Have you looked at the internal processes of your dental practice recently? If you haven’t, it may be a good time to do so. Not only do your systems affect your bottom line, but they can also affect the value of your practice or even the ability to sell it. Vigilant dental practice management helps keep you on track and your systems running efficiently.
Procedure blocking your schedule can be one of the best ways to mitigate stress in your daily routine while providing security to know that your practice will pay the bills (and you!). If you feel freshest in the morning, prepare crowns and do more intensive procedures at this time, saving fillings for the afternoon. Have your staff explain that this scheduling is done with the patient’s best interest in mind. Similarly, schedule your new patient exams just after lunch so that you’re never late for that appointment and are always able to create a great first impression for new patients. Training your office to operate at this skill level and directive is invaluable in a dental practice transition.
Speaking of your team, how well trained are they? How do they treat your patients and each other? How do YOU treat them? Even the best dental practice owners can get complacent and have internal team conflicts. A vital keystone of smart dental practice management is continual staff training and improvement. However, it’s not just for fulfilling requirements, it can help improve your bottom line through higher quality and more efficient, cost-effective service. It not only means more income to you in the short term, but what helps net income also helps practice value. In addition, having an experienced, highly-trained staff, aware of the practice intricacies of how a profitable and successful office should run, you have immediately offered a valuable and transferable dental practice asset.
Fees, Collections, and Insurance
Do you get paid for your work? That’s not just a collections question. If you’re producing dentistry but not collecting on it, you will find it difficult to pay your bills (again, and yourself). What about reduced-fee insurance, though, do you accept any plans? If you do and are pushing your full fee-paying patients aside, you are essentially not being paid for your work; and the losses can be substantial.
For example, if you take an 80% of UCR PPO plan, your 20% discount may result in a 65% or more cut in your pre-tax compensation. Of course, this assumes that your fees are at the appropriate level; it can be much worse if they are not.
We have heard some doctors say that since they are a heavy PPO practice, they cannot raise fees. While you may not be able to raise those fees immediately, there is a portion of the practice which is not under a plan. Those patients can absorb increases in your UCR fees. You can then use these higher fees in negotiation with the PPOs. This is good dental practice management.
Please keep in mind that you’re not on your own here. We have resources, including Henry Schein Dental’s Henry Schein Practice Analysis (“HSPA”) that can help you with information on your fees, procedure mix and other practice metrics. Please reach out if you would like more information.
This is always a potentially touchy topic in dental practice transitions. The market in technology changes so rapidly that staying on top of it, particularly as sights are set on retirement, can be very difficult and costly. Now in nearly every office, digital radiography is a must. Further, dental practice management software access throughout the practice is increasingly becoming a requirement.
In both cases, the thought of waiting so that a purchaser can pick their system of choice will only diminish your dental practice’s value in the potential purchaser’s eyes. Ultimately, buyers are looking for the ability to practice with familiar technology they’ve learned on from day one. This also means quickly accessing and exchanging information, particularly from within the office, as well as with contacts and resources outside where appropriate (i.e. multidisciplinary treatment, insurance filing, etc.). Interconnectivity is certainly the future “norm”, so initial, incremental steps now can certainly pay off. You will not get dollar-for-dollar back on your technology investment, so be sure you have time to utilize your technology investment. It should further enhance your overall practice systems and your practice.
Why do these systems matter? Buyers will look at these systems and others in evaluating your office as a purchase opportunity and a winning example of effective dental practice management. The systems noted are the most obvious ones. Sophisticated buyers will look at many more, determining the quality of your practice and price they are willing to pay based on what they find. Even to less-sophisticated purchasers, poorly- run offices stand out in the market. Statistical and financial reports directly reflect the internal office processes. These reports are also important in a formal valuation, and the quality of the practice’s systems are usually scrutinized as a component in the tools utilized for evaluation.
Whether determining appraised or fair-market value (the actual price paid), the internal systems of your practice play a much more important role than you may initially think. If you do not feel that your practice is operating at its peak efficiency, the time to begin to fix those processes is now. Smart dental practice management like this greatly enhances your practice value for the future transition, while you reap the professional, lifestyle and financial benefits every day.
Henry Schein Professional Practice Transitions, Inc. is a national leader in dental practice transitions. A subsidiary of Henry Schein, Inc. they provide expert guidance for selling and buying dental practices, dental practice fees and management, assessing partnership and associate-ship opportunities, and performing dental practice appraisals and valuations.