OPTIMIZING YOUR DENTAL PRACTICE:
3 KEY AREAS TO IMPROVE CASH FLOW

Running a dental practice often feels like a juggling act, where you’re constantly trying to keep all the balls in the air. If you find yourself with a fully booked schedule but your dental practice cash flow feels more like a trickle than a stream, the problem usually lies in three key areas: your fee schedule, insurance network participation, and A/R (accounts receivable) management. Let’s dive into each of these areas and discover how optimizing them can transform your practice’s financial health—no juggling required.

1. Update Your Fee Schedule Regularly

Think of your fee schedule as the menu at a fancy restaurant. If the prices haven’t changed since the ’90s, you’re basically giving away filet mignon for the price of a burger. Dental fees need a yearly check-up, just like your patients’ teeth. Adjust them to reflect inflation, rising costs, and market trends. Regular updates ensure you’re not selling yourself short and getting paid what you’re worth for the top-notch care you provide.

2. Limit In-Network Insurance Participation

Being in-network with too many insurance companies can turn your cash flow into a slow drip. Insurance companies love to keep your fees low, which can make you feel like you’re working hard but not seeing the financial rewards. For a practice with six chairs or fewer, it’s a good idea to limit your in-network participation to two insurance plans. This way, you strike a balance between attracting patients through insurance affiliations and ensuring you’re fairly compensated. Think of it as dating—it’s better to have a few quality relationships than a bunch of lukewarm ones.

3. Improve A/R Management

Effective accounts receivable (A/R) management is like flossing: everyone knows it’s important, but not everyone does it regularly. Mismanagement here can leave your practice in financial pain. Implement a robust A/R system with these elements:

  • Regular Follow-ups: Chase those payments like a dog chases a stick—relentlessly.
  • Clear Payment Policies: Make sure your patients know the drill when it comes to payments.
  • Efficient Billing Processes: Smooth out your billing procedures to avoid delays and errors.

 

Better A/R management means quicker payments and fewer overdue accounts, which translates to a healthier cash flow. It’s like finding out that flossing really does save you from expensive dental work down the road.

Optimize Before Expanding

While the idea of growing your practice with new services and expansions or buying a new dental practice is tempting, remember that even a bigger ship can sink if it has too many leaks. Addressing your fee schedule, insurance participation, and A/R management first will give you a sturdy vessel, ready to sail smoothly into new waters. Expanding without this foundation is like building an extra room on a house with a shaky foundation—it’s only a matter of time before problems surface.

In conclusion, keeping your fee schedule up-to-date, being strategic about your insurance network participation, and tightening up your A/R management are crucial steps to boosting your dental practice’s cash flow. This will improve your expansion options while also increasing your value in you’re interesting in selling your dental practice one day. Optimize these areas first to pave the way for sustainable growth and financial stability. Now, go ahead and give your practice the financial check-up it deserves!

Dave Miller
Rosen Dental Transitions
p. 617-990-7237
Schedule a 15 minute call

Related Posts

Receive New Listing Alerts!

Register to receive email and SMS text communication of new listings in the markets you are looking to operate a dental practice.

By providing your phone number and selecting "Yes" below, you agree to receive text messages from Rosen Dental Transitions, LLC. Message and data rates may apply. Message frequency varies.”

I agree to receive SMS text messages of new listings (fastest way to hear about new listings!)*
Location(s) of Interest*