By Roger P. Levin, DDS
In conversations with many dentists who attend my seminars, I hear a recurring concern: "Will I be able to retire at the age I planned?"
Their anxiety comes from the fact that both their income and their assets are insufficient. These observations are validated by research. According to the Levin Group Data Center, 75% of all dental practices have declined in production in the last four years. The latest Dental Economics/Levin Group Annual Practice Research Report indicates that production is still flat for dental practices overall, and that dentists predict they will have to work longer before retirement.
That's the bad news.
The good news is that, in almost all cases, dental practices have a 20-30% potential for growth. It remains untapped simply because dentists — who learned very little about business in dental school — lack real-world management and marketing skills. Until a few years ago, this shortcoming mattered little. Dental practices benefited from favorable market conditions, with sufficient demand for dental services to keep all dentists moving steadily toward their financial goals.
As a result of the Great Recession and other changes in the dental field, the situation today is far more challenging. Fortunately, there are several immediate steps dentists can take to grow their practices in the new economy.
Immediate Action Steps
Called upon to help turn around thousands of dental practices, Levin Group has identified a number of strategies that consistently improve bottom-line performance almost immediately and for the life of the practice. Among the most effective are the following:
1) Schedule 98% of all active patients in the practice within the next 90 days
Real-world businesses make the most of what they already have. Following this principle, practices will recognize that patients who are not scheduled (who become overdue) must be persuaded to make their next appointments as soon as possible. To facilitate this, practices should schedule patients' next appointments at checkout. There should also be a capture system in place. This triggers a series of follow-up actions to keep patients from moving off the schedule. The most effective capture system consists of two parts: the "One-Day Rule" and the "Nine-Week Follow-Up Process."
One-Day Rule – Patients receive a call, preferably on their cell phones, when they are one day overdue for an appointment. Following scripting, the front-desk coordinator shows concern for the patients' well-being and eagerness to get them back on the schedule. This activity should become a daily routine for front-desk staff. If the call does not result in an appointment, it's time for further action.
Nine-Week Follow-Up Process – Unscheduled patients represent lost revenue and may be on the brink of becoming inactive patients, or even nonpatients. After the initial call, the unscheduled patient qualifies for nine weeks of follow-up communications:
- Phone call every week for three weeks
- Email every week for three weeks
- Letter every week for three weeks
When dentists first hear about this process, there are some who think their patients will feel harassed. The key to preventing patients from feeling pressured is to approach these communications as expressions of concern for the patients' oral health. To control messaging, the phone calls are scripted in advance, and the emails and letters are written as templates that can be fully personalized for each patient. Also, keep in mind that most patients will agree to an appointment within three to four weeks.
2) Reactivate all inactive patients
In today's economy, many patients are putting off dental visits out of anxiety about family finances. Some are genuinely unable to pay for dental care. Others simply are reluctant to spend the money now. Even those with insurance may want to avoid co-pays. All understandable, but the problem is more than just lost production. The longer patients remain inactive, the "colder" the patient/practice relationships become. When they finally decide to see a dentist again, there is a high risk that they will go to some other practice.
To avoid this, I strongly recommend that practices offer an incentive, such as a free exam or even a free hygiene visit. The cost of such incentives is negligible, yet the potential reward can be very great. Not only can these reactivated cases become loyal, lifelong patients, but they also may have greater dental needs because they have not had routine care for some time.
3) Target 80% of new patients to refer family members
Fewer new patients are coming to practices today than four years ago. This underlines the need to improve presentation skills so that more treatment will be accepted.
Another effective response to this challenge is an innovative concept many Levin Group clients have found to be very beneficial. The strategy is to focus on the "New Patient Experience," giving new patients such a positive feeling about the practice that they encourage other members of their families to also go there for dental care. There are three key phases in this process:
- The new patient phone call should be carefully scripted to not only schedule the patient within seven days, but also begin building value and trust for the doctor and practice.
- A "New Patient Orientation" is implemented that makes a patient's first visit to the practice impressive and memorable. While familiarizing patients with the office, introducing them to staff, and helping them fill out forms, the front-desk coordinator also continues the value-building process that begins with the first phone call. With excellent scripting, the front-desk coordinator communicates what sets the practice apart and presents it as a caring source of excellent dentistry. It's all part of relationship-building.
- Meeting the doctor during the first visit should be a major event for new patients. Rather than being a cursory exam at the end of a hygiene visit, this encounter should include comprehensive examination and diagnosis. Recommended treatment can be presented during this first visit or, if the case is more than $1,000, during a follow-up appointment (so patients do not feel pressured by too much, too soon).
By making the New Patient Orientation a truly outstanding introduction to the practice, the team will have little difficulty motivating 80% of new patients to refer other members of their families. But it will not happen automatically. No matter how nice and caring the doctor and the team are, patients will not think to make referrals without prompting.
An excellent way to gain patients' cooperation is to thank them by handing them attractive certificates entitling their family members to complimentary exams. Again, any doctors who object to "giving away" this service need to remind themselves that it's a small price to pay for acquiring more new patients … each of whom represents average lifetime production of approximately $12,500. Few practices today can afford to pass up this potential income.
Conclusions
There are numerous management strategies for stimulating practice growth and income, including presentation skills, collections, overhead control, and scheduling. Starting with the ideas discussed here and adding more improvements over time, dental practices can increase production again. They can reasonably expect to grow significantly in the course of two to three years.
Countless real-world businesses have adapted to meet the new challenges posed by the post-recession economy. Seeking ways to make the most of what they already had, companies have identified innovations — often discovered in industries other than their own — that unleash new sources of growth. To achieve growth in the new dental economy, practices should emulate these businesses and create a culture of change.
There is truth in the axiom, "If you keep doing what you've always done, you'll keep getting the same results," but it doesn't go far enough. I suggest modifying the statement to get a true picture of the situation for dental practices today: "If you keep doing what you've always done, you'll now get worse results." Dentists worried about declining production and assets must actively seek new ways of handling the business of dentistry. Their only hope for retiring on schedule, or reasonably close to it, is to implement new strategies proven in the business world and adapted for dentistry, such as those discussed here.
To learn how to run a more profitable, efficient, and satisfying practice, visit the Levin Group Resource Center at www.levingroup.com/gp. The site is a free online resource with tips, videos, and other valuable information. You can also connect with Levin Group on Facebook and Twitter (@Levin_Group) to learn strategies and share ideas.
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