Increasing dental production is a critical goal for any dental practice, especially for those operating multiple locations or under Dental Service Organizations (DSOs). One effective strategy for achieving this is focusing on same store growth, which means increasing the revenue generated by existing locations. This article delves into various strategies to boost same store growth, including patient financing, patient membership plans, re-marketing to existing patients, and building a referral program. We will also discuss the high costs of patient acquisition and managing PPOs, and how to mitigate these challenges.
Patient Financing
Patient financing is a powerful tool to increase dental production by making treatments more affordable for patients. By offering financing options, dental practices can remove the financial barrier that often prevents patients from pursuing necessary treatments.
Benefits of Patient Financing
- Increased Case Acceptance: When patients have the option to pay for treatments over time, they are more likely to agree to comprehensive treatment plans.
- Improved Patient Satisfaction: Financing options can enhance the patient experience by reducing the stress associated with large upfront payments.
- Higher Revenue: Financing allows patients to opt for more expensive procedures that they might otherwise decline due to cost concerns.
Implementing Patient Financing
To successfully implement patient financing, dental practices can partner with third-party financing companies. These companies offer various plans, from interest-free options to extended payment terms, catering to different patient needs. Prominent companies in this space include CareCredit, LendingClub, and GreenSky.
Patient Membership Plans
Patient membership plans offer another avenue to boost same store growth. These plans provide patients with regular preventive care at a fixed annual or monthly fee, along with discounts on other treatments.
Advantages of Membership Plans
- Steady Revenue Stream: Membership plans generate predictable, recurring revenue.
- Patient Loyalty: Patients who subscribe to membership plans are more likely to remain loyal to the practice.
- Increased Visits: Membership plans encourage regular visits, leading to more opportunities for additional treatments.
Designing Effective Membership Plans
To create an effective membership plan, consider offering:
- Preventive Care: Include two cleanings, exams, and necessary X-rays per year.
- Discounts: Provide discounts on treatments such as fillings, crowns, and orthodontics.
- Family Plans: Offer plans for individuals, couples, and families to cater to different patient demographics.
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Re-marketing to Existing Patients
Re-marketing to existing patients is a cost-effective strategy to increase dental production. It involves reaching out to patients who have already visited the practice, encouraging them to return for additional treatments or regular check-ups.
Strategies for Re-marketing
- Email Campaigns: Send regular newsletters with updates, promotions, and educational content.
- Recall Systems: Use automated recall systems to remind patients of upcoming or overdue appointments.
- Special Offers: Provide special discounts or promotions to incentivize patients to schedule their next appointment.
Benefits of Re-marketing
- Lower Cost: Re-marketing to existing patients is generally cheaper than acquiring new patients.
- Higher Conversion Rate: Existing patients are more likely to respond to marketing efforts compared to new prospects.
- Strengthened Relationships: Regular communication helps build stronger relationships with patients, increasing loyalty and trust.
Building a Referral Program
A robust referral program can significantly contribute to same store growth by leveraging the goodwill of existing patients to attract new ones. Referrals from satisfied patients often result in higher-quality leads and increased patient retention.
Key Elements of a Successful Referral Program
- Incentives: Offer attractive incentives for both the referring patient and the new patient. These can include discounts, free treatments, or gift cards.
- Easy Participation: Make the referral process simple and straightforward, ensuring patients understand how to participate.
- Promotion: Actively promote the referral program through in-office signage, social media, and email campaigns.
Measuring Referral Program Success
Track metrics such as the number of referrals, conversion rates, and the lifetime value of referred patients to assess the effectiveness of the program. Regularly reviewing these metrics can help refine and improve the referral strategy over time.
The High Costs of Patient Acquisition
Acquiring new patients is essential for growth, but it comes with high costs. Marketing efforts, advertising, and promotions can quickly add up, making it expensive to bring new patients through the door.
Cost of Patient Acquisition
- Marketing Expenses: Digital marketing, social media advertising, and traditional marketing methods all require significant investment.
- Staff Time: Administrative staff spend considerable time managing marketing campaigns and follow-ups with potential patients.
- Opportunity Costs: Focusing on new patient acquisition can divert resources from other areas of the practice.
Mitigating Acquisition Costs
To reduce the high costs associated with patient acquisition, practices can:
- Optimize Marketing Strategies: Focus on the most effective marketing channels and continuously refine campaigns based on performance data.
- Enhance Online Presence: Ensure the practice’s website is optimized for search engines and provides a seamless user experience.
- Leverage Patient Referrals: As previously discussed, referrals are a cost-effective way to acquire new patients.
Managing the High Costs of Working with PPOs
Participating in Preferred Provider Organizations (PPOs) is a common strategy for attracting patients, but it comes with significant costs. These include administrative burdens and substantial write-offs.
Administrative Burdens
- Billing and Claims: Managing insurance claims and billing requires extensive administrative effort and can lead to delays in payment.
- Compliance: Ensuring compliance with PPO requirements and regulations adds to the administrative workload.
Financial Impact of Write-Offs
The average dental practice writes off about $36,000 per month due to PPO participation. This equates to:
- Annual Write-Off: Approximately $432,000 per year.
- Lifetime Write-Off: Over a 40-year career, this amounts to $17,280,000.
Strategies to Mitigate PPO Costs
- Fee Negotiation: Negotiate better reimbursement rates with PPOs to reduce the financial impact.
- Efficiency Improvements: Streamline administrative processes through automation and improved practice management software.
- Selective Participation: Evaluate the performance of each PPO plan and consider dropping those that are not financially beneficial.
Conclusion
Focusing on same store growth is a strategic way to increase dental production without the substantial costs associated with opening new locations or acquiring new patients. By implementing patient financing, patient membership plans, re-marketing to existing patients, and building a referral program, dental practices can significantly enhance their revenue. Additionally, addressing the high costs of patient acquisition and managing the financial impact of working with PPOs can further improve the profitability of dental practices. Embracing these strategies will not only drive growth but also ensure sustainable success in the competitive field of dentistry.
