Today, many Americans don’t have insurance or are unhappy with their coverage. When they require specific types of treatment, they’re often left frustrated by expense, waiting periods, exclusions, deductibles, and the portion of the bill that an insurance carrier won’t even touch.
Fortunately, dentists are starting to change all of that by offering in-house dental savings plans as an affordable alternative to conventional insurance policies. Continue reading
If you talk to any dentist that owns their own practice, chances are that they’ll tell you college taught them how to become a great dentist, but nothing about what it takes to run a competitive business. Continue reading
If you want to grow your practice, but are only looking at production and new patients, you’re missing the bigger picture. You’re fighting the windmill on a daily basis and you’ll never truly get to realize the full potential of your business.
Improvement and growth starts with recognizing a basic, but critical, business metric: Profit per Patient. Looking at your business on these terms helps frame your goals in a different way: namely that you don’t always need more patients to grow or sustain your practice.
What’s more, is that this one metric gives you a way to measure your current performance against the past just by using your salary and your active patient count or number of appointments. Both values are readily available to you or you may already know them off the top of your head.
Profit per Patient represents how much you, as a dentist, will make on average from each of your patients. It is calculated by taking the total profit earned over a period of time (usually your net take home or salary for 1 year) and dividing it by the active patient count or more accurately, the number of patients you’ve seen during that period of time (i.e. number of patient visits / appointments including multiple visits per patient).
The average profit per patient visit is $56 †
If you’re like most dentists, then your average profit per patient visit is $56, according to the most recent ADA data available for General Dentists†.
So now that we have a handle on our key metric, “Profit per Patient”, we can identify ways to improve it and achieve business objectives. This makes it easy to realistically measure and execute strategies that will help you grow and improve your practice.
For example, let’s say your goal is to increase income (profits) by 10%. You have two choices:
Growing a patient base is difficult and expensive. To increase patient visits, you can also work longer hours or work with other dentists, either through partnership, acquisition, or employment. All equally as difficult.
You only need $10 more profit per patient to achieve your goal. So you can reduce overhead (salary, rent, supplies, etc), charge more for services, increase billings or expand treatment plans. But again, easier said than done, because expanding treatment may have a commensurate increase in overhead and the alternative, reducing costs, can take a lot of time and effort.
Our ideal solution would generate 10%-20% more income without increasing your patient base, extending hours, changing procedure mix or billing more.
Once you realize that you only need to earn $10-$20 more profit per patient per year, you’ve framed the problem in such a way that it becomes easy to find new solutions.
Sounds ridiculous doesn’t it? $10 = 10% growth? But that’s all it takes.
Here’s a Simple Rule:
$10 profit per patient ≈ 10% growth
With per patient goals, the solution becomes obvious: you can simply expand treatment options by providing products to your patients using a turn-key service like DentalStores. This way, you don’t have to invest in any inventory, deal with customer support or fulfill orders – DentalStores handles it all for you. Plus you earn money on all sales, just as you would selling them direct from your office.
Using DentalStores, you can make 10-20% more profit per patient. The average profit per patient returned ranges between $10-$30 – and some offices make more depending on what they sell.
1 Electric Brush ≈ $50 profit
For example, you can earn up to $50 on an electric toothbrush. So selling just one brush to one patient would literally DOUBLE the profit earned per visit for that client. Imagine selling a toothbrush to every patient – it means you could grow your income by 50% – and this doesn’t even include the replacement heads they will be buying in the future.
Product sales provides a new, continuous revenue stream back to the office – but what’s even better, is that you continue to be involved in your patient’s care.
What are you waiting for? Start selling today!