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The Financial Future of Your Practice

by adminjay


Most dental offices across Canada were severely affected by the pandemic lockdown period. However, although most are doing fairly well in the first 3 months after being reopened, there are lessons learned that are important to prevent future financial crises during these trying times. Cross our fingers that it doesn’t happen, but it is possible that there could be another lockdown and it is important to be prepared for that.

Implement a Contingency Plan for PPE Items
Practices need to be concerned first and foremost for the safety of their patients and their staff. As we go through the fluctuations of COVID-19, you need to manage your practice’s stock of the safety items and other supplies required to provide patient care.

A plan needs to be made as to what items to stock up on now, and then identify multiple sources for high quality PPE products from trusted suppliers. Having an overabundant supply now is not a waste of money because they will eventually be used one way or the other. Buying now could also save you money in the long run as prices have been escalating.

There are ways to cut costs on PPE. For instance, one dentist bought eight fabric gowns for each staff member and they put a fresh one on for each patient all day. Then a local laundry washes them every night for $.43 each. Masks bought in bulk become more reasonably priced also.

Note that each province has its own guidelines about what needs to be worn and some now have “extended use” guidelines as to what can be cleaned and reused. Stay up-to-date because pandemic has rules change rapidly.

Business Continuity Plan
Whether COVID-19 has a third wave, or smaller recurring outbreaks, one thing is clear, the worst may not be over. Right now, we are in the eye of the storm with a moment to adjust. Get your team involved in making a business continuity plan from all the different positions in the practice.

  • What would you do if you yourself as the practitioner have symptoms or test positive and have to self-isolate? Who will cover your in-person visits? Can you do some virtual visits from home?
  • What happens if reception staff have to isolate? Possible back up staff or temps should be lined up.
  • How much PPE and cleaning supplies should you stockpile now?
  • How will your practice absorb a drop in revenue if procedures are suspended again?
  • Do you have remote access to patient files and your appointment schedules? Can you redirect your office phone?
  • Have you sat down with each staff member and worked out what contingency plans THEY need to make in their personal lives to ensure availability for the practice? This should address childcare, elder care, schedules with other family members, and so on.

Budgetary Matters
Getting your finances in order and adapting your business to new financial policies can help you better weather the storm.

A lot has been learned from the first lockdown and reliance on government subsidization again may not be possible. Dental practices should have a financial cushion. Many practices, however, don’t have the funds for this, particularly after the loss of revenue during the lockdown period. As a result, now is a good time to look at an overall cost reduction plan in order to respond to different issues that could occur in the months ahead.

You should take a hard look at your business overhead with an eye to what can be eliminated or cut back on for the next while:

  • This can include reducing staff or reducing hours (without losing quality of service).
  • Most fee guides now include coverage for PPE and also virtual visits where possible. These vary province by province. Ensure that you are at least covering your costs. Some insurance companies are covering PPE while others are slowly joining in; be sure to find out which ones are doing so. In presenting any PPE fees you are charging directly to patients, be sure to tell the patient this is for prevention to ensure their safety during the pandemic.
  • If it is feasible, repair any equipment that breaks down instead of ordering new. As a caveat, if you have an unused op due to lack of full equipment, and you have an overabundance of patients and are booked way out, you may consider the return on investment of equipping that op if it will generate another $25,000 to $40,000 per month.
  • Over the next year, monitor government programs for wage subsidization, rent reduction, and so on.
  • If your lease is coming due, negotiate with your landlord as they are now much more “pliable” as a general rule.
  • Have a close look at your supply companies and their pricing and work to get the best deals possible, even if it means using a variety of suppliers for different products.
  • Ask your staff if they can think of any areas where costs can be reduced.

Many dentists found it necessary to access their LOCs to handle practice renos to accommodate room enclosures as well as plastic shields in the reception area and so on. While you need to pay your current bills, concentrate on paying down your line of credit or overdraft as fast as possible so there is a lot of room to access funds should a future practice closure be required.

Internal Marketing
You can only cut back on expenses just so far, and then the question becomes how you can generate more income. First rule when cutting back your spending (as above), don’t cut back on marketing! In fact, most practices would do well to increase the amount of funds allocated to marketing in order to attract more new patients.

At this time, you want to pack your practice with as many patients per day within the guidelines of safety. Internal marketing is almost cost-free if done fully and correctly. This is the time to make sure that your service level with every patient exceeds their expectations, and, as a result they will tell friends, family, coworkers and Google Reviews about you.

Reactivations
Another way to market internally is to really concentrate on reactivating all past patients back into the practice. This requires that your front desk staff are fully trained up on how to handle patients who have COVID-19 concerns. Some staff have those concerns too and instead of encouraging the patient to come in, they go into agreement with them not doing so. This requires giving your staff member some TLC and help with their concerns.

Secret Shopper Calls
Through Secret Shopper calls we have found that most receptionists could use a little help (or a lot, in some cases) with handling shoppers on the phone. Shoppers come in different sizes and shapes. Some are just looking for a new practice and want to see how they are treated in the first phone call while others may be price shopping. Keep in mind that they all have a need or they wouldn’t be calling, so train your staff how not to miss on these.

“Use It or Lose It” Time of Year
Don’t miss out on the “use it or lose it” message for all your patients who have insurance; Encourage them to come in soonest to take advantage of any service they need rather than waiting for the end of the year when you are too packed to squeeze them in.

External Marketing
Get your social media up to snuff and in ever greater quantity – Facebook, Google Ads, Instagram, podcasts, videos for YouTube, and so on. These are all quite inexpensive and get you “out
there.” Upgrading your website to a current look that will attract more new patients can be a good expenditure in terms of ROI.

Efficiency
Efficiency is another way of saying “budgeting your and your staff’s time.” By cutting out all inefficiencies, you will be able to accommodate more patients per day and week. Have a look at this concept with your staff and get their suggestions and implement them.

In Summary
By updating your Business Continuity Plan with all of the above, you will find that you’ll be in much better shape to make it through a second or third wave of COVID-19 should it happen. Apparently there is a good chance that future pandemics will happen but taking the above precautions now will make it possible for you to survive in the best possible way.


About the Author

Janice Wheeler, is the President of The Art Of Management Inc. which has grown more than 700 Canadian dental offices over the last 31years. She is an international speaker, has written over 500 management articles (www.amican.com), regularly contributes to various Canadian healthcare journals, wrote a book “Practical Advice for Practice Owners”, and has an awesome team who love helping dentists reach their practice goals.





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