Dental practice owners are searching for ways to save money and boost revenue as costs rise, requiring many to rethink how they run their businesses.
Two dentists recently spoke with Becker’s to discuss common mistakes practice owners make that could be hurting their bottom line.
Note: Responses were lightly edited for clarity and length.
Question: What’s the biggest financial mistake dental practices are making right now, and what should they be doing instead?
Paul Mabe, DDS. Owner of Naples (Fla.) Family Dentist: The biggest financial mistake dental practices are making right now is focusing on revenue growth without paying equal attention to profitability. Many practices are producing more dentistry than ever, yet seeing margin compression due to rising labor, supply and operating costs.
Instead of simply chasing production, practice owners should focus on overhead control, operational efficiency, case acceptance and patient retention. The practices that will be most successful over the next few years will not necessarily be those with the highest collections, but those that understand their numbers, protect their margins and build efficient systems that deliver exceptional patient care.
Robert Trager, DDS. Dentist at JFK Airport (New York City): There are far too many mistakes dentists are making financially. One is that they are not retiring or selling their practice when they should. Many dentists are working in their 70s due to economic conditions, but their practice may not be as busy or as valuable based on gross income if they intend to sell the practice. The practice is only worth what you are doing now, not what you previously did or what the future may hold. Possible area gentrification, retirees, the passing away of patients and possible practice location being converted into a condominium — all these scenarios will lower your intended sale. It’s best to have a plan to sell your practice at the height of your career and not wait too many years afterward. There may be too many negative events that could lower the sale of your practice.
Another financial mistake dentists are making is that they may not understand insurance benefits. Some people might have the same insurance company, but the plans have been negotiated differently. There are many underlying scenarios that these plans have, and the dentists may not understand them. The insurance companies can have one benefit plan for one group and a different benefit plan for another group, yet they all have the same employer. The reimbursement fees may have caps, for example $2,000, and some may not have a cap (no maximum). The dental office has to know how to navigate to get the best reimbursements even though the patients may have the same employer but work in different departments. The dentists may not understand all the hidden clauses or gimmicks the insurance companies hide behind, and it’s up to the dental office staff to know how to understand and navigate the system the insurance company plays in order to get the best reimbursement for the dental practice.
Another financial mistake the dental practice makes is over hiring. [For example,] too many staff members and not vetting to get a staff member who will last for 10 plus years or more, who knows how to multitask (can do front desk, assist, cross train future employees, office sterilization technics, etc.), or who lives close enough to the office to avoid a long commute and keep transportation costs down. As a team member, these types of employees feel like family and their loyalty remains with the dental practice. If the employees are treated and paid well, they will stay for many years without the dental office having to constantly replace employees. In the long run, the dental practice may be able to save thousands based on worker’s compensation, benefit packages and liabilities for employing too many staff members.
At the Becker's 5th Annual Future of Dentistry Roundtable, taking place September 14-15 in Chicago, dental leaders and executives will gain insights into emerging technologies, practice growth strategies and the evolving landscape of dental care delivery, with a focus on innovation, patient experience and operational excellence. Apply for complimentary registration now.