by Roger P. Levin, DDS
At seminars, I meet many dentists who are anxious for things to return to the way they were. They long for the days of less competition, the days when getting new patients was easier and case acceptance was higher.
The truth is that we will never return to how things used to be. Taken together, the following eight “game-changers” demonstrate that American dentists are in an entirely new situation — one that they have never faced before. Although some game-changers may seem daunting, proactive dentists can ensure bright futures for their practices.
1. The Great Recession and an uninspiring recovery
We have been assured that the recession ended several years ago. Yet, the recovery has been underwhelming for most Americans. A federal survey has revealed that the median family net worth dropped a staggering 40% in 2010 from 2007.1 Investment gains have been anemic and unemployment has continued to plague most areas of the country.
As dentists have discovered, this recession has been like no other. In the past, recessions came and went without greatly affecting dental practices. This recession was different. As the Levin Group Data Center™ indicates, 75% of dental practices have suffered sustained declines that have not been completely reversed.
2. Changes in consumer purchasing habits
In a recent Wall Street Journal article focused on individuals with incomes between $200,000 and $250,000 per year, it was pointed out that these consumers now ask themselves the following questions prior to making a purchase:
- Do I really want it?
- Do I want it now?
- Do I want to buy it here?
This is a seismic shift in consumer psychology and behavior, not only at higher income levels, but also across all demographics. Consumers are no longer making impulse purchases. This paradigm shift has created downward pressure on case acceptance in dental practices. According to the Levin Group Data Center™, the cost of the average accepted case is lower than the prerecession era, the number of rejected cases is increasing, and more patients are settling for less-than-optimal treatment.
3. Opening of many new dental schools
With new dental schools opening in nearly a dozen states, the eventual influx of new dentists will likely mean three things:
- Greatly increased competition in large metropolitan areas
- More dentists joining national corporate dental centers
- More “fee wars” in suburban and urban regions
4. Higher dental school student loan debt
Today, new doctors find themselves overwhelmed by their accrued debt. It is not unusual for a new dentist to start his or her career owing a half million dollars or more. Perhaps an even more troubling concern is the inability of young dentists, saddled with high debt, to sufficiently invest in the practice to ensure growth in the years ahead.
5. Decrease in insurance reimbursements
Last year, a major dental insurance company cut reimbursement rates by 7% in one state and 15% in another. Dentists worried that this move was the beginning of a trend that would spread to other states. Their fears appear valid.
Now, the company has revealed that it will cut payments to dentists in two other states by 4% to 5% in 2013. It is only logical that we will see further incidents of reductions in insurance reimbursements in the future.
6. Expansion of national corporate dental centers
For some dentists, corporate centers are problematic. For other dentists, especially younger ones, such dental centers can offer distinct advantages over owning a solo practice. Evidence indicates that corporate dental centers are here to stay. This is a new type of competition that is changing patterns in certain markets.
7. Fewer associateship opportunities for new dentists
As practices struggle with reduced production, fewer offices have the ability to expand. As a result, fewer young dentists can become associates, which may force them to practice in new environments such as underserved rural areas. They may also take on additional debt to open a practice sooner.
8. Dentists practicing eight to 10 years longer
At one time, being a dentist virtually ensured an excellent living. No dentist had to market his or her practice. Doctors hung out a shingle and that was it. The patients would come and the dentist was set for life. Now, with so many factors interfering with practice success, dentists are seeing themselves less able to retire when they had planned.
The game plan for dealing with game-changers
The time has passed when dentists can simply provide excellent patient care and expect to sustain consistent growth. In this new environment, dentists should implement excellent business models that allow their practices to increase production and reduce stress. To combat the eight permanent game-changers in dentistry, Levin Group strongly recommends that practices implement systems to:
- Increase patient referrals
- Prioritize patient retention
Increase patient referrals
Marketing activities that motivate current patients to remain active in the practice, accept additional treatment, and refer others are critical to continued practice growth. To remain competitive in an era of game-changers, practices must:
• Implement internal marketing. Retain current patients and gain new ones by using marketing to differentiate your practice from current and future competitors. Practices must initiate 15 strategies to generate referrals from current patients and the community.
• Educate every patient about all services. To protect the practice against game-changers, production per patient must increase. Many patients are not aware of certain services or, if aware, do not recognize their value. Patients should be educated about potential treatment at every appointment.
• Educate every patient about all financial options offered by the practice. This should include a convenient, flexible patient financing option with a reputable outside financing company such as CareCredit.™
• Train your team to ask for referrals. Training the dental team to ask for referrals can lead to a dramatic increase in new patients. When patients remark how pleased they are with the practice, team members should be trained to respond with the appropriate marketing response.
• Stay in contact with patients. Patient communication is not just confined to interactions that occur at the office. Creating value through regular mail, email, and Facebook updates is an integral part of the internal marketing communications plan.
• Reactivate inactive patients. Practices should reach out to recent inactive patients (those who haven’t been seen in 18 to 48 months). Send out a letter or email about restarting care, and then follow up with a phone call. Stressing the need to preserve patients’ oral health shows that you care.
Prioritize patient retention
Your current patients are the backbone of your practice and often a source of new patients. In a tight economy, patients are more likely to cancel or not show up. Levin Group recommends a variety of patient retention strategies to keep patients coming to your office:
• Schedule the next hygiene appointment before patients leave the office. Patients should visit the office every six months for recare. The best way to do that is to schedule their next appointments while they are in the office.
• Confirm all appointments 48 hours in advance. Don’t rely on home phone numbers. Use a variety of communication vehicles, including email, text messages, and cell phones.
• Provide superior customer service. The goal should be to exceed expectations during every patient interaction. Don’t give patients a reason to avoid your office.
The objective should always be to keep patients active in the practice and happy enough that they won’t consider going to another dental office.
The new world of dentistry
We live in a new world in dentistry. As a result of these eight permanent dental game-changers, practice success is no longer guaranteed. The practices that grow exponentially in a changing environment are those with proven management and internal marketing systems in place to increase patient retention and patient referrals.
In fact, effective systems complement one another. For example, an efficient schedule leads to superior customer service, which builds trust and leads to greater case acceptance. This combination of factors enables dental practices to enjoy remarkable profitability, regardless of game-changers.
To learn how to run a more profitable, efficient, and satisfying practice, visit the Levin Group Resource Center at www.levingroup.com/gp. This is a free online resource with tips, videos, and other valuable information. You also can connect with Levin Group on Facebook and Twitter (@Levin_Group) for learning strategies and sharing ideas.
References available upon request.
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