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After several years of lower expectations, dentists once again are opening their checkbooks to make investments in overall practice health, according to a recently released survey from TD Bank. Thatâ€™s a reflection of the overall optimism dentists feel regarding revenue growth in the coming years. About two-thirds of respondents said they expect their practice revenue to grow in the near term.
Dentists are optimistic about their ability to grow practice revenue over the coming two years, according to the 2017 Dental Practice Survey by TD Bank. Two-thirds of respondents indicated they expect to see practice revenue growth in the near term.
“People are excited about opportunities,” Dan Croft, head of healthcare practice solutions at TD Bank, said. “I think it’s a reflection of general optimism in the dental industry.”
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And that added revenue isn’t expected to stay dormant. Forty-two percent of respondents indicate they plan to buy or lease new equipment or technology, an indication dentists are ready to make investments in overall practice health.
“New equipment and technology, coupled with effective practice marketing, will allow privately owned practices to grow their customer base and better compete against larger corporate and group practices,” Croft says.
THE TECHNOLOGY FACTOR
David Fantarella, D.M.D., who maintains a private practice in North Haven, Connecticut, has been a leader when it comes to technology integration. He believes technology is a key factor when it comes to positively affecting the patient experience.
“If you’re not investing in your practice with technology, your practice is deteriorating at a very rapid rate,” Fantarella says. “We all lose probably about 12 percent every year; and if you’re not (investing in technology), you’re not only not growing, but you’re not replacing that 12 percent.”
Fantarella believes the practices that are doing well are those that have reinvested and redefined the dental experience for patients. Technology, he says, is enabling them to operate more efficiently and pass those savings on to patients.
“There are two dentists in North Haven who have literally come to my lectures because they want to know why I’m taking all their patients,” he says. “I’m not taking their patients. Their patients are making a choice for better value and a different patient experience.”
Fantarella points to courses on how to sell dentistry, saying that he resents that phrase. He doesn’t believe dentists sell dentistry. Rather, they educate patients on what is possible, then enable them to manage the costs and experience so (the procedure) is something they want to do.
“I’m not going to convince you,” he says. “I’m just going to show you what we can do, how quickly we can do it, how painlessly we can do it, and how cost-effective it can be. And (the patient) is going to say, ‘Well, why wouldn’t I do that?’”
“When you look at the technology that’s coming out … it opens a lot of opportunities to see patients faster, and patients have a better experience.”
A NEW MODEL
The TD Bank survey, which was a poll of dentists who attended the recent Greater New York Dental Meeting, and Yankee Dental Congress in Boston, also found that 29 percent of respondents are considering buying, selling or merging their practice in the next few years, and 19 percent are considering bringing on a partner.
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Fantarella says that, in his opinion, those figures should be closer to 80 percent.
“That’s an old model,” he says. “It’s going to be about larger practices, many dentists, sharing overhead. I have millions of dollars worth of equipment. Your average dentist can’t get out of school and buy that.”
Bringing in associates and investing in technology has enabled Fantarella to not only double his operatories but also double revenue over the last two years.
“It’s a phenomenal success story,” Croft says. “He’s a good example of how technology in the right situations can result in great expansion. But obviously, you have to have the right situation.”
Croft says there are partnership and merger opportunities to be had, but there’s also apprehension in the field about partnerships.
“People hear a lot of stories about partnerships that dissolve or have problems,” he says. “For all those reasons, I think you’re see more mergers versus true partnerships.”
According to the TD Bank survey, the most worrisome challenge facing dental practices is overhead costs — 52 percent of dentists indicated as much.
“Everything is expensive,” Fantarella says. “America is expensive. There’s only one way to combat it, and that’s to get more efficient and grow.”
Croft echoes those thoughts. He says that much of overhead is fixed costs, so if a practice is able to grow revenue there’s going to be much more profitability.
“If your average patient accounts for $300 and you can increase that to $500 or $600, you become much more profitable, right?” Croft asks, rhetorically. “There’s efficiency with doing larger procedures. So if you can do more procedures and grow your patient base, you’re going to have much greater profit margins.”