The cost of running a dental practice can fluctuate significantly, as patient traffic and the required supplies vary throughout the year. You need to evaluate the true cost of your supplies and find ways to consolidate endodontic overhead.
Here are some top tips from the experts to help you reduce dental practice overhead costs and become a more efficient dental facility.
1. Review Your Purchases Often
Your purchases might have tons of room for improvement, but you won’t know unless you review them on a regular basis.
You must keep a close eye out for defective product returns, overstocked item storage, shipping charges, and other hidden expenses. The longer you monitor your purchases, the better you’ll know your practice’s strengths and weaknesses.
Some problems might take the better part of a year to identify, while others might become apparent within a quarter. For example, it may take a while to realize you have too many broken appointments, but it doesn’t take long to notice that you buy from brands with questionable prices (more on that later).
Many contributing factors play a role in increasing/decreasing the costs of running your practice. It could be something as simple as additional restocking fees or a failure to capitalize on discounted items. Make sure your accounting department has a reliable system in place for tracking purchases and inventory.
Finally, don’t be afraid to hold your suppliers accountable if your supply costs increase beyond a reasonable amount. Establish clear boundaries and make sure they are financially liable for the price increase.
2. Buy Things Once
The price of a product or service might be cheaper than other options now, but that doesn’t automatically make it the most cost-effective choice in the long run. You might end up spending extra to compensate for a cheap product later on. Basic single-use items like cotton swabs don’t have this issue, but tools and equipment are better as one-time purchases.
For example, instead of buying inexpensive chairs every few years, pay more for a state-of-the-art chair that will last for the foreseeable future. There’s no sense in paying for something multiple times when a long-term solution is available. Accounting for dental practices is complicated enough as it is, so make your staff members’ jobs easier by buying things once.
However, don’t compromise your practice’s quality by holding onto products for too long. If something gets broken or a better alternative is introduced, make the switch by all means. Buying only becomes excessive when you underpay for goods and the receipts keep piling up, defeating the purpose of buying cheap in the first place.
3. Buy From the Right Brands
Buying from many vendors might be more convenient, but it can also multiply shipping and delivery costs. You should try to buy the bulk of your products from one vendor to establish trust and negotiate costs. This effort, combined with the “buy once” philosophy discussed above, will greatly simplify your practice’s overhead.
Transitioning from many vendors to a few won’t be easy, but you need to worry about controlling the cost of running your practice, not keeping other businesses afloat. Meet the tough decisions head-on and put your practice first.
Go through your current inventory and identify all the brands you bought from in the last year. Identify all the expendable names and determine whether you can remove them from the equation without disrupting day-to-day operations. You should aim to end with a select few trusted partners.
4. Take Advantage of Loyalty Programs
With fewer vendors to worry about, you can take full advantage of all available loyalty programs that previously slipped past your nets. Sometimes you don’t know the discounts a company offers until you ask. It may take time and specific qualifications to become eligible for a discount, but you need to make that extra effort if you want to lower overhead costs.
On the flip side, you also need to make sure your patients get rewarded for their loyalty. Encourage them to leave feedback and reviews to improve your practice’s customer service. Use email, social media, and other tools to interact with patients and market your services.
Start a rewards program to accelerate patient growth and incentivize repeat patients to return. You might offer dental hygiene products, subscription boxes, gift cards for local stores, and other cool perks. When you focus on the customer and hear their needs, you can optimize your operations and reduce overhead costs in places that patients don’t find important.
For example, operating room televisions might be low on your list of priorities, but they can make a huge difference in a patient’s experience while your staff works on their teeth. Spending a little extra on new TVs can set you apart from competitors, bring more patients to your practice, and increase customer loyalty.
5. Focus More on Lab Expenses
Lab expenses should make up around 6 per cent of the total costs of running a dental practice, but that number can increase to 10 per cent or more if you are not careful. You don’t have to switch labs or overhaul the equipment, but you should keep up with technological advancements to make lab work more efficient.
Competition in the lab market has lessened in recent years, for better or worse. Locally owned labs aren’t that common anymore, but you now have a greater chance of partnering with national or overseas laboratories, getting higher-quality service for a lower price.
Even if you find a laboratory that suits your needs, constant communication is the only way to ensure you only pay for the necessary features. You don’t want to get stuck paying for a specific tool if you don’t plan on using it. A successful partnership comes from trust and a mutual understanding of each test’s purpose.
Take photos of each case every step of the way so that the lab technicians can refer to them as they work. Notify them of any preferences early so they have time to adjust their workflow without disrupting the case. These small efforts will reduce your practice’s lab expenses and get you more accurate results.
6. Offer More Services
As the old saying goes, you need to spend money to make money. Consider adding more services to your practice so you can make more money. Overhead costs will temporarily spike with each addition, but as they gain a following and you find the appropriate price for the service, the numbers will balance out and overhead will decrease in the long run.
The process of adding a new service – also known as a “line extension” – is easier said than done. You may have to hire and train new staff, buy new equipment, and change your building’s layout. All of these expenses are worth it if you can add endodontic procedures, surgical extractions, soft tissue work, and other lucrative services to your arsenal.
You might think line extension contradicts the first few sections on this list advising you to keep your overhead expenses simple and straightforward, but you only have to add a handful of vendors if you play your cards right. Ideally, you will find a vendor that specializes in the products your new service needs and you can establish a close partnership.
7. Listen to Your Staff
Your employees are your biggest and most important expense – so, naturally, you should listen to them and hear their concerns. Ask them about their daily schedules and routines.
Are they short on any specific resources? Do they think your practice overuses or over-prioritizes certain things? The answers might reveal inefficiencies in your overhead you didn’t know existed.
You also need to keep your staff’s morale high by meeting their expectations and compensating them fairly. Treat them like your most valuable commodity and they will work harder to get maximum value out of every resource, from the pens at reception to the most expensive equipment in the building.
The world would be a better place if businesses across all industries remembered this fundamental practice. A disengaged employee doesn’t care about overhead costs or the company’s success, but a happy employee does.
How can I reduce my dental overhead?
Here are simple things to do to reduce dental overhead and the cost of running a dental practice:
- Review your purchases often.
- Buy things once.
- Buy from the right brands.
- Take advantage of loyalty programs.
- Focus more on lab expenses.
- Offer more services.
- Listen to your staff.
Want to Reduce Dental Practice Overhead? Keep Things Simple
Trying to reduce dental practice overhead won’t be easy, but you can make it happen by keeping things simple.
Regularly review your expenses to identify weak points. Cut back on your number of vendors and focus on a handful of trusted partners to consolidate costs. Your goal should be to buy things once and hold onto them for as long as possible.
Relationships also help drive down overhead costs. Take advantage of loyalty discounts and create programs for your returning customers. Request and record their feedback to determine which resources are worth overspending for. You’ll never know until you ask!
Have a keen eye for detail in your laboratory work and stay in touch with the technicians. Add more services to your practice to become more profitable.
Last but not least, listen to your employees and let them have a larger influence in day-to-day operations. They make your business run, so you need to listen to their insight. Apply these simple strategies and you’ll reduce endodontic overhead in no time.
My name is Beth. I’m a health writer with 3+ years of experience, and I run an online wellness magazine, Body+Mind.
