Dental school teaching clinics as cost centers

Increasing net patient revenues from teaching clinics is one of the alternatives available to dental schools seeking to alleviate economic pressures. Managerial decisions directed to this end require accurate and useful data on clinic finances and economic organization. An important step in this direction can be taken by defining the teaching clinic as a cost center, that is as an economic entity in a dental school with identifiable specific resources, costs, and revenues. This paper describes the accounting and economics frameworks within which resources and costs are classified and allocated into direct and indirect, and fixed and variable categories. The development and structure of a cost-revenue model designed for the teaching clinics at the University of Connecticut School of Dental Medicine is described to illustrate an application of the cost center concept.