Collections -- Ensuring Your Numbers Are Accurate

Properly recording payments in the collections process at a dental office can be complicated, especially if the dental office participates in one or more dental insurance networks.  And the more complicated, the more room for human error.  One simple way to reduce errors is to verify the deposit slip that accompanies the checks that go to the bank matches the record of payments for the day in the dental practice management software.  If the two do not match exactly, an error has been made somewhere along the way and the person responsible for the deposit should find and correct the error.

Here are a few tips and comments about this system:

• Deposits should be grouped by full calendar day. For example, checks and cash that are recorded on Monday should be deposited separately from checks that are recorded any other day.  This allows for a clean and consistent convention for grouping payments on deposit slips.  Further, most dental practice management software can only generate payment reports for full calendar days.  You cannot typically get a report of checks that were received from Monday afternoon to Tuesday morning.
• Keep copies of the deposit slips that go to the bank AND the payment reports from the practice management software.  You can scan these documents if you are a paperless office.  The historical records can be valuable if patient account entries are lost or altered in the future.
• If there is any chance at all of embezzlement, dishonesty, cheating, theft, whatever you want to call it, consider reconciling the payment records from the practice management software with deposits in the bank on a monthly basis.  This reconciliation should include credit card payments, care credit payments, electronic deposits, and patient refunds in addition to cash and check deposits.  The person performing the reconciliation should NOT be the person responsible for handling the money stuff on a day to day basis.  Even if everyone is honest, this monthly reconciliation can catch a few innocent but costly errors on a monthly basis.
• Be aware that while this system improves accuracy in the records of money received by the office, it does not address errors or dishonesty with regard to writeoffs.  If the person processing payments is entering artificially high writeoffs, this system will not detect the errors.

What is the customer acquisition cost for a dentist?

See my answer on Quora: http://www.quora.com/What-is-the-customer-acquisition-cost-for-a-dentist.

A Dentist's Experience with Groupon - Preparing for the Deal

The popularity of daily deal coupon sites like Groupon has increased dramatically over the last year.  The consumer gets a discount, Groupon gets a cut of the offer price, reportedly around 50%, and the business offering the deal gets more customers.  But recent articles such as Is Groupon Good for Small Business in the New York Times question whether the benefit of more customers outweighs the cost to the small business.  The products or services offered in the deal are deeply discounted after all.  Further, the dramatic increase in customer traffic may be more than the offering business can handle.

I work with a dentist in Grand Rapids, Michigan who decided to gamble and offer a Groupon for dental services.  Actually, we put quite a bit of thought into the decision to do a Groupon.  We considered internal costs, the value of new patients, the likelihood of deal buyers deciding to become regular patients, the ability to handle a large number of patients, some of the sticky points of offering health care services to patients who may not be appropriate candidates for the services included in the deal, and more.  We answered our questions as best we could and worked with Groupon to structure the offer in a way that would reduce the potential for problems, but at the end of the day, we still faced a number of unknowns.  The endeavor was in fact a gamble, but we believed it to be a smart gamble.

We capped the number of Groupons at 500, but anything close to 500 was a scary number.  We could comfortably accomodate within the current practice schedule only about 150 Groupon patients.  To prepare for the possibility of more than 150 Groupon patients, we identified some additional days we could open the practice if needed.

As I write, the deal is still being offered.  I will write again to describe how it goes.

Dental practice bonus systems

Dental staff bonus plans has been the most popular topic on this blog about dental practice management.  I'm often asked whether dental practices pay bonuses to staff members.  Some dental practices pay bonuses and some practices do not.  Among practices that pay bonuses, bonuses (or incentive compensation) comprise anywhere from a small percent of earnings to 100 percent of earnings.

From my experience, there is no "normal" when it comes to dental staff bonuses.  Dental practice managers need to decide for themselves what makes sense in their situation.

Four Factors to Increase Dental Collections

See the full article, which I posted as a Knol. Here's the list:

1. Number of patient visits
2. Procedures per visit
3. Fees per procedure
4. Percent of fees collected

Five Dental Consulting Biases

See the full article, which I posted as a Knol. Here's the list:

1. Short-term bias
2. Dramatic change bias
3. One size fits all bias
4. Smart sounding answer bias
5. Rule of thumb crutch

Appointment Reminders

I offer anecdotal evidence on the value of appointment reminders. A dental practice in Grand Rapids, Michigan neglected to perform reminder calls one day. The no show rate was extraordinarly high for the affected day and some patients specifically said they forgot their appointments without the reminder calls. Separately, the practice quit sending appointment reminder postcards for three months. Last minute cancels were higher in those three months than ever before.