Athena Consulting: Dental Practice Solutions

Last time I heard the statistics, they indicated 35 percent of all dental practices will experience embezzlement at some point in the life of the practice. I believe this number to be much higher because many doctors do not report or prosecute embezzlement. They do not want their peers to know they have been a victim in their own practice.

Because so many cases of embezzlement go unreported, the dental staffers who do it go on to work in other offices and continue this very destructive cycle.

First, let’s address the reasons people embezzle. All people have reasons for behaving as they do. All people have developed behavior patterns that, once established, can’t be changed without a significant reason. The principle of cause and effect applies to the relationship between a change in some aspect of a person’s life and an accompanying change in that person’s behavior.

There are three primary motives for a person to embezzle:

• Need for money.
• Revenge.
• Excitement.

What symptoms do embezzlers display? While there is no such person as an “average” embezzler, most employees who embezzle consistently display universal crisis “symptoms.” These signals serve as a warning that an employee is unbalanced mentally, physically, emotionally, spiritually or financially. These clues are often apparent to doctors and other dental staff, who are in daily contact with the employee.

Demonstrating any one of these symptoms does not mean an employee is embezzling. He or she might just be at risk of a breakdown of morals, values and ethics, and intervention may prevent an escalation of the imbalance. As you review these symptoms, recognize that most people have demonstrated at least one such behavior or lifestyle event at some point in their lives.

The listed symptoms all involve a significant change in behavior, attitude, lifestyle or job performance. Active embezzlers generally display addictive behavior, and simultaneously demonstrate three or more of these symptoms:

• Displaying a suddenly enriched, extravagant lifestyle, unsubstantiated by normal wages.
• Frequently requesting cash advances, or delaying repayment of prior loans.
• Receiving telephone calls at work from creditors.
• Having wages garnished.
• Borrowing constantly from fellow employees, and seldom repaying them.
• Displaying careless or sloppy work habits; failing to follow instructions or giving conflicting instructions; making unusual errors in judgment; being absent frequently from the work area; suffering repeated or unreasonable accidents on or off the job; or other significant changes in behavior, attitude or performance.
• Failing to report for work or offering poorly explained absences; being chronically tardy and leaving work early; or taking excessive advantage of available sick time.
• Refusing to take time off, or passing vacation options.
• Constantly working overtime without sufficient reasons, and often without pay.
• Gambling at the workplace, or excessive references to gambling activity.
• Making references to current excessive consumption of alcoholic beverages; consumption of alcoholic beverages during the work day; or evidence of frequent hangovers.
• Making references to substance abuse of a drug other than alcohol, either the overuse of prescription medication or consumption of illegal drugs; substance abuse in any form during the work day; or evidence of the cumulative effects associated with substance abuse.
• Making references to significant domestic problems; telephone calls received at work from family members regarding domestic problems; or evidence of physical, mental or emotional spousal anise and accompanying signals of distress.
• Meeting with questionable associates at the workplace; and
• Creating disruptive or erratic behavior; displaying withdrawn or preoccupied manners; inappropriately displaying anger and frustration; suffering from extreme mood swings; and displaying a visible deterioration of physical appearance, and mental and emotional stability.

How do dental staff embezzle from the practice? In every way possible, and I have first-hand stories that would make any doctor’s hair stand on end! A few examples:

• Not balancing at the end of each day.
• Not posting charges and pocketing cash receipts.
• Not posting insurance checks, applying a ‘credit adjustment” to a patient’s account, forging the doctor’s name on endorsement and depositing the checks into a personal account.
• "Borrowing” from petty cash and never repaying the "loan "
• Having signature rights on the office checking account
• Opening an office checking account under your name, using your Articles of Incorporation and depositing receivables into that account from which staffers then write checks to themselves.

Your dental consultant can implement safeguard systems within your practice to prevent embezzlement.

When providing management consulting services to a practice, I always look for signs of embezzlement in the management reports. It’s not unusual for an employee to quit her job once a consultant is brought into the practice. That staffer will usually object the loudest and is usually the one who has been embezzling.

Have you been - or do you think you are - a member of this club?