Bulletin, May 2010
The Latest in Area Economic and Technical Trends
Exclusively to Clients and Friends
of Advanced Practice Management

The Dental Dow 2010 First Quarter
For the sampled practices, production was up an average of 2.4% and collections 2.6% compared to the first quarter of 2009.
Downtime in the hygienist’s schedule was up about 10%. New patients were down 8%. However, overall patient flow as measured by total exams was down just .5%.

Production per patient examined (a function of fees, case acceptance and range of services rendered) was up 3.5%.

As was the case last year, patient flow continues to hold (more or less) although the first quarter downturn of new patients is a somewhat disturbing development.

For perspective, I checked my 2003/2004 Dow statistics. In 2004, first quarter production was up 6.2% and collections were up 4.8% compared to the first quarter of the prior year (2003). By today’s standards that would be pretty brisk growth. The average collections percentage of the sample practices was 94% back in 2003. Nowadays it’s about 88% (insurance write offs and PPO participation continue to take greater chunks out of your hides). Oh, for the good ol’ days! But worry not Doctors, the best days are yet to come. I’m sure of it.

Are Demographics Destiny?
If you listen to anyone on the lecture circuit and most consultants, they’ll tell you that it doesn’t matter where you practice…it matters how you practice. True, mostly. I have certainly seen the substantial difference good management can make wherever you’re practicing, however, after 30 years of doing this I have come to think that even the most virtuous, capable dentist with a well-managed office can be hurt by crummy demographics. The toughest demographic—a low population to dentist ratio.

Many dentists locate with the income of the population in mind and little attention to much else. That’s why there’s very high dentist to population ratios in affluent areas such as Wayzata, Edina and North Oaks. It’s been my experience that these are some of the toughest, most competitive places in the state to practice. The high per capita income does not overcome the high dentist population ratio. Dentists have an easier time of it if they’re located in a place with a lower dentist population ratio even if the population’s income is not in the top tiers. On the other hand, there’s a point where the population’s income can be so low that no matter if you have a low dentist to population ratio (e.g. lots of patients) it isn’t worth it because you find yourself doing less and less on more and more people—a version of dental hell.

	Low	Average	High
GP Dentist to Population Ratio	400	1,600	6,200
GP Dentist Average Production	$310,000	$515,596	$950,000
Per Capita GP Dental Spending	$110	$201	$430
Per Patient GP Spending	$370	$504	$820
Data Provided by TE Demographics www.TEDemographics.com

Want to know what the key demographics are for your area and how it stacks up to others in the state? Just ask us and we’ll arrange a preliminary study for you.

You may think this information has limited value in the sense that most of you can’t just up and move your practice. However, if you do know what your situation is, it tells you how tough you might have to be. This might remove delusions of “If I just practice good dentistry and have good intentions, I’ll always be busy....” Good decisions always begin with a realistic assessment of your resources and challenges.

For example, let’s say you’re in an area with a high dentist to population ratio and your new patient flow is really a problem (say, less than 10 new patients/mo. per Doctor). After years of hoping and wishing and perfecting your dentistry, you might realize it’s time to do something different. The majority of dental practices aren’t open Friday afternoons. If you do endo and don’t mind catching up on your reading (when patients don’t show from time to time, which they won’t), chances are by opening on Fridays you’ll have an advantage. Same with some evening hours. The majority of area practices still don’t offer them. I’ve seen practices with less than ten new patients a month who desperately want to see more people—but, when you call to get an appointment, you have to wait two months for a 4:00! You can’t make people come in when they don’t want to come in. So maybe it’s less convenient for you to be more convenient for the patients, but, again, most Doctors aren’t willing to take those measures so you will have a competitive edge.

Or, you may have to accept the reality that you’re going to spend more on marketing than most of your colleagues will because you’re in a tough neighborhood. Moreover, the marketing won’t work as well because other Doctors are probably advertising too. Tough, you’ve got to do something.

Or, you may join more PPO’s. As you know, this goes against our grain because we usually do a pretty good job of getting Doctor’s off PPO’s (when the situation is right for the practice). However, for some practices (usually newer, smaller ones) this makes sense. Through good management, you can increase your income and make sure that for your patient flow and your advertising you have the best possible outcomes. Most advertising efforts are expensive and all are unpredictable. I have personally helped many Doctors increase their new patient flow through advertising and other means…but there’s been some bombs along the way too. Years ago I wrote to you, “The Truth About New Patient Development,” where I say anyone that tells you they have 100% predictable outcome on new patient development is pulling your leg. It’s like a fishing guide saying that he guarantees you’ll get your limit every time on the lake. If one had the magic bullet that could truly increase any Doctor’s new patients by 50 per month without fail, they’d be able to retire within one year. (and buy their own Caribbean Island—believe me, I’ve fantasized about it!)

I keep in touch with colleagues whom I respect across the country. These are top management consultants with long-term successful consulting practices who cannot or would not be in business if all they did was blow hot air. If there is something out there that’s working miraculously, believe me, we’d know about it. We can greatly increase your odds of success, but if you’re serious about increasing new patients, you have to be willing to devote at least 4% of your practice collections to advertising…much of which will be a “waste” of money from your point of view, at least initially.

Coming full circle back to management. Strong management gives you the confidence and funds to advertise and grow your practice…through getting the biggest bang for your buck in whatever you do.

Protect Your Reputation.
Keep an Eye Online:
As you probably read in the recent Northwest Dentistry, given the pervasiveness of The Web, every Dentist is vulnerable to receive a derogatory review online.

I’ve seen several occasions in the last few weeks where Dentists didn’t even know that there were negative reviews online. Do a Google search for your area...for example, “Maple Grove Dentist.”

First of all, see if you come up under Google Maps within the first page or two. If not, get after your web guys. Also, make sure there is a link to your website. We’re surprised how often there isn’t.

Then read the reviews. The only defense against a negative review is to have it diluted by a preponderance of positive reviews. Get patients who you are especially close with to write positive reviews ASAP.

When you’re looking for vacation places or searching online, you read reviews, don’t you? As you know, in many places (but not all, yet), The Web is replacing Yellow Pages as a source of new patients. And despite years of controversy, I personally have seen Yellow Page and online advertising work, so it’s worth staying on top of this. A bunch of good reviews can make a difference in your new patient flow.

Yours truly,