Where the Dental Profits Go

I ran across two interesting studies from the ADA’s Health Policy Institute (HPI). One is from 2014, while the other is from April of this year. Both have implications for the future of dentistry in the U.S.

The 2014 article noted that “From 2002 to 2012 there was an increase in the percentage of total receipts accounted for by dental firms with 20 employees or more – from 15.7 percent to 20.1 percent. The percentage of total receipts accounted for by the smallest dental firms (0 to 4 employees) fell from 19.9 percent to 16.0 percent.”

Basically, larger dental firms took a chunk out of smaller firms’ profits.

That’s particularly significant when you consider that in 2012 dental firms with 20 or more employees accounted for only 17% of dental employees.

As the 2016 research brief notes, the trend toward consolidation in dentistry is continuing, although not to the same extent as in health care generally.

To be clear, small practices still dominate the field of dentistry. However, the 2016 research brief found that ⅓ to ½ of small practice dentists aren’t fully busy.

The implications of these findings is chilling. As consolidation continues, expect to see larger practices take an increasing share of revenues. That will put additional pressure on dentists who already have unused capacity and are experiencing declining reimbursements. And as the number of dentists in solo practices continues to rise, market share per dentist will continue to decrease.

So, what can you do?

The 2016 brief points out that large practices are unlikely to establish lasting relationships with dental patients. That’s where individual practices can and should focus their marketing efforts – toward attracting patients who stay, pay, and refer.

Large practices are faceless; patients may not see the same provider twice, depending on appointment availability. That doesn’t breed patient loyalty and large practices will need to spend significant resources to continue attracting a steady stream of one-and-done dental patients.

To survive and thrive, you have to give prospective patients reasons to choose you as their dental care provider. That means giving them reasons to like and trust you.

Some of the best ways to accomplish that are through 1) a strong and consistent social media presence, 2) patients testimonial videos, and 3) a superior patient experience.

Social media includes Facebook, Twitter, Instagram, LinkedIn, and a host of others. The goal of your social media marketing shouldn’t be to instantly convert new patients; instead, share useful and interesting information, establish yourself as approachable, concerned, and expert, and drive your followers subtly toward your website.

Patient testimonial videos, done properly, are powerful new patient attractors. Web pages with videos are 53 times more likely to be seen than pages without. Make sure that your videos are the highest quality you can produce. Imbed them in your website as well as posting them to YouTube. For optimal results, include a transcript so that the search engine crawlers can find your videos.

Word-of-mouth advertising remains very important in attracting new patients. Your practice should provide a seamless, comfortable, and reassuring experience for every new patient, from first contact through follow-up appointments. Your staff’s attitude and demeanor, plus their willingness to go the extra mile to ensure patients’ comfort and convenience, will pay dividends in word-of-mouth referrals.

The trend toward consolidation will continue to eat into your profits… unless you do what the bigger practices can’t – attract patients who stay, pay, and refer.