Practice Management

Proactive Measures to Optimize the Mature Practice

By

Ron Weintraub

on

February 28, 2019

February 28, 2019


When contemplating the future of a dental practice, several steps are essential to this long-range planning. Dentists of mature practices need foresight and a clear strategy to optimize the financial potential of practice that will undergo transition in the future.  Therefore, taking positive measures to enhance the mature practice requires a realistic analysis of the brand and the ultimate goal.  

Influence of Patient Population on Stabilizing Mature Practices

Mature practices have unique features.  Often, these practices have had only one owner since the early 70’s and frequently exhibit these common characteristics:

  1. A declining patient base in general health and number;
  2. Patients may not be geographically close to the office but, they are loyal, content, and make regular visits to their “dental office”.  This scenario can have negative repercussions in evaluating the practice for a future sale.  Extremely loyal patients may be reluctant to transition to another practitioner’s style of practice and may ultimately decide that the trip to the office is unjustified if their former dentist is unavailable.

The majority of the purchase cost of an existing practice is the successful transfer of the viable patient base.  The rest of the valuated assets may comprise a much smaller portion of the price and include, the following:

  • Fixed assets
  • Favorable rent
  • Accessible location
  • Staff of long duration, if retainable
  • Transition assisted by the selling dentist

The existing long-standing team is key.   Dentists often assume that they are the greatest reason for patients’ loyalty to the practice.  The reality is that patients have an affinity to all the team members of the practice.  A potential downside of having long-term employees is their resistance to change. This may include balking at a more contemporary approach to growing the essential new patient component of the practice.

Counter-Productive Solutions To The Diminished Patient Flow

When some practitioners adjust to the diminishing demand for appointments, they sometimes employ counter-productive strategies.

  1. By decreasing office hours (e.g. 4.5-5 days/week to 3.5 days/week) to accommodate the diminishing demand for services, they lose the potential for walk-in and emergency patients to access care and services. This also negatively impacts revenues.
  2. Cutting back on hygiene services while the dentist takes on this role also affects production adversely. Patients used to having 45-60 minute hygiene appointments often perceive this as a diminished service.
  3. Eliminating the introduction of more contemporary procedures because of investment costs also hurts the practice. It makes the practice seem less modern and up-to-date and is a disincentive for loyal patients to refer their family and friends.

Strategies To Assure Protecting Value Of Our Aging Practices

The need to step back and take stock of the existing operation is undeniable.   Bringing in an outsider with a strong knowledge of dental office operations to obtain an unbiased assessment of the present status is valuable.   This evaluation should begin as soon as production and the ability to acquire new patients begins to decline. Generally speaking, this would be 5 to 7 years before one would be planning to place the practice on the market.  What should this exercise yield? A sense of what makes this practice different from all other practices.  

The Brand

What is the practice's unique essence?  The Brand.  

Each office has a unique brand that should be communicated to its community of potential patients.   A web designer or marketer can develop an effective website to tell the story of your personal practice which will resonate with the internet-friendly potential-patient-user. Those who scan websites before calling the office to get more information about the practice generate the majority of new patient referrals; therefore, it is essential to develop a positive online presence.    If patients are reluctant to commit on the basis of viewing the website or getting a personal referral, an invitation to visit the office for a more in-depth explanation of the operation on a pro bono basis could be considered.  Additionally, further steps to make inexpensive cosmetic improvements to the physical environment of the practice is an option.

Another positive improvement is to add a coffee and drink station in the reception area to create a more hospitable and contemporary feel.  Signs placed in the waiting area indicating that new patients are always welcome also helps to create a warm, comfortable, and inviting atmosphere.  

The mature practice, with some updates and upgrades, can ensure that you have a valuable asset upon transition to sale.  Choosing the status quo and allowing the practice to atrophy and decline is less than ideal. However, by taking initiatives to arrest the decline can lead to enhanced productivity and increased professional satisfaction. Which would you prefer? I strongly recommend the latter.