Practice Profits Down? Here’s How to Fix It
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
1. Are you bringing in as much money as you believe you should/could be?
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
• 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
“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 email@example.com
More New Patients!
Front Office Training Course #FO312
“Dr. Ge” and “Dr. De” (names have been changed) signed up to have their three Patient Coordinators take McKenzie Management’s customized Front Office Business Training Course because their practice numbers were in decline. New patient numbers were only 3-4 a month, but retention was fair at 70%. Yelp reviews and Demandforce reviews were good, parking was easy, signage and visibility was fine – so what was the problem?
To attract new patients and keep existing patients loyal, most dentists opt to accept the conditions of Preferred Provider Network insurance. It is observed that most dental practices have a diversified mix of in-network, out-of-network and non-insured or cash patients. Currently, PPO accounts for about 70% or more of practice revenue, unless the practice is fee for service with limited PPO out of network.
The coveted patient has always been the fee for service patient who is not bound by the policy restrictions of insurance networks. Attracting cash or fee for service patients is always desired, but the bulk of services are purchased by those with dental insurance.
In the past 15 years or so, the demand and purchase of dental insurance has changed. A study done in 2002 revealed that PPOs accounted for 42% of dental plans. Today the amount has risen to 85% PPO. Most new patients who call to make an appointment will have some type of PPO dental insurance benefit plan.
The demographics of Dr. Ge and Dr. De’s practice revealed a community of many large firms, including the biotech industry and local university. There isn’t a rational reason why a practice that accepts six major PPO network plans should not have a higher new patient count, unless there are poor internal systems in place. The doctors had scripted the front office team to be honest with patients who were not in-network by saying:
“We take your plan but there may be limitations in the coverage and your plan may not cover everything. You will be responsible for paying deductibles and copayments at the time of service.”
They wanted to make sure patients were not misled. Although the disclosure was supposed to eliminate disgruntled patients, it appeared to instead be eliminating patients.
Since Dr. Ge and Dr. De accepted assignment of benefits, they wanted to make sure the patients understood they were taking a risk by waiting for insurance to pay. That is why they collected the deductibles and co-insurance (co-payment) at the time of service. Collecting deductible and co-insurance at the time of service is standard operating protocol and is supported by the insurance companies. Dr. Ge and Dr. De further scripted this:
“We will be willing to wait up to 45 days for your insurance company to pay. If they do not pay or deny the claim, we will send you a statement and you will be responsible for payment in full.”
As one who has filed thousands of dental insurance claims, I can ascertain that if the claim information is verified and eligibility and benefits are confirmed to be accurate, there should be very few claims (2-10%) that will need further attention. So why create negativity when everything usually goes well and the claim is paid? When you are speaking to a new patient, bringing up potential problems could send the message that you have a problem getting claims paid, you are afraid the patient won’t pay, or you care more about getting paid than you care about the patient.
Dr. Ge and Dr. De decided to try a different approach to new patients. Some of the new scripting is:
“Yes, we have many patients who are covered by your plan and are satisfied with the coverage. We have a well-trained front office team of three Patient Coordinators who are at your service to verify your coverage and benefits prior to delivering services to you. We are confident that you will be happy with our services and with your dental care.”
Patients with any type of PPO coverage are more likely to seek dental care than patients with cash only. Be ready to schedule an appointment with as few road blocks as possible. Attracting and keeping patients has no cookie-cutter answer for success and takes some investigation into the practice’s daily systems. For help with attracting and keeping new patients, call McKenzie Management today for professional business training.
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