There’s an old fable that I often refer to, because it’s an interesting image to draw upon. Imagine you have a large cauldron of boiling water, and you drop a frog in it. The frog, hitting the hot water, would immediately jump back out. If you instead put the frog in a cauldron of cold water, and slowly brought the temperature up, degree by degree, the poor, unfortunate frog would eventually boil alive.
I’d argue that this is what’s happening to our wider economy, and also to dentists. As an example, the United States Senate has recently been discussing the debt cap – raising the limit on new debt that the US can issue. This is essentially a similar situation to if an employee was earning, for example, £2,000 a month, with outgoings of £2,100. If that person charged the excess £100 to their credit card every time, and the situation didn’t change, they’d eventually hit their limit and need to keep extending it.
This is, in a nutshell, how the US government operates. At the time I’m writing, the Senate hasn’t yet resolved the issue, but the fact that they’re having the discussion is pertinent in itself. It’s just one manifestation of the fact that governments worldwide are addicted to inflation and the expansion of their money supply. They simply can’t help themselves printing more and more money.
Unfortunately, there are consequences to this – and these are the things that we see playing out around us now. However, in the blame game, we all love a big, easy target. We attribute wage cost increases to Covid-19, which caused a shift in behavioural dynamics, with more people working from home, moving house, and retiring. We blame the Ukrainian-Russian war for high energy prices. They’re the stories at the forefront of the news, and of our minds.
If you have an external locus of control, you’re always looking for an external reason for what’s happening – in short, something you can blame for your own circumstances. There’s a righteous comfort in being able to get angry about things, while believing they’re not your fault. As humans, we all have attention bias: a tendency to focus disproportionately on certain things, such as the phone bill or energy prices. We become overly preoccupied with these things, even though they don’t actually move the needle.
What nobody told you is that the rules of the game have changed. At this moment in time, we’re at a massive inflection point, with serious change (either positive or negative) on its way.
As a result, it’s time to double down.
The good news is that dentistry is still buoyant. However, buyers have become more discerning, so you’ll need to show the fair value exchange of the price you’re charging for the treatment you’re providing. Dentists will also need to be far less wasteful than they were before. In this, I’m not talking about being clinically wasteful (it’s not throwing away too many gloves) but thinking more broadly in terms of how the business is run.
As an example, this might be neglecting to invest in reaching former patients. We know from working with a colleague who supplies reactivation calls to dental practices (more content coming on that soon) that it takes around 4.5 calls to reactivate a patient. His company specialises in this service, meaning it’s able to make around 170 calls every day to bring patients (and their money) back into practices. It’s no mean feat, and something that’s almost certainly beyond the scope of your average dental practice receptionist – after all, how many will have the time, skills, and dedication, to make 4-5 calls per patient? And yet, many dentists baulk at outsourcing the task to a third party. They’re reluctant to do the maximum – or even the minimum – possible to bring their patients back.
Another way of cutting “waste” is boosting ADYs by making sure that you’re seeing, prescribing and offering all possible treatments to patients. Don’t forget that patients like it when you add value for them. And, as we often say, you should monitor your numbers. This is one sure-fire way of being able to reduce waste and react to opportunities when they occur.
Up until now, the industry has been good. But during this rain, have you been digging your wells? In an ideal world, you’ll have done this five years ago – but the next best time, if you haven’t yet started, is now.
To achieve this, I recommend really beginning to focus on the profitability within your practice. It’s inconceivable to most dentists that a practice can be turning over £500,000 and not be making money, but this does happen – it’s almost a guarantee. When you first become a practice owner, nobody tells you that you’ll also have to wear the hats of sales and marketing, leadership, and financial stewardship. As we’ve said before, it’s no longer enough to be a great dentist – it’s time to start taking ownership of your entire operation. There will be winners after this inflection point, but there will be losers too. Don’t let yourself be the unsuspecting frog sitting in the cauldron of water.
If you need help getting started, get in touch.
