Establishing effective production systems

by Lois Banta

It has long been said that production must first get "on the books" in order to get "off the books." Effective production systems are essential for the success of a practice and one of the most important tools in a successfully run dental business.

Determine production goals for the practice. One way to easily achieve this is to identify how many production dollars are needed to keep the overhead at a reasonable percentage. To determine this, add up the total expenses for the practice in a year. To keep the overhead at 50%, production must be 1.5 times this number.

For example, if overhead is $300,000, then production and collections must be $900,000. But if a practice is contracted with a number of insurance plans and this results in 20% write-offs, the production goal must include an additional 20% in production to keep overhead at 50%.

Careful consideration must go into this planning process, including the following:

1. The production tracking systems should take into consideration total office production and production for each provider in the practice – operative and hygiene.
2. Take into consideration the types of payment options that coordinate well with production goals. Offer flexible financial arrangements such as CareCredit. This will help when customizing the scheduling systems and helps a practice remain consistently profitable. I will cover this system more thoroughly in my next column regarding collections. Flexibility and customer service play an important role in treatment acceptance.
3. Use electronic communication services to assist the practice with patient scheduling, follow-up, and follow through. Working "on" the practice (i.e., internal and external marketing) in addition to working "in" the practice is essential.
4. Track and identify trends. Typically, if a practice statistic goes in the same direction three months in a row, it's a trend. This is important because it identifies whether or not a specific trend is working or if the practice needs to return to the drawing board. As an example, if the production decreases over a period of three months, identifying where the change is coming from is crucial. Typically, the reasons for a decrease in productivity are linked to increased open time and decreased treatment acceptance; however, they can also be linked to a decrease in effective communication skills.
5. Inspect what you expect. Pay special attention to the type of dentistry that you want to do in your practice. Do you want to have a special focus on restorative dentistry or cosmetic dentistry? Then be sure to implement productive strategies to achieve that level of care. As an example, if it is cosmetic, close attention must be paid to marketing strategies to attract this type of patient. Each month, identify the results of the previous month's production to determine if your strategies are working well.
6. Pay special attention to gross production and adjusted production. Bill and code for what dentistry is performed. Additionally, if the fee is not going to be charged to the patient (e.g., a courtesy given), charge the entire fee anyway and create a special adjustment. There are two reasons for doing this:

a. So patients can see value in the services done for them for which they are not charged.
b. To track the dollar amount of adjustments so the practice can use the information to make informed decisions about future adjustments.

These tools for production will help the practice move in a positive direction and help achieve a high level of success.

Lois Banta of Banta Consulting, Inc., is owner of The Speaking Consulting Network. Banta Consulting specializes in dental practice management and has more than 37 years of dental experience. To contact Lois for a personal consultation or to invite her to speak, call (816) 847-2055, send an email to [email protected], or visit www.bantaconsulting.com.