4.21.17 Issue #789 info@mckenziemgmt.com 1-877-777-6151 Forward This Newsletter
 

Practice Profits Down? Here’s How to Fix It
By Sally McKenzie, CEO

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For the most part, you love your job as a dentist. You love helping patients reach their oral health goals and getting them back to optimal health. But the business side of owning a dental practice, that you could do without.

Most dentists have little interest in running a small business, but unfortunately it’s part of the package. If you want a successful, profitable practice, you really have to embrace your role as CEO – and that includes paying attention to practice profits and understanding what influences revenue losses and gains.

The good news is, you don’t have to figure this all out on your own. I can guide you through it. To get you started, I’ve put together a few tips to help you grow practice profits and finally reach your full potential.

Start with a 10-Point Financial Assessment
When I talk with dentists who are struggling, many of them don’t know much about their practice financials. It’s important to get a good handle on this before you try to make any improvements. To do that, I suggest you ask yourself these 10 questions:

1. Are you bringing in as much money as you believe you should/could be?
2. Are you saving enough for retirement?
3. Are you waiting to start saving for retirement until practice income increases?
4. Do you ever skip making payments to your retirement fund?
5. Do you have enough revenue to cover continuing education for yourself and your team members?
6. Do you hesitate to make investments in equipment because you’re worried about how much it costs?
7. Do you delay improving your practice’s appearance because of the expense?
8. Are you effectively marketing your practice and your services to existing and prospective patients?
9. Are you concerned about staff raises?
10. Do you feel like you can’t possibly work any harder?

Once you honestly answer these questions, you’ll know if your practice’s financial health is holding you back – both personally and professionally. From there, you can start making the necessary changes to get back on track.

Develop a Financial Policy
Having a policy in place will help ensure you get paid on time. This policy should make it clear when and how payment is expected from patients. Here are a few elements I suggest you include:

• Third party patient financing. Many patients skip treatment simply because they can’t afford it. Offering third party financing from a company like CareCredit will help make these patients more comfortable going forward with treatment, thus boosting case acceptance and your bottom line.

• Electronic billing. This saves your front office time while also making it convenient for patients to pay their statement balance online. You get paid faster and team members can focus on other tasks.

• Reward patients who pay upfront. Consider offering a slight fee adjustment, maybe 5%, when you receive payment for a large case upfront. Refer to this as a bookkeeping adjustment rather than a discount.

• Collect payment before patients leave. Let patients know you expect full payment at the time of service for all procedures that are less than $200. I also suggest requiring insured patients to pay at least part of the amount they’re responsible for before they leave.

Once you develop a written policy for your practice, hand it out as part of the new patient packet and remind existing patients of the policy before they start restorative or elective services. I also suggest you post the policy on your website.

Educate Patients about the Value of Dentistry
If all you do is collect money at the end of an appointment, patients won’t understand the value of the services they just received. Use this as an opportunity to educate. Train your team members to say something like this:

“Mr. Watt, the doctor performed fillings on three teeth. This involved seven surfaces, medication in each tooth and anesthetic.”

Now the patient knows exactly what he’s paying for and that the service provided was much more than just a filling.

It’s also important to be clear when telling patients the fee for services:

“The charge for today’s restorative treatment is $427. Would you like to pay with cash, check or charge? We’re happy to submit your insurance claim. The payment will come directly to you.” 

Running a dental practice isn’t easy. There’s a lot to think about that goes beyond providing exceptional patient care. To be successful, you have to focus on the business side as well as the clinical side, and find ways to increase profits. These tips will help get you started. If you need more guidance, don’t hesitate to contact me. I’m always happy to help.

Next week: Three ways to improve collections and grow practice profits

For additional information on this topic and more, visit my blog: The Lighter Side

Interested in speaking to me about your practice concerns? Email sallymck@mckenziemgmt.com
Interested in having McKenzie Management Seminars speak to your dental society or study club? Click here.
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