Profitability is a crucial aspect of effective practice management. Healthy profits enable a practice to provide cutting-edge services and convenience to its patients. But before we explore the various methods to increase profits, let’s establish how profits are calculated in a practice. The following formula sums this up well.
Profits = (Total no of visits Production per visit Collection efficiency) – Overheads
Keeping in mind the key elements of the profit equation, namely patient visits, production, collections, and overheads, let’s dive into some best practices to increase profits at your practice.
More Services Equal More Revenue
Expanding the range of services offered at your practice will help double your revenue. Practices that refer out patients end up performing 60 procedures per year, while practices that make the most of their offered services may be able to perform up to 120 procedures per year. By offering more procedures, you reduce the number of patients you need to bring in to achieve the same revenue goals.
This approach increases the production per patient, as you maximize the revenue from each patient visit. You no longer have to rely solely on increasing patient visits (for a limited range of services) to increase your profits. Additionally, when you decrease the range of services, you will need to refer your patients elsewhere. Simple oral surgery, Invisalign, cosmetics, occlusal guards, mini-implants, sedations, automated endodontics, and soft tissue programs will all help increase your profits.
Stay on Top of Your Numbers
Challenges in insurance payments largely occur, thanks to the tug-of-war between insurance carriers and dental practices. While a practice seeks to collect payments from carriers, insurance companies reject claims that don’t fall within their parameters of acceptance. Add to that, the complexity of claims processing, and we can see an average practice forfeiting around 9% of its yearly production to uncollected insurance revenue. When you crunch the numbers, the ramifications are astonishing.
Annual revenue generated by an average dental practice is around $1,500,000. The average annual revenue lost in uncollected insurance benefits is around $135,000. The average uncollected revenue over 30 years is $4,050,000. To add insult to injury, to write off the debt as uncollectible, a practice has to clear audits by the IRS and prove that it has taken reasonable steps to collect the debt but was unable to do so.
To excel in insurance billing and payments requires knowledge, experience, and efficient processes. Challenges in maintaining the right staff and expertise, managing staff turnover rates, and the ever-evolving complexities of the insurance ecosystem, makes outsourcing dental billing a viable alternative. The core responsibilities handled by your practice, naturally make it difficult to provide uninterrupted time, attention to detail, and the consistent focus required for insurance collections. Hence it is vital to seek out a billing support provider with high-caliber staff, round-the-clock support, and an excellent track record.
Highlight Your Unique Value Proposition
What differentiates you from the competition, and why does it even matter? If you don’t stand out from your competitors, your patients will choose the least expensive service available. Your website should have key messages that appeal to your niche. This includes the services you offer (extractions, implants, restorative services), the people you wish to serve (seniors, children, young adults, ethnic or religious communities, women, working professionals), the locations where you serve, and the value benefits that are unique to your practice.
Tap into the New Patient Potential
The cardinal rule for generating leads is to provide value-based content for your audience. Content can be classified into awareness-based content and consideration-based content. Blogs, videos, how-to guides, testimonials, and success stories fall within awareness-based content. Consideration-based content generally includes industry-specific whitepapers or e-books which are fact-based, include supporting data, and provide valuable insights. These help you establish credibility as both a professional and an expert in the eyes of your audience. Professionalism and credibility are key factors that influence patient purchase decisions.
The scheduling button on your website is a vital call to action that qualifies as a ‘must have.’ These need to be embedded across most pages of your website and should allow visitors to schedule their appointments, within minutes. An efficient practice management software can be linked to your website to instantly log appointment requests to the software. It also helps you with reminders, confirmations, and easy-to-fill online forms that make scheduling a breeze for new patients.
Manage Online Reviews
Dental anxiety among patients is a leading factor that impacts visitations. Thanks to Amazon, reading reviews before every purchase is the new norm among consumers. Negative reviews will add fuel to the paranoia that patients already have about dental procedures. But what happens when you do get a negative review? During such instances, it is crucial to take the interaction offline and ensure that you resolve patient concerns. Follow this up with a request, asking them to reconsider and update their reviews. Handling negative reviews is one half of the coin, the other has to do with religiously collecting positive reviews from your existing patients.
Practice management software allows you to collect reviews from your clients in a manner that is convenient to both the practice and the patient. Use the law of averages to work in your favor. A higher count of reviews reflects positively on the professionalism of your practice and encourages new patients to choose you over your competitors.
Top-Notch Front Office Systems
Your front office marks the first interaction that patients have with your practice. This includes your team of receptionists, scheduling & treatment coordinators. The front desk handles activities that range from answering phone calls, resolving queries, handling new patients, verifying insurance, managing registrations, scheduling appointments, follow-ups, rolling out reminders, and presenting patients with their treatment plans. While patients acknowledge the need to visit a dentist, they must pay for a service and put their faith in the dentist's expertise. There are no trial runs or tangibles to measure the quality of care.
Patients are left with no choice but to rate treatment and assess a practice based on its conduct towards them. This includes how they’re greeted at the front desk, the cleanliness and hygiene of the practice, how quickly their concerns get addressed, conveying the importance of hygiene and oral health, payment plan customizations, and how treatment plans get discussed. This is not the best way to rate treatments, but this is how patient perception works. To ensure loyalty and revisits from patients, it’s important to delight your patient through every stage of their journey within your practice.
Care to Recare
The hygiene department at a dental practice can contribute up to 1/3rd of the total revenue received from treatments. A large chunk of these treatments come from re-care patients. The primary objective of a dental hygienist is to provide a framework of patient care that helps identify the oral health conditions that can be prevented by dental hygiene care. Having a patient coordinator dedicated to driving engagement for re-care patients ensures that you grow your patient base while having ready alternatives to fill your schedules in case of no-shows and cancellations. The bottom line is that focusing on your recall systems is guaranteed to grow your production volumes.
An in-house membership program is where your patients receive special benefits and discounts for a yearly or monthly subscription to the services offered at your practice. The obvious benefits of such programs are it guarantees a predictable source of recurring revenue and helps you stay prepared to streamline insurance payments from known patients.
Master the Art of Referrals
When patient referrals account for a major chunk of new patients for a dental practice, it becomes vital to pay attention to your referral programs. Thanks to social media, people are connected like never before. It plays a vital role in multiplying word-of-mouth referrals. Once you’ve nurtured a loyal pool of patients, it’s important to acknowledge their contributions when they refer a new patient to your practice. Create referral cards, send out thank you notes, offer incentives, and leverage email & social media marketing to reward loyal ambassadors of your practice.
Curb the Overheads
Last but not the least, reducing overheads directly impacts your profits. A general approach that is followed to reduce overheads is by cutting unnecessary expenses or finding a less expensive supplier. But the major chunk of overheads comes from payroll, which usually runs from 20-55% of overall practice expenses. Ideally, this figure shouldn’t cross the 35% mark. Outsourcing and investing in practice management software that provides value without adding more staff members help mitigate expenses.
Boosting patient volumes, flawless and timely claims submissions, a wider range of services, reputation management, patient engagement, and lower overheads help drive the profitability of a dental practice. CareStack offers a modern cloud-based practice management solution that reduces costs while adding value to all aspects of your practice formula for profitability.