A week ago in Connecticut while lecturing I was asked how to make anterior esthetic dentistry work if you are a provider for dental insurance fees with set fee schedules. This is a complex question at many levels, and each of us has to determine based on our preferred business model whether being an insurance in network provider is workable. This decision and many others on the business side of dentistry depend on understanding the finances of your office and being in control of them.
When I think about the financial side of my practice what I have come to understand is that I only have three financial “levers” to adjust. The profitability levers in a dental office are fees, time and expenses. As part of a specific business model we may have more or less control over each of these levers, and sometimes we give up our control completely. Our ability to set fees allows us to adjust gross earnings to adjust for increases in expenses that might include lab fees, clinical supplies or technology purchases. When we become a provider for insurance plans we make a choice to give up our ability to use this lever to manage the financial health of our practices.
We can also control profitability by using the lever of expenses. Expenses may include anything from salaries to clinical supplies and lab fees, as well as rent and insurance. Many of the choices we make on the expense side have to be balanced so that we do not diminish the quality of the care we provide or the level of customer service that fits our chosen business model.
The last lever is time. In dental practice time is really a representation of the number of patients or procedures we can complete in a given workday. One limitation on our ability to complete more procedures is having enough patients, the next is the physical limitation of the provider and the last is not compromising care due to speed.
Each of us gets to chose for our office how we want to use the levers of fees, time and expenses to create the practice we envision and deliver the care that fits our personal philosophy. Success is any chosen model is dependent on skillfully using the levers to create profitability
There is a fourth lever: Volume. By not participating you make it very hard to add lots of patients. Patients who need not be seen by you. There is profit there as well. In fact, it’s the dentists who control THIS lever that are the MOST profitable. Further, participation can make business flow smoothly as there as less cyclical and seasonal downturns.
This is a question just about every dentist in America needs to ask. The answers are VERY complex…and getting more-so every day. I just tackled this question on my blog, this very morning. I gave 10 ways to get out of network. They apply to all dentists except those who have truly developed practices that are free from third party factors. In writing my post, I just opened the door to what is possible…but it is possible.
Barry
TAOofDentistry.com
Time is such an overlooked part of the process, finances are largely focused on. It seems that Dentists have a decent handle on controlling expenses and fees, but the number of procedures done in a day can really limit a practice.
Thanks for sharing superb informations. Your site is so cool. I’m impressed by the details that you have on this website. It reveals how nicely you perceive this subject. Bookmarked this web page, will come back for more articles. You, my friend, ROCK! I found simply the info I already searched all over the place and just could not come across. What a great website.