New Offerings
Providing the best possible patient services can also mean expanding your offerings–which requires an investment in your clinical education. "New services are some of the most profitable, Koenigsberg says. "They will distinguish your practice from the competition. If you want to offer new services, the only way is to get education, whether that is on CAD/CAM, implant placement, or orthodontics."
Gary Radz, DDS, associate clinical professor at University of Colorado School of Dentistry and a practitioner in Denver, Colorado, adds that sleep appliances represent an opportunity to boost revenue–if the doctor and team are prepared to make a time investment upfront. Radz offers sleep dentistry in his private practice and is also dental director for Somnia, a sleep wellness store in Lone Tree, Colorado.
The challenge with developing a sleep practice, he says, is threefold. First, there is getting the proper training. "Most dentists need to acquire new knowledge, so it requires going to a number of continuing education courses until you have enough expertise to be able to provide that service," Radz explains. Second, a dentist must be committed to advertising the new offering to patients to reap the full benefit. Production from providing sleep appliances can range widely–it could be anywhere from $2,000 to $20,000 a month–depending on the number of patients, and marketing plays an important part in ensuring a return on investment. Finally, there is the challenge of billing, which is perhaps the most difficult part for dental practices. "Reimbursement is through medical, not dental, so the dental business team has to learn to negotiate their way through medical billing," Radz says. But an investment in sleep dentistry can definitely be worth the effort, in terms of increasing both practice profits and your status as a comprehensive provider.
Although some may balk at the time investment required to expand one's scope of practice, Koenigsberg believes that it's well worth it. "Many dentists feel if they can't get a plug-and-play solution, something they can take in a 1-day course or 3-hour evening course, then they're not interested. I think that's bad for the patient who is not getting that new service, and I think it's bad for the dentist whose practice is going to be limited."
Conclusion
It's an unfortunate fact that dental school curricula are simply too overloaded to include the kind of hands-on, practical business training that dentists need to run their practices in the way that truly benefits their patients and themselves. For most, it's trial by fire, where your reputation, career, and credit are on the line.
Although there is no magic bullet to increase production and profit, being proactive with assessing your practice is the place to start. Understanding the reality of your practice's unique situation leads the way to opportunities that you may not have considered recently, but that are right for you.
Dentistry's 8 Game Changers
Roger Levin, DDS, shares the key factors that have influenced the current state of the business of dentistry.
1. The recession. The change in the economy starting in 2008 slowed down dentistry to a large degree, just like many industries.
2. Changes in how patients make buying decisions. Our patients are much more careful where they spend their money and how they spend it.
3. More dental schools. Since 2008, there were 13 more dental schools opening in the Unites States, which means the supply is increasing, and when supply goes up, competition goes up.
4. Higher student loan debt. The average dental school student graduates now $277,000 in debt (if they go to one of the newer for-profit schools, it's closer to $380,000). That changes some of the choices dentists make.
5. Decrease in insurance reimbursements. We are seeing downward pressure on reimbursements from many companies, which means lower production.
6. Expansion of the dental support organizations or "corporate dentistry." This means different forms of competition are emerging in the profession.
7. Fewer associateships available for dentists. Since 2008, there aren't as many choices for students coming out of school.
8. Delayed retirement. The reason there are fewer associateships is the average dentist is now practicing 8 to 10 years longer.
Top Business Advice for New Practitioners
1. Build Experience
"Earning potential is greater for an entrepreneur rather than gaining employment as an associate, but I recommend that new dentists practice for 12 to 18 months after dental school. That gives a good year to go through a whole cycle of business as well as all the seasons. They can learn to motivate team members and manage patients."
Allen Schiff, Dental CPA, CFE
2. Craft an Identity
"The first question I always ask a transitioning or scratch practice is, ‘What is the name of practice?' This is a really critical question. Historically there was a lot of regulation, where you had to use name, middle initial, last name, DDS or DMD, PC, and that was it. Your name was on your shingle and that's all the marketing you were allowed to do. Today you have to be able to communicate a qualitative difference in terms of your practice philosophy, who you are, and what sets you apart."
Naomi Cooper
President, Minoa Marketing/Chief Marketing Consultant, Pride Institute
3. Consider a DSO
"We've seen dentists of all ages and experiences choose to contract with dental support organizations (DSOs). But I think we're seeing younger dentists more recently due to factors such as a desire to have a more balanced work/home life, along with a heavy student debt load, which makes incurring additional debt more challenging and less promising."
Quinn Dufurrena, DDS, JD
Executive Director, ADSO
4. Consult the Experts
"New practitioners need dental knowledgeable people. One of the biggest mistakes is using the family attorney for a dental contract. The family attorney doesn't have enough experience in that area. You need an attorney and an accountant and you might want a consultant or a broker, but you should surround yourself with experts."
Roger Levin, DDS
Chairman and CEO,
The Levin Group
5. Measure the Practice KPIs
"Learning how to track key performance indicators (KPIs) can be different for new practices. They have the opportunity to create productive processes from the start; however, a new dentist may be overwhelmed with all of the decisions he or she has to make. It might be an associateship and planning a transition. They might be opening their own practice, so they are dealing with large capital purchases, leasing a building, and hiring a team. New practitioners have to make a special effort to understand effective practice management."
Matt Singerman Practice
Education Manager, Henry Schein Practice Solutions
6. Make a Financial Game Plan
"When you think about dentists who are just starting their practices, they want to pay off their student debt as rapidly as they can. I use a rule of thumb that the practice debt has to be paid back in 10 years. If a practice is trying to pay off their debt in 5 years or 7 years, in my professional opinion, that's just too rapid for them to retire the debt. Their cash flow gets hurt and then other things start to suffer. The sweet spot for commercial loans is 10 years; 12 or 15 years is simply too long."
Allen Schiff, Dental CPA, CFE
