Since the onset of the Great Recession in 2008, 75% of dental practices have experienced production declines, according to the Levin Group Data Center. The ADA noted in its "A Profession in Transition" report that the percentage of adults seeking dental care had been dropping since the early 2000s. In addition, consumers are much more careful with their health care spending than in the past, especially as out-of-pocket costs continue to rise. These trends, combined with declining reimbursements from insurance providers, have made it difficult for dentists to grow their production, especially at the rates they were accustomed to prior to 2008.
In today's more competitive environment, dentists are searching for solutions that can provide a much-needed boost to falling revenues. But how do they know what the right solution is? Is it a direct mail campaign? Offering expanded hours? Building a new website? Moving to a new location? Or all of the above?
Before making significant changes, dentists should analyze their practice's performance so they have a better understanding of where the practice is in terms of production, systems, and active patients. Without accurate information, it is impossible to make the best decisions. The first step is not immediate action, but rather immediate analysis.
Step 1: Analyze Your Practice
While dentists usually have a general idea of their monthly production, they don't regularly evaluate the systems that contribute to overall production. For our clients, we use the Levin Group Practice Performance Matrix to examine how well a practice is functioning in what we call the 9 Areas of Expertise:
5. Case Acceptance
3. Team Building
6. New Patient Experience
Using this tool, we determine which areas of the practice are underperforming and need to be addressed to reverse a decrease in production. For each area of expertise, we start with three key questions, such as:
- Does hygiene production account for 25% of all practice production?
- Are 99% of all my hygiene patients scheduled at all times?
- Are 30% of patients in periodontal management programs?
- Are 90% of cases for need-based and elective treatment accepted?
- Is single-tooth treatment less than 60% of doctor production?
- Is elective production growing by 15% annually?
A negative answer to any of the questions indicates an area for improvement. Most practices in a slowdown score less than 50% on the matrix. By analyzing each area in a comprehensive manner, dentists can "red-flag" the trouble spots, pinpoint the opportunities, and ultimately formulate a plan to address the identified deficiencies.
If you would like to test your practice to see how it's performing in all 9 Areas of Expertise, download your copy of the Practice Performance Matrix at www.levingroup.com/matrix. Identifying your "current state" is the first step in turning around a slow or declining practice.
Step 2: Create a Strategic Plan
Systems are step-by-step protocols that lead to a desired outcome - patients scheduling appointments, patients showing up on time, increasing patients' referrals of friends and family, patients accepting recommended treatment, etc. Using the data gathered from the analysis, the dentist should assess the effectiveness of each practice system, prioritizing the areas that require urgent attention. For example, if the analysis reveals that six systems need to be overhauled, the dentist should answer the following questions:
• What system, if fixed, would have the biggest immediate impact on production?
• What would be the easiest system to improve? What would be the most challenging?
• What team members would be responsible for what systems?
• What is a reasonable timeline for improving or replacing each system?
• Is the practice capable of making all the changes without the assistance of outside experts?
• Do team members have the skills and training to implement the changes?
• What improvements will require the doctor's direct involvement?
The answers to these questions will help the dentist shape the strategic plan. Once the plan is created, the next step is putting it into action.
Step 3: Implement Key Systems
Systems drive performance. As the years go by, they become less and less efficient, making it more and more difficult for practices to perform at peak levels. Unless systems are upgraded or, better yet, replaced, practices in a slowdown will struggle to make the positive improvements needed to increase production.
Once an underperforming system has been identified, then countermeasures can be implemented. For example, if only 85% of all hygiene patients are scheduled compared to the 99% goal, the dentist and the team can address this deficiency with the following steps:
• Contact all unscheduled patients within the next seven days, preferably by cell phone. Any patient who isn't reached will be placed into the follow-up process described below.
• Establish and implement a practice policy that all patients who become one day overdue will receive a call to their cell phone that day.
• Implement a nine-week follow-up process that includes:
Weeks 1-3: Scripted cell phone calls once a week
Weeks 4-6: Emails once a week expressing concern for the patient's oral health
Weeks 7-9: Letters once a week from the doctor reiterating a pro-oral health message specific to the patient
Scripts for these steps are written from the standpoint of caring. This process has been carried out thousands of times by Levin Group clients, successfully resulting in 98% of patients being scheduled at all times on an ongoing basis.
Based on our experience, a slow practice usually scores poorly in at least five areas of the Practice Performance Matrix. One area that the majority of practices, even many successful ones, fail to master is collections. While many doctors believe they are collecting 99%, the contribution of bad debt has most practices significantly below that number - 94.3%, according to last year's Dental Economics / Levin Group Annual Research Report. The difference can lead to losses in the six figures when left uncorrected for years.
To resolve low collections, we recommend a strategic system called The Four Financial Options:
• 5% discount for cash up front
• Credit cards
• Half the fee at the beginning and half prior to the final treatment
• Patient financing from a reputable outside company, such as CareCredit
Many doctors and office managers don't realize that today there are patients who simply cannot afford treatment without patient financing. These four options, when used correctly, enable practices to significantly increase the percentage of total collections. An additional benefit of this system is that more patients will be able to afford treatment in the practice, and case acceptance will increase.
By using the Levin Group Practice Performance Matrix, practices can analyze their performance and identify problem areas. Using the data from the analysis, dentists can create a strategic plan to address the identified deficiencies. The next step is to implement targeted systems and solutions that enable the practice to improve performance. This process demonstrates that dental practices can use a data-driven analysis to create a practice turnaround.
To learn how your practice is performing in the 9 Areas of Expertise, download the Levin Group Practice Performance Matrix at www.levingroup.com/matrix or call (888) 973-000 for more information.
Also by the Roger P. Levin, DDS:Inside the Numbers: Latest Research Report Findings from the Levin Group Data Center