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Small Changes Can Improve Practice Profit Margins


Are you setting goals for collection rates and celebrating when they're reached? What about conducting annual competitive market analyses to compare the costs of services and ensure your practice is competitively priced? Reviewing income, leveraging technology and managing expenses will go a long way toward helping dental practices improve their profit margins.

Profit margin, business, income, expenses, collection rates, amenities, testimonials, social media

Gruebele believes that dental practice owners look at their income, but often ignore their expenses.

“Dentistry is a craft,” says Keith Gruebele. “It’s an art, a skill and a passion.”

However, that’s only half the equation says Gruebele, senior vice president at Bankers Healthcare Group. The other half is managing the business of dentistry. And unfortunately, he adds, too few dentists are doing that.

“If you’re not managing the business of dentistry, you might be managing yourself out of business,” Gruebele says. “Too many dentists are not looking at numbers more carefully.”

Those numbers that relate to a practice’s profit margins can make or break the equation.


Gruebele explains that profit margins change based on demographics and the market in which a practice is located because that will often impact the fees a practice can charge. However, two important ratios he believes dentists need to examine are new patient flow and collection rates.

“It’s critical to constantly add new patients,” he says. “If you’re not adding, you’re not growing. And if you’re not growing, you’re shrinking.”

So, what marketing strategies have you recently invested in? Are you effectively using social media? Are you getting and leveraging patient reviews? Marketing, Gruebele says, is an investment that can deliver big rewards. And part of that investment involves leveraging technology. He recommends improving patient contact rates by using a customer relationship management system, or CRM, to send custom emails or texts to patients.

“Not only can this save your staff from a tedious task, it can add value to patients,” Gruebele says. “And hopefully get them through the door more often.”

But just getting them in the door is not enough. If your collection rates are down, it means you’ve invested your time and that of your practice staff, invested materials, but you’re not getting paid for work you’ve done. A proper target, Gruebele says, is to aim for 96 to 98 percent collection rate based on office service performed.

“Even a two percent uptick in collections is a huge income boost,” he explains.


Gruebele believes that dental practice owners look at their income, but often ignore their expenses. He recommends a simple, practical idea that’s hiding right inside the practice’s supply closet. By initiating a quarterly cleanup day, you can manage and evaluate the inventory of your supplies.

And this first quarter of the year is a perfect time to begin that assessment, as well as to negotiate.

“What was the total spent last year, and what was the biggest chunk of that?” Gruebele asks, rhetorically. “Then, start shopping around the biggest chunk of that invoice. Chances are your suppliers will start realizing, ‘Wow, they’re going to shop everything around.’ And from a sales perspective, they’re not going to want to lose the account over a couple of percentage points or a couple of dollars per item.”

Next, consider what amenities you can cut across the board. For example, are patients really reading the magazines in your waiting room? Or are they glued to their smartphones or laptops? Wi-Fi, Gruebele says, is one of the most critical amenities for a dental office environment.

“It makes people feel comfortable coming into the office,” he says. “It shows that you’re with the times, and engaging them on their device of choice.”

Similarly, Gruebele doesn’t believe having cable television available in the waiting room is doing the practice any justice. Instead, if you have a TV in the room, for a modest price, he recommends putting up patient testimonials related to the experience they had during their visit.

“That’s going to go a lot further than Days of Our Lives,” he says. “The reality is, whatever people want is on their phone. So, give them something that they’re not expecting.”


Gruebele recognizes that for some dentists the fear of social media is real. They may not understand it or have a level of comfort with it, but he stresses that it’s important to evolve. That’s where dentists need to leverage their staff.

“Specialize them in a task or chore that empowers them, that is measure, where they can see their impact that makes them feel like they’re contributing to the office,” he says. “Make their success your success.”

And you don’t need a huge social media campaign to get the ball rolling. Take the first step. Have someone take photos of the staff; post comments about what you’re doing in the community; or talking about even silly national holidays like national hamburger day.

“It’s quirky and funny, and it gives people a relief,” Gruebele says. “But it’s also a constant reminder that their dentist is involved in the community, and is sharing information with them.”

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