By Roger P. Levin, DDS
Written exclusively for Incisor
The COVID-19 crisis is an unprecedented event in the history of dentistry. It arrived without warning and many practices found themselves suddenly shut down without any preparation or understanding of its impact. At the time of writing this article, most practices are still in a shutdown mode, but several states are indicating that they will be reopening in the next few weeks. Just as there was no time for preparation before the shutdown, most practices have done very little preparation for reopening. Perhaps it’s because many practices believe they will re-open, operate exactly the way they did before COVID-19, and gradually build back. This would be nice but it’s unrealistic. We only need to look at history to see that it will not be business as usual after the recovery from COVID-19.
What We Can Learn From the Great Recession
There is virtually no data to work from regarding the COVID-19 crisis and its effect on dental practices. One area of evidence that we can look at and rely on is the 2008-2009 recession. Often referred to as the Great Recession, this was the longest and deepest recession in American history. Here are some key data from that recession.
- Dental practice production declined for 75% of all practices and remained down for approximately five years.
- The number of patients in dental practices declined by approximately 10%.
- 20% of dental hygienists were released from their positions, as practices could not fill hygiene schedules, or dentists decided to reduce the expense of employing hygienists.
- Case acceptance declined. For example, implants went from 16% annual growth to under 3%. Larger cases were not accepted at anywhere near the same rate and most dental procedures were single-tooth dentistry.
These are a few of the findings that indicate what we might expect as dental practices re-open from the COVID-19 crisis. However, it’s important to recognize that the 2008-2009 recession was strictly an economic recession. The COVID-19 crisis has the added factor of a health crisis.
Understanding Practice Recovery
In order to better understand the application of high-value growth strategies for dental practices following COVID-19, Levin Group has built a model based on the following three stages:
- Stage 1: The COVID-19 Crisis
- Stage 2: Entering Recovery
- Stage 3: Recovery
Each of the stages will have very specific actions that need to be taken in order to help the practice have the best chance of a strong recovery. Here are action items to consider for each stage:
Stage 1 Action Items
At the publication of this article, it is likely that many dental practices will still be closed, which means they are still in the first stage of the crisis. It is important to prepare for both this stage and the next so that when the practice reopens, recovery is faster and easier. In this stage we recommend staying in regular communication with your team and your patients, tracking overdue patients daily, having the phone answered live during normal working hours, evaluating expenses, acquiring necessary loans, and monitoring cash flow.
Stage 2 Action Items
In this stage, practices should be about to re-open. It is at this point that we recommend contacting all overdue patients using a 90-day follow-up process in order to minimize the loss of patients. After the Great Recession, patients were hesitant to return to their dentists due to financial challenges. After the COVID-19 crisis, there will be patients who not only face financial troubles, but also have serious safety concerns that will keep them from coming back to the practice.
We also advocate ramping up production in every way that you possibly can. Practices will be facing a true business turnaround when they reopen. In a turnaround, it’s important to increase revenue as quickly as possible. Prioritizing larger cases in order to schedule the most productive treatment as soon as possible, expanding hours to include evenings and weekends in order to maximize the number of patients seen per week, and decreasing vacation time to limit the amount of time that the practice is not productive or operational will all help to increase production quickly.
Stage 3 Action Items
The third stage focuses on recovery and will be the most critical stage. We believe that this stage will last at least 12 months, with the goal of producing 80% of the average monthly revenue of the previous year by month 12. Some practices will hit 70% and others 90%, but most will not re-capture all the productivity that occurred in 2019 in the first 12 months of recovery.
To help hit this goal, we urge practices to continue to focus on maximizing production. If production is increasing throughout recovery, then revenue will increase which means cash will increase and income will be available.
We also advise practices to focus on cross-training staff members. It is very likely that you will experience some level of staff reduction. By cross-training now, you’ll create the necessary flexibility to cover those lost positions.
Accumulating cash will also be critical. At the start of the COVID-19 crisis, most practices found that they had less than one month of cash available. Without loans, many practices would have had to close permanently or be funded by the dentist’s personal savings. As we like to say at Levin Group, “Build a fortress around your practice.” But instead of wood or stone walls, armor your practice with cash. We suggest gradually accumulating up to four months of cash over 12 to 18 months in the recovery stage. Keep in mind that if you don’t use it, the money can always be taken later as income.
How are your systems and scripting? In the recovery stage, having highly efficient systems and effective scripting will be essential. After 36 years and over 30,000 clients, Levin Group has observed that many practices understand the importance of systems and scripting but do not consistently follow the systems or rely on scripts. Without them, practices gradually return to old bad habits. Without them after COVID-19, practices will suffer a much more difficult recovery. Remember, it will not be business as usual when you reopen. Practices that don’t have systems and scripting highly focused on production, collections, and insurance management will get through recovery slowly or—even worse—not at all.
While history shows us that recovery after a recession is difficult, it doesn’t have to be impossible. All practice management should be focused on the recovery. Put all your focus into production, collection, revenue, cash, number of active patients, number of patients without appointments and income.
We are in an unprecedented time with no guidebook. Each practice needs to develop a strategic recovery plan. You’ll find lots of advice, strategies and tips at our COVID-19 Recovery Resource Center at www.levingroup.com. Those who are planning now and understand what steps they will take will recover faster and more fully.
Roger P. Levin, DDS is the CEO and Founder of Levin Group, a leading practice management consulting firm that has worked with over 30,000 practices to increase production. A recognized expert on practice management and marketing, Levin has written 67 books and over 4,000 articles and regularly presents seminars in the U.S. and around the world. To contact Dr. Levin or to join the 40,000 dental professionals who receive his Practice Production Tip of the Day, visit www.levingroup.com.