Looking To Bump Production Without Insurance? Check Out Powerprox & Extractions!
0I am often asked for ways to increase production outside of insurance. I received this information today regarding an upcoming class where Dr. Tommy Murph is partnering with Rick DePaul’s Powerprox 6 month braces 101. A great way to get information in expanding dental services all in one shot. For anyone who can make it to the Charlotte area in November, here’s the information:
Famous Exodontist Dr. Tommy Murph to Speak at Powerprox Six Month Braces 101 Course
Margie and I are SO EXCITED to announce that world famous exodontist Dr. Tommy Murph will speak at the Powerprox Six Month Braces 101 course this November 5-6, 2010 in Charlotte, NC.
Tommy is an in-the-trenches general dentist like you and me and has simplified and demystified the tooth extraction procedure. This allows you to comfortably and confidently treat many more extraction cases in your office. He is so inspiring I even thought of taking his course and I am a well known oral surgery amateur. His straight shooting style is admired by many doctors worldwide. In fact he has one of the most popular threads in Dentaltown history where he helps docs with their extraction cases.
Tommy will speak on day 2 of our course in Charlotte.
Topics will include surgical extractions, Crane pick extractions, easy lower incisor extractions, and much more.
Tommy’s EXCELLENT oral surgery book will be available with a special course discount. He will be giving a discount of $25 per book purchased. Tommy will even autograph it for you. He will also give you a discount of $25 per Crane pic purchased.
Also be sure to bring any films/records you have on extraction cases that you want some guidance with. Tommy is always happy to help.
There will be no additional charge to our standard seminar fee.
Tommy and I both want you to be exposed to this excellent material and we do not want additional course fees to be a barrier.
If you have any questions to ask about the course please visit our thread on Dentaltown or call 440-646-1000. You can register at that number or online HERE
Space is limited so we recommend you register ASAP to avoid disappointment.
Here is a link to Tommy’s oral surgery thread so you can get a preview of the type of top notch information you will receive.
Margie and I thank you for your continued support.
Rick DePaul
How Does Insurance Affect Practice Purchase Decisions?
01 year ago
by Sandi
in Uncategorized
I was recently participating in an online discussion where someone was considering buying their first practice. They asked if buying a practice that is 80% insurance participation would be a good decision. There are several questions to ask yourself before making this large investment:
1. Even if this pracice is profitable currently, what debt would you, as a new owner, have that the current owner does not. If the selling dentist is retiring, chances are they are relatively debt free and sometimes own the real estate on top of the practice making for lower rent. Because they have no student loans and/or practice debt, they may be able to create a profitable practice at a realistic pace due to low or non-existent debt. Be sure that your anticipated profits can do more than just pay your added debt levels and can also sustain profit needed for everyday living expenses. The insurance participation levels can have different consequenses for different owners of the exact same practice based strictly on the impact of debt level differences.
2. What expenses has the selling dentist been generous with that you may have to target for elimination? This typically means staff expenses. It’s not unusual for a retiring dentist to have a long term staff who is paid generously with top notch benefits. After practicing for 30 years, many dentists find that it’s well worth extra salaries to make their lives easier at the office and after 30 years they can afford it. A new owner, however, can rarely do the same and often finds themselves in a situation of unsustainable salary levels yet unable to make changes for fear of a mass exodus of staff or poor attitudes. Recommendations vary but the typical range of compensation benefits (including salaries and all benefits combined) is from 20-28%. If you determine you are unable to sustain the salaries of the selling dentist, be sure to tie necessary changes to the retiring dentist upon the sale of the practice (so they are the bad guy instead of you).
3. Analyze how the patient flow is working with 80% insurance participation. It is very possible to have a profitable, successful practice with high levels of insurance participation and provide quality service but you must make sure that the pieces making it work for the selling dentists are ways you want to work also. Are you willing to delegate to staff? Do you want to see one patient at a time or overlapping patients with higher volume? Do you like to find ways to multi-task and create systems that are constantly improving on efficiency? Are you good at managing both yourself and staff? Recognize the steps the selling dentist has taken to make the practice profitable and be honest with yourself about if it’s a good fit for your personality, practice philosophy and long term goals.
4. Take a look at the selling dentists insurance fee schedules. I tell dentists that I consistently see about 30 fee codes make up 90% of a practice’s revenues. The 30 fee codes vary from practice to practice, but it’s still a mix of 30 that determines the vast majority of revenues. Make sure that you know what your 30 are and then compare fee schedules of the selling dentists to see where you might have some negotiation room with the insurance companies. Remember it’s far better to get better fees on the codes that matter instead of a flat 3% increase the insurance company is more likely to offer. Call us if you want help with this process.
5. It is not unusual for a dentist to recognize they need insurance participation to fill chairs in the early years of practice ownership with a goal of dropping plans as the practice grows and becomes busier. For this reason an 80% insurance practice would not be a deterrent for many first time practice owners. It is important to be realistic in what your long term goal is in regards to insurance so that you do not pay for a practice that can’t be molded to the type you eventually want to have. Few buyers find a practice to buy that is perfect but the closer it matches your long term goals of practice style, the more likely you will see higher profits earlier in ownership.
Enter Those Fee Schedules!
0One of the best tools to use in managing insurance participation is to be sure you have entered the insurance fee schedules in your practice management software. This allows your software to track write-offs according to each insurance company and gives your office the ability to crunch numbers quickly and efficiently. Many offices do not have individual fee schedules entered, or if they do, they are outdated. It’s time consuming to enter each fee schedule but once the work is done you can make much better decisions about continued insurance participation. Regardless of which dental software you use, a quick call to customer service should provide guidance on how to get them entered. Knowing the gap between each fee schedule and your full fee is the biggest step in knowing where your production dollars are going!
10 Tips In Getting Down To Business!
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Many offices are seeing a drop in production due to the economy, which is worse in some areas of the country than others. Dentists have to be more strategic about how they operate their businesses to maximize the discretionary dollars patients are willing to spend. Many dentists I talk with are trying to reduce their involvement with PPOs, yet recognize they must then expand their patient base and production dollars from other sources. A few ideas:
1. Consider adding services that you currently refer out. This is more important if you are experiencing empty chair time as opposed to just not being booked out as far as you used to be. There are over 7,000 posts on this thread on DentalTown started by Dr. Tommy Murph discussing this idea with extractions: http://www.towniecentral.com/MessageBoard/thread.aspx?s=2&f=173&t=128068&v=1
2. Look into in-house dental plans that may offer your patients an alternative to traditional dental insurance. If you have a high number of patients who have lost their jobs this may be a welcome option for them, especially in light of the high costs of COBRA plans. If the idea sounds intriguing but you don’t want to create your own plan from scratch check out www.CompleteDentalPlan.com.
3. Get personal. If you or your staff have downtime, use it to make a personal connection with your patients. Hand written notes to overdue patients and personal follow up calls after major procedures make memorable impressions on patients. Don’t forget to say thank you for internal referrals!
4. Reign in overhead. When times are good we sometimes stop watching where every dollar is getting spent. Time to get smart about expenses again. This means not only managing supply bills and minimizing wasteful spending but also managing your hours and staff well. Maybe it’s time to keep the same number of clinical hours but shift them to some evening hours instead of the typical 9-5 schedule that might work well for your staff but not your patients. Make sure staff downtime is being spent doing something that will generate patient flow, not stocking shelves or purging charts. Being busy is not the same as being productive!
5. There are many ways to stay in touch with patients through email, text messages and online newsletters that are inexpensive or even free. Forget the traditional expense of stamps and envelopes. If you have never explored any of these services, check out what your practice management software might have available that you aren’t utilizing. For a free option visit www.DentalSenders.com
6. Stay educated at a fraction of the price. It’s no longer necessary to travel thousands of miles to see the best continuing education presenters. There is inexpensive or even free CE readily available, often through your local dental society, supply companies, labs, study clubs and many options on DentalTown or HygieneTown at www.TownieCentral.com
7. Whenever possible, pay with cash and be realistic about the impact debt has on your need to produce. The old adage “you have to spend money to make money” holds true in some respects but patient often notice fresh paint and chairside cable tv before fancy equipment that may be more impressive to dentists than patients. A modern image is important but now is the time to keep debt in check.
8. Unless you are the only dentist in town, you need a website. I’m a fan of social media as well, such as Facebook and Twitter, but a website is a must. You don’t have to spend thousands but there is a large part of the population that looks online before they make any purchasing decisions so you need to have a presence.
9. Scary thought, but there are some offices that aren’t making it right now and are looking to sell. If you need a quick influx of patients contact local brokers or pinpoint small satellite offices who may decide to sell their small base of charts only for a reasonable amount. No need to purchase unneeded equipment or office space but purchasing a few hundred charts from a small office or retiring practitioner can sometimes be an option that pays off quickly.
10. Check out Groupon, a relatively new idea in marketing for dentists. I’ve heard mixed reviews depending on the geographic market and practice style but worth investigating: http://www.groupon.com/
Embezzlement? Let’s Hope Not!
0As I discuss the effects of PPO involvement on a practice’s collections, another question that sometimes arises is whether or not something else is “off”. No one wants to suspect that a lack of collections may be due to something more suspicious than poor insurance fee schedules however it’s always prudent to be sure you have proper systems and solid monitoring of those systems. When I receive questions regarding potential embezzlement I refer to Sandy Pardue of Classic Practice Resources who I consider to be a leading expert on this issue. She has worked with hundreds of practices and has seen it all regarding embezzlement. On a recent post on DentalTown, Sandy stated that “statistics show 38% of practices have been embezzled from, that is just the practices we know about”. Sandy never charges for a phone call from dentists so if you have any concerns about your collections issues, give her a call. Her consulting company can be found at www.ClassicPractice.com or she can be reached at 1-800-928-9289 ext. 10. This is one area where it’s better to be safe than sorry.
How’s Your Website?
3Most dentists realize that a website isn’t a fancy option anymore but rather a requirement for any type of business, dentistry included. Most of my clients come to me looking to move away from insurance participation and one suggestion I always make is to consider how effective the practice’s website is in terms of attracting new patients. Some practices feel that by being a Provider for an insurance company means that they will get new patients just by being on an insurance listing. Today’s patients are becoming more savvy. They no longer just pick a name, but rather go down the list of available Providers and research them online before making a choice. Of course, if you do not participate with insurance companies at all, having an effective website is even more important. If your website provides valuable and personal information about why your practice is different you stand a much better chance of increasing your new patient flow. A few suggestions to consider:
1. Ask your target audience their opinion of your site. If you practice in a retirement community then you may be trying to appeal to seniors with helpful information about dentures and implants or a senior citizens discount. If you practice in a suburban area with young families look for ways to be appealing to moms. Get feedback from decision makers in your area.
2. Spend some time on your content beyond just explaining that you provide crowns and have a laser. Patients want to know what services you offer, but they also want to know who you are as a person. They are looking for some reason to connect with you. They want to know what your style is and if their personality will fit with yours. Some patients will be focused on high tech equipment, some on convenient hours, some will want a laid back approach so make your website attractive to the kind of patients who will seek out the practice style you are offering.
3. Don’t just slap up a site and let it sit there. Use it in combination with other online resources that tie in well like Facebook, LinkedIn, Twitter and other social media to enhance your image online in different ways. Remember that even if you hate Facebook, the majority of your patients do not! For a good book on entering the world of social media I highly recommend Jason Lipscomb’s book called Social Media For Dentists http://www.socialmediadentist.com
4. Know what questions to ask your website designers and the people you hire for SEO. If you decide to design your site yourself then know how to get quality results. Check out dentist Mike Barr’s book covering everything you need to know about websites for dentists at http://www.revupmymarketing.com/ There is a huge range of web designers and costs so be sure you do your research before committing to large design fees or long term contracts. This book will help you make sure you hire well by asking the right questions.
5. Invest some time by linking your business website to relevant places wherever you can. Be sure you are registered with Google Maps and keep track of your online reviews from patients.
If you are trying to move away from insurance participation, an excellent website is one way to gain new patient flow without relying on insurance provider lists. Make sure you spend the time to make your image a good one on your website!
Find Production!
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Many dentists are questioning how to increase revenues during slower economic times, such as these, so that they do not have to increase insurance participation. One great source of revenue can be to first examine how much unscheduled treatment your office already has. If possible, I’d always rather see dentists follow up on treatment that was planned, yet not completed, with current patients before jumping in-network with insurance to attract new ones. Oftentimes this area falls through the cracks because it’s a big project and it seems too hard to climb the mountain. If you wonder how much revenue has been treatment planned in your office with nothing to show for it, take a look at www.ProductionFinder.com Lisa Weber has an excellent service for office’s who want someone else to step in and handle this project for them. Lisa tunnels into your practice management software to see where you have unscheduled treatment, then she contacts your patient base to follow up and schedule on your behalf. Her phone number is set up to look like it is coming from your office, allowing a personalized approachwithout interrupting your regular office staff flow. Check out her website for more information about the packages she offers. I’ve personally known Lisa for many years and I have no doubts she will take excellent care of any of my readers who are looking for some help in this area.
How to Grow? More Patients or More Collections Per Patient?
0There are only two ways to grow a dental practice, either by increasing the number of patients seen or by increasing the amount collected per patient. Assuming the schedule does not have holes in it, a full schedule indicates that either capacity must be expanded or fees can be raised. For those who decide to go the route of increased capacity, this may mean a larger office, increasing hours, adding an associate or considering a partnership. The upside to this route is that with solid systems in place, more profit can be obtained and the practice itself is growing in value so when it is time for the dentist to sell or retire it’s worth more. The downside is typically more administrative headaches, more staff to manage and, unless planned for appropriately, less profits for more work. For those who decide to go the route of increasing fees, dropping the poorer paying insurance plans can be a good route to go. This allows the dentist to keep a similar schedule within the solo practice model while collecting more for the same production.
If you are a solo dentist getting ready to add an associate because you are busy, first do an insurance analysis to determine your profits on each plan. It’s a great situation to be “too busy” so the next logical step to consider is adding an associate. The problem can arise when failing to realize that maybe 20% of the patient base is on fee schedules with 40% write offs. By adding an associate rather than dropping the plans with bad fee schedules, the dentist is adding headaches instead of profits. The dentist may have been able to squeak by with a 40% write-off but that is because he/she was providing the services himself. When adding an associate there is not only the 40% write-off to consider but now the associate must be paid their percentage on top of that. A typical solo practice has 65% overhead so having fee schedules that pay well becomes critical before adding an associate to the mix.
If you aren’t sure about your insurance write-offs, give Sandi a call at 303-204-9515. We can quickly summarize your insurance data to give you a clear snapshot of your practice so that you are armed with the tools to make the best decision.
Who’s Watching Write-Offs?
1There are days it seems like more work to manage a dental practice than it does to do dentistry. One thing that often slips through the cracks is watching insurance write-offs. Not just overall adjustments, but tracking which insurance companies write-offs and fee schedules are dropping below the rest of the pack. It’s also important to tie that information to how much revenue is generated by each plan. Every office should have a file for each insurance company with current fee schedules as well as the date that the fee schedule expires. The insurance company will not tell you when you are eligible for another increase so be sure you initiate the process. I am often asked for tricks of how to negotiate and the reality is that some companies will negotiate and some won’t. The important part is to know what to ask for with the ones who will. Knowing which codes are most relevant for your office is key. If you take a pano on every new patient that code will be more important for you to monitor than a practice that doesn’t have a pano machine. It’s a very individualized process to negotiate good fee schedules because each practice runs differently so fighting for the right codes for each office takes some detailed analysis. If you are due for a fee schedule review and don’t have the time or inclination to do it yourself, give us a call. Within 2 weeks you will have a detailed outline showing the impact of each insurance plan on your practice. This is some of the most important data a dentist should review. We can be reached at 303-204-9515 or visit our Contact Us page to send us an email.
Hidden Contributors to PPO Involvement
0When trying to monitor progress with PPO involvement, there are a couple of hidden contributors to practice growth and insurance participation that often no one talks about. Consider two identical start-up practices, same location, same equipment, same patient flow. Practice number one appears to be thriving while practice number two seems to be just surviving. Why the difference? Although business skills, clinical excellence and strong leadership are all factors, often debt is the unnamed source. If the owner of practice 1 came out of undergraduate and dental school with no student loans while the owner of practice 2 paid for his/her entire education, there is easily a debt difference of $300,000. The tens, and often hundreds, of thousands of dollars of educational debt that are common today can contribute to the options a practice has in terms of insurance participation. I believe that someone who is set on having a strictly fee-for-service office can do it with the right marketing plan in place in spite of high debt, but debt levels add an additional burden because there is usually less room for mistakes. The pressure of having a full schedule is more heightened the higher the debt level, which is one reason why some practices choose to take more PPOs than others in the beginning. Another contributor to the amount of PPO participation can have nothing to do with the practice itself, but rather the dentist’s spouse. If the dentist’s spouse has a career which can support or significantly contribute to the household expenses, there is less pressure for the dental practice to become profitable immediately whereas if the spouse is at home, perhaps caring for children, the dental practice must instead recognize a profit fast. The discounted income of PPOs is better than empty chairs when bills are piling up with no other income source. Both practices will become successful, there are simply additional factors that need to be recognized when it comes to the pace of growth. I advise you not to get caught up on thinking your process may not be working if it seems slower than the dentists you are surrounded by. Be sure you have a plan in place for your practice based on your own circumstances and don’t get side-tracked!
