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Breaking
Down the Fee For Service Barrier
Undercharging patients
by as little as 7% or 8% each year translates into thousands
of dollars lost to the practice. Undercharging by 40-50% and
you are talking serious financial hammering. And that is exactly
what is happening. Many dentists have fees, seemingly
set in stone, that are only in the 50th to 60th percentile
for their areas. The resulting cost to the practice is astronomical.
Yet many dentists
would rather turn cartwheels across the waiting room than
address the issue of fees. The process is laden with anxiety
and trepidation. Well, it’s time to take the fear out
of fees. Step back and realistically look at your income,
your costs, and the dental experience you are providing every
patient that walks through your door.
- Time
and materials are COSTLY. Evaluate the time required
for each procedure, the fixed expenses necessary to run
the office, variable expenses including supplies and lab
fees, income required per hour to compensate you, the dentist.
- Look at where
your expenses are as compared to where they should be. Examine
gross income and establish a goal to rein in expenses
so they line up according to the following benchmarks: Laboratory
expenses – 10%, dental supplies – 5-7%, Rent
-5%, Employees’ salaries – 19-22%, payroll taxes
and benefits – 3-5%, miscellaneous - 10%.
- Consider
your production goal to determine the number of
days per week you will see patients and the number of hours
you will spend on treatment. If your annual production goal
is $850,000, you work 48 weeks a year, 36 hours per week,
your hourly production goal is $492.
- Establish
a solid fee for each service and no waffling.
- Increase
income even before you increase fees. Overlap patients
during the first and last 10 minutes of each appointment
or schedule Assistant/Doctor time.
- Know your neighbors.
Study the fees of other dentists in your area as well as
the income demographics of your patients. But remember your
fees should reflect the quality of the dental experience
you provide. Your standards may be far different
than those of the dentist down the street.
- Adjust
your fees twice a year, 2% then 3% for an annual
increase of 5%.
- Provide
payment options. Establish a relationship with
a patient financing company, such as CareCredit™.
You have established
a trusting relationship with your patients and few people
seek out healthcare providers based on who is the cheapest.
Patients want quality dental care and they recognize that
care has a price.
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"I
knew we had great potential to be an exceptional office,
but we did not have the know how. Giving us all job descriptions
really gave us the direction we needed. I feel we now have
direction and our possibilities are endless."
Rhonda, Office Manager
Invest
in the people who can make a difference in your practice.
The
Center for Dental Career Development
Advanced Business Education for
Dental Professionals
For
current information 
 |
|
|
Technology
Tool Box
 |
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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Avoiding
A Data Mess
About six
months ago, I wrote an article on the importance of
keeping your data “clean”. This week I want
to focus on how to avoid the mess in the first place.
Dirty data causes all kinds of problems in dental practices.
The most common are poor customer service, inaccurate
reporting, all the way to missing production opportunities.
I do not expect dentists to have to maintain the database
in your office. The person responsible for the specific
business systems (hopefully in their job description)
should be responsible for keeping everything as clean
as possible.
Where
does the data mess come from?
- Double
entry: Things happen quickly in a dental practice.
It is not uncommon to see two patients at the front
desk and two phone lines ringing. In a hurried environment,
team members tend to “add” data before
looking to see if it already exists. The most common
double entry mistakes are patients, insurance companies,
and insurance plans. This mess wreaks havoc on your
system’s ability to process patients properly.
- Mistyped
dates: Most of the practice management systems will
recognize a mistyped date. Some date sensitive records
will warn the user if the date “looks”
wrong to the program. Others will do nothing. The
programming design in general is inconsistent. Therefore,
you should take steps to make sure those mistakes
don’t show up as dirt at a later point in time.
Erroneous dates normally show up in the transactions
or ledger. You can run transaction (or ledger) reports
with date ranges from 1900 through the month before
you started using the system. This will find any erroneous
“early dates”. Then, run a transaction
(or ledger) report with date ranges from tomorrow
through 100 years from now. That will catch the erroneous
“later dates”. Fix any entry it finds.
- Staff
turnover: This is probably the biggest cause for dirty
data. It doesn’t really matter if the new employee
has experience with your particular practice management
system. They may have used it differently in a previous
office. Humans are creatures of habit. The new team
member will invariably create dirty data somewhere.
- Inconsistent
abbreviation at data entry point: BCBS or Blue Cross
Blue Shield? Prudential or The Prudential? Guardian
or The Guardian? In a “lookup” window
in your software, these entries will be in two very
different places on the list. Most lists are sorted
alphabetically when you are viewing them on screen.
If you’re searching for “Prudential”
visually, and the person entering information typed
in “The Prudential”, you won’t find
it and will ultimately add another of the same plan
or insurance company. Same thing holds true for patient
names. MacDonald? or Mac Donald? The point is, the
things you are looking for could already be there.
You and the person who entered the data just aren’t
on the same page with abbreviations.
Consistency
Meeting
I know, it sounds kind of elementary doesn’t it?
But, I would be willing to bet 99% of the readers have
more dirty data than they realize.
Print the
data entry screens of your software. Over a working
lunch, go field by field with the team. Discuss the
following:
- Before
you add something new, everyone needs to get into
the habit of looking to see if it already exists.
- Everyone
needs to agree and be consistent on abbreviations
in your office. Show some examples to the whole team.
Come to a uniform and consistent agreement.
- The team
needs to know that your system’s audit trail
will trap who made the mistake when mistakes are made.
It’s up to you, but you might want to have the
offender held responsible for cleaning up the data.
- If you
don’t know how to run an audit trail to find
out “who” is making all the mistakes,
find out NOW!
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Dear Sally,
Following your visit to my office
in the late 80's, my practice is producing way over 100% from that
time with 55% overhead. With some fine tuning, I know we have room
for growth. Thanks for all you have done for my practice and my
personal life. Your management assistance has allowed me to live
a high quality life all these years and spend quality time with
my family. I just wanted you to know that you are not just a practice
management consultant. What you do for our professional lives ripple
affects the quality of our personal lives, as well. Looking forward
to working with you again.
Best Wishes,
Scot Mardis, DDS
Terre Haute, Indiana
How
satisfied are you with your practice?
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Center for Dental Career Development. Sally McKenzie and her
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·
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The
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Test
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The
Center for Dental Career Development
Advanced Business Education for Dental
Professionals
1-877-900-5775
737 Pearl St. Ste. 201
La Jolla, CA 92037
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