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