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The global economy has changed, and the dental world is forced to change. too. Once thought by most to be recession-proof, dental practices are being impacted by the economic downturn in many ways. Today’s economic conditions are unpredictable and have placed new challenges on staff and resources. As the economy continues to fluctuate, dentists are uncertain about what actions to take.
That was then ...
In the past two decades, I have witnessed many changes in our profession. The combination of innovation and entrepreneurship has led to significant breakthroughs. The emergence of cosmetic dentistry and the growth of implant dentistry created a renaissance in the dental profession.
But that was then …
As dentistry continues to evolve in a new economy, it is even more critical to keep an eye on the business side of the practice. Most practices continue to manage themselves as they did when the economy was far different and much more robust. In the current market, today’s dentist is wondering what should be done to manage day-to-day pressures while running the practice. In a world of “that was then,” you can no longer afford to practice the way you once did. Practices are working harder to maintain production levels, and doctors’ investment portfolios have declined and only just recently started to climb back up. While there is a strong desire to increase doctor income, no one is sure exactly how to make this happen.
This is now …
The new economy has shown us a new era of dentistry. Practices will no longer automatically find success by hanging out a shingle. Even dental insurance is no longer a guarantee that patients will come to a practice. Patients with insurance, similar to other consumers, are cutting back on spending. Unlike medicine, dentistry almost always comes with a co-payment or out-of-pocket cost. Given that a great deal of dentistry is not based on emergencies or pain, many patients are deciding to hold on to their money rather than spend it. Some of the changes Levin Group has seen in the last 18 months include:
- An increase in no-shows and last-minute cancellations
- A decrease in the number of patients preappointing for hygiene services
- A large decrease in cosmetic services
- A minor decrease in implant services
- A decrease in the number of new patients and overall case acceptance
- An increase in practice overhead percentage
- A decrease in doctor income
- A decrease in the number of staff pay increases
These observations illustrate how dental practices need to be more efficient than ever in their operations to maintain profitability. During this time of transition, the key factors contributing to “this is now” include:
1. Bring in new patients through internal marketing: They’re already there in your practice. They have the knowledge to help you build your practice. They’re more effective than Yellow Pages ads or radio commercials. They are your current patients.
Most are happy to refer their friends and family — but you have to ask. If current patients aren’t aware that your office is accepting new patients, it’s doubtful you will receive many referrals. You and your team need to communicate that the practice is actively looking to provide excellent oral health care to more patients. Signs, scripting, and patient incentive programs are good strategies to boost patient referrals.
Once you receive referrals, be sure to call and thank any patients who refered their friends and families. Levin Group recommends that the dentist be the one to make the call. Patients who receive these phone calls are motivated to continue referring others.
2. Reactivate inactive patients: One of the key principles of practice management is to retain patients. I recommend the following methods for keeping patients engaged, as well as for reactivating those who have become idle over the last 18 months.
- Identify inactive patients — Use a software system or perform a manual chart audit to generate a report of inactive patients from the past 18 months. Based on the number of active and total patients in the average practice, this task should not take too much time and is well worth the effort.
- Contact inactive patients — Make telephone contact first. It is always more beneficial to talk to patients in person, since the goal is to motivate them to make an appointment. The telephone call also creates an opportunity to refer to the appointment more as periodontal maintenance and an oral cancer exam rather than a simple cleaning. Don’t limit the call to basic services. If you do, you may not create value in the mind of inactive patients who have already allowed their dental visits to lapse.
The phone call sequence should be three calls over a three-week period. This has worked extremely well for many practices, allowing them to activate a large majority of patients who have not presented to the practice in the past 18 months. It is also important to track these patients separately to be sure that they keep their appointments because their value for the practice or amount of dentistry performed may be lower than that of an active patient.
3. Increase elective services/promote comprehensive dentistry: As patients begin to stabilize financially, practices should continue to present cosmetic and elective dentistry. I know some dentists may balk at this, saying, “My patients are struggling. They don’t have money for ‘extras.’” I understand this perspective, but let me make a few salient points.
Remember, not everyone has been affected by the economic downturn. Some patients are doing quite well and will want to invest in a better smile and quality of life. Others may have a major life event (wedding, reunion, job interview) where they want to look their best. Even if patients turn down treatment now, they may accept it later. Sometimes, it takes more than one case presentation for patients to say “yes.” This isn’t the time to hunker down, but rather move forward with making your practice vision a reality.
4. Make treatment affordable for patients: No matter what the economy, you should make it easy and convenient for patients to accept your services. The more financial options your practice offers, the better the outcome for everyone. To ensure patients can afford and feel comfortable with payments, try to offer the following options:
- Pay half up front, half before completion of treatment
- 5% courtesy for full payment in advance for larger cases
- Credit cards
- Outside patient financing
Make no mistake — patient financing matters! According to a recent study by Hiner & Partners, 73% of patients surveyed indicated they felt their dental office was looking out for them if financing options were offered. Therefore, offering flexible financing options through an outside patient financing company such as CareCredit® that understands the needs of dental offices is a good way to increase patient trust.
5. Streamline operations through high-performance systems: Many dentists do not realize that a practice without outstanding documented systems will never reach its true potential. An average practice operates at approximately 30% below its potential due to a lack of adequate systems.
Major management systems can be broken down into five categories:
- Patient finance and collections
- Practice financial management
- Case presentation
Each of these systems is a practice’s key component, with the exception of hygiene for some specialty practices. But all five systems are integrated to make it virtually impossible to change one without affecting the others. For instance, scheduling affects practice finance and hygiene affects case presentation.
Redefine practice operations
In the past, dentists could accumulate enough savings over a reasonable number of years. However, my warning is that this will no longer be the case in the “this is now” economy. If dentists continue to operate practices “the way it was then” versus “the way it is now,” today’s dentists can expect to work 10 years beyond what they expected.
When a dentist can redefine practice operations to adapt to a changing environment, achievements are more appropriately aligned and a renewed sense of satisfaction is gained.
Dental Economics® readers can receive a 50% courtesy on a Levin Group’s Total Success Practice Potential Analysis™, an in-office analysis and report of your unique situation conducted by a Levin senior practice analyst. To schedule an appointment, call (888) 973-0000 and mention “Dental Economics,” or submit an e-mail to [email protected] with “Dental Economics” in the subject line. For more information on Levin Group programs and seminars, go to www.levin groupgp.com.
Roger P. Levin, DDS, is chairman and CEO of Levin Group, a dental management consulting firm that is dedicated to improving the lives of dentists via a diverse portfolio of lifetime services and solutions. Reach Levin Group at (888) 973-0000 or www.levingroupgp.com.