Episode Transcript

Auto-generated transcript: Dental Bookkeeper Mara Johnson interviews Prosperident's David Harris

You are listening to the dental practice owner's podcast. Brought to you by Prosperident. From our unique perspective as dentistry's and bezel-lit experts, Prosperident's team can bring you the information that is important to practice owners. The dental practice owner's podcast brings you strategies, tools and tips that you can use, and dentistry's thought leaders as guests.

So sit back, relax, and listen to Prosperident's Amber Weber. Wendy Askins and David Harris. Talk about the issues that matter to you.

Hi, I'm Mariah Johnson with MJ Dental Bookkeeping. And I am very honored to have David Harris with us today. He is the CEO of Prosperident and is the dental investment expert. And it's been doing this for, I believe, three decades. He is very much a sought after speaker and is the author of dental investment, the art of theft and the science of control. And he has taught me everything I know about dental investment. So it is a huge honor to have you here.

It's great to see you, David. Great to see you, Mariah. I'm really flattered that you asked me to do this. Likewise, well, thank you. So a lot of people ask me, is this really a problem in general practices? So what would you say to that? It definitely is pinning down the exact numbers is a little bit of a challenge sometimes. And I'll maybe touch on why in a minute.

But it's safe to say that if somebody is graduating from dental school today, there's probably an 80% chance that they'll be embezzled at some point in their career. There's about a 40% chance that they'll be embezzled more than what's. Wow. Wow. The confounding factor in measuring the numbers is that some embezzlement never gets detected probably. And some gets detected but never reported anybody. And those two things sort of make the final number of it elusive.

But the 80% is pretty safe. Yeah, so many people never even know. I just, I think I told you recently about a friend of mine who's dad had a dental practice and was embezzled for 15 years. Sold the practice and didn't find out about the embezzlement. That was almost a million dollars until two years after the practice. So sometimes, Dennis have no clue it's even happening. It's very true. And what I think some of the audience may not realize about embezzlement is how interactive a crime it is.

In other words, how much it is dependent on the person who's doing the embezzling, starting by studying their adversary, the dentist, and saying, alright, what does this person look at? And more importantly, what don't they look at in their practice? And then the embezzler builds a scheme that is designed to bypass whatever the doctor looks at. That's custom made schemes. Well said, yeah, it really is. Well, what are some of the misconceptions? Because I feel like there are so many about how to how to find this and just on the subject in general.

Well, let's start with vulnerability. A lot of dentists convince themselves that they're not likely to be embezzlement victims. And let's face it. Life is more comfortable if you can if you can talk yourself into that. And I hear a lot of reasons why people think they they won't be victims. For example, my staff have been with me forever. Or I live in a small town and really embezzlement is an urban problem. You know, it happens in big cities when you end up hiring people, you don't know very well.

I put that one. Yeah, but all my you know, all my staff started out as my patients. So I know them really well. The thing I'll say about embezzlement, Mara, is that it's a selfish crime. So the person who's doing it doesn't think about their victim or the situation or anything else. It's about me, me, me. I mean or I want. And so there's no there's no immune practice.

There's no practice where the circumstances mean that somebody will never be embezzled. Another one that I hear a lot. And this is a this is a good way to illustrate the point of making is I pity my staff really well. And the typical embezzlement will take between two and four percent of a practice is gross revenue. So on a practice that that brings in a million dollars a year, that translates to somewhere close to forty thousand dollars that an embezzler can be stealing. When a hairdo doctor say that she pays her staff really well, she's talking about sort of one or two dollars an hour above the local going right. It comes nowhere close to scratching that it's right. And then you have the embezzlers who aren't stealing because they need the money.

They're stealing to address an ego deficit. You know, they feel underappreciated by society or more specifically by the practice order. And they're stealing to take what they think they should have received in the first place. And for those people, it doesn't matter what you pay them. But it's almost irrelevant. The real question is what they believe they should be paid, which is invariably a bigger number. You talk in your book a lot about justification. Yeah.

And how, you know, someone that works in a don't practice, they're seeing all that money coming in. They don't know what the loan payment is. The student loan payment for that dentist. They don't know all the expenses they have. They just see that money coming in and so sometimes they feel like, hey, I'm doing all this work for the dentist. I need to get a cut, you know, I need to get a piece of that. So they don't, they don't always appreciate what the dentist has gone through to get where he is. Or she is.

Every staff member over estimates how much the dentist takes home. You know, partly because as you say, some of the overhead is invisible. Right. To the staff, even the stuff that they see, they tend to kind of forget about on a day to day basis because you're right. They see lots and lots and lots of money in there in their in their scale coming in. And they just assume that their dentist is is walking home with the gross revenue, which we and every dentist in the audience knows is just not remotely possible. Yeah. When you think about a dentistry is a fairly high overhead business.

You know, and and for most of your your audience probably overhead in the 60 to 70% range is not uncommon. So the difference between gross and that is significant. But yeah, every embellish or who. I've ever talked to about this, had just a very worked perception of how much the doctor actually took home. And then the student loans alone. I don't know what the average student loan amount is,

but it's quite large six figures, usually. I don't think for somebody graduating today, 400,000 would be out of the question. So you're right. There's a significant investment in education and it has to be recouped. And the other thing that I'll say about every dentist is that they made a choice.

You know, they could have left school after their undergrad degree and become a drug rapper, work for Henry Shiner, something like that. And they chose to forgo that and spend another four years if they're