I’m finally getting around to looking at my first quarter results in my dental practice. Sound familiar? I was shocked to see our profits were down. How could this be? The number of patients seen and procedures worked were both up. But, profits were down for the first time in years. It was time to dig a little deeper and learn why.
We discovered several things that have changed incrementally over the last several years:
- Several of the major insurance players have been decreasing reimbursements on our primary procedures by a few dollars each year.
- Our lab fees have increased each year.
- Our supply bill has increased over the last three years.
- Other small increases have occurred with several of our vendors over the last two to three years.
Wow! How did I, Dr. Rob, who teaches other dentists and their teams the “Clinical Business of Dentistry,” lose track of my own practice? What I discovered was our upgrade charges were now too low. Simple fix, right? How ironic was it for me to see how “small changes” can not only lead to significant increases in practice revenue, but they can also lead to significant losses when the above four points are not closely monitored.
What did I do about this financial pitfall that had snuck in without being noticed? I did exactly what I preach to all of our awesome clients at My Practice My Business, I found ways to increase revenue through upgrades and value-added service. Thanks to our good friends at Brasseler, I learned of a new value-added service in root canal therapy and added it to our offerings. For the first time in years, all of my upgrade fees have been “upgraded.” And, so far, we have nearly 100% case acceptance on our value-added services.
Often, we are told to simply raise our Fee-For-Service fees to increase revenue. That would work if we were not 85% insurance driven in our practice. I realize there are many practices who are not as insurance driven or are completely Fee-For-Service, but that is simply not the case in many areas of the country. Moreover, current research is showing the number one reason patients choose a dental health care professional is if they are “in network” with their insurance plan.
Insurance plans will continue to increase, our patients will continue to join dental plans, whether through their employer group or on their own, and that will drive us to get better at figuring out ways to increase profits. At My Practice My Business we have many of the answers to help offset the losses incurred by taking insurance plans, and have the ability to help you be more profitable on your non-insured patients. Simply call us for details.
Most importantly, keep an eye on your numbers. Watch your top thirty procedures and track insurance reimbursements from year to year. If they decrease their reimbursement fees on your top procedures, you have to recapture it somewhere else. Use My Dental Docs and My Dental Stats to help educate your patients, increase case acceptance, track your business success, promote oral health care, and prevent lost revenue.
Rob Thorup, DDS
My Practice My Business