A Dental Incentive System that Works

Juris M. Svarcbergs,DMD,MPH Dental Director CAMcare Health Corporation

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Background
The early years Do gooders Focus on ideal service Dedication to cause or philosophy

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Background
Traditional professional formula Work in itself a reward
(a non-monetary incentive)

Salary adequate compensation

(your paycheck is the reward)

Administration outlook
(were not the private sector)

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Background
The Changing Times Burdened with debt Graduates Business oriented Dentists MBA Administrators The realization:To do Good,

we must do Well!
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Driving Forces in todays environment

Decreased grant funding opportunities Mainstreamed care delivery Competition for patients Competition for revenue Increased opportunity for Revenue generation
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The New Environment

200,000 180,000 160,000 140,000 120,000 100,000 80,000 60,000 40,000 20,000 0

Goal Actual

Profitability

Cost Center Analysis

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DENTAL PRODUCTIVITY
Target is 2,400/DDS

Annualized Rate: 2,639 enc/DDS

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Improvements in MIS, CIS

Enable accurate dental data collection
RVU capabilty for correlation of amount of care with visit info

Provider profiles
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Why not become in todays environment with MOTIVATED and EFFICIENT PROVIDERS!?!
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competitive

Lets Try an Incentive System!

Money always works! Should we Increase salary? Should we consider commissions? How do we tie work produced to paycheck?
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The Dilemma(s)
Increased Revenue can only be generated with Administrators dont want to lose over expenditures Providers dont administrators to share income or commission's fairly

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Available Incentive Systems

% of Provider generated charges % of collections of Providers production x % of Medicaid income y % of Self Pay income $s per R.V.U. generated The mathematician's dream formula
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Satisfaction
Can you really be happy if you Cant figure out your take home pay or bonus Cant trust the figures of billing or admin people You have to treat some patients in ways to benefit your income
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Real Life

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How to Build an Effective Incentive Program: The 5 Commandments

Simple and easy to understand Allay administration fears Empower providers Make the reward memorable Relate the incentive directly to the organizations income level
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The CAMcare Incentive Plan

Guaranteed base salary: Reasonable and contractual Good fringe benefits Health coverage, malpractice,CME time & coverage, pension

Security Budgeting Goodwill and competitive edge Only one concernPRODUCTIVITY

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The CAMcare Incentive Plan

Quarterly Goals
600 visits/ FTE (not 599!!) (individual

provider not group average)

Quarterly Payout

10% of base salary in contract-exactly

(prorated for quarter i.e 2.5% of annual base salary)

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Bonus Payout Example

Dr. XYZ had 645 patient visits this quarter At $80K contract/yr, Dr.XYZ recd $20,000 in base salary Reaching/Goal gets $2,000 Bonus CHC submitted bill for approx. $64,500 to all payors CHC expects to get min. 2.5 times what pays out docs CHC gets $42,500

(Doc gets $22,000)

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Special Request for Payout!

Goal Achievers:

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Bonus is Recognition of Achievement

Bonus checks are separate and usually presented by CEO

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And its part of total Package

Professional Compensation Package: 1. Base Salary $ 80,000 2. Health Coverage 5,604 3. Soc.Security Taxes 4,142 4. CME Allowance 1,500 5. Vacation,CME,Personal, Holidays,Sick, time 8,941 6. Malpractice Coverage 3,800
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Add up Total Package

Total Value$ 103,987 If Loan Repayment-add 25,000 TOTAL Package without Bonus: $128,987 !!!

Is another $ 8,000 worth the effort???

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Results: Avg.Encounters/DDS
3,000 2,800 2,600 2,400 2,200 2,000 1,800 1,600 1,400 1,200 1,000

1998 1999 2000 2001

Visits/DDS
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Results: RVUs per DDS/yr.

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Results: DDSs reaching goal

90.00% 80.00% 70.00% 60.00% 50.00% 40.00% 30.00% 20.00% 10.00% 0.00% 1998 1999 2000 2001

1998 1999 2000 2001

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DENTAL VISITS by Year

14500 14000 13500 13000 12500 12000 11500 11000 10500 10000 1998 1999 2000 2001 1998 1999 2000 2001

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The Bottom Line: Dental Cost Center $ EPI (profitability)

60,000 50,000 40,000 30,000 20,000 10,000 0 1998 1999 2000 2001 EPI/DDS

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CAMcare Revenue & Expenses

CAMcare Health Corporation
Annua l Re venue vs Expense
11

Mil li ons

10

Revenue Expenses

8 1997 1998 1999 Year

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2000

2001

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S = R/E
Choose a goal that directly influences the organizations income level Offer a definite bonus amount that is BIG yet small Support providers in achieving goal at every level

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S = R/E
Make the reward memorable (timing, amount, presentation)
Report to Board as a Dental Department defining event! (Dental exceeds expectations)
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Who are the Satisfied Customers?

Providers
(and support staff)

Board Patients
Community
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CEO
CFO

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Simply Satisfying!
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