Dental Economics-Dental News – What a great time to be a dentist!
Original article found at: Dental Economics-Dental News – What a great time to be a dentist!
First, the demand for dental care has never been higher. Our aging population’s dental needs will continue to grow. Simultaneously, the number of experienced, quality practitioners continues to decline, even as the total number of dentists increases. In fact, many doctors who have been pondering the decision to retire will take this opportunity to discontinue the expense of running a marginal practice. Others will limp along hoping to recover lost savings by extending the life of an obsolete practice, while refusing to invest in what they hope will be a relatively short extension of their career in dentistry.
Second, 90% of our working population is likely to remain employed. While this may vary by region, the fact is that the vast majority of working people will remain just that — working. These people will continue to break teeth, get decay … and need attractive smiles even if it is for the purpose of interviewing for a new job. Yes, some patients will want to give up on teeth and get dentures. We don’t control this, but we certainly can be ready to provide the best possible outcome when they make this decision. The reality is that it doesn’t really matter what type of teeth patients choose, but rather that they choose us as their dental care providers.
Third, the failure of an economy based on consumer spending is likely to be followed by a return to fundamentals. One of the most basic of these fundamentals is health care. During the Internet boom, we observed a phenomenon in which young, healthy, working adult patients became so obsessed with the fortunes they were making on paper that it was almost impossible to get their attention to pursue even the most obvious investment in dental care. In their minds, every dollar that was being poured into IPOs was surely the one that was going to ensure an early retirement. After the bubble burst, it was remarkable how rapidly these individuals returned to an appreciation of what was really important — family, community, and health.
Fourth, the dental care which will be deferred by some will inevitably result in far more extensive and costly procedures. As a profession that has relentlessly pursued prevention, it is certainly not our desire to have patients increase the level of required care. However, this is an unavoidable result of the current situation. Even those who can afford care may be delaying or deferring treatment until their sense of panic has abated. The 80% to 90% of the population with reasonable job security will not delay long, and most people with dental insurance are rushing to pursue care.
Fifth, market leaders in any industry consolidate their leadership positions during times of contraction. This is simple business reality. Those practices that are the most organized, highly motivated, and best trained are positioning themselves for the inevitable growth ahead. Will America be the great single superpower that it was in previous years? That is largely irrelevant. Witness countries such as France and England, long in decline in a leadership role. World power status does not significantly affect one’s ability to pursue dental health.
Sixth, now perhaps the best part of this story. Never in the history of my 25 years in dental practice have I seen the pool of highly skilled and highly motivated employees as large as we see at this moment. This is a tremendous opportunity to build a superstar team! Team members have, perhaps, for the first time in a generation, come to understand the value of a secure occupation and position. The level of satisfaction at work and appreciation for work has never been higher. We have seen a steady stream of applicants, some with decades of experience, for all positions in the dental practice. In addition, a number of highly skilled people from outside the profession are making every effort to enter into our secure, satisfying, and rewarding occupation. Imagine a practice alongside such a skilled group. I personally cannot wait!
Seventh, quality real estate has never been more available. Leasing opportunities that were never available to health-care practices suddenly are being freed up at rental rates that were previously unimaginable. Land is often available at distress sale prices. It has suddenly become possible in many areas of the country to build a new office in a location that will provide a sustainable competitive advantage for decades. As the years go by, late movers will simply be unable to capture these premier sites.
If you are willing to consider this reality — the reality of those fortunate enough to have chosen dentistry as their life’s work — how do you respond to this level of opportunity?
1) Grow! You have got to make room for those who want your services. One way to do it is to consider spreading hours to accommodate patients who are reluctant to take time away from the office or factory for their dental care. An expanded schedule does produce a certain amount of inconvenience in many offices. However, the primary purpose is to obtain economic security and expand the practice’s market position. For those who are timid about the opportunities at hand, this might be a good place to start.
2) Accept the new economic reality as the opportunity that it is.The increase in needs-based care — and shift away from or delays in accepting cosmetic procedures for some patients — will inevitably lower the case average for practices. In order to accommodate a lower case average, greater capacity is a requirement. Some offices merely need to optimize poorly utilized space in their existing facility. Many offices will find that by increasing room count, they can easily overcome the reduction in case average. The economics of room count are compelling, if counterintuitive. Expansion when possible clearly shows great benefit. At even the extremely low case average rate of $1,000, you would only need to treat an additional 50 to 75 new patients to offset the cost of a new room using simplified systems. Offices with higher throughput are able to easily handle significant increases in new patients. When the economy returns to a more stable balance, there will be opportunity for a return to higher case averages.
3) Consider expanding or building that new office you’ve always wanted now! With rates as low as they are, land costs plummeting, the availability of high quality contractors who are highly motivated to complete projects, and the decrease in construction material costs, this is unquestionably the best opportunity in our lifetime to create a new office. Patients have choices, and they are more confident than ever about their abilities to choose wisely. Outdated, inefficient, noisy — and I must say — ugly offices do not achieve the new patient referral counts that their clean, private, comfortable, and efficient counterparts do. You have the ability to create patient demand. You want to prevent the erosion of patient loyalty, and you want to lock in the lowest cost for a new office. From our vantage point, from coast to coast, the time is now!
In my next article, I will discuss proactive steps that you can take to increase profits, even as case averages decline. I will discuss the very important concepts behind the relationship of quality and productivity … and it’s not what you think! The future is ours to make. For dentistry, it has never looked brighter!
David J. Ahearn, DDS, is a full-time practicing general dentist. His office consistently ranks in the top 1% nationwide. The president of Design/Ergonomics, he lectures on cost-effective office design, design for performance, and making it easier to get dentistry done. Reach him at (800) 275-2547 or at firstname.lastname@example.org.
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