14: Incorporating Technology

Chapter 14

Incorporating Technology

Scott A. Trapp and Gregory G. Zeller

Background on Information Technology in Dentistry

The history of information technology in dentistry has mirrored that of other functional components of the U.S. economy. Prior to the introduction of the personal computer in the early 1980s, very few dental practices utilized computers to automate business and clinical functions. This was due primarily to the high initial cost of the investment in this equipment and was further exasperated by the high recurrent costs associated with programming and operation.

The introduction of the personal computer helped to remove the barrier of high start-up costs, but programming and computer operation continued to be a barrier. The adoption of the Microsoft Windows operating system as the de facto standard in the business environment led to the development of dental practice management software that was easier to use and reduced the costs associated with training and ongoing maintenance.

As the information technology market matured, the need for ease of use and off-the-shelf software was fulfilled by new entrants to the dental informatics market. This influx led to a number of varying dental information management systems on the market by the beginning of the 1990s. Many of these systems were developed by small start-up companies that did not have the market base nor the capital required to develop a significant level of market penetration to maintain viability. Thus, by the end of the 1990s, very few of these dental practice management systems were still being supported by their developers, and by the middle of the first decade of the 21st century, the dental practice management system industry had consolidated to a handful of major companies. This, in turn, led a number of dentists to reinvest in new practice management systems at a significant cost. Unfortunately, these systems have still failed to standardize their databases on a single patient-centric electronic dental/health record, which has inhibited effective communication between the various providers the patients see.

Benefits of IT in Dental Practice

Advantages

The proliferation of information technology in healthcare has led to great gains in patient prevention and disease management programs. Dental management systems first began as systems designed to manage the dental hygiene recall systems by alerting the practice when a patient was due for his or recall, then generating reminder cards. These systems have now evolved to the point where they can actually make reminder follow-up phone calls. The practice management systems soon moved beyond the administration of the recall systems and started building dental charting capability. The creation of the electronic dental chart shaped the ability for the dental practice to more effectively manage patient treatment plans to completion. Through the use of data mining techniques, the dentist can now seek out patients who may have not followed up with recommended treatment and encourage these patients to complete their recommended dental care. The business side of the dental practice management systems started out as simple monthly statement generating systems. Today these systems have the ability to interface with third-party benefit providers to determine levels of coverage and co-payments required, often in real time. This level of service has led to great improvements in communication not just between the dentist and the patient but also between the dentist and the third-party payer.

Unfortunately, despite the establishment of consensus-based transaction standards for this type of communication between the dentist and the third-party payer, a large number of third-party payers have failed to implement the systems necessary for this level of improved communication. The implementation of dental practice management systems has allowed the more effective management of a larger patient base while improving the level of service within the dental practice. This has given those who have these systems a distinct competitive advantage over those who have not upgraded their management systems.

Disadvantages

While the advancement of information technology into the practice of dentistry has produced a number of advances in the management of patient care, it has also presented a number of challenges. The high rate of change in technology related to both the hardware and software platforms has led to shorter product life cycles. Dentists have grown accustomed to capital budgeting expenditures that are often in the 10- to 15-year upgrade range. However, rapidly changing technology requires planning for new information technology hardware and software upgrades that may be in the 3- to 5-year range. This rapid turnover in technology also comes with an education and training cost. Currently our workforce has an information technology gap. There are a great number of individuals who are still uncomfortable using computers. This is mostly due to their education and training background. As the segments of our workforce that were not exposed to computers early on in their careers reach retirement, this gap will continue to decrease. In the meantime, dentists need to be aware of this gap and make efforts to utilize the vast knowledge possessed by those who may have a limited exposure to computers. If there is a need to have the dental office computer systems connected to the internet, there is the constant requirement to ensure the security of the patient’s records. Safeguards must be in place to monitor for potential intrusions into the computer system through the use of firewalls and virus protection. The connection to the internet may be a further limitation depending upon the location of the dental office. There are still a number of rural areas that lack broadband internet access. The reliability of computer systems has improved dramatically, although these systems may still experience downtimes greater than that of other equipment in the dental office. Safeguards can be implemented through the use of uninterrupted power supplies and real-time backups that can ensure a high level of reliability. Table 14.1 presents the advantages and disadvantages associated with use of current information technology.

Return on Investment

Dentists are trained to provide the latest and most advanced treatments possible to their patients. This is through the use of the latest and most improved techniques, materials, and equipment. This mindset often discards the need to evaluate these new technologies in a cost-effective manner. There are a large number of examples of dentists who have thousands of dollars of discarded equipment in storage and have never recouped the cost of their investment. When a dentist is making any purchasing decision, he or she must also understand that dentists are business people and must make purchases that will provide a return for their investment. The concept of return on investment and payback period should also be used to make the decision to upgrade to a new technology within the office. In the field of finance, the types of calculations that aid in the purchasing decision process are referred to as “capital budgeting.” There are generally three techniques that are useful in the capital budgeting process: the payback period, net present value, and internal rate of return.

Table 14.1. Advantages and disadvantages of information technology.

Advantages Disadvantages
Improved communication Constant learning curve
Improved efficiency Security
Improved service Reliability
Ability to mine health data Infrastructure
Improved patient management Product life cycle/upgrades
Competitive advantage

Payback Period

The payback period is the time period, usually expressed in years, that it takes to recover the original investment. This technique is useful in evaluating the differences between two items or projects. For example, if the decision to upgrade to a new computer printer has been made, one can evaluate the recurring costs between the existing printer and the replacement. If the new printer has an initial cost of $200 with a cost per page of $0.02 and the practice prints 50 pages per day with a 220-day work year, this would give a recurring printing cost of $0.02 × 50 × 220 = $220. If the old printer is costing the practice $0.03 per page, that would give a yearly recurring cost of $330. Subtracting the recurring cost of the old printer from that of the new printer, $330 ‒ $220 = $110, gives a cost savings by upgrading to the new printer. The payback period would then be calculated as the original investment cost of $200 divided by the cost savings of $110, giving a payback period of 1.8 years. A good rule of thumb is to compare the payback period to the depreciable life span of the equipment under consideration. (Consult with an accounting professional for depreciable life spans.) If the payback period is less than the depreciable life span, the decision would be to make the purchase.

Net Present Value and Internal Rate of Return

The use of payback period is a good basic capital budgeting technique but fails to account for the time value of money. We know that a dollar today is worth more than that same dollar 1 year from now, if we can earn interest on our money. The capital budgeting technique of net present value and internal rate of return takes into account the time value of money. A detailed discussion of net present value and internal rate of return is beyond the scope of this text. The main concept to understand is that your sales representative should be able to provide this information to you for major purchases. The decision to make the purchase would be made only when the net present value is positive and the internal rate of return is acceptable for the use of your money. The key with the internal rate of return is that your investment in the technology must exceed the rate you can expect to receive in other investments.

Whenever evaluating an information technology project for its ability to improve dental office operations, there are a number of factors to consider beyond those of just cost. There is a benefit derived from improved accuracy and error reduction. This can be difficult to quantify in terms of dollars. One method is to look at the costs associated with an error and calculate the costs of the time spent correcting the problem. Another factor to consider is the time savings gained from the investment in the technology. For example, if one was to consider an investment in digital radiography, there would be a time savings by being able to display the image instantaneously versus waiting 5 minutes for the film processor to develop the image.

Standards

Why Standards Matter

Standards ensure desirable characteristics of products and services such as quality, environmental friendliness, safety, reliability, efficiency, and interchangeability at an economical cost. />

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Jan 4, 2015 | Posted by in General Dentistry | Comments Off on 14: Incorporating Technology
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