Will You Hit a Slowdown? 4 Ways to Tell

During the COVID-19 pandemic, many patients had excess stimulus funds and were not spending money in traditional areas such as travel, entertainment, restaurants and luxury items. Instead, people chose to receive needed treatments as dental offices began reopening. Today, this “pandemic effect” is slowing down, and people are returning to spending in more traditional areas. Additionally, the overall economy has also slowed down, and the excellent performance of many practices in 2021 may not be matched in 2022. This rebalancing may simply be a return to more normal consumer spending in a slower economy. What you need to determine is how and when your practice may be directly affected. 

A Unique Way of Measuring 

In a down economy, which many dentists have never experienced, the traditional measurements to indicate how your practice is performing may not reveal whether you might be facing a slowdown. For example, production, profit and income would indicate practice performance, but that is a real-time measurement. You won’t know if your practice is slowing down or not until after the trend has already begun. 

We are advising practices to track four key numbers that will give them an indication of whether they could soon be facing a slowdown. Using these metrics, you have an opportunity to take specific steps to avoid a slowdown and keep the practice performance strong. Here are four leading indicators that will give you a sense of where your practice is headed: 

1. No-shows. No-shows are always important, but the truth is that most practices don’t carefully track the number of no-shows or amount of lost chair time. In a slower economy, it’s important to carefully watch the number of patients who don’t keep their appointments. If the no-show rate begins to increase, it may be due to patients who are behaving as consumers and tightening their belts. You must also keep in mind that many people who can still afford dental treatments miss appointments because they are concerned about where the economy is headed. The best way to avoid this is to build higher levels of value for each appointment, review the benefits of recommended treatment in detail with each patient, discuss the possible consequences of not having treatment, and design an excellent appointment confirmation process. Letting all patients know that interest-free financing is available is also a strong factor, as people become more comfortable if they can finance their dental treatment without incurring interest. 

2. Cancellations. Keep in mind that last-minute cancellations are basically the same as no-shows and have the exact same effect on the practice. This is another statistic that is rarely measured by practices because cancellations with notice can often be filled in. However, practices should track the number of cancellations for any appointment and look for increases in this area. Another way to evaluate this, while not directly proportional, is monitoring open time in the schedule. If open time is increasing, this may be an indication that the overall economy is causing some patients to pull back on visits. 

3. Number of new patients. Just as active patients may not show or cancel if the economic conditions are concerning them, some potential new patients will not make appointments. If the number of new patients begins to decline, this may be an indication that practice production, profit and income will slow down at some point in the not-too-distant future. Steps to take to avoid this include adding a strong internal marketing program, such as asking for referrals, asking for more reviews, and sending a monthly practice update that includes thanking patients for referrals. New patients have a high value to dental practices because they help replace lost patients and are often more prone to accept treatment recommendations. If the number of new patients begins to decline, it is likely that production will decline as well. 

4. Case acceptance. This is another area that is not usually measured by dental practices. Practices should track both the number of cases presented and the production value of cases accepted. If case acceptance begins to slow down, which can easily happen in a slower economy, then practice production will slow down sooner than any of the other statistics above. This is because a patient accepting a treatment recommendation typically results in near-term production. That production will be lost if patients are less willing to accept treatment. Practices need to increase the focus on the case presentation system, including building relationships and rapport with patients, scripting value-based statements and benefits, offering financial options, and having open conversations with patients so that they can feel comfortable accepting treatments. If patients have more concern or anxiety about accepting treatment, then the case acceptance process must be even more focused and caring than in the past. 

Summary 

Analyzing practice performance in a slower economy is different than tracking the standard measurements of production, profit and income. Most dental practice statistics that are easily measured indicate how a practice is performing at that point in time. The four measurements above will give a practice an indication of what might be coming and provide them with the opportunity to take steps that will allow them to perform at the highest level possible. 

Roger P. Levin, DDS, is the founder and CEO of Levin Group, a dental management consulting firm. To comment on this article, email impact@agd.org.