Growing the Practice through Technology
Roger P. Levin
The inside line on practice profitability.
Dentistry has evolved dramatically over the last 30 years. Today, dentists must be able to quickly adapt to emerging products and technologies. Practices that properly analyze new technologies to increase efficiency and add services will have a tremendous advantage and be able to position themselves to achieve significant long-term growth.
Making the Right Choice
Since the 1980s, an explosion of technology-driven innovations has made it challenging to stay abreast of the latest advancements. At times dentists are overwhelmed with the sheer magnitude and variety of options. Highly trained sales representatives walk into practices every day and present volumes of information about multiple technologies which dentists must analyze before making a decision to purchase. There are numerous factors to consider.
A breakthrough in one area often leads to a breakthrough in another. Within a very short time, an array of choices is available to dental practices. This leads to the common quandary—should you buy one or buy them all? The problem is, not all products in that category may live up to the manufacturer’s claims. Also, as in every industry, certain products or services are very well-suited to some practices, but not others.
High Initial Expense
There was a time where the cost of opening a dental practice was fairly standard and most treatment rooms had a similar look. The cost of opening a practice was based on the size and number of rooms rather than available services and the products/equipment to support them. Today, new and established dentists must choose from a host of different products and services, ranging from affordable to expensive. These choices did not exist in the past. Each practice must now evaluate the expense of new opportunity and the cost of implementation.
Not Every Technology Will Be Successful
Breakthrough technologies have often only progressed one step beyond the experimentation stage. While the product may have been beta-tested and approved by the Food and Drug Administration (FDA), many advancements may not perform as expected in the practice. They could also pale in comparison to the next generation of the same technology. At this stage a dentist must decide whether he or she is an innovator and risk-taker or prefers to take a more conservative wait-and-see approach.
While the section above advises caution, Levin Group supports technological breakthroughs when properly researched and evaluated as a true asset for the practice. Innovations that improve efficiency or speed, or increase the number of services, should be considered. However, it is essential to analyze which technologies are true opportunities for each practice. The first step is to establish what value a technology has for the practice and the patient.
? Investigate whether the innovation has been available in other fields, for how long it has been available, and whether it works as well as its manufacturer claims.
? Inquire about how many other practices are using the technology and what their experience has been.
? Ask for references from practices with a similar-size patient base. Call the references so that you can discuss how the product has performed and what the benefits are for the practice and its patients.
? Find out what is involved in implementation. Will the manufacturer and/or distributor ensure the product’s success? The level of service the manufacturer provides can be the difference between success and failure.
? Ask those who have implemented the technology how steep they found the learning curve to be.
Realistically, every dental practice will be implementing new technologies in the future. The questions are: which ones will they implement and how quickly will they be available? These questions are an excellent starting point. Much depends on the requirements and goals of the practice. Consider these factors:
? size of the patient base;
? type of patient base;
? services typically offered;
? practice profitability;
? practice debt ratio;
? debt-equity ratio; and
? annual budget and capital investment for the practice.
These factors will help dentists to decide the appropriateness of new products for their practices. Careful analysis helps dentists avoid the pitfalls of rash decisions that have a negative impact on their bottom line.
Growing The Practice With Technology
Dentists should evaluate innovations by asking, “How will this benefit my practice?” Four benefits you should look for in any new technology are:
1. Does it improve quality of care?
2. Does it increase productivity?
3. Does it increase efficiency?
4. Does it provide a return on investment?
Carefully consider technologies that are reported to enhance the quality of care to your patients. Be wary of emergent technologies that only marginally increase the quality of care. Conversely, some innovations have made a tremendous difference in how dentistry is delivered. Sometimes in-office dispensing of technologically advanced ancillary services expands practice offerings and helps patients to improve oral health habits. For example, Water Pik, Inc (Chicago, IL) allows dentists to offer dental water-jet technology as an alternative to flossing. In this instance the product improves the quality of care while increasing productivity. New products should always be evaluated in terms of their value to your practice.
Improvements in productivity mean lower overhead, increased profitability, and reduced stress. The general rule of thumb is to work smarter, not harder. Technologies like digital radiography are highly desirable because they improve productivity, reduce overhead, and decrease stress. Ultimately, these benefits amount to greater profitability for the practice.
Most practices have numerous bottlenecks and areas where products or instruments may fall short. The practice’s systems will not exceed the speed of its largest and slowest bottleneck. Technology can be the solution to eliminating practice inefficiencies. When practices upgrade and/or replace outdated systems with new technological advances, they improve efficiency. Productivity and profitability are also consequently improved. Over the last 23 years of working with thousands of dentists, Levin Group has seen practices significantly increase production in less than 2 years by improving practice efficiency.
Return on Investment
Evaluate the technology’s purchase price, payment method, and long-term benefit to the practice. It is wise to create a timeline for technology research, evaluation, acquisition, and implementation. This approach allows the practice to continually move forward in the process while assessing the financial impact it will have on the practice. Taking time to evaluate the return on investment is an excellent business principle that enables practices to move forward with a realistic financial profile.
New technologies offer practices many opportunities to deliver better patient care, and increase practice efficiency and profitability. However, dentists must take the time to carefully analyze each new product or service, considering productivity, efficiency, quality of care, and return on investment. A thorough investigation creates clarity about which innovations are best suited for an individual practice to achieve true business growth.
Dr. Levin has received financial support from Teledyne Waterpik.
Inside Dentistry readers are entitled to a 20% courtesy on the Levin Group Practice Productivity Seminar held on May 14-15 in Las Vegas. To register and receive your discount, call 888-973-0000 and mention Inside Dentistry or e-mail firstname.lastname@example.org with “Inside Dentistry” in the subject line.
|About the Author|
|Roger P. Levin, DDS |
CEO, Levin Group Inc
Owings Mills, Maryland