Surviving and succeeding through economic uncertainty
It's a dirty job, but someone's got to do it! Let's talk about the economy and its effect on dentistry in general.
by Amy Morgan, CEO, Pride Institute
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It's a dirty job, but someone's got to do it! Let's talk about the economy and its effect on dentistry in general. It never fails to amaze me that in times of economic uncertainty, dentists almost always panic and blame the economy for all that's wrong, and even more recklessly, start to look for silver-bullet solutions to address any and all real or perceived obstacles. For example, let's say you live in Michigan, and while you've heard a boatload of bad news about the woes of Ford and GM, you have a magnificent treatment plan to present to a new patient who you are confident will immediately say yes to it. Lo and behold, the patient actually hesitates and asks if there is a way to postpone some of the work. She even mentions that she's a little concerned about the financial obligation. But instead of analyzing the situation, your reaction is to blame the economy, decide all patients must be feeling the pinch, and immediately hit the panic button by signing up for more insurance plans, tripling the marketing budget, or even downsizing.
So, are the concerns about the economy valid at all? My answer is a resounding yes, no, and maybe. How can I say that? It's because every day at the Pride Institute, we get phone calls from doctors all across the country who report the highest levels of productivity ever — and also the lowest. In fact, sometimes the conflicting reports come from the very same neighborhood! Some dentists insist that the economy is to blame for their inability to reach their statistical goals, and other dentists are saying, "Help me, I am so busy! What can I do to slow down the patient flow?"
The conclusion we draw from these often conflicting calls is that dentistry continues to be financially secure (relatively speaking), because both functional and esthetic dentistry will always be wanted and needed by many people. Patients who desire either maintenance health care or ideal esthetic function and health will find the wherewithal to pay for their desires. We are also still dealing with a peak generation (the baby boomers) that is growing older, requires more dentistry — either for cosmetic relief, function, or health reasons — and will still, once again, find a way to pay for it. So, are the economic issues valid? Yes, to some degree, and I contend that dentists can protect themselves from economic uncertainty based on their ability to embrace and endorse certain systems basics that always lead to success.
Five to survive
There are five basic secrets to dental practice success that, if applied completely, will prove that dentists who actively engage in their business can survive and — I dare say — prosper during any and all economic twists and turns. Are the secrets easy to apply? Not necessarily. Is it worth it? Absolutely! I know that any practice struggling in a downward trend is misapplying, or not applying, one of them. Let's review the secrets.
Secret No. 1: It is absolutely essential that you know the real signs of practice health. If you've been in practice for a while, it can be a challenge to not get lazy with your numbers. It is easy to focus on a few numbers that may or may not represent your practice health today, because it could have represented your practice health five years ago. Focusing on certain key statistics during times of economic upheaval is essential for a practice to prevent downward trends. The most important statistics to monitor are:
- New patient numbers
- New patient value
- Case acceptance percentages
- Production per hour
- Exit monitors (i.e., how many patients are leaving or how many patients are asking about insurance who haven't asked before?)
When you don't know your numbers, you focus on solutions that don't necessarily address the real problems of your practice. Shame on you if you don't have an understanding of your active patient base, a utilization analysis, a base breakdown from adults to children, and continuing-care compliance — before you ever consider investing in a "silver bullet" marketing solution that triples your promotional budget in the hope of 30 additional patients a month! Any new solutions you implement should be the result of knowing the real signs of your practice health and must always include a healthy return on investment. To invest in a new financial tool or a new piece of technology without having a significant ROI is basically fiddling while Rome is burning. Once you know the real signs of practice health, then you are ready for secret No. 2.
Secret No. 2: Create clear, compelling goals that address potential challenges and reinforce success. For example, any dentist who goes to his or her office staff meeting and says to the team, "Folks, we need to be busier and more productive," is violating the basic tenets of clear, compelling goals.
The SMART method of goal setting applies very well in this situation. A SMART goal must be Specific. You don't just say, "I want to be busier." What is the production per hour, per day? The goal must be Measurable. Goals such as "I want to be happier, more successful, and balanced, and I want more patients saying yes" will get you nowhere. In this case, measurable means looking for a statistical interpretation of success that would result in balance, happiness, and patients saying yes. A SMART goal must be Achievable. You might have been able to produce $1.2 million two years ago, but if your situation and method of operation have changed, the worst thing you could ever give your team is unachievable goals. Your team, knowing the goal is unattainable, will be demotivated instantly. Next, ensure the goal is Relevant. Set goals that support your vision, values, and strategies. If no-shows and cancellations are not a problem in your practice, and you don't see them ever being problems in the future, then you don't need goals that address no-shows and cancellations. In more sophisticated offices, I often see so many statistics that the intention of the goals and statistics get lost. Finally, a SMART goal must be Timely. Are your goals set to address the actual issues of the moment, or are you two days too late to do something about a systems failure that has already happened? If you are a SMART goal setter, then you are able to accomplish this secret.
Secret No. 3: Know your patients. Most of us didn't get into dentistry to be the richest person on earth. We got into dentistry because a) we really like to help people, b) we love to tinker with the clinical stuff, and c) we want to provide services that are valued, needed, and wanted. Even when the economy becomes a negative factor, don't lose sight that we are good people who want to help others. The more dental teams help others, the more likely they will continue to ride through the downturn successfully. So, what do I mean by "know your patients"? We all know the saying: "Don't assume anything because it makes a donkey out of you and me." If you assume that every patient has a pocketbook issue because news reports scream about an economic upheaval somewhere, then you are not hearing each individual patient's questions and concerns and, more important, you are not customizing your approach to meet their unique desires. The only way dentists can find out what motivates and concerns their patients is by asking questions, exhibiting empathy, and ultimately creating treatment plans that accommodate what they've just heard.
Secret No. 4: Adapt your management systems. In an economic downturn, the systems that usually require the most tweaking are marketing, financial arrangements, and insurance. Yes, you may need to market your practice more aggressively if you notice a decline in the number of new patients. You may have to get out there more. Don't expect that asking for referrals is the only way to make you successful. I don't mean that you market in a way that doesn't represent your vision and values; I mean that marketing is a system where I see a lot of inertia and procrastination, because it's an area of minimal expertise for the dentist and the dental profession as a whole. The relationship your practice has with insurance may need to be viewed in a new light, because it is a gift that can be applied to the dental model and help with affordability. You may need to look at your financial arrangements. Could you be more flexible? Should you be looking at CareCredit in a new way? You need to look at solutions you may not have considered before.
Secret No. 5: Stay the course. For example, while a restaurant or retail store may truly fail — actually go out of business — when the economy downshifts, dentists will always flourish and prosper when they do the right thing for the right patients, with the right staff and right systems in place. This doesn't mean that you might not have a bad day, bad month, or even a bad year, but for every patient who says no to treatment because of economic concerns, there's another patient out there who will say yes, because you have exceeded that patient's expectations. Your goals and strategies that have worked in the past can work again.
¿ My kindest advice is: Don't hit the panic button, reengage with your business proactively, and respond to outside influences. If you do these things, you can continue to be successful and never fear an economic downshift again.
Amy Morgan is CEO of Pride Institute, dentistry's most respected practice management firm. For more than 30 years, Pride's team of dental, business, and financial experts have helped dentists at all career stages achieve the practice of their dreams. If you want practice success, there are many opportunities within Pride Institute. For specific course dates or further information on individual consulting services, other continuing education seminars, and training products, call (800) 925-2600 or visit www.prideinstitute.com.