9 Problems Your Dental Practice Risk Management Strategy Should Target
Running your own dental practice may require you to wear two hats at once. You are a practicing dentist, but you are also a business owner. In your own practice, one role could be dependent on the other.
Some of the upsides of this arrangement are the autonomy, flexibility, and prestige associated with having your own practice. If you can manage the risks of running your own practice, you are more likely to realize the benefits of being in business for yourself.
Some risks associated with owning a small business
revolve around managing employees, reputation, patients, and finances. Some risks associated with the practice of dentistry are exposure to malpractice claims and regulatory violations.
Focus Your Dental Practice Risk Management Strategy on These Potential Problems
These are some of the risks you may face when you own a dental practice.
1. Low Employee Retention
It may be expensive and time consuming to find new hires and then onboard them into your practice. It is important you hire people that understand the mission of your practice and fit into the cultural and social dynamic of the office. A thorough interview process and a frank discussion of what will be expected of them can be helpful ensuring a great fit. On top of that, make every effort to onboard each employee thoroughly.
If you are not able to retain great employees, the success of your practice could suffer. You may not only spend more time in the hiring process, but you may also never reap the benefits of having experienced employees entrenched in the culture of your practice and dedicated to making it succeed.
It is especially important to make efforts to keep key team members in place if you purchase a practice that is already up and running.
2. Losing Track of Important Financial Metrics
As the owner of a small business, you should track your financial data closely. This goes beyond the balance sheet as vital metrics may not be obvious when looking only at revenue and expenditures.
Key performance indicators (KPIs
) for dental practices may vary for every practice but could include:
- Equipment ROI
- Hygiene profitability
- Active patient count per dentist
- New patients per month
- Production per day
If you do not regularly review these KPIs, you may run the risk of losing your grasp on the true financial health of your practice.
You may want to consider hiring a dental management consulting company to support your business development goals. Additionally, working with a specialized CPA that has multiple dental clients could be beneficial.
3. Weak Demand for Services
Your practice could be exposed to cyclical downturns in patient demand related to a rise in local unemployment and the resulting decrease in dental insurance coverage for the local population.
Additionally, if your local market becomes saturated or you neglect to dedicate adequate resources to marketing efforts, you could face weakened demand and have trouble bringing in enough patients to sustain profitability.
4. Unmanageable Debt from Equipment Purchases
Dentists should have an in depth understanding of the projected returns for new equipment and how debt payments may impact monthly cash flows. As production and collections can be cyclical, but debt payments are typically constant, cash flow problems could result. This is especially relevant when considering equipment purchases that are not integral to the practice’s services.
5. Reputational Damage Related to Mismanagement of Medical Emergencies
could take place at dental practices. Vasovagal syncope, allergic reactions, and hypoglycemic events are some of the more common emergencies dentists and their staff should know how to handle.
Your practice could face reputational damage or struggle to keep patients if staff fails to properly manage a medical emergency in your practice.
Policies that could help ensure your staff is prepared to manage a medical emergency include requiring CPR certifications, training on epinephrine administration, a complete medical history on all patients, and vital sign monitoring. Ensuring at least two staff members are always on the premises could also allow for emergencies to be handled more efficiently.
6. Occupational Safety and Health Administration (OSHA) Violations
OSHA maintains standards for managing occupational health and safety risks in dental offices. It is up to each dental practice to make sure they are upholding these standards.
Exposure to bloodborne pathogens, respiratory infections, chemical agents, ionizing radiation, and ergonomic hazards are a few of the occupational hazards OSHA outlines as specific to dental professionals. Confirmed violations of OSHA standards may result in fines administered by OSHA or may provide the basis for a workers’ compensation claim.
7. Health Information Portability and Accountability Act (HIPAA) Violations
HIPAA exists to safeguard your patients’ protected health information (PHI). Your dental practice is responsible for implementing the physical, technical, and administrative systems required to keep PHI private while receiving, sharing, or transferring the information.
HIPAA violations are usually discovered through a data breach investigation, complaint from a patient, or compliance audit. Some common violations
are unnecessary access to health records, failure to perform risk analysis, lack of a risk management process, and denying patients access to records. If your practice is found to be in violation of HIPAA regulations, you could face significant fines.
8. Data Breaches
Dental practices could be vulnerable to cyberattacks. Hackers typically seek personal information to commit identity theft and tax fraud. Small practices are especially vulnerable as they may not have dedicated the proper resources to data security
In addition to any reputational damage or interruption to business that a data breach could cause, there is a possibility that the data breach could lead to HIPAA fines as well. HIPAA requires timely notification for all patients should a data breach occur.
9. Malpractice Claims
According to our most recent Dental Professional Liability Claim Report
, over 85% of closed claims involved general practitioners.
The most common allegations relate to inadequate precautions to prevent injury, treatment failure, improper procedure, failure to diagnose, and failed implants. The dental procedures most associated with these allegations are implant surgery, root canal therapy, surgical extraction, crowns, and simple extraction.
Managing the Risks Your Dental Practice Faces
Dentist’s Advantage can help you manage the risks you face as a dental entrepreneur. We offer coverage specifically for dental practice owners.
Learn more about our insurance solutions for dental practices