““The FQHC Balancing Act ”The FQHC Balancing Act ”

Establishing Dental Encounters Establishing Dental Encounters and Productivity in a Community and Productivity in a Community

Health CenterHealth Center

Bob Russell, DDS,MPHBob Russell, DDS,MPH

HRSA Bureau of HRSA Bureau of Primary Health Care Primary Health Care 20032003 Recommended Recommended Dentist Productivity: Dentist Productivity:

1.7 encounters per 1.7 encounters per hourhour13.5 encounters per 13.5 encounters per day day minimumminimum2006 Average cost 2006 Average cost per dental per dental encounter: $139encounter: $139

Moving TargetMoving TargetNationalNational 2003 cost per encounter: 2003 cost per encounter: $124$1242003 cost per user: $2932003 cost per user: $2932006 cost per encounter: $1392006 cost per encounter: $1392006 cost per user: $3332006 cost per user: $333

A rise in cost of over 11% in three years nationally!

Bottom-line: Costs are a moving target!

StateState (MI) cost per (MI) cost per encounter: $127encounter: $127State cost per user: State cost per user: $294$294NationalNational 2006 cost 2006 cost per encounter: $139per encounter: $139National 2006 cost National 2006 cost per user: $333per user: $333

Goal #1Goal #1

Establish a Establish a Bottom-lineBottom-line cost cost per encounter for providing per encounter for providing

dental care servicesdental care services

Goal #2Goal #2

Monitor your Monitor your Bottom-lineBottom-line cost cost per encounter annuallyper encounter annually

Goal #3Goal #3

Allocate a proportion of total Allocate a proportion of total base 330 grant for dental base 330 grant for dental

operationsoperations

What to do?What to do?

Link the budget with the goals and Link the budget with the goals and objectivesobjectives specified in the oral health specified in the oral health project plan and overall Health Center project plan and overall Health Center mission.mission.

Identify specific costIdentify specific cost such as salaries, such as salaries, equipment, supplies, rent, etc.equipment, supplies, rent, etc.

Provide a budget forecastProvide a budget forecast for future for future years which demonstrates increasing years which demonstrates increasing potential for program success.”potential for program success.”

Components of Cost per Components of Cost per EncountersEncounters

Total fixed and variable costs of Total fixed and variable costs of running a dental programrunning a dental program– Including Administrative overheadIncluding Administrative overhead

Estimated total annual Estimated total annual expectedexpected encountersencountersProjection of annual revenue sourcesProjection of annual revenue sources– Including proportion of 330 allocated for

dental within overall FQHC cost centers

Estimated projected total collectionsEstimated projected total collections

Set Realistic Financial and Set Realistic Financial and Productivity GoalsProductivity Goals

Service costs provided (Service costs provided (averageaverage) ) should be should be lessless than actual rate per than actual rate per patient/encounter.patient/encounter.Comprehensive mix of services Comprehensive mix of services should emphasize should emphasize basic basic therapeutically acceptable caretherapeutically acceptable care options. More “bang for the buck.”options. More “bang for the buck.”Productivity goals based on practice Productivity goals based on practice objectives: services vs. time objectives: services vs. time (encounters).(encounters).2500 to 2700 encounters/yr. X FTE Dentist2500 to 2700 encounters/yr. X FTE Dentist1300 encounter/yr. X FTE Hygienist1300 encounter/yr. X FTE Hygienist

ProductivityProductivityBased on 2003 UDS Data a health Based on 2003 UDS Data a health center program with one-dentist center program with one-dentist needs to needs to collectcollect approximately approximately $300,000$300,000 to break even to break even (~$356,396 in 2006). (~$356,396 in 2006).

It should be noted that this It should be noted that this sum includes sum includes funds collected funds collected from patient carefrom patient care services as services as well as well as grant subsidiesgrant subsidies to to cover uninsured and cover uninsured and underinsured patients. underinsured patients.

Total Dental Operational Total Dental Operational Revenues Should Revenues Should NotNot Be Only Be Only

Revenues Generated By Patient Revenues Generated By Patient Service CollectionsService Collections

Dental Cost Centers must include a proportion of all grant and other revenue resources allocated to the health center.

ProductivityProductivity

Sites should calculate the Sites should calculate the gross productivity, utilizing gross productivity, utilizing full feefull fee charges as one charges as one measure of productivity. measure of productivity.

Average gross charges, Average gross charges, presuming that the fees are presuming that the fees are market rate fees, market rate fees, should should exceed $400,000/dentist/yearexceed $400,000/dentist/year

Productivity = EncountersProductivity = Encounters

““If” the average cost per If” the average cost per encounter is about $117, you encounter is about $117, you would need would need 2564 encounters2564 encounters to to break even or reach $300,000 break even or reach $300,000 annually (if annually (if averageaverage collections collections also =$117 per encounter).also =$117 per encounter).

Assuming roughly 200 work days Assuming roughly 200 work days per year (or 1600 work hrs per per year (or 1600 work hrs per year after holidays and vacations).  year after holidays and vacations). 

Productivity = EncountersProductivity = Encounters

Based on 2005 UDS stats Based on 2005 UDS stats Nationwide, the average Nationwide, the average number of encounters per full number of encounters per full time dentist were time dentist were 2700 per 2700 per yearyear or or 1100 patients1100 patients..The average number of encounters The average number of encounters per Dentist FTE per hour would be per Dentist FTE per hour would be 1.7 patients per hour or 13.5 1.7 patients per hour or 13.5 patients per day for 2700 patients per day for 2700 encounters/200days/yr. encounters/200days/yr.

Productivity = EncountersProductivity = Encounters

Many sites have Many sites have 220 days of 220 days of care/FTEcare/FTE, so the math would be , so the math would be 1.54 patients per hour (8 hour 1.54 patients per hour (8 hour day) or day) or 12.3 patients/day12.3 patients/day.. You may want to benchmark the You may want to benchmark the productivity of your current program productivity of your current program to see if greater efficiency can occur to see if greater efficiency can occur that would allow you to see new that would allow you to see new patients.patients.

Productivity Productivity

A dentist should utilize a A dentist should utilize a minimumminimum of of two chairstwo chairs and and 1.5 dental assists1.5 dental assists to to achieve these productivity aims. achieve these productivity aims.

This is for This is for minimumminimum efficiency. efficiency.

Use of additional operatories and Use of additional operatories and assistant staff significantly increase assistant staff significantly increase the marginal rate of return on the marginal rate of return on investment and increase productivity.investment and increase productivity.

Fiscal Policy Management Fiscal Policy Management

A financial analysis and A financial analysis and formula should:formula should:– be developed by the health be developed by the health

center’s financial management center’s financial management with guidance for the dental with guidance for the dental directordirector

– Establish Establish minimumminimum ratiosratios or or percentage of payer mix percentage of payer mix needed to maintain operations.needed to maintain operations.

Example:Example:

Health Center “X” average Health Center “X” average projected revenue proportions projected revenue proportions for for minimumminimum program viability program viability must be must be 40% Medicaid40% Medicaid, , 30% 30% SFSSFS, , 10% insured10% insured and and 20% 20% uncompensated care uncompensated care uninsured write-offsuninsured write-offs. .

EXAMPLE:EXAMPLE:In addition – Health Center X allocates In addition – Health Center X allocates 20% of its annual $800,000 federal 330 20% of its annual $800,000 federal 330 grant toward dental operations to cover grant toward dental operations to cover estimated 20% uncompensated care: estimated 20% uncompensated care: $160,000$160,000Dental operations is roughly 20% of Dental operations is roughly 20% of overall cost center operational charges overall cost center operational charges within the health centerwithin the health centerOther revenue resources should be Other revenue resources should be allocated proportionately for dental as a allocated proportionately for dental as a cost center within the health centercost center within the health center

Example:Example:Service Area Population:Service Area Population:– Demographic data reflect a Demographic data reflect a similar ratio: similar ratio: 40% Medicaid; 40% Medicaid; 30% low-income employed; 10% 30% low-income employed; 10% insured; and 20% uninsured.insured; and 20% uninsured.

– Both demographic and minimal Both demographic and minimal bottom-line financial restraints bottom-line financial restraints should match or exceed should match or exceed expectations.expectations.

Example: Practical ApplicationExample: Practical Application

In this scenario, the clinic can In this scenario, the clinic can assign available appointment assign available appointment slots to match financial slots to match financial demographic expectationsdemographic expectations::– 40% Medicaid40% Medicaid– 30% Sliding Fee Scale discount30% Sliding Fee Scale discount– 10% Insurance10% Insurance– 20% write-off at zero%20% write-off at zero%

WHY?WHY?

Matching available resources to population demographics is considered adequate justification.

Good data helps the dental clinic avoid the potential of appearing selective or “cherry picking” for the sake of financial gain only.

Bureau of Primary Health Care PolicyBureau of Primary Health Care Policy

Access to services defined within their Access to services defined within their scope must be made available to all health scope must be made available to all health center users center users regardless of ability to payregardless of ability to pay..

Health centers must be able Health centers must be able to justifyto justify why services and/or populations are why services and/or populations are excluded from the scope of practice, if the excluded from the scope of practice, if the scope of services are limited and/or less scope of services are limited and/or less than comprehensive.than comprehensive.

JustificationJustification

Combine population Combine population financialfinancial profileprofile and and demographicdemographic datadata with the with the health center’s financial health center’s financial ““bottombottom lineline”” indicators necessary to sustain indicators necessary to sustain the facility;the facility;

Manage patient access by essentiallyManage patient access by essentially matching clinic access patterns with matching clinic access patterns with the combined profile data. the combined profile data.

JustificationJustification

Key points:Key points:– Manage Manage allall practice resources, practice resources,

schedulingscheduling, , chair timechair time and and patient flowpatient flow consistent with consistent with practice mission objectives;practice mission objectives;

– Base financial limitations on Base financial limitations on support data that provides support data that provides justificationjustification for exclusions and for exclusions and service limitations.service limitations.

Application LimitationsApplication Limitations

Do not restrict emergency Do not restrict emergency accessaccess – based on payer category or based on payer category or

patient type. patient type.

Only appointment slots, Only appointment slots, new patient routine care new patient routine care and comprehensive exams and comprehensive exams can be can be managedmanaged chair time. chair time.

Managing Clinic AppointmentsManaging Clinic Appointments

Emergency access is managed by Emergency access is managed by limiting the limiting the total numberstotal numbers seen per seen per dayday

Emergencies can be absorbed in your Emergencies can be absorbed in your uncompensated care appointment uncompensated care appointment ratio or “write- offs” if revenue ratio or “write- offs” if revenue collections for these types of services collections for these types of services are minimal are minimal

RationaleRationale

The FQHC is “still” available The FQHC is “still” available to to allall users within the centers users within the centers fiscal and physical capacityfiscal and physical capacity

Active PromotionsActive Promotions

Health Centers must actively Health Centers must actively promote their services to target promote their services to target population to assure adequate population to assure adequate patient flow in patient flow in all demographic and all demographic and payer categories. payer categories.

Promotions must be culturally Promotions must be culturally relevant and focused toward major relevant and focused toward major social outlets utilized by target social outlets utilized by target population. population.

Questions?Questions?