From saturation to dilution: Major paradigm shift for dental practice
COVID-19 has brought about radical economic and organisational changes in dental practice. For years, we have believed, and I think rightly so, that by optimising chair time, that is by making the most of the time with the patient, we would achieve maximum profitability within the boundaries set by the business model of the dental practice. Thus, we thought that using each dental unit for approximately 85% of the available time (while still leaving some space for peak time management) would result in the optimal use of the dental practice.
After optimising chair time, we could then possibly look for further improvements in other areas, such as costs, prices and offering mix. Very few dental practices managed to achieve maximum profitability prior to the pandemic. Never has the use of the past tense been more appropriate, since dental practice profitability no longer seems attainable in the current situation.
A submicroscopic pathogen has changed the lives of people worldwide. We do not yet know how long this situation will carry on. What we do know is that it has already reshaped the way dental practices and other businesses in which waiting times and groups of people were customary are run.
Many dental practices had been planning to reduce patient waiting times and waiting room overcrowding, improve the punctuality of both patients and dentists, and to efficiently manage appointments. Some of them had already invested a substantial amount of time in doing so. We are talking about dental practices in full activity, not those (about 30%) in decline and with a demand that is gradually decreasing, a trend that often goes hand in hand with the increasing age of the owner, who slowly reduces his or her own and the practice’s activity.
The most challenging aspect of this radical change is the reorganisation of the dental practice business model.
It is not only specifically about managing patient flow, an issue that can easily be solved by improving how appointments are scheduled. The main problem lies in eventual changes in clinical and extra-clinical protocols, which will reduce dental practice productivity.
Italian dentists are already aware of these changes taking place. In a survey conducted by Key-Stone in collaboration with Italian dental manufacturer IDI evolution in the last week of March, 41% of the dentists who responded stated that they would probably have to transform the clinical protocols, and 35% thought that they would need to improve appointment management. Only 15% of the respondents referred to an increase in costs as a consequence of elevated personal protective equipment use, and 9% (18% of respondents older than 55) thought that the pandemic would not radically affect their established routines. Respondents were only able to choose a single answer to each question to deliver quality insights.
Although the mode of data collection (online only) may have some systematic errors, the sample size, consisting of 1,028 dental practice owners, encouraged us to publish the survey results, which are to be considered reliable.
Clearly, these are points of view. Moreover, they are subject to change as our moods and knowledge of COVID-19 change daily during this interminable lockdown phase. Until official health and safety guidelines for practitioners and patients are published, no objective conclusions can be drawn, and no reliable assessment of the duration and the financial impact of this Copernican revolution of dentistry is possible.
I believe that the real problem we will have to face in the coming months or even years will not be a lack of demand for services, that is the economic power of families, but the actual capacity of dental practices, because there is no doubt that, with the same working hours, fewer patients will be accommodated.
This is where the concept of “dilution” comes into play. Dental practices will not achieve efficiency and profitability by maximising their capacity, as this would only lead to chaos and conflict, and affect health and safety. The key success factor will be the ability to dilute and possibility of diluting the workload in an optimised way.
Dental practices will find their own solutions to boost practice profitability. This could be achieved by scheduling longer appointments to carry out more treatments, offering longer opening hours and employing digital technologies to mitigate supply chain risk. It could also be done by using teledentistry to develop certain remote services, rigorously engineering dental practice workflows, eliminating certain operating units to make way for waiting rooms and laying off staff to reduce unsustainable fixed costs in relation to demand.
Also, the competitive landscape may change, owing to the possible closure of a significant number of dental practices (as reported in the same survey by 14% of the respondents) and the likely unsustainability of some low-cost models. Paradoxically, this would only aggravate the problem that excess of demand would pose in relation to the capacity of the remaining dental practices. The real issue would then be improving practice productivity in a business model that is supposed to generate profitability.
A decision to give less priority to prevention, hygiene and check-ups, even though this would consequently reduce the unit value, would affect the entire system, the organic expansion of the patient base and the oral health of citizens.
We can only hope that the relevant authorities will set guidelines that are reliable and take into account not only the health of practitioners and patients, but also the different levels of risk associated with various treatments and the necessity of ensuring business continuity. Then it will be the vision, intelligence and entrepreneurial capacity of those who will have to reorganise their profession that will make the difference. Competitive advantages achieved in the past will not guarantee future success.
Roberto Rosso is president of the Italian strategic consultancy and market research company Key-Stone.
Editorial note: The article was first published on managementodontoiatrico.it in Italian and an English version is published here with permission.