Losing money

Four ways your dental practice could be losing money, and how to fix it

John Clarke Practice Management Leave a Comment

The dental industry is a dynamic sector characterised by growth and increased investor activity in recent years. Analysis conducted by IBIS World has revealed that the overall UK dental market size in revenue terms was £6.7bn in the UK in 2017-18 and forecasted to grow at approximately 1.1% per annum over the next five years, up from 0.5% annual growth during the preceding five-year period.

An ageing population and an increased public understanding of the importance of good dental hygiene have stimulated demand for advances in traditional treatments and cosmetic dentistry which is increasingly profitable. The dental market landscape is clearly changing and diversifying. But is your practice in pole position to take advantage of emerging opportunities or missing out on potentially lucrative revenue streams?

This blog will highlight four areas where your dental practice could be losing money and what actions you can take to maximise efficiency and your profit levels.

An over reliance on the NHS

It is estimated that some NHS dental practices have lost 35% of their income over the last three years. If this applies to you then it’s time to review your business’s strategy and make changes before it’s too late. From consuming less sugary products to being more appearance driven, consumers today are more health conscious, which has led to some seeing their dentist more regularly.

Longer waiting times for NHS services have stimulated demand from the private sector. Private dental practices can be very profitable as patients typically have greater needs for receiving cosmetic-related dental treatments that they are willing to pay more for. Perhaps you should consider refurbishing or expanding your practice to include a new surgery to accommodate the demand for private dental services in your area that are likely to yield good returns. If you don’t, you can rest assured that your competitors will!

Poor awareness of your financing options

Patients could be deciding not to have necessary treatments because they are worried about the significant expense they are going to incur. To alleviate their concerns, and positively influence your own business’s performance, it’s vital to offer patients a variety of financing options and explain to them what they are.

Research by health care consultants LaingBuisson has highlighted that a quarter of private patients now pay for treatments through some form of annual funding plan, up from 20% in 1998, compared to 75% who pay out of their own pocket. Practices offering practice-branded membership plans make paying for treatments more affordable. Your practice will also grow in value as the strength of goodwill be greater as the percentage of patients you have on plan increases.

Failing to adapt to patient trends

As the old saying goes, if you fail to prepare, prepare to fail. Dental practices that ignore evolving patient trends are going to get left behind. According to IBIS, women are nearly twice as likely to have had a dental check-up in the past 12 months as men and are also more likely to undertake cosmetic procedures. Review your current marketing strategy to determine whether your practice’s services are meeting the needs of patients in your area. Could you run marketing campaigns specifically focusing on women, or perhaps adapt your patient communications towards encouraging more adult male patients to have check-ups more frequently?

Maintaining outdated IT systems

A sizable minority of dental practices still rely on paper-based and manual processes to manage patient appointments, missing out on thousands of pounds each year in lost income. Investing in patient management software could make a material difference to your practice’s bottom line. Modern IT solutions make it easy to send email and SMS messages to patients to inform them about new treatments and reschedule appointments should they miss a check-up. Leading systems go one step further by providing powerful reporting information. This can be used to capture patient feedback from a variety of formats, monitor the success of marketing campaigns, track waiting times and identify gaps in surgery schedules, which can be filled to increase fee income.

With profit margins likely to be curtailed by increasing competition and rising wage costs over the next five, years it has never been more important to keep on top of your practice’s finances. Before committing to any new investments don’t forget the golden rules. Does your practice need it? How will it benefit your patients? What is your anticipated return on investment? Whatever your chosen route, experienced and specialist financial lenders can provide guidance and tailored funding solutions to help your business to flourish.