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Lab
Expense is Below Budget … and that’s a Problem?
So you are feeling
pretty smug, eh? The practice budget is looking better all
the time. In fact, there are some areas where you are coming
in under the benchmark regularly. Only one small problem …
the area that is consistently under budget is the line item
for laboratory expenses. That is not a good thing.
If your lab expenses
are less than 10-12% of your monthly collections, chances
are production is not where it could or should be. The 10%
figure is based on the industry standard that between 35-45%
of production involves work on crowns, bridges, veneers, inlays,
dentures, partials, and the like.
However, if lab
expenses are over 10% of gross production, the problem likely
rests in the area of collections or lack thereof. Although
some particularly costly procedures may require more flexibility,
generally patients receiving treatment over $200 should be
expected to pay at least half at the time treatment is started
and the balance at the time the "laboratory" treatment
is delivered to the patient. |
Sally’s
Recommended Actions
- Generate an
aged accounts receivable report. Randomly look at patient's
account ledgers that show a "high" dollar amount
in the "current" column of the report. You are
looking for patients who have had crowns, bridges, veneers,
etc. performed and zero to minimal money was collected from
the patient.
- Bring this "evidence"
to the Financial Coordinator and reiterate your payment
expectations, i.e., all treatment must be paid for at the
time it is delivered to the patient.
- Educate the
Financial Coordinator to understand that the practice has
generated a laboratory bill and insufficient monies have
been collected in order to pay the bill.
- Accept credit
cards and participate in patient financing programs, such
as CareCredit. Payment options are essential in encouraging
patients to pursue comprehensive dentistry.
- Evaluate your
fees in comparison to the laboratory charge. If the lab
charge is $135 the treatment fee should be 6 to 7 times
or $810.
- Ensure that
the Business Coordinator fully understands the financial
policy and is professionally trained to execute it.
When it comes
to lab work, your goal is to be a perfect 10. |
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| Technology
Tool Box
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Mark
Dilatush
VP of Professional Relations
for McKenzie Management
Mark@mckenziemgmt.com
1-877-777-6151
Ext. 28 |
A series of short
weekly chores designed to keep the return on investment
in technology at its highest level.
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If you missed any of the previous issues
CLICK
HERE.
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Lab
Tracking:
Since Sally wrote an article about lab costs, I thought
it would be appropriate to further explain Lab Tracking
using your computer system.
Purpose:
- Enhance your patient service experience. Completely
avoid the embarrassment of not having a lab case ready
for an appointment. Stress free management of your
lab/office relationship.
What
to do:
- Set
up your computer system properly. There should be
a setting in the ADA code area that allows the system
to open or close a lab case once you post the appropriate
code (2750 for instance). Your computer system should
have a lab database as well. Add your labs and their
appropriate information.
-
When you post the code to a patient’s ledger
and the system opens up a lab case, tell the system
which lab it’s going to. Your system should
calculate the normal return date of the lab case.
- When
the patient schedules to have their work inserted,
attach the lab case to the appointment. It should
be a simple drop down list on the appointment screen.
- Every
morning, run a list of outstanding lab cases and tape
them on the wall next to your case trays. Have the
person who is responsible for receiving the lab cases,
highlight the list of all received and “confirmed”
cases. A confirmed case is one that is believed to
be complete and correctly done. In other words, ready
for the patient’s arrival.
-
At the end of each day, someone is responsible for
taking the “confirmed” cases and marking
them as “returned” in your database. Throw
away that day’s list.
-
Your computer system should warn you when making and
confirming appointments that there is a complete or
incomplete lab case present and connected to each
appointment.
-
Some computer systems allow you to enter your invoice
totals from the lab cases and run monthly lab reconciliation
reports. For those of you who own a system that does
this, I strongly recommend you do so. It makes reconciliation
a breeze and catches lab invoice errors.
How
long will this take you to implement properly:
- Setup
will probably take you an hour or so. Daily management
is miniscule … maybe 5 minutes per day. The
resulting benefits far outweigh the setup and maintenance.
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|
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You have 7
work days to reach your year end GOALS
. . .
•Will your production exceed last
year minus fee increases?
•Will your patient retention increase
to add days of hygiene?
•Will you take home more money?
The TOP 4 concerns
of 2002
•Staffing •Scheduling
•Hygiene •Cash Flow
Will you make it?
Take this test
to find out!
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