Seven Ways the 'New' Economy is Changing Dentistry
Posted Mar 12, 2012 in Management
Dr. Roger Levin, Chairman and CEO of Levin Group, Inc., offers a look at how the economy is affecting your dentist-clients and what it means for their practices.
Dentistry is going through exponential changes. The future will have little semblance to the past, and at no point in the future will dentistry ever look the way it did as recently as four years ago.
Perhaps no single event in the last 100 years of dentistry has had a greater impact than the recent recession. There have been slow periods in the past, but nothing like what many economists have termed "The Great Recession." Here's how the economy is affecting your dentist-clients and what it might mean for their futures:
1 | Fewer patients presenting to dental practices. Patients who were looking for a dental office or who had become inactive (not visiting a dentist within 18 months) opted out of the dental system. There are also many regular patients who no longer visit dental practices. Dental practices will have to attract new patients and entice former patients to come back.
2 | Many dental patients are rejecting elective treatment. According to the Levin Group Data Center™, 81% of all dental appointments are single-tooth treatment. Factor in that fewer patients are presenting for treatment, resulting in a decline in production and a plateau or decline in revenue. This means dentists and their teams will have to sharpen their case presentation skills to increase patient acceptance.
3 | Some insurance carriers have created lower reimbursement plans. Many dental patients have transferred to these new plans, and most dentists have had no option but to accept these plans. This population of patients will lower practice production, something that will not easily be reversed in an improving economy. Consequently, practices will need to increase the average production per patient. They will also have to increase elective, non-insurance-covered services as a percentage of total revenue to grow in the future.
4 | Dentists are marketing more than ever before. Although a fortune is being spent on marketing methods from advertising to direct mail, the majority of these programs don't produce a positive return on investment. Internal marketing is still the most effective, least expensive form of marketing on the planet. Properly implemented, it allows the practice to identify and attract the right patients through referrals from existing patients.
5 | Young dentists are graduating from dental school with significantly more debt. This has led to a new phenomenon: an increasing number of dental practice management companies owning practices and employing dentists. With the proposed opening of numerous new dental schools, the available labor force of potential employee dentists will grow. Many of these dentists will remain employees, allowing these companies to further expand. I firmly believe there is a strong future for doctor-owned private practices but they will coexist with practices owned by dental practice management companies.
And, since practice management companies often accept all insurances and offer expanded, patient-friendly hours and days of operation, this will put pressure on the traditional private practice in terms of providing patient convenience and customer service.
6 | Americans will have less money to spend on retail and service sector businesses, including dentistry. Many Americans are making less and saving more, about 7% more than before the recession. The money they do have to spend is being allotted differently, which usually means less money earmarked for things such as visits to the dentist.
Dentists are going to have to work more closely with patients concerning flexible financial options (such as outside financing) that make it possible for patients to afford treatment. The more affordable the treatment, the more likely patients will say, "yes."
7 | Dentists will be retiring later than ever before. Current data from the Dental Economics/Levin Group Annual Practice Survey indicates that lower practice profitability is having an impact on the ability of dentists to retire at the desired age. The hard truth is that many dentists will be working eight to 10 years longer than previously planned to be able to afford a comfortable retirement.
Dr. Roger Levin is a third-generation general dentist and the Chairman and CEO of Levin Group, Inc., a dental practice management and marketing firm based in Owings Mills, MD, and Phoenix. He has developed a scientific systems-based consulting method that increases practice production and profitability, while lowering stress. Levin Group can be reached at 888-973-0000 or www.levingroup.com.
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