Dental Ethics & Business

Gross Versus Net Income: Earnings

The fee charged for services rendered. These are the potential revenues.

Gross Versus Net Income: Income:

The actual payments received by the practice (cash, credit card, cheque, etc.). Income is what is actually available to meet expenses

Gross Versus Net Income: Accounts Receivable

Money owed to the dental practice for treatment that has been completed but not yet paid for.

Gross Versus Net Income: Overhead/Expenditures

The costs associated with operating the practice, such as rent, salaries, lab fees, and supplies.

Gross Versus Net Income: Profit

Income remaining after all expenses have been met.

Elements of a Financial Policy: Inform Before You Perform

Patients should be informed of fees and payment expectations before treatment begins.

Elements of a Financial Policy: Tactful, Firm, and Direct Payment Collection

• When asking for payment at the time of service, be direct and offer payment options: "Mrs. Patient, the fee for today's visit is $234.00. Will you be paying your account with Visa, MasterCard, Debit card, cash, or cheque?"

• Avoid asking if payment is okay or if they would like to pay today, as this can elicit a "no" response.

Elements of a Financial Policy: Walkout Statement

If a patient is unprepared to pay because they were not informed, provide them with a walkout statement (an itemization of charges) and a return envelope, instructing them to send payment as soon as possible.

Most Used Financial Plans: Cash, Cheque, Money Order:

Paid on the day services are rendered. A restrictive endorsement stamp should be used on cheques for protection.

Most Used Financial Plans: Post-Dated Cheque:

Dated up to three weeks from the service date, useful if the patient is awaiting insurance reimbursement.

Most Used Financial Plans: Credit Cards (Visa, MasterCard, American Express)

A service charge (typically 1.5-3.5%) is charged by the credit card company to the dental office.

Most Used Financial Plans: Debit Card (Interac)

Direct payment from the patient's bank account

Insurance Billing: Assignment of Benefits

The dental office submits the insurance form to the insurance company and then bills the patient for the remaining balance.

Extended Payment Plans: Monthly Billing (30-day revolving credit)

Statements are sent to the patient as treatment progresses.

Extended Payment Plans: In-House Budget Plans

Established by the practice, with payments made via post-dated cheques (3-12 months). A contract is advisable.

Extended Payment Plans: Divided Payment Plan

Payment is divided based on the length of treatment (e.g., 1/3 at the beginning, 1/3 at midpoint, 1/3 at completion).

Extended Payment Plans: Third-Party Bank Plans (Outside Payment Plans):

Credit is arranged through an external financial agency (e.g., a bank).

Financial Agreement

• Clients must sign a financial agreement for installment payments.

Accounts Receivable Management:

Accounts receivable (AR) is a system that tracks all financial transactions between a patient and the dental practice, calculating the amount owed.

Accounts Receivable Management: Transaction

Any financial activity (charge, payment, adjustment, write-off).

Accounts Receivable Management: Statements

• Should be professional, neat, legible, and itemized.

• Mailed consistently each month.

• First statement: 30 days post-treatment.

• Second statement: 60 days post-treatment.

• At 90 days: Use stronger wording and make a phone call.

Collection Calls: Verify Debtor

Ensure you are speaking directly to the patient responsible for the debt. Do not disclose information to third parties.

Collection Calls: Identify Yourself

State your name and the dental practice.

Collection Calls: Be Specific

Clearly state the reason for the call and ask for payment

Collection Calls: Listen and Note

Pause and actively listen to the patient's response, taking notes.

Collection Calls: Avoid Threats

Do not threaten or antagonize the client.

Collection Calls: Have Information Ready

Have the patient's chart and account details accessible.

Collection Calls: Privacy

Do not make the call in front of other patients.

Collection Calls: Offer Solutions

Suggest ways to help the patient pay their account

Collection Calls: Payment Plan

Work out a reasonable payment plan that is agreeable to both the office and the patient

Collection Calls: Specify Plan Details

• Exact payment amounts.

• Exact payment dates.

• Payment method (e.g., VISA, cheque).

• Who is making the payment.

Collection Calls: Positive Closing:

End the call on a positive note

Accounts Payable Management

Accounts payable (AP) is the system that manages all the money the dental practice owes to creditors, typically for supplies, equipment, or materials.

Organizing an Accounts Payable System: Set Cheque Generation Dates

Establish regular dates for generating cheques. Some payments (e.g., payroll, government agencies) have specific due dates to avoid penalties

Organizing an Accounts Payable System: Develop Filing System

Categorize unpaid bills by the date cheques will be written.

Organizing an Accounts Payable System: Verify Postings

Before paying statements, compare invoices with statements to verify charges and payments. Make corrections as needed.

Organizing an Accounts Payable System: Prepare Cheques

Use a computer or manual system to write cheques

Organizing an Accounts Payable System: Mark Paid Statements

Stamp the date paid and cheque number on the statement and file it

Organizing an Accounts Payable System: Categorize Expenditures

Group expenditures for accounting reports

Payroll Records and Deductions

Accurate payroll records are essential for compliance and employee management.

Required Payroll Information

• Employee's full name (including middle name).

• Social Insurance Number (SIN).

• Complete address (including postal code).

• Date of hire.

• Appropriate tax claim code (from TD1 form).

• Hourly rate (if applicable).

Payroll Deductions: Gross Pay

The rate of pay before deductions.

Payroll Deductions: Net Pay

The pay remaining after deductions.

Mandatory Deductions: Canada Pension Plan (CPP)

Deducted from individuals aged 18-70. The employer matches the employee's contribution dollar-for-dollar

Mandatory Deductions: Employment Insurance (EI) Premiums

• Both employee and employer contribute. The employer's contribution is 1.4 times the employee's contribution.

Mandatory Deductions: Income Tax

Only deducted from the employee's earnings.

Mandatory Deductions: T4 Slips

Issued annually to employees for tax reporting.

Mandatory Deductions: Vacation Pay

Employees are entitled to 4% of their gross pay annually (equivalent to two weeks of paid vacation) after the first full year of employment. Vacation pay is treated as regular income with appropriate deductions

Inventory Management

Accurate inventory control is crucial for managing office expenses. Dental practices typically allocate 5-10% of their total budget to medical supplies.

Inventory Control Principles: Responsibility

Clinical staff manage clinical supplies; administrative staff manage administrative supplies

Inventory Control Principles: Expiry Dates

Regularly check and rotate time-sensitive products.

Inventory Control Principles: System

The inventory system should be simple, workable, and kept up-to-date

Ordering Supplies

• Full brand name of the product.

• Descriptive information.

• Reorder point for the product.

• Purchase source (supplier name and number).

• Necessary catalog numbers.

• Quantity purchase rates and reorder quantity.

Reorder Point

Determined by the rate of product use and lead time (time for ordering, shipping, or backordering).

Reorder Quantity

Determined by the rate of use, shelf-life, storage space, purchase price (is it a good buy?), and available cash flow.

Inventory Control Sheet

• Item

• Description

• Expiry Date

• Minimum Quantity

• Order Quantity Required

• Supplier

• Price Per Unit

• Type

Types of Supplies: Dental Consumables

Single-use items (e.g., saliva ejectors, gloves, restorative materials).

Types of Supplies: Office Consumable Supplies:

Used up during function and need replenishment (e.g., paper, envelopes, toner).

Types of Supplies: Expendable Items

Low-cost materials used up quickly (e.g., mouth mirrors, burs).

Types of Supplies: Non-Consumable/Expendable Items

Smaller equipment/instruments replaced after a specific time (e.g., curing light, handpiece).

Types of Supplies: Major Equipment

Larger items with a longer lifespan (e.g., dental chairs, radiography equipment).

Record Management

Accurate and organized patient records are vital for patient care, legal purposes, and third-party payments.

Standards/Criteria for Record Keeping: Legal Document

Records must be accurate and legible.

Standards/Criteria for Record Keeping: Confidentiality

Protect patient information from unauthorized access

Standards/Criteria for Record Keeping: Ownership

The dentist owns the chart; the patient owns the information and can review it.

Standards/Criteria for Record Keeping: Transfer of Records

Only copies can be sent, with a signed Release of Information Form. The dentist cannot refuse to transfer records due to unpaid accounts.

Standards/Criteria for Record Keeping: Retention

At least 10 years from the last entry, or 10 years after a minor reaches 18.

Standards/Criteria for Record Keeping: Procedures

Use non-erasable ink, cross out and sign/date corrections (no whiteout), use consistent abbreviations.

Standards/Criteria for Record Keeping: Client Identification Number

Must be on all pages of the record

Sender/Receiver Model

Information is encoded by the sender, transmitted, and decoded by the receiver. Feedback allows for verification.

Barriers to Communication

Physical (office design, noise), psychological (preconceived ideas, emotions), semantic (jargon, differing language), and cultural differences can impede understanding.

Verbal Communication:

The words used, clarity, speed, pitch, and tone. Avoid jargon.

Appointment Book Control: Goals

Maximize productivity, reduce staff tension, maintain patient focus, and maximize income.

Appointment Book Control: Methods

Paper or computer-based systems.

Appointment Book Control: Legal Document

Appointment books must be kept for the prescribed retention period.

Outlining/Matrixing the Appointment Book: Routine Hours

Operating hours, holidays, days off, lunch breaks

Outlining/Matrixing the Appointment Book: Buffer Periods

Time blocked for emergencies (1-2 units).

Outlining/Matrixing the Appointment Book: Meetings & Vacations

Staff meetings, educational days

Outlining/Matrixing the Appointment Book: Minor Holidays

Noting days when schools or businesses are closed.

Factors in Appointment Scheduling: Emergency Appointments

Prioritize based on pain level, duration, and impact on daily life.

Factors in Appointment Scheduling: Walk-in Clients

Accommodate if possible, or politely referv

Factors in Appointment Scheduling: Specific Patient Needs

Consider young children (mornings), elderly (avoid rush hour), and physically challenged individuals (accessibility)

Factors in Appointment Scheduling: Dovetailing

Fitting short appointments (less than 1 unit) between longer ones

Factors in Appointment Scheduling: Series of Appointments

Schedule multiple visits for procedures like dentures or crowns

Changes in Schedule: Late Clients

Emphasize punctuality

Changes in Schedule: Canceled/No-Show Appointments

Reschedule promptly and document meticulously for legal reasons.

Changes in Schedule: Short Notice Appointments

Maintain a list of clients available for last-minute openings.

Changes in Schedule: Positive Communication

When there's an opening, inform clients of an "opening in the schedule" or that the schedule has been "rearranged," rather than mentioning a cancellation.

Abbreviations: NP

New Patient

NPX or NPE

New Patient Exam

CON

Consultation

C

Child

6RC or 3RC

6 Month Recall / 3 Month Recall

P&F or SEAL

Pit & Fissure Sealants

REST

Restoration

COMP

Composite

AG or AM or AMAL

Amalgam

IMP

Impressions

C&B

Crown & Bridge

CUD or CLD

Complete Upper/Lower Dentures