NewsletterPart 1: Production and Collections.
By Rhonda Savage, DDS | Diana P. Friedman, MA, MBA
The world has gone digital, dramatically influenced by fast-evolving online technologies and communication channels. The new digital age of communication can be overwhelming and intimidating, as we move from face-to-face experiences, tangible documentation, and brick-and-mortar environments to virtual conversations, digital documentation, and intangible experiences.
A 2011 study documented the fact that 57% of people stated they talk more online than they do in real life.1 What started as the World Wide Web and simple advertorial websites has now evolved into a complex platform for communicating, learning, and transacting business online. This world encompasses not just websites, but also mobile sites, applications, social media channels like Facebook, YouTube, Twitter, blogs, and more. The data is astounding: 98% of US households with incomes of $75,000 per year or more use the Internet.2 More significant is the fact that 139 million consumers used the Internet on a monthly basis to seek healthcare information.3
In June of 2000, Sheets and Douglass published a research study in the Journal of the American Dental Association that concluded: “Changing patient demographics and technological advances will lead to higher patient expectations and greater demands for oral healthcare in the 21st century than they had been during most of the 20th century.” The changing trends would be due to:
• an increase in the general public awareness regarding oral healthcare;
• a more knowledgeable patient who has researched dental service options and providers online; and
• patients who are becoming more aggressive in holding healthcare providers accountable for the quality of care.4
Today’s consumer has a much louder voice on the Internet. This consumer is significantly better educated and is substantially more prone to shop around for services while evaluating providers and studying posted consumer comments and reviews on websites and social networks.
In 2011, the average shopper consulted with 10.4 online sources prior to purchase, twice as many as in 2010.5 Although online comments, positive or negative, are not as powerful as a direct interpersonal exchange or recommendation, they can be very important to your business as the majority of your target consumers rely upon online recommendations to make their final choices. Anecdotal evidence exists to support the fact that even when personal recommendations are made, consumers will tend to get online and vet those out before making a decision to contact a service provider. Young people, especially, are heavily influenced by the Internet. It has been estimated that the Generation Y category population (aged 6–24) influences 50% of all spending in the US.6 In order to convert all referrals into your practice, and secure new patients online, it is imperative to have a comprehensive and effective online presence.
Patient selection of a provider is not the only purchase behavior impacted by their new online preference. Even existing patients increasingly demand that the practice communicate with them where they are—online. A national longitudinal study by Sesame Communications found that 97% of dental patients would rather click than call the office,7 with 90.7% noting online access to the practice and their records was “much more convenient.”8
In order to best serve your patients, it is important that you develop a comprehensive, integrated, user-friendly online platform to facilitate such communications, and address patient preferences. Interestingly, dentists have recognized this trend with 98% of dentists surveyed stating that letting patients choose their preferred method of communications supports their commitment to individualized treatment.9
The tight economy has fortified a more competitive environment for dental practices. Discretionary spending on cosmetic (eg, veneers, whitening) and optimal care options (eg, implants) drastically declined over the past 24 months. In this market it is important for the practice to effectively attract new patients, retain existing patients, and ensure treatment acceptance supports the practice production goals. More significantly, practice operations need to be improved to ensure the schedule is consistently full, and that accounts receivable are effectively managed.
Technology provides powerful tools to effectively address these challenges, from comprehensive patient portals that allow 24-7 access to records, appointment information, and payment options, to automated e-mail and text message appointment reminders. On the marketing side, a successfully branded online presence can drive high-quality new patients into the practice.
Whichever digital channels the practice opts to implement, it is important that those communication channels be professionally and proactively managed so as to maintain a strong and cohesive practice brand, and online reputation.
The questions this Whitepaper will address are:
• Do traditional practice operations, marketing, and patient communication modalities still have value?
• What online practice operations, marketing, and patient communication platforms exist, and what is the business case and Return On Investment (ROI) associated with each?
• How do you optimize practice performance in the digital age of dentistry?
In order to study this issue and quantify the findings, this Whitepaper will focus on aspects of the three core areas that impact the practice the most. In each segment studied, a more granular analysis of the comparative costs, outcomes and ROI is provided. Those areas are:
1. Production: Keeping the operatories full, the practice on schedule, and improving patient case acceptance;
2. Collections: Managing past due accounts receivable; and
3. Marketing: Attracting new patients, retaining existing patients. (This segment will be published in Part 2 of this series, in the October issue of Inside Dentistry.)
In order to effectively retain relationships with existing patients, increase commitment to appointments, and keep the schedule full, dental professionals often develop and implement comprehensive systems and procedures. These cover all of the important practice operational areas including systems addressing scheduling, appointment confirmation, patient education, and patient retention via a recare soft-tissue management program.
The Traditional Practice Model
In the traditional dental practice, implementing these systems and procedures generally required significant investment of staff time (eg, appointment confirmations) as well as direct costs (eg, expenses for postage, newsletter development and printing, recare cards, practice stationery).
Keeping the Schedule Full
In an average dental practice, we can estimate the following costs associated with securing effective patient communications so as to drive the right performance in terms of production and patient retention.10 The calculation of costs associated with these systems, provided in Table 1, translates to a conservative $2,900 per month in overhead expenses.
The challenge with the traditional model is not simply the time, focus, and cost associated with implementation of the systems. The most significant challenges are associated with the human element introduced into these solutions.
A dental practice is a hectic work environment. The fast pace and need to maintain patient management as a top priority often results in the team not being able to consistently execute all systems effectively on a daily basis. This impacts practice performance in fundamental ways. For example, an administrative team facing a busy day with multiple emergencies and last-minute cancellations that need to be filled may be unable to complete confirmation of the next day’s patients earlier in the morning. By the time outbound calls are made, the team may not be able to reach all patients, and any openings that are identified may be difficult to fill with productive appointments. This will most likely impact the practice production and collection for the coming day.
In addition to effectiveness, the human element in patient communications introduces diversity and inconsistent implementation. For instance, the scripts for confirmation calls may not always be used, or confirmation calls may not be made at the appropriate optimal time to secure patient compliance. These types of factors will also drastically impact results.
Automation of certain administrative duties, like patient confirmation, removes these risk factors and manages patient communications in a more consistent, reliable, and predictable manner. A significant 87.6% of surveyed dental professionals agreed that automated patient reminders gives them the peace of mind to know all patients are consistently contacted prior to their appointment. More importantly, in a national survey conducted by Sesame Communications, 79.5% of patients stated they preferred text message and e-mail reminders over phone reminders.9
Improving Patient Treatment Acceptance
Research consistently shows that, on average, consumers require 7 messages before they make a purchase decision. Assuming this statistic holds true for dentistry, it is important to ensure the practice continues to educate patients regarding diagnosed incomplete treatment.
In a traditional practice, this is accomplished via phone calls, printed newsletters and recare appointment examinations. Consistency and quality of the phone call can vary due to the effectiveness of the tracking system, the experience of the team member, and verbal skills utilized by the employee. Newsletters are not only costly, but tend to be a “one size fits all” solution, so there is no ability to customize messages to specific patients. The limitation with recare visit presentations is that they are separated by long intervals of months, which decreases the effectiveness of the message.
The Digital Practice Model
Dental professionals value building relations with their patients, and have traditionally seen personal communication as a key variable in delivering an excellent experience for patients. Interestingly, research conclusively demonstrated this may no longer be the case. It turns out that automating systems and leveraging technology to deliver a better, more consistent performance and patient experience is not about the practice, it is about addressing existing patient preferences. Patients have embraced the digital age, and practices need to change to meet patients on their terms, where they are—online. In a 2010 research study by Sesame Communications close to two thirds of patients noted having 24-7 online access to the practice and their records makes them more likely to stay with the practice.11
The good news is that automation in patient communications offers a significantly more economical model for the practice, with substantially higher ROI.
The costs associated with a complete online patient communication portal ranges from $100–$300 per month, depending on the sophistication of the system and its features. On the higher end of the spectrum, a patient communication platform will include the following features:
• Automated appointment reminders—voice, e-mail and text messages
• Automated patient educational e-mails post treatment presentations
• 24-7 patient access to their records so they may share treatment diagnosis with a significant other/decision maker
• E-newsletters that may be customized, and be content-specific, per patient treatment profile. Interestingly, in a national study, 61.8% of dental professionals stated that electronic newsletters are important to the success of their practice9
• System for generating promotional campaigns to the patient population (eg, whitening special in the Spring)
• Ongoing patient communications including birthday cards, holiday cards
The benefits of implementing a complete, integrated digital solution for production-related patient communications are substantive in terms of practice efficiency, quality of patient experience, and ROI. Automation delivers more consistent patient compliance, and a more predictable schedule and production for the practice. In a national survey of dental professionals, 85% of participants stated sending automated appointment reminders reduces outbound calls from the team and saves them time.9 The time savings can reduce staffing requirements and allow the team to focus on more important tasks like maintaining great relationships with existing and prospective patients.
Digital automated patient communication platforms reduce costs by over $20,930 per year, translated to $1,744 per month—not an insignificant amount. Most importantly, these savings are achieved while delivering a quality patient experience that is consistent, predictable, and effective in keeping the schedule filled, improving treatment acceptance, and retaining patients in the practice.
Managing collections in a practice is a priority, as this activity defines cash flow and impacts budgetary decisions. Collections are a complex undertaking involving many aspects throughout the process of rendering treatment to patients. The different elements include:
• Case and fee presentation
• Securing a down payment
• Collecting insurance benefits
• Financed monthly payment plans
• Managing accounts receivable (A/R), and delinquencies
Considering the fact that close to 60¢ of each $1 produced in a practice goes to cover expenses, it is critically important to collect all fees for services delivered. Of particular concern are past due A/R. How a practice manages past due A/R dramatically impacts profitability. This Whitepaper will discuss the most challenging collections a practice faces—past due accounts.
The Traditional Practice Model
In a traditional practice, the collection efforts may be pursued through different systems. In most instances, the process will include repeated monthly billing (2–4 statements), a letter from the practice, and, at some point, initiation of collection calls. Considering the fact this is an extremely sensitive area to manage, oftentimes practices are reluctant to initiate collection action, allowing accounts to become more delinquent and a higher write off risk.
Recent cost-saving measures by the US Postal service resulted in fewer delivery dates, and a much slower (5–7 days) delivery schedule for all classes of mail.11 This can dramatically and negatively impact collections and delay receipt of statements and patient and insurance payments. The ability for the patient to pay online provides a beneficial and effective solution that addresses these factors.
Based on a national survey of dental practices, the average A/R 60 days past due are at 36%, with 30% over 90 days. The average days a dental practice account is outstanding were 39.3 days. A Dental Economics survey concluded managing each A/R in a practice costs between $7 and $10 per month, significantly impacting profitability margins.12 Table 3 provides a conservative estimate of $3,550 in monthly costs associated with managing A/R.
Collections are always a challenge, as they place patient relationships at great risk. Once confronted with an outstanding balance, patients may be embarrassed or apprehensive about returning to the practice, and at times will initiate new complaints regarding the care they received as justification for not clearing their balances. Either outcome is not optimal, yet the system does not support any other solution but personally confronting delinquent patients.
The Digital Practice Model
In the digital practice, collections are managed in an automated, consistent, and predictable manner. Monthly billing addresses the current accounts within 60 days of treatment delivery. A complete online patient portal affords patients the opportunity to access their account information 24-7, and the ease and discretion of paying their bills online via credit card. Interestingly, in a survey of dental patients, 90.3% stated they were comfortable with online bill payments for their dental services.7
Delinquent accounts are often managed via discrete automated e-mail reminders, informing the patient of the delinquent balance. Automated reminders for accounts 60 plus days past due can be managed through patient portal functionality. Research on online payment of delinquent accounts has uncovered astounding results. Within 24 hours of sending an automated past due balance e-mail reminder, 32% of patients make an online payment. Within 48 hours, a significant 50% will make an online payment.13 This is significant as the practice can promptly collect the past-due funds without risking damage to their relationship with a patient, or investing great effort in collection activities. Interestingly, 56.9% of dental professionals surveyed stated those patients who pay online pay faster than those who choose to pay by posting a check to the practice.9
Managing past-due A/R in a dental practice is critical to its profitability. Transitioning to a digital solution not only saves on average $36,000 per year, it more significantly allows the patient to become compliant with their financial obligations, without putting at risk the relationship and the lifetime of the patient in the practice.
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Rhonda Savage, DDS
Chief Executive Officer
Miles Global
Past President
Washington State Dental Association
Gig Harbor, Washington
Diana P. Friedman, MA, MBA
President and Chief Executive Officer
Sesame Communications
Seattle, Washington
