Q: I have been practicing general dentistry for 25 years. To date, I have enjoyed the profession and have been professionally fulfilled. However, my accountant has informed me that, in the last 10 years, I have been grossing more but taking home less net revenue. I can’t determine what is happening with the financial aspects of my practice. Do you have some suggestions to alleviate this challenge?
A: Yes, I do have some suggestions for you. Most general dentists are feeling the same financial challenge you described. There are numerous reasons for the problem. I will discuss a few of them below along with some potential solutions.
Dental third-party payers now indirectly dictate the income that dentists receive by setting the reimbursement levels. It is clear that reimbursements from most third-party payers are not keeping up with the growth of the economy. As a result, most general dentists are making more gross revenue but seeing less net revenue since almost all dentists are obtaining the majority of their revenue through third-party payers. There is little or nothing you or any other individual dentist can do about this situation. Changes in this area must be the responsibility of organized dentistry by negotiations with the respective companies.
There are now many corporate and group practices in the United States. They have provided a way for young dentists to have a place to practice after graduation, build speed and competence, begin to pay back their enormous education debt, and still provide for their families. Also, some mature dentists are finding the practice characteristics of corporate dentistry are more attractive to them than traditional private practice. On the other hand, corporate offices often enter communities and create competition for private practitioners. Why is this a challenge? Corporate practices can negotiate with distributors for discounts and other benefits that are difficult for private practitioners to obtain. These savings allow corporate practices to set lower fees than some private practices.
Third-party payers and corporate groups are causing the major challenges with your net revenue.
What can you do?
I see several proven, identifiable actions that individual dentists can take to reduce the obvious stagnant net income problem. They are as follows:
Increase the clinical responsibilities of staff. This will allow production of some clinical tasks at lower cost and free the dentist to do other income-producing clinical procedures at the same time. Since staff do not have overhead costs, and they receive a salary, this concept can make a significant increase in gross revenue at minimal cost to the practice. Although some dentists do not delegate many clinical responsibilities to staff, it has been well proven that motivated, educated, and trained dental assistants and hygienists can become highly proficient at numerous clinical tasks. An article I wrote for Dental Economics recently enumerates and explains many clinical procedures that can be delegated legally.i Such delegation is one of the most important ways to increase services and revenue.
Increase the knowledge and speed of dental assistants. There are many ways to implement this valuable concept. One of the easiest methods is to have frequent in-service education sessions to upgrade staff on whatever techniques and services you are emphasizing in your practice. A good time to have these meetings is one hour before the practice opens in the morning. The meeting can be held for 45 minutes, at which time the morning “huddle” can be held. This simple concept can significantly improve staff knowledge and speed.
Increase the speed of procedures by using the six-handed dentistry concept when appropriate. Most dentists are now using the four-handed dentistry concept. However, expanding the staff to allow for six-handed dentistry is not as well known. You may think that hiring one more dental assistant will not be cost-effective. Adding just one more assistant to your practice can increase your practice productivity and revenue by far more than the salary of the assistant will cost. Of course, this assumes that the assistant is motivated and educated well. This person can help not only the dentist but also hygienists.
Code procedures appropriately. Many new codes are being implemented on a routine basis. Some of them provide revenue and some do not. It is imperative that your front-desk staff are knowledgeable about the many codes they use daily. I suggest using the American Dental Association code book as each edition becomes available. Additionally, I suggest using the book that is revised and updated each year from Dr. Charles Blair and Associates, Coding with Confidence. The codes change constantly, and some are very difficult to understand. Coding is a topic of major influence in your practice and is a logical topic for frequent in-service education meetings. Your meetings should include relative payment for specific codes and clarification of the many codes in the profession.
Develop improved relations with third-party payers. Your front-desk staff should become as knowledgeable as possible about all of the third-party payers your practice uses. All of the companies have detailed documents to help with this task. Your staff should know the many rules and regulations of each company, the paperwork necessary, the relative reimbursement level of each, and the usual timing of payments. Although third-party payer challenges are well known, and many dentists are not pleased with some of the companies with which they work, dentists should do their best to implement a good working relationship with these companies until a more equitable relationship between dentists and third-party payers can be developed.
Improve your collection policy. General practice overhead is extremely high. Average overhead for typical GPs is in the neighborhood of 70%. This necessitates excellent patient financial commitments and highly competent office business staff to provide adequate collections. Some practices are negligent in this area of activity. Patients should have detailed information on your collection policies before starting treatment and should be held to the policies. If you feel incompetent with your collections, get some help from firms that specialize in that area.
Negotiate supply and equipment costs with your distributors. As you know, dental support organizations (DSOs) and group practices negotiate with distributors to obtain the most value for their expenditures. Supplies and equipment amount to about 6% or 7% of your gross revenue. That is a significant amount of your income. Talk to your local dealers to negotiate the best costs you can obtain. Also, look seriously at the house brands of products from the reputable distributors. Purchase the products that the distributors advise you are working well. In Clinicians Report research, the house brands are usually premium products with the distributor’s name on them instead of the actual manufacturer’s name.
Assign one of your staff as a treatment coordinator. The treatment coordinator should follow each patient through treatment, including referrals to specialists. This person can help to avoid patients getting lost and not staying with their treatment plans.
Author’s note: The following educational materials from Practical Clinical Courses offer further information on increasing productivity.
- Multiple Patient Scheduling—Working Smarter, Not Harder (Item No. V4794)
- Top Ten Revenue-producing Expanded Functions (Item No. V4700)
- Optimizing Dental Hygiene to the Next Level (Item No. V4799)
- Foolproof, Fast Single-crown Procedure (Item No. V1980)
Two-day hands-on course:
- Oral Surgery Secrets with Dr. Karl Koerner
- Restorative Dentistry 1—Restorative/Esthetic/Preventive with Dr. Gordon Christensen
For more information about these educational products, call (800) 223-6569 or visit.
i. To read Dr. Christensen’s August 2018 article, “We already have the perfect team,” visit and search “Christensen perfect team.”