Cliff's Notes

The Business of Dentistry

In-House Dental Insurance Plans May be Illegal …


The in-house dental insurance plan may be illegal in your state. Here in New Jersey the “good intent” may cost you hundreds of thousands of dollars. The fact is simple, you are offering insurance and you are not a state licensed insurer. BANG! You just broke a whole bunch of laws. Also, the higher your UCR the higher your reimbursement, that is pretty much a fact, but offering a special (i.e. $69.99 Cleaning, X-rays, Exam) may re-adjust your reimbursement to a lower rate and may require you to refund any patient that paid a higher rate during the promotional period and that includes insurance companies.

Healthcare providers are subject to additional consumer protection laws. If you are a PPO provider you are subject to insurance company rules and regulations. However, the rules keep changing. It is almost impossible for a dental office doing less than $1M/year to have the resources to understand and manage the ever changing landscape. Insurance reimbursements are fluid and constantly shifting and require continuous monitoring . Now is the time to think about “Out Sourcing”.

Simple economics … Out sourcing your PPO management program may cost $400.00/month. A team member may cost $600.00+/week. A PPO management company has multiple resources and can react quickly to changes in rates and law.

This past week I attended an outstanding presentation on PPO management and how to navigate and monitor the insurance system. I was amazed at the data the insurance companies compile to determine your reimbursement rate. Do you do “write-offs”? Maybe you should do “insurance adjustments”. Understanding the insurance market and managing it correctly could amount to thousands of dollars per month.

Another thing I noticed was the lack of interest in learning about such an important topic. Most dentist do not understand the insurance market and leave it to the office manager. The office manager does not attend quality seminars and the dentist assumes everything is being done correctly and legally.

Seminar attendance for the new generation of dentists is down and that is not good. They get there information on line but the interaction of a live session really brings things home. For a dentist, practice management sessions are not interesting but they are essential. A good business owner does not have to know how to do something but they need to know what can be and has to be done and then hold team members accountable.

As the cost of operations continue to rise, outsourcing is a very viable option. Outsourcing is nothing more than “shared services” and the only down side is having to pick the best company to work with. Get recommendations and interview several dental orientated companies and calculate the best ROI. The investment in third party specialists can be very rewarding. Would you ask a PPO management company to do a crown prep? Why do you think you can manage PPO’s? After all, you don’t know what you don’t know! Please contact me at any time with any questions or concerns.

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October 30, 2016 Posted by | Uncategorized | Leave a comment

Survival of the Fittest … Your Patient Base may be a Time Bomb!

thjqzm52xuYour Patient base is your future. Did you ever really study your “revenue base”? What is the average revenue value of each patient? Looking back at the all the practice valuations that I have done I have seen a range from $650.00/year to $1850.00. Both of those extremes were practices that grossed similar amounts ($1.2M) so why is the higher value more dangerous? The higher value base was one half the size with less than 900 active patients and that leaves the organization more vulnerable to outside economics and changes in the healthcare market.


Average Patient Value is the average dollar amount that a patient spends annually on dentistry. That should take into account the cost of 2 hygiene appointments and $300.00 in additional work. It doesn’t mater if the patients are private or insurance because your net receipts are used in the calculation. Remember, this is only an average, some patient may need $3000.00 and some just hygiene. The value is easy to find, take the number of active patients (24 months) and divide it into 12 months of receipts. The biggest problem here is that most dental professionals do not know how many active patients they have.

Patient Demographics is extremely important when managing the growth of a patient base. The average small practice (1-2 doctors) usually has a patient base within 10 years (+ or -) of the doctor. A dentist that is 50 years old will have an average patient base of 40-60. There are always exceptions but this average will hold true 80% of the time. This is a time bomb. As the base gets older it will shrink in size. A strong healthy practice has 1200 active patients per dentist. You want to engage 20-25 new patients per month to off set lost patients and the front end of your demographic model that will be needing less dentistry as they age.

Where is the Pain & Where is the Joy that your patients are experiencing in their lives? An endodontist told me a great story about what happened in his office. He practices Spa Dentistry and pays attention the “patient experience”. He completed a procedure on a 45 year old woman that was referred to him. When it came time to release the patient, she said “do I really have to go”? When the doc laughed she said it was so quiet and relaxing and now “I have to get home, make dinner and get the kids onto their homework”. You need to relate to your patients world and understand their personal concerns. That’s dentistry beyond the mouth. Be who your patients want you to be.

Healthcare Today has become a business. The dental practice that defines the “patient experience” as a priority will be rewarded with the greatest gift, a patient referral. Pay attention to growing the base with families, you need to continuously replenish the back end of your of your patient demographic. Please feel free to contact me at any time with any questions or concerns.

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October 16, 2016 Posted by | Uncategorized | Leave a comment