Although it's not for everyone, investing in cone-beam computed tomography (CBCT) can be a smart strategic move. "An office that is doing mostly composite fillings and has no desire to do anything else probably doesn't need a CBCT," Koenigsberg explains. "On the other hand, if a practice wants to place implants, then they have figure out a way to get that technology."
Lande falls in the latter camp. After restoring implants for years, he decided to learn to place them and purchased a CBCT. "I bought the GALILEOS, because it would coordinate with my CEREC," he explains. "I could make surgical guides so I could place the implant and feel more confident."
Clinically, CBCT has taken Lande to the next level. "There are still not a lot of general practitioners who have a cone beam. But it's amazing what you can see on it; the difference between 2-dimensional and 3-dimensional is just eye opening."
If you are ready to invest in new technology, Drayer advises having a plan and knowing where your credit stands.
"This is an excellent time to lock in very low fixed rates on financing," Drayer says. "Financial institutions that deal with health care professionals specifically, like the financing offered through Henry Schein Financial Services, are originating loans at more attractive terms than they have in the past 6 years."
Schiff agrees that financing might not be as difficult as one would expect. "Quite frankly, the borrowing power dentists have is quite substantial, and there's plenty of money out there. The national failure rate for dental loans is 0.003%, so many banks are willing to lend them money if there's the right opportunity."
Even so, Koenigsberg found that he was not able to finance the kind of state-of-the-art practice he wanted on his own. "Things that are harder to finance as an individual are easy to finance as a group. The ROI is greater and the incremental cost of equipment is much lower with multiple users."
Whether you practice solo or in a group, Levin stresses that planning financially for purchases in advance will greatly help practitioners when it's time to buy. His recommendation is that every year the practice include a "capital investment for technology" line item in the budget. A technology plan is also important to help evaluate the office and prioritize purchases. Levin says, "Ask which technology will do one of four things: improve quality, increase speed, increase production, or provide a return on investment. My idea is that if it doesn't do one or two of those four, then you probably shouldn't be buying it."
After the purchase is made, Schiff advises amortizing the depreciation expense over the life of the loan, rather than succumbing to the temptation of a large up-front deduction, in order to offset the "phantom income created from the principal debt reduction."
Opportunity #3: Your Staff
"I get asked all the time, ‘Where can I hire a great staff?'" Levin says. "And my answer always is, ‘You don't hire great staff, you train great staff.' Training is not a one-time activity." As leaders of the dental team, he says, dentists need to create personalized training plans, rather than take a one-size-fits-all approach.
"We typically find that practices don't invest in enough training to begin with, and then most practices experience turnover every 12 to 18 months," Barker says. "The new team member is trained by the existing team members, who didn't have adequate training to begin with. There's a dilution of knowledge, and the practice starts to see an increase in inefficiencies."
In addition, practices with turnover in business staff may start to see a problem with overdue collections or lapses in follow-up with patients who are overdue in hygiene or have unscheduled treatment plans. This can negatively affect the practice until a new staff member is up to speed.
Having an excellent, well-trained dental team increases your chance for financial success exponentially, according to Drayer. When your staff can work as a team, he says, the office is likely to be more efficient, you will have higher employee retention, and your patients are likely to be much happier and, therefore, to refer other patients. This all leads to greater profitability.
Billing and Collections
When it comes to effective collections, Drayer says, having a systematic approach and pragmatic policy that is implemented consistently will yield the best results.
While having a policy is critical, it's not enough. Financial policies of the practice need to be made clear to patients and need to be enforced by staff members, which means taking emotion out of the equation. Levin says this is another place that targeted staff training pays off, since 98% of financial coordinators have no background in managing finances.
On the point of developing and implementing a clear financial policy, Levin recommends giving patients a choice of four options: 5% off for cash up front; credit card payment; half payment in the beginning in a multiple-appointment case; and patient financing. With patient financing through companies like Springstone or CareCredit, a patient can often get a loan or a line of credit in 3 minutes and the office gets paid within 24 hours.
When payment is due, persistent and direct patient communication should be the practice's policy, Levin says. "Put in a system that if any patient is overdue by 1 day, that patient will be called that day. If you don't reach the patient, you should have a 9-week follow-up process until patients realize they have to pay the bill."
Even when in-house systems are well established and running efficiently, practice management consultants often provide a "fresh pair of eyes" that can benefit a practice. Busch used one who assessed his practice location, fee schedules, and other information, and made recommendations, including which fees to increase. The consultant also came to the office to train the staff. Busch also employs an insurance consultant, a professional who, for a flat fee, negotiates your rates with your insurance companies.
"I just made about 15% across the board this way," Busch says. "Some doctors don't know they can ask for a raise from the PPOs. Some people know they can ask, but don't ask often or don't know the rules of how often they can ask."
Opportunity #4: Helping Yourself
Investing in yourself as a practice owner or team leader can also go a long way toward boosting practice profits, but it's not always the first strategy on dentists' minds. Levin says that taking the time to get training for yourself–on everything from professional selling skills in case presentation to learning to run your business like a CEO–is a wise investment.
"Dentists are so busy; they don't have the time for pure academics. They need to get very specific training to benefit their own practice. They need to go to the experts who have already put it all together so they can learn and implement it very quickly," Levin explains.
Barker, who helps dentists through Henry Schein's Profitability Coaching Program, says it's akin to getting a personal trainer at the gym. "When you hire a personal trainer, they help you see all the little things you can tweak and do better, and it has a huge impact in your fitness. And that's exactly what we are doing with our customers," she says.
By the end of the sixth month in the Dentrix Profitability Coaching Program, the average customer has increased their month cash flow by $8,000 a month. "Customers are paying $2400 for this program," she says, "so if you annualize the return on investment, it's over 1600%."
Events like Henry Schein's annual Business of Dentistry conference can provide missing skills as well. Being held this year from October 7-10 in Kissimmee, Florida, the conference focuses on helping dentists learn new skills in business management, Dentrix software use, and clinical techniques. There are courses tailored to other dental team members as well, so the whole office can benefit.
For an increasing number of dentists, the definition of entrepreneurship is expanding to include the services of dental support organizations (DSOs). "Profitability of any business is simply a function of how well the business is run," says Quinn Dufurrena, DDS, JD, executive director of the Association of Dental Support Organizations. "DSOs utilize the collective experience within their organizations to implement business best practices across the broad spectrum of services they provide, from billing to marketing, insurance to accounting. Additionally, DSOs use their economies of scale to help reduce those costs and those associated with procurement and lab expenses."
Expenses were key in Koenigsberg's decision to embrace group practice. "I'd been in solo practice for 23 years, enjoyed the perks of being a solo practitioner, and recognized the limitations and hassles of partnership. However, I realized I couldn't afford to incorporate the technologies and provide the customer service I wanted on my own. I don't believe that it is possible economically without some kind of sharing arrangement."