Running a dental practice requires a lot of hard work and attention to details that aren’t related to the clinical care of your patients; in other words, it isn’t easy. Successful private dental practices have owners who understand the importance of tracking expenses systematically, maximizing revenue, and minimizing risk. These practices have become financially astute to ensure that the business is profitable. While practice success requires a lot of hard work and sometimes difficult decisions, many dentists are happy in their careers and feel the challenges are worthwhile. They feel professionally satisfied and appreciate the benefits flexibility and profitability that they are able to build into their personal and professional lives.
Several recent surveys have reported that the 2008 recession caused significant and lasting shifts in consumers’ spending patterns, especially when it comes to healthcare. And, even though the recession is over, consumer demand for dental care has leveled off and caused dentists across the country to increase their capacity with a reduction in profitability and earnings.
The American Dental Association’s Health Policy Institute (HPI) describes this economic reality as the “new normal” and reports that this shift has caused many dentists to do more with existing resources and, in some cases, to postpone retirement. Today’s economic realities have made it even more challenging for dentists to maintain the right balance between revenue and expenses.
Another reality of this new normal is the challenge of managing the clinical aspects of dentistry with monitoring the balance sheet and growing the practice. Recent data shows that mid-career and older dentists are feeling the pinch of trying to gain traction in today’s economy.
While today’s dental practice environment doesn’t require the dentist to have an MBA, it’s important to have enough business savvy to capitalize on revenue.
Critical factors include identifying metrics for success, establishing internal controls to prevent fraud and embezzlement, setting up patient payment systems that work, determining how you pay yourself, and improving patient satisfaction and retention. Many dentists—at all stages of their careers—find that having a clear, documented financial protocol outlining these procedures and targets can help. Many find that it also helps to share some of that information with members of the team since it’s an opportunity for them to see how they contribute to everyone’s success.
The Managing Finances module of the American Dental Association’s (ADA) Guidelines for Practice SuccessTM
) offers tips on managing your practice’s revenue and expenses. This module provides a framework for handling the business side of your practice with consistency and predictability. Keep reading for more information or link to one of the topics below for more details about specific areas of interest.
RISK MANAGEMENT AND FRAUD PREVENTION
The American Dental Association thanks the following individuals for their contributions to this module:
Dr. Andrew B. Brown, Council on Dental Practice 2012-2016, chair 2015-2016
Dr. Joseph G. Unger, Council on Dental Practice 2011-2015, chair 2014-2015
Dr. Jean L. Creasey, Council on Dental Practice 2012-2016
Dr. Miranda Childs, Council on Dental Practice 2011-2015
Dr. Scott Theurer, Council on Dental Practice 2014-2018
Dr. Irene Marron-Tarrazzi, immediate past member, New Dentist Committee; Second Vice President 2015-2016
Dr. William "Bill" Blatchford
Ms. Teresa Duncan
Ms. Debra Engelhardt-Nash
Ms. Susan Gunn
Ms. Cathy Jameson, Ph.D.
Dr. Roger Levin
Ms. Virginia Moore
Ms. Tammara Plankers
Mr. William Prescott, EMBA, J.D.
Mr. Allen Schiff, CPA, CFE
Dr. Roy Shelburne
In addition to the individuals cited above, principal contributors to this publication include Dr. Pamela M. Porembski, director, Council on Dental Practice, Cynthia Kluck-Nygren, manager, Dental Team Activities and Publications, and Dr. Diane Metrick, senior manager, Special Projects and Emerging Issues. Special thanks to the ADA’s Council on Dental Benefit Programs, Council on Dental Practice, Council on Ethics, Bylaws, and Judicial Affairs and the ADA’s Legal staff for their review of and contributions to this module.