COVID-19 has had a major impact on the world and dentistry. The onslaught of challenges and rate of change has been unprecedented in our profession and we know that it will no longer be business as usual. Operating a practice in this new climate requires resilience and agility on the part of leaders and staff members. Fortunately, there are three key strategies that any practice can use to ensure that a turnaround is successful.
The first order of business for any dental practice has always been to stay focused on production. Production is the key element that leads to revenue, which will become even more important for practices during these uncertain times. When revenue exceeds expenses, the practice is profitable and moving successfully in the right direction for the recovery.
It is also important for practices to understand that a business turnaround is different than normal operations. In some cases, production and profitability will increase almost immediately due to the pent-up demand following the shutdown of most dental practices. However, we estimate that this demand will only last for approximately 3 to 4 months. When it is over, practice production will begin to slow down, marking the second phase of our projected recovery timeline.
Rather than focus on a wide variety of strategies in the business turnaround of your practice, it is better to focus on only a few key strategic actions that will ensure that the practice survives and returns to profitability. The following three strategies can help practices to reach equilibrium quicker and begin to bounce back. Please note that some of these recommendations are atypical of the advice that we would usually offer. These strategies were specifically created to help practices recover faster and better following the COVID-19 crisis.
Strategy # 1: Reactivate as many patients as possible as quickly as you can.
Reactivation now has a new meaning. It no longer refers to patients who you haven’t seen in six months, 12 months, or longer. It refers to any patient that doesn’t have an appointment. The objective of the strategy is to schedule as many of these patients as quickly as possible with respect to your new office scheduling parameters. We have evidence from the Great Recession (2007–2009) that patients often put off seeking dental care in a deep economic downturn. Their financial challenges or anxiety about the economy may lead them to let regular examinations or needed care go by the wayside. Practices must have an active campaign to contact these patients and offer positive information about practice safety and expanded financial options. This is an essential and powerful strategy for keeping patients and helping your practice to return to a higher level of production.
We suggest that you first call all patients that need to be reactivated. While it’s easier to simply send a text message, it’s far less effective. In each call use excellent new scripting that includes information about practice safety and expanded financial options that help patients comfortably afford treatment.
Every patient that can be reactivated will help to increase practice production and patient loyalty. To that end, the new mantra of the scheduling team should be: “Every patient leaves with their next appointment.” The more patients who are active and scheduled, the higher your practice’s chances are for a successful recovery.
Strategy #2: Offer expanded financial options.
The simple fact is that we are entering a deep recession and challenging economic time. There are patients who have lost jobs and their dental insurance. Others are experiencing real financial challenges. If patients don’t feel that they can comfortably afford dental care they will stop coming to the office except for emergencies. One way to counteract this is to expand financial options. We recommend increasing the use of patient financing by 200% - 300% and offering interest-free financing. When patients hear that interest-free financing is available it creates a powerful belief that they can afford treatment.
For patients who might not qualify for financing, practices should consider offering payment plans. In the past, Levin Group would discourage this as an option. We project that 8% of payment plan patients will not complete their payments, which makes this an unappealing choice for practices. However, if a practice gets 50% of the fee upfront and then collects many months of payments, it is still covering overhead and has some profitability on the case. Ideally the practice would like to collect 100% of the payment plan and in most cases it will. But even at 70% the practice has covered overhead and there is some profitability. In a business turnaround following a crisis, patient financial options that contribute to overhead are worth accepting simply to be sure that the practice can pay all its bills and move into profitability.
Strategy #3: Step up collections.
The collection system is now of paramount importance. Yes, production is always the main goal, however production that is uncollected doesn’t contribute to a recovery. Collections help create revenue and revenue may be the single most important factor in a successful business turnaround for every dental practice.
We suggest that you start with what we call the “one-day rule.” In a business turnaround or recovery, key strategic actions need to be taken every single day. One of those daily actions is the collection process. The one-day rule simply states that any patient who is one day overdue for payment will be contacted that day, making sure you follow the Telephone Consumer Protection Act rules when contacting your patients. In general, most patient should not be overdue. Other than payment plan patients, the practice should collect fees at the time of the service to help eliminate the need for a collection process. However, there are some situations where patients become overdue for payment, and the practice should have a system of contacting patients first by email and then by phone. When contacted, most patients will arrange to pay their balance. For those who are struggling, you can offer them one of your patient financing options. The key to a collection system is following protocols every time which include collecting money at the time of service, getting 50% of each treatment fee upfront, and letting patients know that they will be contacted one day after their unpaid balance is due. This is not a foolproof system it is a system that ends with excellent results.
COVID-19 has been a game changer and many businesses are in the early stages of recovery and rebound. It will take time to figure out the best courses of action, but these three strategies will help any practice to perform better and recover faster.
About the author
Dr. Levin, is the CEO and Founder of Levin Group, a practice management consulting firm that has worked with more than 30,000 practices to increase production. He 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 or email email@example.com.