The pandemic brought seemingly irreparable damages to the U.S. economy. Case in point: The current inflation noted as the highest since 1981.
The cost of living has risen to its highest point in 40 years. And while costs may have peaked last March, the looming threat of Russia’s war keeps prices from settling down. Not even the recovering labor market and federal stimulus checks are enough to spare Americans from the soaring food, petrol, and housing costs.
With as much as 60% of consumers now living paycheck to paycheck, people are forced to cut back on spending. And one common way people tighten the belt is by skipping their dental visits.
With more Americans now ignoring dental care, dental practices are not exempt from the effects of inflation.
Inflation and the Dental Practice
To be clear, the cost of dental care has barely risen (1.17% inflation) compared to other goods and services (3.76% overall inflation). Still, nearly half (48%) of insured Americans have skipped dental visits and procedures. Naturally, this number goes even higher for uninsured Americans (65%).
On top of the dwindling number of patient visits, dental clinics suffer from lower profit margins due to the rising cost of maintaining the business.
How Are Dental Practices Coping?
With the unprecedented impact of inflation going across the board, Benco has taken a deep dive into the issue and published a white paper titled, 2022 INFLATION TO DO LIST: Simple, Straightforward Strategies For Fighting Back Against Surging Costs.
With the expertise of Benco’s senior leaders, in-house practice coaches, office designers, and financial consultants, Benco has outlined a strategy for fighting inflation and yielding the highest possible ROI amid the economic downturn.
Here’s a glance at the top recommendations of Benco resident experts on how to fight inflation.
Top 5 Simple Straightforward Strategies To Help Dental Practices Fight Inflation
#1 Introduce a Loyalty Program
Loyal patients drive up businesses. It would cost enterprises five times more to acquire new patients than to bring back existing ones. If you were to look at your clinics as a brick-and-mortar, your returning customers would spend more than new customers.
One of the best ways to fight inflation is to invest in your existing patients. It would help if you give your patients a reason to stay, and one way to do this is through loyalty programs.
Loyalty programs reward repeat clients with perks such as exclusive discounts and freebies. It’s a concept dating back to the post-Great Depression era when banks handed out toasters to attract new customers. In its 21st century iteration, brands from Nordstrom to McDonald’s have loyalty cards that customers can use to accumulate points in exchange for deals and bargains.
This strategy is excellent in keeping your patients returning to your practice instead of going to your competitors. A study showed that 84% of customers say they are more likely to stay with companies that offer loyalty programs.
Are you interested in building your loyalty program? Here are a few pointers on how you can start.
How to Create a Successful Loyalty Program
Offer Membership Plans
Think of a gym membership. Instead of paying the hourly rate, customers opt for membership because, aside from the discount, they also get free perks. That’s the core idea.
Depending on the terms of your plan, patients can avail of more affordable services if they pay for a period as opposed to per visit. Since payments are generally settled before treatments, membership plans also reduce the difficulty in collecting payments.
No need to overcomplicate things. Inclusions can be as simple as two preventative appointments and one restoration over a year-long membership. The most important thing is to develop a plan that’s simple to implement for your practice and easy to understand for your patients.
Outsource Your Loyalty Program
Don’t get fooled. It may seem easy but designing and launching a dental loyalty program for your practice is a challenge. You would need a comprehensive market analysis of your patient base.
Setting it up is one thing, but keeping it running is another. You have to set goals and key performance indicators (KPIs) to measure growth, and then you need to evaluate and make adjustments.
These crucial tasks require the technology and technical know-how that only outsourcing can provide.
Offer Rewards With Low Cost But High Perceived Value
Trade secret: Patients in loyalty programs bring in enormous profits for the company, but the cost of their so-called rewards hardly makes a dent in dental practice’s expenses.
For instance, reward them with name-brand dental healthcare packages that you get for free from medical representatives. If you are going to invest money in these rewards, make sure that you’re still making a profit at the end of the day. Work with your finance team to ensure that you’re not cutting into your bottom line.
Promote, Market, Advertise
Don’t just settle for the usual brochures in your waiting room’s magazine rack. Invest in local radio ads, billboards in busy streets, and classified ads in local papers. This strategy may cost you at first, but the long-term investment return is a hundred-fold.
#2 Track Monthly Attrition
Inflation has forced some Americans to drop dental care from their budget priorities. As a result of the pandemic, an estimated six million Americans lost their dental insurance. While it’s inevitable for clinics to lose patients, there must be an essential takeaway from the present situation.
Keeping track of your monthly patient attrition can help you make informed business decisions.
How To Track Patient Attrition
You should consider these three critical things regarding patient attrition: total active patients, annual attrition rate, and annual growth rate.
Patient attrition or churn rate is the rate at which your patients stop going to your practice. A spike in your churn rate means you need to devote more resources to strengthening patient relationships.
It can be computed as:
Patient churn rate = The difference between the number of patients at the beginning of the month and the end of the month/Number of patients at the beginning of the month.
Meanwhile, the growth rate is the average speed at which your practice gains new customers over time. It would be best to compare these metrics to your patient base (the total number of active patients your practice has) to plot your business growth better.
For instance, the U.S. has an average patient attrition rate of 17%. If you have an active patient base of about 1000 patients, you can expect that some 170 will stop visiting your practice. Let’s say you gained 100 new customers in that same year. Is your business growing?
Your patient attrition rate shows you that you have to gain at least 170 new patients to make up for the ones you lost before you can start counting positive gains. So, short answer: you acquired 100 new customers, but your business did not grow. It shrunk.
Monitoring these KPIs can also help expand your patient base. Those figures will give you a glimpse of your patient demographics and behavior. Getting to know them will help you adjust your messaging. This way, your marketing would appeal more to your target niche.
How can it help to fight inflation? In a nutshell, tracking attrition can help you get to the root of the problem of your patients leaving your practice.
#3 Introduce Teledentistry
Another way of fighting inflation and staying ahead of your competitors is by going digital.
A few years ago, going online to visit a dentist was unheard of, maybe even something straight out of a science fiction novel. But the pandemic lockdowns fast-tracked the digitization of services, and health care was no exemption. A study in 2021 showed that almost one in four adults reported having a remote appointment with a healthcare professional.
Telemedicine aims to provide patients with a wide range of solutions that they can receive remotely in the broadest sense. And teledentistry is one form of it.
The internet has made dental care more convenient and accessible for people who have no time to visit your clinic. Nowadays, practices use video conference calls, telephones, and apps for consultations. The information shared by patients through these platforms can help dentists deliver diagnoses, treatments, and consultations remotely.
Outsourcing Telehealth Services
Amid the inflation, some medical facilities struggled to keep up with the rising demand for telehealth.
Not all healthcare providers are equipped with the technology it takes to go virtual. This gap paved the way for advancements in healthcare outsourcing. Outsourcing can help healthcare providers improve their workflows, reduce costs, strengthen patient engagement, and maximize efficiency.
Even before the pandemic, some hospitals were already outsourcing services. However, as the demand for remote healthcare grows, so does the need for telehealth outsourcing.
Telehealth Outsourcing Benefits
What’s the point of getting online consultations if your patients keep getting cut off? Inadequate technology often gets in the way of telemedicine, causing it to fail. Outsourcing companies set up and maintain reliable teleconferencing platforms that best suit your practice to facilitate seamless communication between you and your patients.
- Back-office Support
Repeating the same thing will leave your staff drained and disappointed. Still, someone in your practice has to do repetitive tasks such as appointment-setting, billing, and medical transcription.Let outsourcing companies do the routine work for you. They provide back-office support and automate these processes. With your staff free from the daily toil, they can focus their energy on more pressing matters like patient engagement and retention.
- Patient Monitoring
Healthcare providers keep tabs on patients’ health using devices like heart rate monitors. With the help of advanced software, facilities can now remotely track vital signs such as blood pressure and pulse rates regularly.
#4 Make Reducing Waste the Goal Instead of Saving Pennies
When we throw something “away,” where do you think it goes? Imagine all of the single-use waste that ends up in landfills and oceans. They will remain there for future generations to deal with.
Did you know that going green can help your practice fight inflation? Eliminating waste can help you save money in the long run. Some disposable materials such as plastic syringe tips will cost you significantly more than reusable alternatives.
If that’s not enough for you to consider making changes for the environment, maybe this fun fact will: A recent study found that almost 70% of consumers in both the U.S. and Canada think a brand must be sustainable or eco-friendly. This means that going green could also widen your client base.
Here are a few simple ways you can integrate environmentalism into your practice:
- To avoid the use of chemicals, use steam sterilization
- Utilize digital technology for imaging, impressions, cancer screening, charting, and marketing techniques
- Configure printers to print on both sides of the page
- Buy in bulk for items that you frequently use, such as masks, gloves, prophy, and cotton
- Reduce the number of boxes shipped
#5 Outsource Key Financial Functions
Healthcare is one of the most common sources of debt for individuals in the accounts receivable management industry. A study in 2016 revealed that about a quarter (26%) of U.S. adults reported having difficulty paying medical bills. The pandemic and inflation have likely pushed this number further up.
The same study found that dental care ranked third as the largest patient bill. Because of this, dental practices are finding it increasingly difficult to collect from some of their patients.
A different study showed that 77% of providers say it takes them more than a month to get paid. Your practice could be bleeding money because of unexpected payment delays and unpaid bills.
The answer to this problem is outsourcing. Service providers can automate billing, expedites payment, and provide much-needed transparency in your finances. These firms can also process insurance claims for a quicker turnaround.
Best Practices For Dental Bill Paying, Receivables, Management, and Collections
Apart from outsourcing, we’ve outlined some ways that can help ensure that your practice gets paid.
- Allow Patients to Pay in Installments
The pandemic, inflation, and the Great Resignation have made it even harder for people to pay their medical bills, especially if they’re paying out-of-pocket. Anticipating this, you should present more payment options for your patients.Please give them the liberty of drafting their payment plan so they can pay you on their terms. They can set up recurring payments that will be automatically deducted from their bank accounts or credit cards. This way, even if you don’t get paid in full right away, you will be guaranteed an increase in your accounts receivable.
- Set Up Online Payment Options
These days, digital billing and payment options have become even more important to patients. Sadly, if your practice can’t keep up, they’re willing to look elsewhere. A study showed poor digital billing experiences had forced one out of every five patients to switch providers.When it comes to paying, your patients expect speed and convenience. Make sure your practice allows online bank transfers and payment via credit card. Set up an accessible online payment portal that can store their credit card or bank account information for future bills.In today’s digital world, cybersecurity is a must. Ensure you have safeguards to protect sensitive patient data from unauthorized access and use.
- Exhaust All Modes of Payment
Give your patients a wide variety of options to choose the best payment option suited for them. It would help if you were willing to process payments through credit cards, debit cards, e-checks, and virtually any payment type available.
- Hire Service Providers
Let’s face it. Sometimes, a single phone call is not enough to prompt our patients to pay. Set up an early out collection system to inform your patients how much still needs to be paid at the earliest possible time. You can also hire third-party service providers to coordinate with your patients and ultimately help them settle their bills.
Weather the Inflation With Benco
Benco Dental has been delivering dental care par excellence since 1930. Our company has thrived throughout the years amid several financial crises by focusing on innovation and driving the industry forward.
In these trying times, we aspire to pioneer once again developments that will pave the way for more progress in the industry. Interested to know what they are? Want to learn more strategies for weathering inflation? Check out Benco’s white paper here.