Economic models to help periodontists evaluate their practices: how to analyze a practice to assess the potential impact of managed care contracts.

The purpose of this article is to examine 10 steps analyzing the financial impact on a periodontal practice accepting a proposed managed care dental plan. It is emphasized that this analysis should be conducted before formally agreeing to accept the proposed plan. The procedures for examining the 10 steps include the use of hypothetical data for a periodontal practice confronted with a discounted fee plan. Each step is identified, discussed, and the hypothetical data are used to develop results presented in a set of tables. The steps in the analysis process include constructing a practice profit and loss statement and developing a dataset of practice characteristics and productivity measures. Other estimates should be made of covered lives, new patient utilization, existing patient utilization, utilization of non-covered services, estimating other sources of revenue and expense, and the impact on capacity utilization of operatories and practice staff. Results are presented in a set of analysis tables. The importance of multiple analyses is discussed as is the importance of analyzing the impact on results from changing assumptions. Some of the higher risk variables faced by the practitioner are identified for submission to risk evaluation to examine the sensitivity of results. Finally, the relationship between the proposed plan and the additional time required by the periodontist to meet the plan's specifications is examined in light of the data developed in the 10 steps and the results tables.