We live in an age of information overload. There have never been more journals, blogs, e-mail newsletters, or online dental communities providing information, nor is there a shortage of dental coaches and consultants.
Who do you listen to? Whose advice is the best? Is the way a dentist chooses to run the practice all in the philosophy? How can a consultant guide a practice to become more profitable? How can a consultant provide guidance to protect the doctor from making mistakes, sometimes on a daily basis, which can cause that doctor to not only suffer financially, but potentially lose the ability to practice?
Let’s engage in a bit of myth-busting.
MYTH: “I should tell prospective new patient callers that our practice is fee-for-service and we do not participate in plans because we do high quality dentistry.”
Wrong! This will stop your new patient flow dead in its tracks. Instead, ask questions to elicit what is most important to potential patients in a dental practice. While insurance plans might play a role, they are not always the determining factor in whether you will win the new patient appointment.
Let’s face it: our economy is in the middle of uncharted waters. It takes more new patients and more recall patients than it did a few years ago for most practices to experience the same level of operative dentistry done in the past. This is true unless a practice has above average case presentation skills.
Put your best communicators on the phone. While many patients may find your practice on the web, the majority of appointments are made on the telephone. Your first impression with a prospective patient is a one-time only event. Your goal is to make the callers believe your office is their place. Not by pressuring them, but by finding out what is most important to each one and letting them know how the experience in your office will fulfill their wishes.
MYTH: “I lost money by being in network with ABC Dental Plan.”
There’s an old adage: statistics can lie only when liars use statistics. So is the case with the term “write-off.”
Academically and from an income tax accounting perspective, a write-off is identified as an uncollectible debt. With your current “cash” (as opposed to accrual) system of accounting, when a patient pays you $100, that amount is considered income and is taxable. In the unforeseen event of a problem with the previously collected payment (bounced check, etc.) it may be later identified as a write-off. In other words you had it posted as taxable income but later it was lost.
With the current political as well as Wall Street redefinition of the term “fuzzy math,” let’s revisit some basic financial accountability. Is your practice management software working for or against you? Are you getting at least basic information to make sound business decisions or is your computer nothing more than a glorified pegboard? Our point is this: have you ever heard your colleagues make one of the following statements?
• If we were not a participating provider for ABC Dental Plan, we would not have had to write-off all those crown buildups.
• Our office lost money because we participate with ABC Dental Plan.
• Look at all the money you are losing by participating with ABC Dental Plan. Those write-offs should be going into your pocket, not the insurance company’s.
The term write-off has in the past most often inaccurately been associated with that which occurs when your usual fee in the open, unrestricted marketplace is $1000, and the plan’s maximum under a participatory contract is only $800. Did you lose $200 doing the procedure or did you never have it in the first place? A write-off is that which you intended to collect but were unable to do so. You did not and cannot lose that which you never had. Do not rely solely on the total dollar amount of financial adjustment to determine the stability and profitability of your plan participation.
Our intent here is to be nonjudgmental as concerns your participation with dental managed care plans. Take out the emotion and deal with the reality of hard numbers. Never join or participate in any managed-care plan (PPO, CCD, Referral Network, etc.) that contractually reduces your usual fee unless you need patients to fill empty chairs. Why in the world would you do a crown today for $800 and make a full fee $1000 crown patient wait weeks for an appointment?
MYTH: ”Templated scheduling doesn’t work.” “Scheduling to Goal doesn’t work in an office that participates in insurance plans.”
Both of these statements couldn’t be further from the truth.
The dental schedule is the central nervous system of the practice. Done well, it can lead to great profitability. If the schedule isn’t structured properly and nurtured, it can be a huge cash drain. This is the reason why we developed Smart Dental Scheduling™.
Smart Dental Scheduling™ begins with obtaining a financial commitment before you schedule the appointment. Especially in today’s cash-crunched environment, payment arrangements must be secured before appointments for extensive work are scheduled. In many practices there is a floor limit of $500-$1000 which means treatment over that amount requires a written financial agreement outlining the total fee and how the patient will handle the financial commitment.
How does Smart Dental Scheduling™ work on a daily basis? We highly recommend templated scheduling to all our clients. The practice must have annual goals for collections, production (by department), and new patients. Once these goals are set, divide them by the number of days worked in the office. Aim for 70-80% of your production goal to be pre-blocked.
How does insurance participation fit into Smart Dental Scheduling™? Each practice must be aware of the percentage of collections they receive from insurance plans. If 30% of the practice collections are coming from plan participation, then no more than 30% of the schedule should be composed of appointments that fall under those plans. This will be easy to check if you are making solid financial agreements, as that information will be top of mind when making the appointments.
MYTH: ”Staff bonus plans don’t work and neither does all of that employee accountability stuff. We’ve already tried both.”
Employee compensation is both a hot topic and a touchy subject. Part of the reason our economy is in the shape it’s in is the mentality that employees deserve a paycheck simply by showing up for work. This makes the selection of your team members a vital part of your practice. Once you get the right team members in place, how do you get them to “own” the success of the practice?
First, recognize there are many different ways to compute an employee bonus. All of them have upsides and many of them have significant downsides. Truly successful practices have teamwork at their core. While giving bonuses to employees based on individual efforts can work to motivate an individual, it can actually create controversy and undermine the team.
Second, be careful when offering a bonus plan based upon accomplishing a goal number of certain procedures. This can lead to temptation to bill and code for bonus instead of what was actually performed.
Finally, keep the bonus system manageable. Too many times we have seen a team bonus plan in place that had the staff salaries running out of control. The best way to bonus the team is to create team goals based on collections, and focus the entire team on working toward that goal. A general practice should have staff salaries that are no more than 20-22% of practice collections. Use this as your baseline and create a win/win situation for doctor and team.
More Myths to bust? Oh Yes. We’ve hit only the tip of the iceberg. If you were hoping for someone to pick up their pom-poms and tell you how great you are, then here’s your moment. You are an accomplished professional who should be proud of the many degrees and certifications you’ve put your heart and soul into. Don’t ever let anyone–not a consultant, colleague, or employee–make you feel like you aren’t competent. Few individuals ever achieve what you accomplished by opening up your practice, let alone handling the ins and outs of running a productive and profitable business. It’s time to take back your practice. Know your state practice act and know what you expect from your team. Physician, Heal Thyself.
Tom Limoli is the leading expert on proper coding and seamless administration of dental reimbursement.
FMI: www.limoli.com