“Dentistry is not expensive; neglect is.” This a popular proverb that dentists quote to patients who neglect regular dental check-ups. Yet, these same dentists may be guilty of similar neglect when it comes to their office management procedures. A few important changes in office management procedures can result in a much more profitable dental practice.
First, the wise dentist will track his level of productivity. Productivity is the main driver of a dentist’s overhead costs. Several items are a part of this overhead such as employee salaries and benefits, clinical materials and equipment, administrative services, and infrastructure costs. The reason productivity drives the overhead is that the ability and capacity to be productive requires certain expenditures. Specifically, a dentist needs to be aware of his gross productivity and his net productivity. His gross productivity is the complete number of procedures and services he provides. His net productivity is the completed services for which he receives payment. Dental practice experts, Schwartz Consulting Group recommend that local practices aim for the a difference of 4% between the net and gross productivity figures. When a dentist keeps track of these numbers, he is able to know which way his practice is headed–to profit or loss.
A second practice of good office management is placing high value on employees and staff. Though it is common from a financial perspective to view employees as an expense, it is better to see employees as an investment. The first view will lead a dentist to seek to hire staff at the lowest salary possible, so that his expenses are lowered. The second view will lead a dentist to seek quality employees who will be a good investment for his practice. Though experienced, good employees will cost a dentist more money, they will enhance his office’s efficiency and profitability. Even the least skilled employee, the office receptionist, should be considered an important investment, as she is the first and last person the client interacts with in the office. An experience and talented receptionist can leave a lasting good impression on clients and enhance the practice’s reputation.
A third important dental office management practice is the implementation of proactive policies to enhance collection of charges due the dentist. Several simple steps can help accomplish this delicate issue. First, clerical staff should be trained to ask each client for full payment of services rendered at that visit. This alone will decrease the amount of outstanding charges for a practice. Next, the office should send out a 90 day letter to a patient when the payment is still unpaid. This letter should be a gentle reminder of the unpaid balance, and request a response from the client in a multiple choice format, i.e. “Please check the appropriate box.” The options should be for full payment, partial payment with arrangements to complete it, and even an option for patient to contest the bill’s validity (when this is the patient’s chosen response, the office should contact them immediately).
Another practice important for successful office management is periodic review of clients to insure they are a good match for the particular office’s business model. When a client is identified as a poor match, they should be discharged from the practice. Such clients would be those who are non-compliant, belligerent to staff, chronically delinquent in paying charges, or abusive of cancellation policies. The latter type of client can be very costly to a dental practice as they cause an open spot in the schedule. If a normal check-up costs $200, and cancellations cause one open spot a day, that could amount to $42,000 listed revenue a year. The dental practice should send a discharge letter to such clients, giving them 30 days notice to find another dentist, assuring the client during that month the dentist will still see them for emergency needs.
“Every tooth in a man’s head is more valuable than a diamond, ” said Cervantes. In the same way, each of these simple tips will be of great value when used to improve dental office management.