Dental Practice Management: Is a Financial Arrangement Coordinator Necessary?

Dental Practice Management: Is a Financial Arrangement Coordinator NecessaryThe dental office financial arrangement coordinator is an important part of dental practice management.

The financial coordinator assists dental patients with making payment arrangements and coordinating dental insurance benefits so that dental treatments are compatible with the patient’s budget, thus you, the dentist, get paid in a timely manner.

When asked about having a financial arrangement coordinator for his dental office, one California dentist complained, “I wish everyone would just pay at the time of service!”

In our most recent survey, The Wealthy Dentist asked dentists if they employ a team member as a financial arrangements coordinator, and dentists were pretty split on their responses. 55% responded that they do not employ a team member as a financial arrangement coordinator, and 45% responded that they do employ a team member to carry out this important dental practice function.

Dentists’ feelings on the subject are mixed; some feel this type of position is better suited for larger dental practices, while others insist it’s absolutely necessary to have someone handle financial arrangements.

Here are just a few of the comments from the responding dentists:

“I have 1 designated team member to make financial arrangements, but occasionally another member has to step in due to the primary being out of the office for various reasons.” (Nevada dentist)

“We estimate dental insurance benefits, and receive the patient’s portion on the date services are provided. Other than that, the only other financial arrangement offered is through Care Credit. Our receptionist comfortably handles this as part of her duties.” (Illinois dentist)

“This is probably a great idea for larger multi-dentist offices, but I find it is not likely to be cost effective in a smaller practice.” (General dentist)

“We have only one person and no one else discusses money. That way it stays simple and patients can’t say someone told them something different. For the most part we have a set of rules to follow, but there is always that special situation where we break the norm.” (General dentist)

“Complete necessity to have someone ultimately responsible and the ‘go to’ person for all financial arrangements, especially patient interaction.” (Michigan dentist)

“An absolute necessity to have one person handling this!” (California dentist)

“This position is vital to keeping cash-flow running smoothly.” (General dentist)

“I make all the necessary financial arrangements directly with my patients, but I am an old-fashioned dentist in a small town, and I want to know what is going on (financially) with my patients.” (Kansas dentist)

How do you handle this dental practice management position in your dental practice? Is one person designated as your financial arrangements coordinator?

Dental Tenants and Changes in the Landlord Relationship

Dental Tenants and Changes in the Landlord RelationshipGrowing up in the 1970s, as the son of a Shopping Center Developer, I became acquainted early in life with leasing terms such as Percentage Rent, Natural Break Point, NER and so forth.

My father spoke highly of his tenants and took a genuine interest in helping them succeed in their business. When a tenant had trouble paying rent, he would spend time with them trying to understand the reasons, and when possible, made concessions such as rent reductions.

In close collaboration with his tenants, my father appreciated that his success was dependent upon theirs. This is a contrast to the manner in which landlords operate today.

Looking Back

It takes me back to 1978, when I was a 10 year-old boy, watching my father prepare for the grand opening on the first expansion wing of what was, at the time, one of Western Canada’s first regional shopping centers.

He would walk the corridors of the mall with a bullhorn, directing construction workers, ensuring that the opening would be on time. Located in Red Deer, in the Province of Alberta, a town of 50,000 and a trade area of a quarter-million consumers, the mall was comprised primarily of local retailers who generally made a prosperous living.

Helping Retailers

The day before the mall was to open to great local fanfare, my father noticed that the new optometry store had almost no inventory, as their expected shipments had not yet arrived.

He immediately went into action, contacting optometrists at other locations he owned, and asked them to forward as much of their excess stock as possible. In return, my father gave them various concessions, such as future rent reductions.

By the end of the evening, over 40 boxes of frames, glasses and other eyeglass products had arrived at the new mall, and the optometrist was able to open his store, fully stocked. My father understood that a retailer never gets a second chance to make a good first impression.

1980s Inflation

Unfortunately, several years after the mall opening, in June 1982, Canadian interest rates similar to those in the United States had risen to 21.5%1,2. These higher interest rates were the result of the Bank of Canada’s and Federal Reserve’s attempts to contain spiraling inflation, which over the same period, had risen by more than 13 percentage points in both countries1,2.

Sadly, my father was unable to cope with the rising costs of operating the shopping centers, hurting his malls, his business and his pride. As visionary as he and many other developers at the time were, they were unable to foresee the business-altering impacts of inflation and the consequent rise in interest rates.

Tenants as Commodities

Today, malls, strip centers and medical/dental buildings are primarily managed by institutional owners, where tenants are viewed not so much as collaborating business interests, as they are commodities, where they are bought, sold, discarded or traded in favor of the mall owner’s and mall stockholder’s bottom-line.

When the costs of operating malls and other commercial properties unexpectedly and quickly began to rise as a result of higher inflation in the early 1980s, the mall and property owners were forced to absorb the additional expenses, thereby cutting into their profit margins. Many properties were foreclosed and resold to other interests. The new owners applied the lessons they had learned from their bankrupt predecessors, and redrafted their lease agreements to transfer inflation risks to their tenants through the “net lease” or Triple Net Lease Agreement (NNN).

This will make managing through the next inflationary period considerably more difficult for retailers and other tenants. Next week, I’ll explain why some dental leases can be so tricky.


Bibliography
1 US Business Cycle Expansions & Contractions (undated)
2 Bureau of Labor Statistics, Consumer Price Index, All Urban Consumers – (CPI-U)

Dentists: One in Four Lose Patients at the Front Desk

Dentists have a range of opinions about their front desk staff, found this survey. A third of dentists (34%) said their front desk team does an amazing job, and another third (31%) said those team members are satisfactory.

However, 24% of dentists acknowledged that they lose patients at the front desk. Another 11% admit that they need to prioritize additional front desk team training.

Dental front desk“My front desk person just left for medical reasons and I discovered huge amounts of denied claims and inadequate insurance processing,” said one dentist. “My accounts receivables are horribly high and probably lost forever. I didn’t pay enough attention.”

“Do I have any front desk horror stories?” asked a Texas dentist rhetorically. “It’s too painful to reply.”

Read more: Dental Practice Success May Hinge on the Front Desk

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