By Genni Burkhart
Fresh on the heels of global recovery efforts from the COVID-19 pandemic, U.S. inflation numbers recently reported a 9.1% jump from the same time last year, hitting all-time highs not last seen since 1981.
In an article written by Jeff Cox on cnbc.com, month-on-month (MoM) medical care costs rose 0.7% in June from the previous month, with dental services reporting a 1.9% increase, the largest MoM inflation increase in dental costs since 1995. As was noted in a recent Incisor article, affordable dental care is currently top-of-mind for dental patients, pinching dental practices in between patients and profits.
As inflation places more financial pressure on dentists and patients alike, we'll review the best ways to effectively inflation-proof your dental practice – protecting profits as well as patient satisfaction.
1. Consider a Membership Program
A powerful and increasingly popular tool, membership programs allow dentists to set their own fees, unlike insurance reimbursements. And perhaps the best part? Offering alternatives to dental insurance can benefit both the practice and the patient. With insurance reimbursement increasingly more difficult to navigate, membership programs can provide a more predictable cash flow free from a third party.
Additionally, many membership programs include software that streamlines and simplifies administrative work, thereby freeing up your staff. A wise first step would be to consult with your attorney before creating a membership program so you don’t run afoul of any insurance laws or contracts that may apply.
2. Stay on Top of Finances
The experienced advice of a financial advisor and certified public accountant can help you avoid costly financial mistakes, and free up your most valuable asset – time! If you're trying to do it all yourself, or if you're multi-tasking office staff with additional responsibilities, it can have a negative impact on productivity and ultimately profits. Financial professionals can make sure business loans are locked in (or paid off) at the most favorable interest rates, investments are consistently monitored, and you're staying on top of everything impacting your bottom line.
3. Make Technology Your Best Friend
Time is money and technology provides a return on investment (ROI) that’s realized in increased efficiency and productivity. Freeing up time for everyone on the team cuts down on staffing costs, increases the number of patients seen, and with the use of patient communication systems, decreases the number of no-shows and late cancellations. Technology in the operatory also increases the types of services you’re able to provide. This means cutting down on the time needed for procedures while also providing patients with the latest and most innovative dental care possible.
4. Consider Group Purchasing
As noted in a recent Incisor article, buying groups can negotiate and source on your behalf with more scale than purchasing supplies on your own. Through a purchasing group, similar businesses team up to source the very best prices and suppliers, increasing the group's purchasing power and discounts. This also saves you time by sharing the work of sourcing products and negotiation across the entire purchasing group.
5. Be Clear with Patients
Let's not avoid the very real possibility that raising prices might be required in consideration of record inflation. However, it's important to keep patients informed by being clear with them about any price increases in advance. In the spirit of clarity, it's also important to be up-front with patients about your time, making sure that no-shows and cancellation of appointments must follow specific guidelines. You'll find this level of honesty with patients will garner their respect as well as that of your staff.
6. Retain Staff
Since the onset of the pandemic staffing issues have plagued small businesses. The investment put into training new staff means retaining the staff you currently have should remain a priority. As reliable and experienced employees are seen as an asset, this means they should be treated as such. Ensure that your practice is staying competitive with competing practices in employee compensation, including paid time off, 401(k) plans, health savings accounts, and other options that can keep employees motivated to stay with your practice.
7. Prioritize Productivity
One of the most important steps in making your practice inflation-proof is through increased productivity, which is why most of the steps on this list mention it. Productivity is a team effort, and this includes the administrative and operatory teams. Technology, training, time management, and people skills all come into play. Make sure that office morale is addressed, and that management isn't negatively influencing staff to increase productivity – otherwise, all the efforts to do so could ultimately backfire.
8. Re-evaluate Your Marketing Strategy
Don’t fall into the trap of cutting your marketing budget to save a few dollars when it’s needed the most. As reported in the “Marketing Budget vs. Inflation” Incisor article, marketing your practice shouldn’t be seen as an expense, it’s a vital investment. Be consistent and patient with your marketing plan, but perhaps most important is to have a plan. Going at it alone can waste valuable money and time. Just as you look to professionals to handle your finances, make sure you’re trusting professionals (in-house or external) to manage your marketing strategy.
By taking the time to inflation-proof your practice you’ll be more likely to minimize the negative effects of rising costs while also benefiting the productivity and morale of your staff. In addition, you’ll ensure you’re consistently providing patients with the highest quality dental care at a time when the value of every dollar they spend is of equal importance.
Author: With over 12 years as a published journalist, editor, and writer Genni Burkhart’s career has spanned politics, healthcare, law, business finance, technology, and news. She resides on the western shores of the idyllic Puget Sound where she works as the Editor in Chief for the Incisor at DOCS Education out of Seattle, WA.