Top 5 Ways to Improve the Cash Flow of Your Dental Practice
A healthy cash flow is like blood in the veins for a dental practice. However, most of the dental practices have to deal with bottlenecks that reduce efficiency and hinder the growth of the practice. The biggest threat to a dental practice’s long-term success is not a lack of profit, it’s a lack of cash flow. Though the providers often try to plug the loopholes, there might still be that slight room for improvement or a better way of handling things that does wonders with the overall profitability of the practice. It’s imperative that time be given to think as to how you can increase the efficiency and eliminate the bottlenecks in the way you are currently handling the workflow. This article deals with issues that might be affecting your efficiency as a dental provider and are worthy of being given a read even if you think things are under control.
1) Effectively coordinating with patients to keep track of patient appointments and verifying patients’ insurance eligibility well in time
Most practices struggle with a true scheduling system with synchronous steps and clear guidelines for patient appointments that the front-desk staff follows. Practices just try to “fill in the holes”. This approach hurts the cash flow the most. Often, patients who come to dentists for a visit, complain about improper communication of appointment times, delay in service and incomplete information being provided to them about their share amount they have to bear for the service in the overall cost of a dental procedure. All these issues have a common cause and that is mismanagement or inefficient management of the patient appointments and insurance eligibility at the office. Often, the staff at the dental office struggles with keeping up with the timely execution of these important tasks besides taking care of routine operational tasks at the office. This aspect needs to be well thought about and needs proper and expert execution as it has maximum impact on the cash coming into your practice. A solution for this is to obtain and store data of each patient in a dental software. All the relevant information for a particular patient should be fetched by an initial phone call and entered in a patient file well before the actual appointment. Providers can take the assistance of reliable dental billing companies for efficient handling of this process.
2) Implementing measures to assist the office staff in better deliverance of operational tasks
Once the issues with the scheduling system and patient eligibility verifications have been dealt with, the other area to focus on is to improve the execution of the operational tasks such as front desk activities, systems to facilitate more efficient performance of dental assistants and hygienists, patient management on the office floor, keeping a check on the ambience and office decor, overall cleanliness of the office, and so on. These are some of the aspects that impact the contentment and satisfaction of patients after a visit to your dental office. Often, because of overburden of work and little time for these routine works, these things are ignored and leave a dent on your service delivery.
3) Regularly scrutinizing the cash-flow statement of your practice
We have discussed how important it is to optimize the execution of activities at your dental practice. However, it’s important to keep a note of and regularly scrutinizing your cash-flow statements. Even if you have outsourced the billing services to dental billing company, you should always prefer a dental billing company which provides you with timely reports on the overall health and performance of your practice on key parameters. You should know where your practice financially stands at all times. Having a clear estimation of incomes and expenses puts you in a comfortable position to deal with any unexpected shortfall.
4) Keeping updated about the changing guidelines and policies of insurance companies for insurance plans
Insurance companies can severely affect your cash flow and cripple your profit margins. Dental practices have to deal with plans of various insurances and with policies and guidelines for plans changing very frequently, inaccurate claims filing becomes a major cause for claim denials. It becomes one of the major factors in determining if you get paid for the services rendered. So, you have to keep a check on the updates and ensure that before you provide a service to patients, you carefully calculate the patient portion of the payment and submit accurate claims with the insurances.
5) Managing a reserve fund for your practice
Keeping updated about the overall cash flow of your practice helps you keep ahead of the financial exigencies all the time. However, sometimes we have to deal with situations which are out of our hands like the current situation of Covid- 19 which has severely affected the cash flow of dental practices across the country. So, you should start to put money away for a rainy day, kind of a reserve where you put a certain amount of money every month to help you during any financial difficulty that might arise. This reserve can help your practice get through tough periods of slow revenue and help you cover employee salaries, order equipment for procedures, or invest in growth opportunities. This step might be the most difficult to follow but could go a long way in providing the financial stability to your practice.
Healthy cash flow is the most important part of any practice. Irregular cash flow poses difficulties in every aspect for practices. The ideas suggested in this article may not end all your issues at one go, but they can go a long way in ensuring that every aspect of your practice’s cash flow and practice management is dealt with utmost efficiency and that your practice gets poised for higher growth.