It is really important to be proactive when Managing Capitation Schemes
Capitation schemes can be valuable profit centres for your business if managed correctly. There are however risks associated with this type of scheme which can be costly in terms of profit and patient care.
Where it can go wrong?
The correct distribution of patients throughout the bands within your scheme is very important.
One of the major causes of lost profit within a practice is when patients are placed in the incorrect band.
A further cost can manifest itself in the fee charged for the banding itself. If this fee is fixed too low it will not provide sufficient income to the practice. To compensate the business for the amount of clinical time spent with patients.
Some patients receive too many hygiene treatments compared to the number covered within their band. This can be particularly damaging when the hygienist is paid a fixed hourly rate.
The ongoing management and re-banding of patients is also important. As a patient’s dental needs change and the level of maintenance required is likely to increase the dentist should re-assess the patient to establish whether they need to move into the next band.
Occasionally some dentists under-prescribe treatment to patients belonging to capitation schemes.
This will lead to supervised neglect. Often this situation is only brought to light when a dentist retires or leaves the practice and the new dentist discovers significant amounts of treatment are required. The results can be damaging to the reputation of the practice and can lead to litigation.
Ask your plan provider to carry out regular audits on your behalf.
Conclusion
Once your capitation scheme is ship shape you need to invest time and effort to monitor and manage it going forward so the same situation doesn’t recur.
And a final point to take note of – if you are looking to acquire a practice with a large capitation income you will find lenders are currently keen to support purchases of this nature because of the significant amount of predicable income coming into the business. However, you should undertake an audit to ensure you are not inheriting the types of issues discussed in this article.
Please Contact Us if you would like to talk more about buying, selling or financing a #dental practice.
