Back to Dental Basics: What Drives Profitability?

Over the past six years, dentistry has changed more than at any time in recent memory. COVID-19 forced practices nationwide to close or limit operations.  This triggered lasting shifts in patient behavior, staffing, and the economics of running a dental practice.  Soon after, dentistry saw a strong rebound as patients returned for delayed care.Practices filled for months, production rose quickly.  For a while, the industry seemed not just recovered, but ahead of pace.

The Boom in Production Ended

Dental practice growth is slowing across the industry. This doesn’t mean dentistry is in trouble—it means the market is correcting after an artificial high, and practices face real headwinds.  With inflation and economic uncertainty, patients are scrutinizing discretionary healthcare spending more closely. They’re delaying elective procedures, comparing options, and questioning treatment plans more than a few years ago.  Labor costs remain high, and many practices still operate with leaner or less experienced teams, reducing both capacity and efficiency.  Supplies, lab fees, and wages have all increased. Even productive practices may feel margin pressure as expenses rise just as fast—or faster.  With slower growth, thinning profit margins, and less room for operational inefficiencies, it is time for dental practices to shift focus toward dental basics: optimization.

Approaches to Practice Optimization

Practice optimization means focusing on activities, processes, and procedures that improve practice profitability.  Here are a few tips to consider:

Revenue Cycle Management and Production

• Reach out to patients overdue their scheduled appointments.

• Reach out to patients who have not yet decided on your treatment plan.  What is holding them back. Offer options.

• Consider charging a fee for no-shows.

• Update your internal scripts to encourage pre-appointments.

• Call delinquent patients to collect overdue balances.

• Emphasize marketing and advertising media that are working; drop the ones that are not.

• Does your website entice prospective patients to contact you?  Does your website give them good reason to contact you?  It should.  If not, rewrite it.  Do you understand what drives their purchase decision?

• Is your staff aligned on how treatment plans are presented?

• Is your staffing level balanced with patient volume?  Staffing efficiency is a primary driver of the operation’s efficiency.

Operations Efficiencies

• Get operating ratio metrics from your Healthcare Consultant or Healthcare Intermediary.  How do you compare to you peer? Why are you different?

• Are staff members performing tasks within their job descriptions or is there overlap, confusion, and downtime?

• Are your supply and lab costs aligned with industry metrics?

• If your practice is not taking government payer patients, have you considered adding procedures that hygienists (not dentists) can perform so to increase productions (e.g., preventive care, cleanings)?

• Has your practice conducted a technology audit to identify activities that could benefit from automation or artificial intelligence?

The coming year provides an opportunity for savvy practitioners to shine.  Once your practice adopts these innovations, production and profits will continue to improve.