In a dental practice, adjustments on our ledger are a fact of life. I want to talk to you about a different kind of adjustment. One that gives clarity to what we’re writing off.
What I usually see are a few broad categories on practice reports. There’s a lot of money written of as adjustments but it doesn’t tell us much about the write-offs. What do I mean?
Let’s take a category like “Insurance Write-offs”, for example. What can you do with that information? What does it tell you? A category that broad leaves us in the dark. We do not know where most of the write-offs are coming from and whether this is helping or hurting the practice.
However, if we see MetLife, Guardian, or Delta adjustments, we have more information to work with. This will empower you as a practice leader to make strategic decisions to help the practice. You can decide if the amount you are writing off is acceptable. You can pinpoint the items that are helping or hurting your practice. Can the practice afford to do this? Is it time to re-negotiate the contract or look into other options to strengthen the practice.
Another broad category I often see is “Patient Discounts”. How can we break that down to be more strategic? I suggest breaking that down further – Senior discounts, Military discounts, and any other specific categories that you use in your practice.
A couple more categories that I recommend are “under warranty”, “charity” and “friends/family/employee” (as one category). Being specific gives you the power to be strategic.
What do your adjustment categories look like?
Practice health is more than just increasing fees. Shaving a percentage or two off your write-offs can make a big impact. Being more specific will give you the knowledge you need to make proactive choices about what’s being written off and have some controls in place regarding adjustments. You will be glad you did!