Episode 141 – When Dental Risks Bite Back
“Let me be honest, I did not have a great year. It’s not a happy ending, but it’s worth learning about.” ~Dr. Chad Johnson
It’s gritty. It’s real. There’s no filter. Both of us went through a lot of business changes this year. As with many things in business, there were successes, and there were failures. “You never want to put up the façade that everything is perfect all the time,” says Regan. “We know that’s not the reality.”
But it is a big problem in dentistry. We feel the need to be perfect and have all the answers. But it’s not authentic, it’s not honest. It’s not sustainable long-term, and it does no one any good.
As you all know, as business owners and leaders, we take risks. Walking through fire is the name of the game, and you know things won’t always work out 100%. You might make it big, you might take a loss. “Yeah it might suck,” says Dr. Chad. “But did you learn from it? Why did the Greeks write tragedies? So you can learn and stay away from those same mistakes.”
Last year when we were wrapping up the year, Dr. Chad was 9 months into owning 2 additional practices and had gone fully FFS in March of 2020. Today, as we wrap up 2021 and look forward to 2022, he gets vulnerable about his struggles this year in the hopes that his experiences will help you avoid some of the same problems. Tune in as we share a candid conversation about:
- What happened with his new locations this year
- When to “back up the bolt”
- Powerful lessons for moving forward
Hello, podcast listeners Welcome to Everyday Practices Dental Podcast, I am your host, Regan Robertson and I am here with my ever faithful ever jubilance ever successful co-host, Dr. Chad Johnson, welcome to the show, Chad.
Dr. Chad Johnson 1:29
Glad to be here.
You are our guest today and last year, we wrapped up in a similar fashion, we just sat down and we kind of chewed the fat on what the year has brought and wrapped it up and kind of a tidy little bow and what we’re looking forward to in the next year and this year, you know, we both went through business-wise, a lot of changes a lot of challenges we set ourselves up for and we work through those and I’m super excited, I need to drop my voice down. I mean, I’m genuinely excited. Excited to be sharing because it’s honest and it’s real and there’s no filter to this.
Dr. Chad Johnson 2:11
and we really haven’t practiced much. We just were trying to come up with problems that would be fun to talk about and I was like, Well, I’ve got a pro. So here’s the interesting thing, the thing that I told you, I said, I’ve got a good start. So you were just like, Well, I mean, it’s not a happy ending and I was like no, it’s not. It reminds me of what like a classic Greek tragedy is in that it’s not a happy ending, but it’s, it’s worth learning about. So you could ask why did the Greeks write tragedies? And it’s just like, well, because you learn from them and well it’s still a story that has an emotion that you can identify with, and then stay away from the pain. So like, if, if the story ends, and he drowned, you know, you could be like, Okay, what’s the take-home, don’t wear handcuffs in the ocean and in the middle of the ocean, you know, I’m just saying is Dini, like, you know, whatever, whatever, whatever he drowned, then don’t do that. You know, it’s even though it’s a tragedy for this person in the story. You can learn from it and be like, Okay, I’m not gonna swim with sharks with meat, meat helmet, you know, like,
Well, I think the most important thing too, is you never want to give off the facade that that being every dentist or Yeah, everything is great. Any business owner and I think that is a major problem. Yep. in dentistry, but in all industries, is that need to project perfection projects, that everything is all right, lead your team, everything, just smooth sailing all the time and that’s we know, that’s not the reality. Right? So last year, when we were wrapping up the year, you had purchased another practice,
Dr. Chad Johnson 3:56
right? I was about what, nine months into having owned two new practices. So I was at three practices total.
Right and then you also had made the dramatic decision to completely drop your insurances. Right? Right.
Dr. Chad Johnson 4:11
So at that point, you know, we were okay, for for the record, I think it was March of 2020, that we dropped all our POS and went fee for service, which at the time, I only had Delta premier left to drop and, um, that that took 60 days to take effect, which we were closed for nine weeks. So while we were closed for nine weeks due to COVID. I set out my 60 days of delta you know, communicated and I use my team to call the patients and let them know this and that send out letters, field phone calls from the patients send emails and you know All that stuff trying to communicate that kind of stuff and so a year ago, we were at the nine-month mark. So now we’re at the 21. Mark 21 month mark of having closed off any BPOS. Wow. Yeah and it
just and I heard that delta is in reimbursing less this year. So the patient pays the same. But now doctors are getting reimbursed less Is that correct?
Dr. Chad Johnson 5:28
I think it has to do with what area you’re in. But that is happening. Yes.
That’s just nuts. So you made those two decisions, right? And it’s been 12 months, right? What is the what? What problems have you had? What problems did you encounter along the way?
Dr. Chad Johnson 5:47
Drumroll. So the thing that I wanted to talk about was my ankle knee office on the north side of town, the dentist that sold me that was working one and a half days a week and the types of patients that he had regarding their insurance policies. Didn’t afford for me to keep many of those patients by the time that I implemented my fee for service, that was quite a dramatic, dramatic change for them. So to start, I think there were 150 to 200 patients
start and is that after they dropped off, or was that what you bought at?
Dr. Chad Johnson 6:29
I probably kept around 100. Okay and so in other words, it was for all the purposes of de novo. Yes and then we opened up and we were doing four days a week, I was trying to think if it was four and a half, but let’s just say Monday through Thursday, and we weren’t getting the calls that we needed. We turned up our marketing, we were getting calls, but then when we said oh, yeah, you know, we’re not necessarily, you know, in-network with that insurance. It was a hangup, you know, almost immediately sometimes.
And Dr. Radius patients we’re very used to,
Dr. Chad Johnson 7:10
right, yes and so that being closed for
COVID Being a new owner of you know, the practice, were two strikes against it, you know, fee for service COVID And being a new owner, three strikes, and the strikes for us. I love the location on the north side of town. There’s a lot of growth in Anthony Iowa, and I was expecting it to just be not necessarily Gangbuster but busy enough and so I then had to as we weren’t getting enough patients, I had to let one of the associates go away.
So did you have associates full time? Did you practice an Anthony, how did I Doctor setup,
Dr. Chad Johnson 8:00
so my normal work hours for clinical were six to noon, and then I would go in the afternoons to some of the different locations. So having three locations, my mainstay location, I would work six to noon and then after six months of you know, when you’re able to get ahead of your schedule, I was able to, to block off time to where every other week I was going between Johnston and on the west side and Northwest northwest side and my Pleasant Hill location on the east side. So the North location though, because it wasn’t getting many patients I let the associates handle that and then I eventually would come up in the afternoons when they needed me or you know, stuff like that, or I would drop in to make sure everything was going good. Okay. Um, but yeah, I ended up not getting, you know, a lot of patients coming in one, I had two associates working there. One was part-time one was full-time, and we switched it to the part-time associate, you know, going up there part time just we weren’t getting the, you know, the appointments scheduled. It just blew my mind it still does and then this September, I think it was the 29th was September 29. We closed the location it was what a year and a half in and well minus COVID closure saying let’s say a year and five or four months in I decided to close it so that’s my transparent if you want to talk about suck timber, you know, like suck timber. You close it in September which closed in October and it was a tough decision. But the problem was if I’m sitting They’re at zero an hour production per hour, as opposed to, you know, other locations doing 1000 Plus production per hour. It’s an opportunity cost issue. Yeah and all the time that I would spend there. It wasn’t paying the bills for that location. So I would be subsidizing it by working at the other locations. Well, at some point, I should just work the other locations, because I’m not able to even pay the bills at that location. Yes. So that’s, that’s kind of the skinny of it, and there came a point when I was just like, you know when I set aside time to work at that North Side and Kony location, it costs me more than if I just didn’t work it. It which is ridiculously a low bar, and sad, but it just was what it was in, in the autopsy of it.
Yes. Are there things that you would have maybe approached differently in purchasing a practice that you feel would have given you a better chance at saving him?
Dr. Chad Johnson 11:09
Um, I. Um, so one issue was, you know,
let’s pretend that the, that the previous doctor had zero patients.
And it was a complete de novo. Well,
so we had a building and some equipment. Yes, yeah.
Dr. Chad Johnson 11:32
Pretty, pretty much. I mean, that’s what I was buying, because it was a good price. I mean, he knew it, I knew it. But in many patients, there where it was, you know, good enough to kind of get it rolling. Um, but we dropped marketing, and we would get calls, but I okay. So if I were to do it differently, do that office as a PPO office first. Yes. Now my problem is I’m stubborn enough that I don’t want to do PPO and I’ve joked around that I’ll go into real estate before I go back into PPO dentistry. I hope I don’t eat those words later down the road, but at least it’s a fun joke now.
And say that again, you would go which to which
Dr. Chad Johnson 12:13
I would like me the joke that I say is I’ll go in because my brother does Realty. So I’m like, I’ll go into real estate before I go back to being a PPO dentist.
Right, right. But,
again, I hope I don’t eat those words in 10 years and I’m like, when it goes on back to being a PPO dentist, under I understand to 95 plus percent of dentists, you know, do some form of PPO. So I’m an outlier. But I think that’s where I like sitting. Furthermore, because I had three offices, that the staff, the team was, was all in one system, it was now a fee for service system. But when I bought the practice, I wasn’t sure that I was going to switch it just yet. But because of COVID, that was when I decided all of the verandah brands is right. But if it was just one office, you could switch it up and take PPO and get a ton more phone calls. Right. Um, so And here’s the funny thing, I closed the office, and I only had one or two prospective buyers, I’m hoping to have it sold here in the next couple of weeks. But he’s just buying it for, like, pennies super cheap, basically just buying it. So that way I can get out of the lease and he can, you know, so it’s a total loss of hundreds of 1000s kinds of stuff. You know, it just it’s a sucky ordeal and that’s why I’m sharing it because it’s neat to be able to hear neat, you know, as a listener to be able to say, I don’t want that tragedy, it’s just like, Okay, well, if you would have started PPO as my first practice that I did, and then 15 years in is when I switched it after you’ve gained trust, and you get decimated by the people that don’t care about that trust, and then you keep half of the people that are like, I trust I trust you enough that I like this. Right? Um, you know, so they stay with you. Absolutely. Yeah. So I think that’s what, but again, I marketed so I wouldn’t change that. But you do need to market, I would have switched it to a PPO and we also, though, had a lot of staffing issues with that office, you know, so a lot of turnover with it. We’ve had that actually at the Johnston office, too and I know that reflects poorly on me, and I hate that, you know, because but COVID just made it rough that people were interested in looking elsewhere. We had a lot of changes going through. We had a lot of patients that weren’t necessarily coming back. So we had a high capacity so we had this kind of shrink. That kind of made it tough to we’ve just got really I mean, some people are like, Man, I’m Gangbuster and I’m awesome. I’m like, I got my butt handed to me, and decimated over the last, you know, year and a half and I’m willing to admit I Chad Johnson and willing to admit that I have not had a successful last year and a half and yet the phoenix rising from the tragedy is that I have learned from it, I’m still around, and I can buy groceries for the family and, you know, so you know, there is learning a lesson that I’ve learned in it. I don’t know, actually, if, in that lesson, I’m able to succinctly express all that I learned from it. In other words, when you live it, there are intangible unexpressible inexpressible lessons that you learn that you can express some of it, but I’ve learned it in my heart and so you know, when someone says, give me the three take-homes, it’s like, well, I mean, that’s good. I can give you three takeaways, but I probably have 17 laid down in my heart that I’m just you know, that I won’t get burned like that again, right? Cuz I’ve lived it not just learned. Otherwise,
well, walking through fire is a cliche. You’ve physically walked through fire, in addition to, you know, mentally walking through fire on fire on fire in it and I think it’s really, I think both our personalities are really aligned, where you would say something like, that’s neat. But I think what the biggest lesson is, you are saying you’re still here, you’re still able to provide and function and move forward and you took a risk and business owners and leaders take risks and walking through fire is that is the name of the game in risk-taking, you know, not everything will work out to 100% Yeah, you buy bitcoin,
Dr. Chad Johnson 16:52
you might have a big payoff, you might lose everything. I mean, talking hypothetically, in the future, I’m talking about some people that you know, you know, have been like, oh, man, I bought high and then I sold low because I scared it’s just like, Okay, well, did you learn something from it? Because number one, that sucks. Number two, hopefully, you learned, so you don’t do it again and yes, there was risk involved and I think you knew that I think I knew that, you know, by interpret that, you know, Vicki was like, oh, no, you’ll be good, you know? No way. No, I said that backward. She was like, I don’t know, like, chat, if you should buy two of them. I mean, how do you say that Carrie said that? Do you know? Oh, so you know, they’re like, oh, that might be a little bit much. I’m like, Nah, I’m good.
I think all of us said it and the conversation that I had with you on the beach when we were volunteering in the Dominican Republic was when you were considering it. I remember that was I’m more of a risk-averse person. Yeah. So you know, I asked you kind of to anticipate some of the things you would go through and you were very dedicated to doing it. You were very dedicated to going through it and some of the lessons that I’ve seen over this past year that you take away are very powerful going forward. So I heard you talk about not anticipating the staff turnover, I do think COVID paid it played a major role in that and I hear that enough times that I could say it’s fairly common when you are acquiring a practice with existing staff that is going to be an immediate Oh, yeah, iteration. Yeah, it happened that my Westside practice too, and I liked and I also liked I understand sitting in your shoes, how you decided to drop BPOS across the board because one, it’s easier from a messaging standpoint, it really makes it takes a stand for your core value of I am no longer doing this. So I understood why you dropped it instead of you know, keeping it in because you really couldn’t anticipate at that time what that was going to do to the patient base.
Dr. Chad Johnson 18:48
burn the ships you know, the mentality for that and so as a burn the ship’s kind of thing to have congruent see between the practices and I, you know, sadly, like I had these practices set up and contracted to purchase before COVID happen. So if someone’s listening, going, in retrospect, well, that was dumb. Why’d you bribed them? You know, so it’s like, well, that was half the problem is, you know, that all hit a few weeks after I signed everything into motion. So it was, you know, it was already into motion it just, you know, yeah.
are you kicking yourself for not having a nest egg to float you through and to make these adjustments, like adding PPS back in and getting your staff aligned and going in the right direction?
Dr. Chad Johnson 19:41
Maybe I should. I don’t, I don’t know like it regarding kicking myself. I don’t. But that’s how risk-averse I am like, I sometimes joke around that I’m kind of a cockroach that when necessary. I can you know, I can survive the nuclear holocaust. financially, too, to work through stuff and I’m just like, oh, just, you know, not fill up my gas tank or, you know, but you know, there are certain things that you can just, you know, drawback really tight and you know, okay, what’s my tight bill? Like, there’s good living, and then there’s the tight living bill. It’s like, okay, I’ve got the kids at school, I’ve got the mortgage and groceries. Okay, here’s my nut that I need to make, you know, how can I make that happen? And I suppose just because I like the bank gave me a line of credit and that was enough to make it work and that might be dumb. So there’s a lesson to be learned for others, you know, to think about, you know, having some kind of nest egg to be able to dwindle away yet, but I’m okay with how I did it. So I think there’s probably a curve for people.
Absolutely, there’s going I think that the majority ends up working on that, you know, the black of a nest egg and just going forward with it and we know it’s not sustainable, long term, but its you know, it is a risk you when you said not to make me think of Danny Hall, our Director of Client Success, she brought in this book called Miller’s bolt, I don’t know if you’ve read it or not. I have not read it, which we’re not even supposed to talk about things you haven’t read yet. But I will say the exercise that she walked our whole company through was called backing up the bolt when things are not going the right way or a problem isn’t it’s friction and friction and friction. So she talked about you know, when you get a new, a new screw and a new bolt, and you’re in your you’re screwing it on and it catches, and it just won’t go past, what do you have to do, you have to back it up a bit and I and I felt that your year was a very tangible example of what happens when you get to that sticking point and it’s not moving, and you can’t move fast enough. Because as an owner, I want I want all of you listeners that have multiple practices to understand and give yourself grace, Chad, it’s easy to diagnose on paper and say, Oh, well, you know, I just should have brought BPOS back. Oh, yeah, you know, done this
Dr. Chad Johnson 22:07
nice job. He should have done those three things and it right work. It’s like, yeah, right. But
you’re also a practicing dentist, you’re also managing to other practices. You’re also a husband and a father and on the school board and a coach and all these other elements and I know my day is discipline to a tee hour by hour, so that I can try to my best to fulfill everything. Right. So. So in that, what is the result that has happened? You you are shutting down that practice? And where are you at today.
Dr. Chad Johnson 22:38
So more clarity in where my productivity comes from and I don’t foresee myself buying any new practices ever, or anytime soon. I mean, listen, I’m not saying it’s bad for other people to do. That’s not my point. But I’ve learned, okay, the two that I have going are really good. Furthermore, the the west side and North Side practice, the two newer ones that I bought, were two different case studies and so they gave me extremes, one had 1600 patients that were fee for service the last 50 years with this doctor and the other one had been open for, you know, two or three years and had just a few, you know, a few handfuls of patients and the doctor was only there a day and a half a week. One was, you know, had an established computer system and the other one was all analog and so I had to upgrade all that, you know, so everything that was positive about the one was negative about the other, and we would sit around and talk about so why, you know, why are we going to buy the West Side practice or the North Side practice and we thought, honestly, that the the north side, Anthony practice was going to destroy the, the, you know, the West Side practice as far as the financial outcomes and everything like it was gonna, and it turns out that it was the other way around. So I’m all for the record. I thought that the Johnston practice, I think it was the majority of my team that was just like, No, the Anthony one’s going to be where it’s at. We don’t know if you should buy the Johnston one and I was like, I think the Johnston one’s gonna do well, but I also liked this opportunity for the Northside one. That’s kind of how it happened. Wow. Take home lessons all together though. Yeah, so now I’m more resolute in working where I’m working to, you know, to fix to help people and not be sitting around. You know, sitting around is okay when you’re investing in the long term, but I’m like, listen, I mean, I’m not just out of school. All right, hungry. I’m like, I’ve got work to do. So. Yeah, I think that’s it.
Well, I like that actually, that was the answer. I kinda was assuming that it would be as I’m going, you know, I’m going back into this all in where I’m really focusing on dentistry and I’m going to focus on the two practices that are running well, yes and I’m going to celebrate that fact. Do you think? Do you think you’ve got, like, just really not, I don’t know if grandiose is the right word, you just like decided, like, I’m just gonna go for it. I’m going to get the three and then I’m going to get five and then I’m going to get 10 practices, you didn’t feel that way? Yep and the result is now you’re like, Whoa, not only not only am I going to go back and just really do well, like Bruce only had one practice, and he killed it and he does talk to that a lot. I’ve heard him say, I just do the one. D and you just said, I don’t think I’ll ever buy another practice. Do you really think you’ll just stay with the two? Yep.
Dr. Chad Johnson 25:57
But, um, part of the problem of today’s answer is the economy as a whole inflation, hiring practices, COVID. All this stuff was not a thing when I first was looking at getting this done. So I mean, there’s been a lot of upside down that a lot of world changes. So if I could go back to an earlier economy, and earlier administrative, helps, etc, then, then that would change the scenario. But you do have to roll with reality,
to be adaptable.
Dr. Chad Johnson 26:39
And the way that I see it, I’m just like, listen, I mean, every year is another year lost of opportunity to, you know, kill it, for your family, for your legacy for you know, your retirement for, you know, who, in essence, who you’re volunteering for. Because when you when we’re generous, and we give money away or time away, or any of our resources, it’s at the cost that we’ve already banked up and so you know, like, if you’re, if you want to be generous with your money, then you still have to think about, okay, well, you could have been more generous if you weren’t sitting around at a an office, that’s not doing anything. It’s just like, that’s not doing anybody any good. If it’s about helping patients, and making, you know, the team, be able to make their, you know, payroll and their goals, not just financially but you know, in in helping patients, and therefore, you get financially rewarded as a business and as an owner for that risk. I’ll tell you what, I didn’t get rewarded for that. That Northside practice as far as the risk pay off, I got spanked and it taught me a lesson just like, this is old school, but it’s like just like a good old fashioned, spanking should do. They should teach you a lesson that you don’t go the next day and do the same dumb thing again, right, you know, and and get in trouble for it and get spanked yet again, it’s just like, Well, you didn’t quite learn that it wasn’t that you didn’t. That’s, that’s not, that’s not smart. That’s or I shouldn’t say that’s not wise,
right? Not wise.
Do you feel like you can control your philosophy of care with associates easier? And well, that’s just kind of a dumb question, isn’t it? You can you can control your philosophy of care easier if you have less practices to bounce from? Yes. So that’s another big issue that we didn’t even address today. I want to address that in the next episode, because that’s really, you know, really important. 2022.
That’s right. That’s right. All right. Well, I am going to close this out because I know in less than t minus five minutes you were preparing to fly away.
Dr. Chad Johnson 28:51
Yes. That was the Phoenix reference, just in case anyone wondered when I
was? Yes. You should put your virtual background up. That’s right now we’re switching hats. You are going to take time with your family?
Dr. Chad Johnson 29:05
Uh huh. Let’s see if I can find it.
I love of course you can find it and it’s always in your that’s not the right one. Is that is that from your area?
Dr. Chad Johnson 29:16
Yes. This is from a snowstorm. A year or two ago. So enjoy that.
Let’s get back to I don’t know. Whatever’s there it is.
There’s the bay. I’m going to boom. Oh, that
looks beautiful. Oh, well. Merry Christmas. Chad. Yes.
Dr. Chad Johnson 29:35
Merry Christmas. Happy New Year.
Merry Christmas to all our listeners.
Dr. Chad Johnson 29:40
Thanks. I gotta buy you a Coca Cola. Right.
Well, thank you. Thank you for listening to another episode of everyday practices, a dental podcast, and leave us some feedback. Give us a review on iTunes. If you enjoy what you’re hearing if you don’t enjoy What you’re hearing email me directly Regan, R e g, a n at productive dentist comm
Unknown Speaker 30:05
Dr. Chad Johnson 30:06
can email me at get lost at? No, I’m just kidding.
We really want to know what type of topics you want us to cover in 2022. So I really do reach out, please reach out say hello and let us know what you think and what you’d like to hear and we look forward to serving you in 2022. So Merry Christmas, everybody. That’s a wrap
Dr. Chad Johnson 30:26
Thank you for listening to another episode of everyday practices podcast. Chad and I are here every week. Thanks to our community of listeners just like you and we’d love your help. It would mean the world if you can help spread the word by sharing this episode with a fellow dentist and leave us a review on iTunes or Spotify. Do you have an extraordinary story you’d like to share? Or feedback on how we can make this podcast even more awesome? Drop us an email at podcast at productive dentist.com And don’t forget to check out our other podcasts from productive dentist Academy at ProductiveDentist.com/podcasts. See you next week.