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46 Cards in this Set

  • Front
  • Back
97 percent of all business's started in 1998......
will fail within five (5) years
Patientsform their opinion of your office based upon?
how they aretreatedby front desk personnel
GeneralPractice-
80% Dentists are in general practice -average overhead 65%
Specialty Practice
1.Periodontics
2..Pediatric~ 3. Endodontics -lowest overhead(28 -30%) 4. Oral & Maxillofacial Surgery -high overhead
5. Orthodontics 6. Prosthodontics-high overhead
1. Oral Pathology -primarily academic 8.Oral andMaxillofacial Radiology
Private Practice:
80% of the nations dentists are in solo private practice.
solo practice
by the end of 7 years in full time practice 98% of all male dentists own their own practices
Partnerships
rather small percentage of dentists practice in partnerships primarily
related individuals.
solo group
a mode of practice where each dentist has his own practice but they share the same facility .They will usually sharethe parking lot, waiting room, businessoffice, sterilization area,central x-ray room with panorex, and laboratory. This arrangement reduces costs but avoids the complications of a partnership arrangement. This is an economic mode ofpractice which is growing in popularity due to:
I. Better utilization of land & facilities 2. High building costs and rising (rent too) 3. Lower profit margins forcing the move to group
Important Factors in Successful Practice
Location!
Office Design
Equipping the dental office
Personnel
Borrowingthe funds to purchase or begin a practice
Contract/agreement negotiation -lease, purchase
Office automation
Practice Location:
RULE:
HARD & FAST -Always, Always, Always choosea location where you would like to live.
Large metropolitan area practice
Best to purchase a practice
a. Takes too long to start from scratch
b.Banks unwilling to take risk
c. Highly visible location usually the most costly
d. Overhead is much higher than a small or rural town
e. Cost of living much higher in city
f. Patients change dentists most often in metropolitan areas
Large to medium practice
Still best to buy a practice -consideration lies somewhere between large and small
Medium to small practice
Still best to buy a practice:
a. But if there is nothing for sale, it's easiest to start from scratch in a small town where everyone will know your open for business. Not so in a large to
medium sized town.
b. Rent and land is much cheaper c.Housing is cheaper
d. Taxes are cheaper-both office and house
e.Insurance is cheaper-both office and house
f. Patients are more loyal as they get to know you and your family
g. Office overhead is less
h. Office ownership more prevalent
Cash Flow
the flow of money in and out the of a dental practice.
External Influences
1. Economy
2. Phase of life 3. Legislature 4. International conflicts 5.Natural disaster 6. Fire 7. Health
Internal Influences
1. Overhead
2. Schedule 3. Production 4. Collections 5. Marketing 6. Facility
Overhead Expenses
1. Payroll Expenses 25.2%
2. Benefits 1.8
3. Lab fees 8.1
4. Rent 6.3 5.Dental Supplies 8.2
6. Office Supplies 2.6
7. Utilities 1.8
8. Other 11.4
9. Interest, Depreciation
and Income Taxes 6.2

Overhead should not exceed 65%
Fee for Service -
The ultimate way to practice
Traditional Insurance
1. patient freedom of choice
2. contract between the patient & insurance company -sharing of fee 3.Patient ultimately responsible for the bill
4. No financial risk for the dentist
Preferred Provider Organization -(PPO)
dentist contracts for a lesser fee
1. patient freedom of choice- with restrictions
2. contract between the patient & insurance company -sharing of fee 3. Patient ultimately responsible for the bill
4. No financial risk for the dentist
Capitation/HMO
Patient pays a flat fee plus a small copay
1. Patients has lost freedom of choice
2. Contract between the dentist and ins co.
3. Dentist now has all the financial risk
Contract Practice -
his type of situation arises when a company contracts with a dentist or a group of dentists to provide all dental services for the companies employees
Individual Practice Association
legal entity organized and operated on behalf of individual participating dentists for the primary purpose of collectively entering into a contract to provide dental services to enrolled populations. Dentists usually practice in their own office and seen on IPA patients too.
Closed Panel -
closed panel practice is established if patients eligible for dental services in a public or private progranm can receive these services only at specified facilities by a limited number of dentists.
Salaried Positions:
1.Work for another dentist -which is called an Associateship
2. Work for a dental management company
3. Public Health
4. State prison system
5. Military
Accounting
system of recording, classifying, and summarizing financial transactions. Two bases for tracking are cash and accrual.
Accounts payable -
an account payable is any bill that comes to your office (usually monthly) for such things as material purchases, lab fees, utilities to mention a few. They are accounts that must be paid in a period of less than a year .
Accounts receivable -
are monies owed to you that are due in less than one year .It can be money owed by patients, credit card companies, or insurance companies
Accrual basis-
income is recorded when service is performed and expense is recorded when incurred even if not paid
Aging
he procedure of classifying accounts receivable by age from the first date of billing
Cash basis
charges for services are entered as income when payment is received and expenses are recorded as they are paid
Cash flow proforma (proforma means estimate)-
A cashflow proforma is anestimateofwhat
your cash flow will be in the future. When your borrowing funds to begin your practice, expand your practice, or build a new building, your banker will ask you for a cash flow proforma.
CPA
individual who has completed course of instruction and successfully taken certifying examination on accounting practices
Collateral -
assets that can be pledged as security to support an enterprise; example: stocks, land,
real estate
Demographics
opulation trends within a geographic area that are used to determine the suitability of establishing a new business (check with Chamber of Commerce, ADA)
Fixed cost
cost incurred regardless of the number of patients seen such as rent, salaries,utilities, depreciation of equipment/buildings
Gross profit
gross receipts less costs
Health Maintenance Organization
an organization that contracts with individual patients, groups of patients, and employers to provide health care services for a set cost
straight lease
you turn it back to lessor at completion of lease period
lease purchase
at end of lease its yours for a nominal fee
Notes payable
are those bills such as the mortgage on your practice and maybe your building or purchases of equipment that will be carried on the books longer than a year.
Notes receivable
are monies owned you over a period of one year. Primarily an accounting terminology .
Preferred Provider Organization
essentially health insurance plans that sell employers coverage for their works
Profit margin
mount of profit remaining after all costs to produce the item are subtracted from sales price
Traffic flow design
designing the office for efficient movement without unnecessary or wasted motion
variable cost
cost directly related to the number of patients seen such as supplies, and lab fees.