Dentistry has changed dramatically over the last several years and it continues to change. I have been practicing since 1984 and the business of dentistry now is nothing like it used to be.
I opened a practice right out of school in 1984. Ignorance is bliss because I thought that since I knew how to do clinical dentistry that I would be financially successful. Man, was I wrong!
I had no idea how to run a dental practice. I had no idea how to run a business. I didn’t know how to hire, train and motivate my employees. I didn’t know anything about how to build and implement strong systems that would make a practice successful.
So, I decided to do what most dentists do. Do whatever comes natural. No systems, no staff training, no verbal skills, no efficiency… just do whatever comes natural. This doesn’t work. You have to learn to do what doesn’t come natural to build a successful multi-million dollar practice.
You must be proactive and make changes in the way you practice the business of dentistry that will not feel natural to you… especially in today’s difficult environment.
After 13 years of trying to make this work, I burned out, sold my practice and worked for the new owner as an associate. I was finished with trying to own a practice and be financially successful in dentistry.
Dentistry has one of the highest burn-out rates of any other profession. Burn-out is typically not because you get tired of the clinical aspect of dentistry. It is because you get tired of running the business part of the practice and it is not generating the level of success you had expected.
Three years after I sold my practice, the owner’s wife (also a dentist) caught him at a hotel with another woman. When he walked into the parking lot, she ran over him with her Mercedes and killed him. Get my book for the whole story.
So… I bought the practice back and decided to do what did not feel natural and learn to build a successful dental practice.
I grew the practice from $675,000 to over $4,000,000 a year in only 5 years. I then grew from $4,000,000 to over $20,000,000 in 5 more years.
How did I achieve this kind of rapid growth? Being proactive!
Don’t keep doing the same things over and over hoping for a different result. Learn to implement the strategies, systems and techniques necessary to build a multi-million dollar practice that is competitive in today’s environment.
Today’s dental environment is much different than it was just 10 years ago. These changes have made building a successful practice much more challenging than it used to be.
These changes are not good or bad. They are just reality. Your ability to be proactive will dictate your level of success in this new environment.
I see four major changes that have impacted our dental environment. We must know how to adapt to these changes for success.
1. Dental fees have not kept up with inflation.
We have had continual downward pressure on our fees from two powerful outside forces. Dental insurance companies and our poor national economy.
The dental insurance companies maintain profit margins by controlling our fees.
We are seeing more and more employers move away from indemnity insurance to PPO network insurance plans as they seek ways to decrease their employee costs. In short, we are seeing indemnity dental insurance going away as we see PPO plans increasing.
I have learned how to be profitable being in network with PPO insurance plans. For years, I said that I would never sign up on any insurance plans. This was back when I was a poor dentist.
When our environment changes, we must change in order to stay profitable and competitive. Every other business I can think of operates this way and your dental business should too.
In 1984 my crown fee was $650. If my crown fee had kept up with inflation since 1984, then I should be charging around $1800 for a crown today.
I don’t charge $1800 for a crown and you probably don’t either. I guess you could charge that much, but you would probably only do a couple of crowns a month! I would rather do 60 crowns a month at $800 than 6 a month at $1800?
I have learned to be profitable with the lower fees by increasing our number of new patients, providing more services, more efficient scheduling, increased cosmetic dentistry, and increased case acceptance percentage.
2. Poor economy
Since the recession of 2008, our national economy has grown less than 3%. They say this is the worst growth since World War II.
So, our patient’s wages have remained stagnant since 2008. Additionally, on average, their debt has increased. This means there is less discretionary income to spend on dentistry.
The ADA recently reported that national dental expenditures, after adjusting for inflation, have remained flat since 2008. The article stated that there is no end in sight to this trend and called it the “new normal”.
I have learned that my patients will usually find a way to pay for what they want, but not necessarily for what they need. My team and I need to understand how to help them want what they need.
We have changed the way we communicate with our patients so they will want the dentistry they need, which has over doubled our case acceptance rate.
3. increase in number of dentists.
The ADA reports there has been a 4.8% increase in the number of dentists since 2005. The number of dentists grew from 58 per 100,000 population in 2005 to 61 per 100,000 in 2015.
This has been from the increase in the number of dentist graduates and also from practicing dentists delaying retirement due to economic reasons.
Dentists’ earnings peaked in 2005, and have been on a steady decline through 2015. So, the increase in the number of dentists coupled with the poor economy has hurt dentists’ incomes.
Increasing your number of new patients and increasing your case acceptance rate will combat these negative trends..
4. decrease in private practice
The average new dentist graduate has a school debt of over $300,000. This prevents most recent graduates from being able to purchase a practice or buy-in to an existing practice.
When I graduated dental school in 1984 my total school debt for all four years was only $17,400. This wouldn’t even pay for one semester today. I have read estimates that 80% of new graduating dentists do not have a desire to own a practice.
This is one of the major factors that have helped the rise in “corporate dentistry”. This is the fastest growing segment of the dental market today.
And it is not just the student debt driving this trend. Many dentists see the advantage of having a dental service organization handle the day-to-day operations of the business.
In addition, 50% of the graduating dentists today are female. Statistically most female dentists choose to work as an employee dentist rather than own their own practice.
Learn how to double and triple your practice revenue. Increasing your revenue is the best way to lower your overhead.
Higher case acceptance percentage, offering more services, more new patients, excellent dentistry, and an enthusiastic incentivized team all work together for a great patient experience and rapid practice growth.
Be proactive! Make the necessary changes in yourself and your practice to build a successful multi-million dollar practice in today’s changing environment.
Dr. Mike Kesner’s practice ranks on the Inc. 5000 list as one of the fastest growing companies in America. He is author of the book Multi-Million Dollar Dental Practice and CEO of Quantum Leap Success in Dentistry. Dr. Kesner teaches dentists across the nation how to have more production, higher profits and less stress. No hype…just results! Learn more at www.QLSuccess.com.