FQHC Dental "Balancing Act": Establishing Productivity in CHCs
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FQHC Dental "Balancing Act": Establishing Productivity in CHCs

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  • If dental represents 20% of the health centers over-all operational costs then dental should be allocated 20% of base 330 grant revenues on average.
  • Revenue forecasts should not be limited to patient service collections but all revenue sources available to the health center: grants and subsidies.
  • Other: Bonuses, gifts, etc…
  • Other: local subsidies, awards
  • Cost center must allocate a proportion of health center grant subsidies toward dental operations in proportion to over-all operational costs.
  • 2700 is not the upper limit of an efficiently managed dental program – this value may serve as the minimum benchmark in some optimally equipped and designed operations.
  • For financial solvency a health center must be able to sustain operational margins in their service area.
  • This provides further reason for proportional non-productivity revenue allocations toward dental services: to cover unexpected uncompensated emergency care.
  • The more non-patient service revenue available the less restrictive the health center’s admissions policies. Active promotions of services to all service population will assure adequate payer mix in each category. General Rule: Patients with less resources will demand services disproportionately to their demographic numbers (higher) – this is why managed appointments and resource allocation is critical.

FQHC Dental "Balancing Act": Establishing Productivity in CHCs Presentation Transcript

  • 1. “ The FQHC Balancing Act ” 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
    • 2006 cost per encounter: $139
    • 2006 cost per user: $333
    • A rise in cost of over 11% in three years nationally!
    • Bottom-line : Costs are a moving target!
  • 4.
    • State (MI) cost per encounter: $127
    • State cost per user: $294
    • National 2006 cost per encounter: $139
    • National 2006 cost per user: $333
  • 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
  • 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
  • 10.  
  • 11.  
  • 12. Set Realistic Financial and Productivity Goals
    • Service costs provided ( average ) should be less than actual rate per patient/encounter.
    • Comprehensive mix of services should emphasize basic therapeutically acceptable care options. More “bang for the buck.”
    • Productivity goals based on practice objectives: services vs. time (encounters).
    • 2500 to 2700 encounters/yr. X FTE Dentist
    • 1300 encounter/yr. X FTE Hygienist
  • 13. Productivity
    • Based on 2003 UDS Data a health center program with one-dentist needs to collect approximately $300,000 to break even (~$356,396 in 2006).
    • It should be noted that this sum includes funds collected from patient care services as well as grant subsidies to cover uninsured and underinsured patients.
  • 14. 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.
  • 15. Productivity Sites should calculate the gross productivity, utilizing full fee charges as one measure of productivity. Average gross charges, presuming that the fees are market rate fees, should exceed $400,000/dentist/year
  • 16. Productivity = Encounters
    • “ If” the average cost per encounter is about $117, you would need 2564 encounters to break even or reach $300,000 annually (if average collections also =$117 per encounter).
    • Assuming roughly 200 work days per year (or 1600 work hrs per year after holidays and vacations). 
  • 17. Productivity = Encounters
    • Based on 2005 UDS stats Nationwide, the average number of encounters per full time dentist were 2700 per year or 1100 patients .
    • The average number of encounters per Dentist FTE per hour would be 1.7 patients per hour or 13.5 patients per day for 2700 encounters/200days/yr.
  • 18. Productivity = Encounters Many sites have 220 days of care/FTE , so the math would be 1.54 patients per hour (8 hour day) or 12.3 patients/day . You may want to benchmark the productivity of your current program to see if greater efficiency can occur that would allow you to see new patients.
  • 19. Productivity
    • A dentist should utilize a minimum of two chairs and 1.5 dental assists to achieve these productivity aims.
    • This is for minimum efficiency.
    • Use of additional operatories and assistant staff significantly increase the marginal rate of return on investment and increase productivity.
  • 20. 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 minimum ratios or percentage of payer mix needed to maintain operations.
  • 21.  
  • 22. Example:
    • Health Center “X” average projected revenue proportions for minimum program viability must be 40% Medicaid , 30% SFS , 10% insured and 20% uncompensated care uninsured write-offs .
  • 23. 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
    • Other revenue resources should be allocated proportionately for dental as a cost center within the health center
  • 24. 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.
  • 25. 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%
  • 26. 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.
  • 27. 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.
  • 28. Justification
    • Combine population financial profile and demographic data with the health center’s financial “ bottom line ” indicators necessary to sustain the facility;
    • Manage patient access by essentially matching clinic access patterns with the combined profile data.
  • 29. 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.
  • 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. 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
  • 32. Rationale The FQHC is “still” available to all users within the centers fiscal and physical capacity
  • 33. 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.
  • 34. Questions?