“Financial Strategies in Sustaining “Safety Net” Dental Programs”

1. “Financial Strategies in Sustaining “Safety Net” Dental Programs” Establishing Dental Encounters and Productivity in a Community Health Center Bob Russell, DDS,MPH

2. HRSA Bureau of Primary Health Care 2003 Recommended Dentist Productivity: • 1.7 encounters per hour • 13.5 encounters per day minimum • 2006 Average cost per dental encounter: $139

3. Moving Target • National • 2003 cost per encounter: $124 • 2003 cost per user: $293 • 2007 cost per encounter: $144.20 • 2007 cost per user: $344.25 • A rise in cost of over 14% in four years nationally! • Bottom-line: Costs are a moving target!

4. National2007 cost per encounter: $144.20 (3.25% increase from 2006) • National 2007 cost per user: $344.25 (4.01% increase from 2006)

5. Goal #1 Establish a Bottom-line cost per encounter for providing dental care services

6. Goal #2 Monitor your Bottom-line cost per encounter annually

7. Goal #3 Allocate a proportion of total base 330 grant for dental operations National average in 2007 was 11%

8. What to do? • Link the budget with the goals and objectives specified in the oral health project plan and overall Health Center mission. • Identify specific cost such as salaries, equipment, supplies, rent, etc. • Provide a budget forecast for future years which demonstrates increasing potential for program success.”

9. Components of Cost per Encounters • Total fixed and variable costs of running a dental program • Including Administrative overhead • Estimated total annual expected encounters • Projection of annual revenue sources • Including proportion of 330 allocated for dental within overall FQHC cost centers • Estimated projected total collections

12. Total Dental Operational Revenues Should Not Be Only Revenues Generated By Patient Service Collections Dental Cost Centers must include a proportion of all grant and other revenue resources allocated to the health center.

13. Managing No-Shows • Schedule appointments out no longer than one month • Charge a minimal fee at each no-show payable before scheduling future appointments • Limited habitual no-shows to walk/in problem focused visits after two missed appointments • No more than one additional scheduled appointment if a balance is due and problem focused visits afterwards until balance is paid

14. Productivity • A dentist should utilize three chairs and 1 dental assistant per chair to achieve these productivity aims. • This is for optimum efficiency. • Use of additional operatories and assistant staff significantly increase the marginal rate of return on investment and increase productivity.

15. Fiscal Policy Management • A financial analysis and formula should: • be developed by the health center’s financial management with guidance for the dental director • Establish minimumratios or percentage of payer mix needed to maintain operations.

17. Challenges to Health Center Fiscal Policy • Environmental drift • The reality that communities are vital entities in motion that change over time and sometimes suddenly in regards to demographic make-up, employment, resources, and needs.

18. Managing Environmental Drift Develop a Good Needs Assessment Plan • The PrimaryOralHealthCarePlan should be established on: • What is feasible • The program’s projected revenue, other resources and grant support

19. Oral Health Needs Assessment Criteria • 1. An estimate number of users. (specify critical mass of dental patients for the program). • 2. A description of existing providers and resources in the community as well as an assessment of unmet need. • 3. predominant characteristics of service population such as race, sex, age, ethnicity, primary language, income, etc.

20. Oral Health Needs Assessment Criteria • 4. Oral health status, prevention, and treatment needs of the population • 5.Barriers to access/availability to comprehensive oral health care services • 6. Description of needs and treatment of special populations. (HIV, homeless, migrants...)

21. Managing Environmental Drift • Key points in addressing environmental drift: • Manage all practice resources, scheduling, chair time and patient flow consistent with practice mission objectives; • Base financial limitations on support data that provides justification for exclusions and service limitations.

22. Managing Environmental Drift - Justification • Combine population financialprofile and demographicdata with the health center’s financial “bottomline” indicators necessary to sustain the facility; • Manage patient access by essentially matching clinic access with the combined profile data.

23. Example: • Health Center “X” average projected revenue proportions for minimumprogram viability must be 40% Medicaid, 30% SFS, 10% insured and 20% uncompensated care uninsured write-offs.

24. EXAMPLE: • In addition – Health Center X allocates 20% of its annual $800,000 federal 330 grant toward dental operations to cover estimated 20% uncompensated care: $160,000 • Dental operations is roughly 20% of overall cost center operational charges within the health center (national average in 2007 was 11%) • Other revenue resources should be allocated proportionately for dental as a cost center within the health center

25. Example: • Service Area Population: • Demographic data reflect a similar ratio: 40% Medicaid; 30% low-income employed; 10% insured; and 20% uninsured. • Both demographic and minimal bottom-line financial restraints should match or exceed expectations.

26. Example: Practical Application • In this scenario, the clinic can assign available appointment slots to match financial demographic expectations: • 40% Medicaid • 30% Sliding Fee Scale discount • 10% Insurance • 20% write-off at zero%

27. Example: Rationale • Chair time slots can be restricted to: • A specific patient age group (child, adult); • AND payer category ratios in total scheduled chair time and assigned based on available appointments, call/walk-in capacity of clinic; • Ratios must be supported by demographic data.

28. Managed Appointment Scheduling (12 slots)41% Medicaid; 41% Sliding Fee; 16% Insurance

29. WHY? • Matching available resources to population demographics is considered adequatejustification. • Good data helps the dental clinic avoid the potential of appearing selective or “cherry picking” for the sake of financial gain only.

30. Application Limitations • Do not restrict emergency access • based on payer category or patient type. • Only appointment slots, new patient routine care and comprehensive exams can be managed chair time.

31. Bureau of Primary Health Care Policy • Access to services defined within their scope must be made available to all health center users regardless of ability to pay. • Health centers must be able to justify why services and/or populations are excluded from the scope of practice, if the scope of services are limited and/or less than comprehensive.

32. Justification • Combine population financialprofile and demographicdata with the health center’s financial “bottomline” indicators necessary to sustain the facility; • Manage patient access by essentiallymatching clinic access patterns with the combined profile data.

33. Justification • Key points: • Manage all practice resources, scheduling, chair time and patient flow consistent with practice mission objectives; • Base financial limitations on support data that provides justification for exclusions and service limitations.

34. Managing Clinic Appointments • Emergency access is managed by limiting the total numbers seen per day • Emergencies can be absorbed in your uncompensated care appointment ratio or “write- offs” if revenue collections for these types of services are minimal

35. Rationale The FQHC is “still” available to all users within the centers fiscal and physical capacity

36. Active Promotions • Health Centers must actively promote their services to target population to assure adequate patient flow in all demographic and payer categories. • Promotions must be culturally relevant and focused toward major social outlets utilized by target population.

37. Questions?