Dental service organizations (DSOs) are experiencing lagging reimbursement rates, which have remained stagnant for years despite rising operating costs and expenses. However, new technology-driven opportunities are available and can help DSO operators grow, diversify services, and solidify their position as dental providers of choice in their respective markets.
In a Becker's Dental + DSO Review podcast series sponsored by RingCentral, Lance Mehaffey, senior director of industry marketing and healthcare principal at RingCentral, discussed steps that DSO leaders can take to overcome their reimbursement challenges and drive growth by leveraging technology and embracing strategic opportunities for digital innovation.
Lagging reimbursements are holding back DSOs from growing revenue and profits
To combat stagnant reimbursement rates, DSO operators are looking to grow revenues and profits by pursuing multiple growth strategies, including acquiring new dental practices. By seamlessly integrating those practices, DSOs aim to achieve efficiencies and economies of scale that counter the effects of lagging reimbursements.
Another approach DSOs are taking is working to optimize their revenue cycle. For best results, DSOs can focus on directed KPIs, such as referral churn, AR collections, and patient appointment conversions. "By improving these three KPIs, DSOs can expand their current revenue performance by having a better, healthier revenue chain," Mr. Mehaffey said.
Technology plays a key role by providing leverage that DSOs cannot achieve using legacy methods
The legacy process of patient appointment conversions, which relies largely on faxed referrals, is a prime example of a manual process with a great need for investing in technology.
DSOs can improve appointment conversions by using technology that enables immediate notifications (including SMS and voice notifications) for incoming fax referrals, thus accelerating response times to time-sensitive referrals.
RingCentral technology has that capability, as well as the capability to capture and return missed calls; this has allowed RingCentral clients to recoup up to 20 percent of missed calls and convert them to patient appointments. The technology's ROI lies in capturing revenue that otherwise would have been lost. Today, of the roughly 56 percent of referrals that are faxed, 45 percent of these fail to convert. "ROI in healthcare is about making incremental changes to really big problems," Mr. Mehaffey said.
Tele-dentistry is another way that technology can support DSOs by providing an additional source of revenue. It can be used to make soft introductions between general dentistry practices and specialists in cases where patients may need higher-level services such as oral surgery. Tele-dentistry also enables dentists to supervise satellite clinics that provide only basic services but can still benefit from expert oversight.
Patient experience is yet another area where technology can play a pivotal role for DSOs. "The best solution to lagging reimbursements is streamlining how patients engage with your practice because the most controllable way to improve financial performance is maintaining high patient satisfaction levels, which lowers churn and increases referrals," Mr. Mehaffey said. He noted that the six largest DSOs have transitioned their legacy communication methods to RingCentral's centralized cloud-based service model, enabling them to scale and standardize patient engagement across their national networks.
Lastly, artificial intelligence can support DSOs by automating workflows for patient-directed service requests, such as scheduling, billing, and refills, mainly by using chatbots. Conversation intelligence AI can automatically generate clinical notes, summaries, and full transcripts from patient-provider interactions, which can be searched to monitor patient sentiment and identify service improvement opportunities.
In assessing cloud-based communication technology, DSOs need to pick the right vendor
Key considerations in this selection process include ensuring a deep level of integration between the vendor's platform and the DSO's critical clinical systems, including its EHR and PMS systems. Such integration allows for patient communication preferences to be "read" and followed by the technology without additional input by DSO staff. "You're leveling up patient experience and satisfaction levels by simply letting the technology do what it's been designed to do intelligently and without direct human intervention," Mr. Mehaffey said. He noted that vendor-DSO integration also has operational benefits: it reduces call handling times, avoids multiple call transfers — which can be frustrating — and increases single-call resolution rates.
Another essential consideration is the vendor's DSO domain expertise and experience. RingCentral's collaboration with many of the largest DSOs in the United States — which account for over 5,000 dental clinics — is a testament to the company's proven track record in that regard.
Conclusion
As DSOs experience rapid growth, AI-enabled cloud communication technology that integrates with their critical clinical systems is key to supporting growth operations by facilitating faster acquisition and onboarding of new practices, supporting staff and patient retention at newly acquired practices, enabling scale, and helping drive revenue and profit growth.
"DSO growth needs technologies that scale just as fast as the pace of DSO growth," Mr. Mehaffey said. "Digital technologies such as cloud-based communications are designed for that very purpose."