Posted 12-28-15

Dental Business Institute: The Power of Centralization
by Vance Taylor

The first, most critical upgrade a group practice or DSO can make, in order to create the economies of scale necessary to increase profitability through expansion, is a centralized software platform. By centralizing its practice management software and, subsequently, all of its data, a DSO can then easily and efficiently centralize its operations (revenue cycle management, scheduling, recall, data administration, security and user management, etc.), create standardization from office to office, and ensure consistency in performance while reducing overhead as it grows.

1. The "Profitability Gap": If a group practice expands without implementing the technology necessary to decrease its overhead per office, it puts itself at risk of being crushed under its own weight because, although it has increased its ability to produce through growth, it’s done nothing to broaden the gap between production and overhead and thus profitability is flat and will actually decline sharply as each new acquisition ramps up production.
2. Centralization: The process of merging the data and systems from each disparate database at each existing office or from the offices you’re acquiring, and making it available in a single, standardized platform by anyone with clearance anywhere on your network.
3. Standardization: Critical for creating consistent success and having a constant against which to measure and identify underperformance, standardization is a key benefit of centralization. By moving all individual sites in a group onto a single, centralized platform, the organization can now create, deploy, and, when necessary, modify standards in coding, billing, scheduling, templates, processes, reporting, etc.
4. Revenue Cycle Management: One of the "low hanging fruit" benefits of centralization is the ability to pull the "billing activities" (RCM) out of the front office so that your staff there can focus on patient interaction, case presentation, and other activities which directly impact production. From a central office one billing manager can easily create and submit electronically all claims, receive and batch process all EOBs, and receive and post non-point-of-care patient payments received for up to 5 offices; thus reducing your overhead per office while simultaneously improving the collection process and increasing your rate of collection.
5. Call Center: Beyond revenue cycle management, the central (or corporate) office can take additional operational tasks off the plate of the front-line, patient-facing employees by managing a call center for appointment reminders, recall management, incoming call management, and billing questions. By implementing a single system on a centralized database, one central call center operator can easily manage the schedules for up to 5 offices.

By implementing technology designed to centralize your operations, you will broaden the gap between overhead and potential to produce and, as you expand, you will increase profitability and hedge your ability to on-board existing, struggling practices, or build new offices which require a ramp-up window to get to full production.

To learn more about The Power of Centralization and the other topics taught at the Dental Business Institute, visit www.HenryScheinDental.com/DentalBusinessInstitute.