PPO Negotiation Solutions

We Level The Playing Field Between Dental Practices and Insurance Companies

Dental Revenues

How to Build a Successful Dental Practice

Dental medicine is a thriving industry with enormous potential. However, that does not guarantee that your dental practice will automatically become successful. Dental medicine has evolved over recent years to become more advanced, more appealing and more comfortable for patients.

The modern dental practice has numerous moving parts and functional systems to keep it operating at peak efficiency. Modern medical care, including dentistry, is a complicated combination of treating patients and running a business. Both sides of the equation must be balanced in order to build and maintain a successful dental practice.

This is where many dental practitioners experience a serious disconnect – they fell in love with dental medicine but likely choke when dealing with all the necessary evils of the business component. A successful dental practice requires acumen in both areas: dental care and business management.

PPO Negotiation Solutions knows what it takes to make your dental practice successful. Whether you are just starting out in practice or you’ve been in business for years, we can offer suggestions and solutions to transform your dental practice from serious drudge to unparalleled success. Here are some basic strategies we suggest.

Competitive Branding

A successful dental practice sets itself apart from the local competition. Learn about the target population in your area, their needs and desires for dental care. Then, find a way to meet those needs and desires with your own competitive advantages. These unique advantages are the major focus of your sales and marketing strategies. Highlight what makes you different and better than the other local dental practices.

It is not enough to feature what every other dental office in the area provides. Some cool amenities and a fancy building still houses the same dental care options that most other dentists offer. You must determine what makes you stand apart from the rest and make that a major focus.

For example, children’s dentists were scare in a particular area, although there were several dental practices from which to choose. One particular dental practice opened with unique branding that focused more on pediatric dentistry, even featuring a circus design motif and décor. Their business almost exploded with growth virtually overnight.

Competent Care

Competitive branding will attract clients, competent care will keep them coming back for years. You must attract and recruit talented and skilled practitioners who know their business. They are the face and hands of your dental practice, and they are the single most important factor that will cause clients to return or go elsewhere.

Skills and personal interactions are equally important. Kind and compassionate treatment combined with unsurpassed dental treatments are a winning combination that will keep your practice thriving. The right team exudes an atmosphere of teamwork and family. That kind of office culture is a huge plus for attracting and keeping quality team members.

Don’t underestimate the success power of a great team, nor the destructive power of an unhappy or problematic team. It may pay off in the long term to contract with professional recruitment services to help you screen and evaluate candidates. This is especially true if in addition to owning the practice, you also personally provide full-time dental services.

Comprehensive Services

Modern people are busy – the number one barrier to most people receiving dental care is a busy schedule. You can trump this argument by providing a comprehensive array of dental services to meet any need. Beyond providing excellent care, you must provide the full range of dental services that your clientele may need.

Patients no longer wish to go to several dental specialists’ offices for numerous appointments. They want one dentist and one office to handle their dental needs. This includes everything from pediatric dentistry to basic and emergency care to replacing teeth in their older years. While recruiting a talented and skilled team, be sure to adequately cover all the bases so you can offer every dental option under one roof.

Dental technology has expanded to include advanced imaging, lab and treatment options that can all be housed in a single practice. It may require a challenging investment up front, but your clients will be more than happy to stick with your dental practice when they can enjoy the latest and best dental care in one place and with one team they know and trust.

Make It Easy for Clients to Get Care

Most people are only offered dental care as an addition to regular insurance coverage, meaning it is often viewed as an extra burden. As of 2019, the CDC reported that only 50.2% of adults between the ages of 18–64 enjoyed the benefit of dental insurance coverage. This means that approximately half of your target clientele have no assistance with paying for dental care.

Targeting this half will require adding some creative payment options that make it easy for clients to get the care they want and need. Flexible financing options can open the door for many of these potential clients when they have no dental insurance coverage. Moreover, many others who do have insurance have limited coverage that does not completely pay for some treatments. Take the necessary steps to accept numerous types of payment, including as many insurance companies as possible, cash, credit and debit payments and some sort of easily-obtained financing.

Be Proactive in Asking for Referrals

Word-of-mouth referrals are still the number-one method of gaining clients. People give considerable credence to the word of those they know and trust. So, make it easy for your clients to refer other clients. Ask for referrals and provide different strategies for obtaining them in different settings.

There are ways to point people to online referral pages through your email, ads and patient communications. Provide in-office referral cards and ask your clients for online reviews. Provide the necessary links to these sites and offer incentives for those who provide referrals or testimonials about their care.

Your Ultimate Success Depends on Clients

How do you build a successful dental practice? It all revolves around your clients. Targeting your ideal customer, providing them with unsurpassed dental care and a pleasant experience while at your office and maintaining a focus on attraction and service will keep clients returning for dental care over the long haul.

This means that your patients must inform every choice you make for your dental practice, including marketing, amenities, staffing and services. The client is your source of revenue, so prioritizing their experience is the key to creating and maintaining a successful dental practice.

PPO Negotiation Solutions offers many solutions to enrich your dental practice operations and profitability. Contact us today for a consultation and learn more about how we can help you build a successful dental practice.

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How Healthy is Your Practice? 5 Key Indicators

You work hard to make sure that your patients’ teeth are healthy, but how healthy is your practice? Chances are good that you spend most of your time focused on serving patients and managing your staff, but long-term stability requires focusing on things that apply to your financial big picture as well. Part of understanding what makes a dental practice healthy centers around analyzing several KPIs (Key Performance Indicators) and then using the information you find to adapt and adjust how your practice functions.

The following 5 key indicators are a great way to assess the overall health and stability of your practice so that you can make solid decisions for how to improve it moving forward into the future:

  1. Patient Scheduling Data

While the average goal across most dental practices is to have 98% of all active patients scheduled for an appointment in the near future, the typical scheduled rate falls much closer to 80-85% at best. Whether due to increased competition or increasingly busy patient home and work-life schedules, it is not uncommon to experience difficulty in filling your company calendar to the brim.

However, you need to remember that unscheduled patients are an attrition risk – if they are not actively planning to come into your clinic, you face the possibility of losing them to another dental practice that is closer, cheaper, or newer. Finding ways to keep your current patients engaged and on your schedule is one of the best ways to maintain your practice’s overall health.

  1. Your Practice’s Overhead Data

While every company has some amount of overhead costs, you need to have a firm grasp of exactly how much you are spending so that you understand the big financial picture your company is in, whether good or bad. Unnecessarily high overhead costs, especially costs that are difficult to get out of or to creatively lower can cripple your practice’s future plans and can make it difficult to grow.

On average, your overhead costs should fall well under 60% of your total cost projections. If you are in a specialty service area like oral and maxillofacial surgery or endodontics, your overhead costs should be under 50% on average. If you evaluate your practice’s overhead costs and find them to be unusually high, it would be wise to audit your spending and uncover areas of bloat that you can reduce to put additional funds back into your pocket every month. You can use the added finds to hire more staff, expand your services, or even invest in marketing.

  1. Staff Labor Data

Without a doubt, staff labor costs make up the largest financial outflow line item for any practice, often making up 25-30% of all costs. As with overhead costs, specialty clinics often see lower percentages, falling more in the 18-25% range. Knowing how much you are paying your staff is vital to your practice’s overall health. If you are operating based on guesswork, you run the risk of overlooking budgetary obligations or missing out on areas where you could be saving money.

  1. Overall Production Data

On average, the production you will see per new patient will be double or triple that of existing patients. There are many factors that play into this, but dentists often find bigger issues requiring large treatment plans with brand new patients. It is vital to track your production and revenues for new patients so that you can accurately project income and budget into the future. Knowing where you stand with new patient services also lets you have a benchmark for how much marketing you need to do to achieve your revenue and production goals.

On the other hand, average production per existing patient paints a long-term picture of how much each patient contributes to the practice’s revenue each month or each year. This is an excellent baseline measurement and budgeting tool. Typically, average production should grow year upon year as your practice grows. If you see these numbers staying the same or even declining, it may be time to add a new service to your offerings to help keep your patient base coming back to you when they need something to help keep their smiles on point.

  1. Patient Attrition Data

Patient attrition is a fancy way of saying patients that leave your practice. It refers to the number of patients a practice loses on a monthly or annual basis. The most successful practices fall almost 10% below typical attrition rates for their industry. The reason behind this is simple: If you are losing patients, you are losing revenue, and you have to invest more money in marketing or patient loss prevention efforts. The best way to keep attrition rates low is to continually look for ways to add value to existing patients and to offer the best quality services possible.

These 5 Key Performance Indicators are an excellent place to start when it comes to understanding the overall health and stability of your dental practice. Evaluate them often, and look for ways – no matter how small – to increase the positive elements and decrease those that are not performing well.

 

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3 Major KPIs to Focus on When Planning Goals & Growth for Your Practice

A successful practice requires a knowledgeable manager and a strategic business plan. In order to create strategic business plans that help dental practice thrive, managers need the proper information, and much of this information is derived from KPIs.

KPI stands for Key Performance Indicator. KPIs can indicate the performance of a number of areas of practice and are a vital tool in determining the health of your business. This is not only important as an indicator of its current status, but also when planning goals and determining the growth potential of your practice. Three major KPIs to focus on when planning new goals are as follows:

  • Budgeted hours
  • Production
  • Generated income compared with overhead costs

In this article, we will discuss exactly how each of these KPIs can help you make the best decisions for the future of your practice.

Keep an Eye on Budgeted Hours to Ensure Monthly Goals are Met

Budgeted monthly hours and monthly revenue go hand in hand and should be one of the first KPIs to consider. In order to succeed in hitting its goal, each practice should base its monthly budget or goals on the number of days/ hours a provider is scheduled to work.

While this may seem straight forward, it is a factor that is often overlooked as things come up and schedules shift. Often times, a practice may not realize that they will not hit their monthly goal because a provider decided to work less than originally anticipated in a particular month.

Numbers may also change due to the way the calendar days and holidays fall. For example, some years may have four weekends in any given month while the next year may have five. A small change in numbers here and there may not seem like a big deal, but this can lead to a difference of thousands of dollars in overall revenue and can be the blind spot that many practices overlook when trying to figure out why their they did not reach their set goals.

Production / Visit vs. Production / Hour

Daily revenue can be analyzed by looking at the production rate per visit as well as the production rate per hour. The per visit rate is indicative of the revenue of each individual patient visit, while the per hour rate is a more commonly used way to gauge the overall income of the practice. Examining the KPI of both rates can help determine in what areas the practice could be doing better and is useful in making adjustments to meet growth goals.

While each practice may have different reasons for not meeting their revenue goals, some of the most common factors include the following:

  • A reduction in the amount of hours a provider works
  • Not meeting the necessary daily production
  • Not meeting the needed number of daily visitors
  • The types of procedures the practice performs
  • Case acceptance

Although often overlooked, many of these factors are easily remedied once they are identified. For example, a provider having to take off work can be remedied by finding another to temporarily cover the shift or by rescheduling already set appointments. Chart audits and proper training are also ways to ensure that providers are keeping up with the necessary procedures and that everyone is on the same understanding concerning the operations of the practice.

Accurate Overhead Cost Tracking and Ongoing Comparison with Income Generated

A third major KPI to focus on when planning goals and growth for your practice concerns overhead costs compared to generated income. These are the numbers that stem from many of the aforementioned factors and are affected by any number of these each month. For this reason, it is important to pay close attention to these numbers and to keep accurate and current information of where your practice stands.

The following are some of the main overhead costs of a dental practice along with the average percentage of the practice’s income necessary to cover these expenses:

  • Rent/Mortgage, 5-7%
  • Laboratory, 8-12%
  • Dental supplies, 5-7%
  • Payroll/Staff salaries, 25-30%

A successful manager will understand the expected percentage of generated income that will have to go to pay these overhead costs. With this information in hand, it is possible to not only form a monthly budget, but also to set accurate and achievable revenue goals as well as successfully planning and achieving business growth.

SMART Practices

A manager of any practice can only set goals and grow a business by understanding the current status of the business as well as why it is so. After all, a situation can only be handled once it is identified and understood. KPIs are useful tools for staying on top of your practice’s financial goals, but simply seeing numbers without any idea of how to assess them will not be much help for setting goals.

Data and statistics are only useful to us if they are properly understood. One method to doing so is through something known as the SMART criteria. This acronym stands for Specific, Measurable, Attainable, Relevant, and Time-bound, and is used to evaluate individual KPIs.

KPIs are merely indicators and are only successful if they meet all aspects of the SMART criteria. When this is not the case, the KPI is likely not beneficial to the goals of your practice and should be reworked.

At the end of the day, the objective of a KPI is to help businesses understand the status of their operation and to figure out how to improve it. Useful KPIs are key to helping your practice achieve its financial goals and find sustainable growth. No matter how your practice determines its unique KPIs, these three areas of focus are key to a successful business.

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Find Your Practice’s Blind Spots to Increase Your Revenues

One of the best things you could do for your dental practice is taking the time to adequately assess your strengths and weaknesses. It can be tempting to focus only on what you are doing well and on what is working, but the reality is that seeking out blind spots and then working to resolve them can do even more to save you money and to provide increased workflow efficiencies that net you more income per month.

What is a blind spot? Is it simply something that is neglected or that someone has not paid attention to in quite some time?  The short answer is yes, blind spots are often areas that have been forgotten or ignored and are thus not operating at their maximum efficiency. In order to remedy blind spots, however, you must first figure out how to examine something you currently have no idea you are overlooking. While some blind spots are obvious, others will require intentional, disciplined seeking to uncover fully.

Engaging in comprehensive practice analysis can reveal many areas that could either be managed more carefully to eliminate wasted time, or that could be leveraged in a new or better way to net more income from each visit. In this article, we examine the following three common areas that practices can improve to increase revenues:

  • New patient call conversions
  • Individual patient visits
  • Hourly income rates

With an honest and comprehensive examination of business operations, any practice is sure to find some area of focus wherein they can improve and grow.

Increase Revenue Through New Patient Call Conversions

New patients are a vital part of a successful business, and it is up each practice to ensure that they take the necessary steps to continually grow their clientele. However, this is where we find the first blind spot in many businesses.

New patient calls are an important opportunity for practices to ensure that potential new patients become long-time patients. However, many practices find that their new patient call conversion rates are much lower than what is desired in a successful business.

Trips to the dentist can be a nerve-wracking experience for many, so a good relationship between staff and patients is important to keep them coming back to your office. Successful new patient call will not only lay the foundation for such a happy and trusting relationship, but it will continue to move the process forward by scheduling an appointment for an in-person visit.

The ideal new patient call conversion rate of a successful practice is at least 90%, meaning that at least 90% of all new patient callers become returning patients. However, this is an area of the business that is often not monitored and may be a major blind spot that is holding back the potential revenue of a practice.

Conversion rates are often low because staff is not properly trained in how to speak with potential new patients or on what steps to take to get an appointment scheduled. Recorded new patient calls are a great tool to help train staff on what and what not to say and do for a successful call and, in turn, an increased conversion rate.

Increase Revenue By Increasing Production Per Visit

Each individual patient visit has the potential for an increase in the practice’s production. Whether it comes at that particular visit or from one yet to be scheduled, certain steps can be taken during each individual patient’s visit to ensure that the office is not missing out on any potential revenue. Ensuring that all proper steps are taken at each visit is, however, is a common blind spot of many practices.

Each patient visit includes a series of steps for staff to conduct. From validating patient information to performing all necessary operations and scheduling follow-up appointments, each part of a visit has the potential for revenue for the business. Practices could be missing out on their full per-visit potential if staff misses any part of a visit, some common examples including the following:

  • Failure to update incorrect patient information
  • Not scheduling the patient’s next appointment
  • A miscalculation of or failure to charge the proper fees

An increased rate of revenue per visit is often improved through training and organization. Clearly defined procedures and a well-versed staff are a practice’s best chance of making the maximum revenue potential per patient visit.

Increase Revenue By Increasing Production Per Hour

The rate of production per hour is how most practices determine how well they are doing financially. However, when the numbers aren’t where they should be, it is often also a blind spot and is frequently forgotten when companies try to figure out how to improve.

One of the most common blind spots when it comes to the hourly rate of production in an office lies in the individual production rates of doctors and hygienists. While a hygienist can see an average of 7 to 8 patients per 8 hour shift, doctors average 0.5-1.5 patients per hygiene visit, depending on the practice. If the average of an office is lower than this or if there are regularly gaps in the schedules of either doctors or hygienists, then the office is likely not living up to it’s hourly potential. A common strategy to avoiding such gaps throughout the day is to over-schedule appointments. Statistics show that patients will inevitably either cancel or skip appointments, so over-scheduling ensures that there are no gaps in the daily schedule of an office.

The hourly rate of production can also by affected by a number of other factors, including the following:

  • A variance in calendar days per month
  • Over or under-scheduling staff
  • A variance in the number of patient cancellations

The net hourly revenue of a practice is what remains after all hourly costs are deducted. With this blind spot uncovered, increasing your hourly production rate is as simple as finding where costs are high and where profit is lacking.

In Summary

The blind spots of a practice often lie in the fine details of the operation, but they can also have a significant impact on the overall revenue of the business. Examining the above three common blind spots can help your practice find what isn’t working so that you can increase your revenue and operate at full potential.

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How To Create Same Store Growth For Your Dental Practice

Almost every dentist would love to increase the revenue their practice generates while not hiring more staff. In business, this is called “same-store sales growth.” There are countless ways to use effective dental practice management and marketing to increase revenue. It takes some vision, creativity, research, planning and investment, but it is not too difficult for a dentist and their staff to increase the revenue a practice brings in. The following are a number of very simple, straightforward and cost-efficient steps dentists can use to enjoy same-store sales growth.

  1. Provide High-Quality Service At Affordable Prices

A Satisfied customer is one of the best forms of advertising. That’s because it’s free and shared with passion and conviction from a trusted person. When a patient believes a dentist delivered the high-quality dental services they needed at a very affordable price, they are very likely to tell their family, friends, and anyone else who will listen, what a great deal they received on their dental services. Satisfied dental patients often write glowing reviews on Yelp and other consumer review sites and talk about it on social media without having to be paid. This attracts more patients and revenue.

  1. Increase Production per Visit/ hours

An example of how this applies to the hygiene department: Training to obtain a “perio” focused hygiene department can conservatively get the hourly hygiene production of  $155 to go to $200/ hour

What impact will the additional $45 prod/ hour have on your practice?

Variables impacting Dentist’s production/hour are: adding “same day dentistry” procedures. Procedures identified in the hygiene room and used to fill in cancelations/openings on the dentist’s schedule.

Increase case acceptance to treatment that is over @ $2,500 in value are the variables that impact production/ hour.

  1. Create A Warm, Welcoming, Relaxing, Comfortable Environment

Many people dread going to the dentist. They associate it with sharp implements and painful procedures. One way to attract more patients is to have the word spread about how warm, welcoming and comfortable the environment and atmosphere in the dental office is. If the environment in your dental office is soothing and relaxing, it puts patients in a better frame of mind and that can improve the experience they have. Soft music and lighting in common areas and a warm, friendly staff talking in soothing tones makes people more comfortable with the experience and their family, friends and acquaintances will also want to experience it.

  1. Have A Staff of Well-Trained, Caring, Professionals

The dental office staff is the patient’s first point of contact with your practice. If

you have a team of well-trained, highly skilled, caring professionals on your staff, the patient will know they are going to be well taken care of from the moment they walk in the door. Having a smiling, friendly receptionist welcome you to the dental office, ask about your dental problems, give you clear, simple, straightforward answers to your questions and calmly and skillfully take care of you makes patients feel like they’re being helped by caring, knowledgeable, experts qualified, able and happy to provide the help they need. Those patients will bring you more clients and additional revenue.

Action :  We highly suggest management review the practices onboarding procedures to ensure all new hires are aware of the practice’s core beliefs, practice etiquette, and learn the duties & skills of their position so patients receive the “ red carpet” experience

Example: Train the front desk staff to appoint every patient for their next visit prior to leaving the office. Keep in mind that getting patients to make their next appointment is not as easy as simply asking the patient when he or she would like to come back

  1. Expand The Services You Offer

One effective way to increase same store revenue in your dental practice is to expand the services you offer. This creates new revenue streams by providing more services for the patients you already have and attracting new patients for the additional services you now offer. When patients are comfortable with and have confidence in the dental care services you provide, they are more likely to turn to you themselves and recommend you to others for your new services. You can increase your income without adding new patients when your current patients begin coming to you for multiple dental procedures. Rather than refer your patients to other dentists, taking care of their needs yourself can increase your same store revenue.

Action: We suggest you look at the number of endodontic, perio, extraction, implant and orthodontic cases your practice refers out on a monthly bases to see how much revenue could be added back to the practice if a provider was hired to perform those procedures.

Hiring a specialist to work 1 day/ week to perform specific procedures is a good place to start.  In addition, provide opportunities for  associates to take courses and/or join study clubs to increase their skills with  endo, sleep apnea, Invisalign etc.

  1. Build Trust Through Patient Engagement

One key to profitable dentistry practice management is engaging with your patients. It costs less to retain your existing patients than to recruit new ones. Plus, when you engage with patients it builds a level of trust that not only keeps them coming back, but also motivates them to refer their family, friends and associates to your practice. Engaging with your core group of patients who regularly come to you for the dental care gives the practice stability. Sending them helpful dental care tips through newsletters or direct mailings keeps them engaged by giving them more value for their dental care dollar.

Action: You’ve heard the saying “out of sight, out of mind”? It is so true!  Your practice needs to find ways to remain in clear view of your patient’s eyes. Social media is a great way for the practice to share how they are giving back to the community, to inform patients of dental related items and to announce fun events, contests and/or specials they are running throughout the year – especially during the Holidays. This will keep your practice in clear view of your current patients and will get them to be an “active” participant. 

  1. Offer More Convenient Regular And Emergency Hours

Many patients choose a dentist because they have convenient regular and emergency hours. No matter how good a dentist is, they will lose patients if they are closed when patients need them most. Ask your patients if opening earlier on certain days and staying open later on other days will make it more convenient for them, their family, and their friends, to come in for the dental services they need. Commit to providing emergency dental services when patients need it. This can give you access to a whole new revenue stream that can make your practice more popular and more profitable.

  1. Offer Incentives And Rewards For Patient Referrals

The average patient who thinks you do great work will refer people to your practice but sometimes an extra nudge is needed. If you offer incentives and rewards for patients who refer friends to your practice, it can significantly increase same store growth in revenue for a very small investment. Offering patients simple incentives and rewards like a free cleaning or discounts on their dental care for X number of referrals can motivate them to actively recruit clients for you. Personal recommendations are more persuasive to people making dental care decisions and can cost you less than paying for an ad.

Action: It’s puzzling why some practices are afraid to ask their patients for referrals or do not run an effective referral program. New patients referred over from a current patient are more inclined to keep their scheduled appointments and will often move forward with treatment much easier than new patients from another source. Do you have an patient referral program?  If you do have a referral program, are you aware of how successful it is?  How many new patient leads schedule and keep their appointments from a “patient referral” each month?

  1. Laser Focus Your Social Media Marketing

Using social media marketing targeting tools like Local Awareness Facebook Ads to make people within a 50-mile radius of your practice aware of its location, hours and services is an excellent way to make your social media marketing efforts more focused, targeted and effective. You can even add a ‘Get directions’ link and a call to action  button that is a highly visible and easy prompt to encourage and remind the person how easy it is to make an appointment, get answers to their questions, and get any other relevant details.

Action: We often find practices that either delegate their social media marketing to an internal team member or outsource. However, it amazes us that they seldomly evaluate the effectiveness of their energies.  We suggest you review your social media activity and outcomes routinely at the end of each month to identify what is working well; as well as, areas that are not working well and/or require tweaking.

  1. Use Facebook Demographic Targeting

About 90% of dental buying decisions are made by women. Many women within a 50-mile radius of your dental office are on Facebook regularly. You can target Facebook ads to women with children in your area and tap into a very lucrative market. Targeted ads can create income streams that continually grow as the children get older and need more complex dental services.

  1. Don’t Forget The Appointment Reminders

People have so many things that compete for their attention, it’s easy for them to forget their semi-annual dental checkup for themselves or one of their children or the teeth cleaning appointment they made months ago. A simple way to help your practice increase its revenue year to year is to give your patients a phone call or send them post cards or emails to remind them of their appointments. You can also use those same those communication methods to make them aware of special discounts you are offering on teeth cleaning and whitening or other dental care services.

Same-Store Growth

With some thought, planning, focused action, and an investment of a little time and a small amount of money, same-store sales growth is possible for any dental care practice.

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