Happy Holidays! This week we review some numbers related to insurance write offs and average overhead. I also discuss a new online resource that I think you will enjoy. Thanks for listening to episode 55 of the Business of Dentistry.
More About This Show
The day I recorded this episode was a rarity: the office was closed on a Friday. I came in to record this show, but also to look at this year’s numbers. I like to look at what we’ve done, where we are at and where we are going for the next year.
On this episode I will give you percentages, but I’m not going to go into specifics. Instead, I’ll share information from a report I pulled. I wanted to see what percentage of production we are actually collecting because it comes from multiple insurance companies and programs like PPOs, fees for service, Medicare and state Medicaid. I wanted to run a report to give me a good composite view of the practice.
When I looked at total production versus collections and write-offs, I saw that we are collecting about 73% of everything we charge out. We charge full fees, even if it’s an insurance company that we have contractual write-offs with. We are really good with our collections, it’s the write-offs and adjustments where we fall off.
Ideally of course we would collect 100% of what we charge, but I’m simply sharing to show you how I gauge the health of the practice. And I’m also sharing to encourage you to look at your write-offs versus your charges and see where you are at, and where you want to be next year.
As a practice, we are also looking at specific insurance plans in the new year, to see what is working and what is not. There are certain insurers we get killed by, especially when performing wisdom teeth extractions. So we’re looking at what patterns we’re seeing and will look at which plans we want to continue working with, or will stop.
Another number I’ve been looking at is the year to date average overhead for my practice. I’ll qualify this by saying my overhead is generally lower than general practitioners because I’m an oral surgeon.
But we track this and the key to this is tracking and understanding what your overhead is and your profit margin. Before I pay myself my average is 47.4%, about a point less than last year. We’ve improved by one point over the past year, which is something I am happy with! We’ve improved our overhead percentages this year, and we are doing okay on our adjustments.
Finally I wrap up today’s episode with a resource I want to tell you about: the Dental Hacks Nation. it’s a Facebook group with about 900 members, many of whom are regular contributors. It’s a great group with a lot of input, feedback, humor and positivity. I think it’s a great platform to check out.
Listen in to today’s episode to hear more about the group, and then let me know if you join. I’d also love to hear from you about your end of the year numbers, and what you are aiming for in 2017. Happy holidays and happy new year from the Business of Dentistry!