Where Have All Your Patients Gone?
The numbers are in and you’re ignoring them. I’m not talking about your profit and loss numbers, or the number of times you’ve had to replace staff, or the number of patients accepting treatment, although those numbers are all vital to your practice profitability. The number that I’m referring to is rarely the focus of your attention, yet it has the potential to have the greatest impact on your profitability. What is it? Your patient retention numbers.
While many dentists tend to be overly concerned about the number of new patients coming into the practice each month, patient retention is where practice profitability is best achieved. Don’t believe me? Consider a few statistics: A 5% increase in customer retention can yield a 25%-95% increase in profitability, according to Harvard Business School. And the Gartner Group notes that 80% of your business’ future revenue will come from 20% of your existing customers. Marketing campaigns targeting existing customers commonly see success rates as high as 70%.
Still not concerned about patient retention? Consider this: A recent McKenzie Management survey of dental practices in business for an average of 22 years revealed a patient retention ratio of 31%. In other words, for every 10 new patients that come to your office for an appointment once, at least seven will never return. If that doesn’t cause the sweat to begin to bead across your forehead, let me drive the point a little closer to home.
Let’s say you have 1,000 patient records on file. Do you realize that more than likely you have a mere 300 active patients? “Oh Sally, I’m sure that may be true for those other dental practices, but not mine. You should see my schedule.”
I understand it is far easier and much more reassuring to pull up the schedule and see that there are but a few openings here or there. After all, what dentist would want to consider that the appointment failures, cancellations, and empty reception areas are symptoms of a serious patient retention problem? Certainly, we are all in denial about something. But if you want to confirm in your own mind that your patient retention numbers are solid, and enjoy the satisfaction of knowing that there is absolutely no need to even consider the possibility that two thirds of your “robust” patient base is merely a figment of your imagination, click HERE to take my Patient Retention Assessment and carry on. Those of you who want to know how to keep the majority of your patients returning to your practice, continue reading.
If you are currently retaining 31% of your patients, and you could increase that by another 54% to 85% - which is the increase that McKenzie Management clients typically experience - how would that improve your practice, boost your team’s morale, and bolster your profitability?
How do you get there? First step: Pay attention. It is the most obvious yet most overlooked variable in improving patient retention. Far too many practices commonly choose to ignore unflattering patient comments. When patients make the effort to tell you something that is less than positive about your practice, your staff, your schedule, etc., take note. These brave souls are carrying the message for countless others who felt the same but never cared enough to share their opinions and experiences directly with you or your team. Instead, they complained to their colleagues, co-workers, friends and family members, and may have even shared their frustration on social media.
Another often overlooked variable in improving patient retention is failing to build positive, personal relationships with patients. Chatting about the weather for three minutes or less every six months is not relationship building. Relationships take time and energy that extends well beyond small talk, yet the return on this investment is huge.
Sadly, we walk into far too many struggling practices where the doctor is performing superior dentistry only to discover that patient retention may be as low as 20%. Why? Some of the very best clinicians disregard the value of patient relationships. They bury themselves in the oral cavity convinced that their work there should be enough. It’s not. For all the methods and systems essential to acquiring and retaining patients, there will never be one that surpasses the value of building strong practice/patient relationships.
Next week, why patients leave.
For more information on this topic and more, visit my blog: The Lighter Side
Interested in speaking to me about your practice concerns? Email email@example.com
Dental Insurance for Dummies
In the world of practicing great dentistry, dental insurance shouldn’t be a game changer. However, it carries heavy weight in the patient’s perception of whether or not to have dental work completed. Even though the maximums (for the most part) hover around $1000 to $1500, and have remained the same since the inception of dental insurance in the late 1960s, the statistics of patients seeking dental care are about 70% more than those without dental insurance.
If you are fee-for-service but accept assignment of benefits for all PPO insurance, you still have to play the insurance filing game correctly or you will lose patients. Your Business Coordinator or Insurance Coordinator is expected to be the “expert” - but he/she should never imply to be anything but a mouthpiece for what the insurance company has communicated about the patient’s eligibility and coverage. The following is a list of important information necessary to file claims correctly:
1. Update your software, because that is the source of updated CDT (Current Dental Terminology) codes and changes in the claim format. Without these updates, claims will be denied.
2. Accurate coding is mandatory or you will raise flags of possible fraud with the insurance company and lose the trust of your patients. Choose the code that best identifies the intended procedure that was or will be performed. If a code does not exist to accurately describe what was performed, use the 999 code matching the category and a clearly written narrative. Submitting 999 or miscellaneous codes without a narrative usually results in non-payment
3. When creating a narrative, you must verify that the doctor’s clinical notes support the narrative. If they are vague, clarify the procedure with the doctor or hygienist.
4. Narratives are required of many procedures and especially necessary when the x-ray does not support the procedure. For instance, if the existing composite restorations are washing out and exposing dentin, this may not be picked up in an x-ray. Narratives should be brief and concise and contain the words from the clinical diagnosis such as fracture, recurrent decay, pain to loading, decay at margin undermining existing crown, etc.
5. The more accurate information provided the cleaner the claim and the faster it is paid.
7. The smallest detail can prevent a claim from getting into the insurance system, even if it made it there electronically.
8. Make sure you have the correct name of the patient as it appears on the insurance eligibility, no nicknames. Correct name and spelling of the subscriber. Correct address. Correct date of birth. Correct gender. Correct relationship to subscriber, such as spouse, self, child, dependent, or other. Correct group number and employer. Correct subscriber identification. Some insurance companies still accept the social security numbers but would rather have the subscriber ID. Some will not accept the social security number, putting your claim in the denied pile.
9. Indicate the number of x-rays you are sending on the claim and other documentation.
10. Indicate the initial placement of a crown or prosthesis. If replacement, you must have a date of prior placement. Ask the patient to try and remember and let them decide on a date. The narrative must include reason or replacement.
11. The treating doctor and billing doctor information must be accurate. If you have added an associate or have moved the practice, updating the credentialing is mandatory or payments will be denied or sent to the last address of record.
12. Authorization for signatures on file must be explained to the patient so it is understood that the payment on the claims is coming to the doctor.
13. If there is a secondary claim involved, checking eligibility to confirm which plan is primary will solve delay in receiving primary benefits. After receipt of primary benefits, the explanation of benefits or EOB must accompany the secondary claim.
14. For prosthetics, determine whether the claim will pay on the preparation date or the seat or cement date. When doing a Cerec crown the preparation and seat date are the same due to the one appointment process.
15. When doing electronic attachments, make sure they are labeled correctly. Check for accuracy of the x-ray, such as being able to see the apex of the tooth for a final root canal record.
These are key points, but this list is not complete. Remember that if your claims are not paid in a 30 day window, something is wrong and you must investigate.
Learn more by calling McKenzie Management today and sign up for our Professional Business Training Program.
Building Your First Practice? Do This, Not That.
Congratulations! You’re building a new practice. It’s an exciting time. You have the opportunity to create the space that you want, according to your specifications. You have a loan from the bank that you are confident will be plenty to build your dream office. Sure, some expenses are coming in north of what you had originally anticipated. By the time you found the almost-perfect location and the right builder, it was going to stretch the budget, but you think it will be okay. Granted, the cost of equipment and high-end finishes are teetering on the brink of over the top, but you don’t want to miss the salesperson’s special offers and great deals that they promised to cut “just for you.”
And, well, you’ve waited a long time, at least seven or eight years when you count the four years you spent dreaming about this in dental school. You want to do it right. And why shouldn’t you? Sure you might have to dip into the amount that was reserved for working capital a bit, and the construction delays are going to be a challenge to manage. Then there was that compromise you had to make on the location. But, hey, having that video gaming parlor next door might provide access to a patient niche that you hadn’t considered. And you are confident that you will be making money in no time.
There you have it - the typical practice start-up fantasy. We see it time and again, almost without exception dentists underestimate the cost, the time involved, and the headaches that commonly accompany the process. They’ve never built a practice before, but they’ve talked to fellow dentists who have, and thus they believe they know all there is to know about it.
The stakes are huge, yet too often dentists go into it with an over-simplified view of what is involved and an unrealistic perception of the budget. They see the building and the equipment as the sum total of what they will need to spend. They become impatient with the process and settle for less than ideal space or locations that will not lend themselves to the type of practice they want. But they convince themselves that everything will be fine. They will make it work; after all they are dentists.
If only all it took were the initials DDS behind a name to make every start-up a guaranteed success. Instead, like dental school, it’s a whole lot of work and money. When it’s done right, there are no regrets. When it’s not, the “woulda, coulda, shouldas” will haunt a doctor for decades.
Building a new practice requires a detailed budget, a clear business plan, and a team of well-qualified experts – specifically, your accountant, your attorney, your insurance agent, and your practice consultant – to protect your interests. Each plays a critical role in the process, from the very moment you are considering making this type of investment in your career.
For example, your attorney should review key documents throughout the process, such as the build-out agreement with the office designer/contractor, the lease agreement, the articles of incorporation, and the many licenses, permits, registrations, and certificates from multiple governing bodies that are required before you can open for business. Your accountant will help you assess your financial situation and assist with your accounting systems. They can also advise you on various financing alternatives and help you assess the pros and cons of each. Your insurance agent will make sure that you have necessary building and property coverage, liability coverage, and other insurance appropriate for your practice.
Your consultant will make sure that you are poised to be profitable when the doors open. They are your go-to person for developing a detailed business plan, which is commonly a requirement in securing financing for a start-up. They should also be able to provide demographic assessments of the prospective practice locations and help you select a financial institution that best understands the unique challenges that your start-up practice faces. Additionally, they are an essential source for contacts and vendors in the dental marketplace – not just random salespeople whose primary motivation is making the sale, not building the relationship.
Most importantly, your management consultant makes sure that you have the systems in place to ensure that patients are choosing your practice, accepting your treatment, and paying your fees from the first day you open the doors to your beautiful new office.
Starting a new scratch dental practice? McKenzie Management can prepare you to face business challenges with confidence and provide you with experienced and professional support in your dental practice start-up. Details can be found HERE.
Interested in speaking to Gene about your practice concerns? Email firstname.lastname@example.org
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