate, and does it motivate them? I think overall, companies strive to be legitimate. The

billboard announcement was appealing, and the adverse comment was in small print at the

bottom of the board, (probably due to law requirement) making it look legitimate. In the dental

field, legitimacy is important. People walk into the dental office and expect to see certain things;

a comfortable waiting room, magazines, a clean bathroom, prompt and kind service,

ergonomically sound office structure, dentist degrees posted on the wall, and good service rates.

Each of these aspects contributes to the perceived legitimacy of the dental practice.

Isomorphism. Isomorphism is a term closely associated with legitimacy in the business world.

Once a company has established a name for itself, it invisibly pushes toward similarity to other

companies in order to maintain legitimacy with consumers. Being accepted is motivation for

individuals. It can be seen in our personal lives. People strive to appear like others, why do you

think there are such things as trends. A few in Hollywood may set the trend, and the rest of the

world attempts to copy it. The same can be seen when an actor or actress is seen walking down

the red carpet in something outrageously different and not merely a step out of normality but

never before seen. Usually the reviews are negative. The same can be applied to business.


Areas for improvement. A couple areas in which this dental office needs to work at creating a

sense of legitimacy as well as being accepted more readily are: (1) having the financial

secretary’s office separate from the hallway where patients pass by frequently. Financial matters

are often sensitive matters and should be dealt with in private. The secretary should not walk out

into the waiting room to discuss financial matters with patients in front of other patients. (2)

Once a patient is seated, the patient should not be moved to another room unless to be x-rayed,

and then the patient should be returned to the same room. (3) The doctor’s children should not

run around the office as they please and should not interrupt the dentist during procedures.

There is a sense of distrust when the physician is preoccupied with his surroundings while

drilling in a patient’s mouth.

Suggestion #8 Evaluate what makes a dental office legitimate in society, establish those

standards within the office.

INFORMATION TECHNOLOGY

Computers can help. In an effort to attract potential buyers to the practice, there is a need to

update the 1980’s computer hardware and software of the office. Information technology is

important in dentistry and health care. Tracking health trends and patient information is essential

in this field. Technology can be used to order office material, automate supplies procurement,

assist in decision making, and protect patients from adverse drug interactions by alerting the

dental provider, teaching healthy habits, procedure training, patient record keeping, and office

finance tracking. In the future electronic insurance claims will also be more prevalent, gathering

insurance information and pre-authorizations will also be done electronically.

Outsourcing saves money. Information technology will also enable the dental office to

outsource functions which can be done cheaper by other companies such as billing. It facilitates

smoother transitions for the patient through the office and eliminates the “lost chart” problem.

Potentially I see information technology assisting patients with finding information about the

office, scheduling appointments, refilling prescriptions, and making online payments. All of this

would save on office staff hours, which translate into saved money, and channel employee

expertise to other areas of office improvement and service.


Suggestion #9 Update computer system.

CONCLUSION

Organizations as diverse as a church, a school, and dental offices have characteristics in

common. They are social entities that are goal oriented, are designed as deliberately structured

and coordinated activity systems, and are linked to the external environment. The dental office

is no exception. It is also an open system, subject to the trends of the economy, needing a strong

mission statement and organization configuration, and strategy of the dental practice. Its design,

information technology, inter-organizational relationships, and leadership can make it an entity

which is attractive in the declining market for dental offices. Starting with a mission statement,

the office will be able to establish their purpose and goals. They can then make a long-range

plan to become independent and acquire resources in a way which makes them marketable in the

shifting economy. As the office implements their mission-derived goals, they can accomplish

much more as they use measurable goals, practice consistency, and work in an effort to establish

legitimacy and loyalty in all areas of interaction. Developing and accentuating traditions, rites,

and ceremonies will help develop unity and loyalty among staff members and the dentist. As the

office manager, I suggest the dentist carryout these specific designs to improve his office and

make it marketable in a very volatile market.


BIBLIOGRAPHY

Daft, R. L. (2003). Organization Theory and Design. (8th Ed.) United States: South Western

Pride, J. R., & Morgan, A. (2003). The changing demographics of dentistry. Dental Economics

February.

Shetty, Y.K. (1979). New look at corporate goals, California Management Review (22), no. 271-

79.

McAuliff, J.A. (1993). Our Mission Statement. New Employee Handbook: Porterville.

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Dental Office Organization: a proposal for change