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

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

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!

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

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

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

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

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.”

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 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

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.

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

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.

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.

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.

Develop a Good Needs Assessment Plan Managing Environmental Drift Develop a Good Needs Assessment Plan The Primary Oral Health Care Plan should be established on: What is feasible The program’s projected revenue, other resources and grant support

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.

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...)

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.

Managing Environmental Drift - 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 with the combined profile data.

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.

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

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. For financial solvency a health center must be able to sustain operational margins in their service area.

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%

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.

Managed Appointment Scheduling (12 slots) 41% Medicaid; 41% Sliding Fee; 16% Insurance Operatory 1 2 3 4   8:00 exam 8:30 treat Insurance Sliding Fee Emerg/Walk-in 9:00 exam 9:30 treat Medicaid 10:00 exam 10:30 treat 11:00 exam 11:30 treat 3.5 operatories per dentist

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.

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.

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.

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.

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.

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 This provides further reason for proportional non-productivity revenue allocations toward dental services: to cover unexpected uncompensated emergency care.

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

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. 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.

Questions?