Your professional life can be likened to playing a game. In fact, many professionals intentionally use the game analogy in their approach to their businesses. Consider the similarities between your dental business and a game:
1. You have to pay to play
2. There are rules
3. Games have winners and users
4. Winning has its rewards, including financial and lifestyle freedom, and losing has its costs
To win this game, you not only have to understand the constantly changing rules, but you must know how to change the game, because whoever controls the rules, also controls the game.
The New Rules
The following new “rules” are changing the dental marketplace:
Dental Service Organizations (DSOs) continue to grow. DSOs now employ almost one out of every five dentists1. DSOs and large groups provide longer and more convenient hours, accept many or all insurance programs and discounted plans, and typically operate a well-managed, highly streamlined and effective model. Many are partially or fully owned by private equity firms with the financial wherewithal to invest in growth.
Insurance reimbursements continue to decline. Certain regions of the country are experiencing this more than others, but the current trajectory will continue. It is likely that all services delivered to insured patients will eventually be reimbursed at the PPO level. With the majority of dental practices now participating in one or more insurance plans, a reduction in reimbursements is leading to a reduction in practice production and profitability1.
Most young dentists are burdened with significant debt. This slows down the speed at which they can invest in a private practice, which in turn reduces the ability of older dentists to sell their practices at prices that support their retirement needs1.
Dentists are retiring much later than ever before, if at all. In a 2018 Dental Economics survey, most dentists selected 70 as their target retirement age, while more than two-thirds (10% more than the previous year) indicated they planned on retiring after age 66. Only 4% said they expected to retire before age 55. The impact of this trend is immense, as it will reduce the opportunity for younger dentists to advance as rapidly as they might want1.
The cost of providing dentistry continues to increase, in large part because of new technology. Technology, which is expanding at an explosive rate, carries a large price tag. Investment in new technology increases overhead and reduces profit unless the team is fully trained, the technology is fully implemented, and efficiencies are realized1.
Competition is increasing. Seven states now allow midlevel providers, a trend that will expand nationally. These dental auxiliaries work outside the dental team. They are not dentists but can perform some dental procedures independent of dentist supervision. It is little wonder that 80% of dentists surveyed reported moderate, high or extremely high levels of stress related to their practices1.
How do we win more, given these new rules and the changing marketplace? Change the game so we have a more competitive position.
Use game changing strategies, but first we must have a game-changer mindset; because strategies are meaningless unless they are implemented.
The Game-Changer Mindset
Dave Anderson wrote an article three years ago that I read and kept. He put businesspeople (i.e. dentists) into three categories: Caretakers, Playmakers and Game Changers.
Caretakers are steady baseliners who do dependable work, but not much more than required. Because of this, their growth is minimal, and they are most susceptible to external influences. They don’t win very often, and when they do the victories are small.
Playmakers have more drive than caretakers. They occasionally do exceptional things. Their biggest enemy is their own success, which can create complacency. They grow until they reach a certain level, become comfortable, and stay there. They don’t win as often as they used to, and they’ve changed their definition of winning to match their comfort level.
Game Changers may have the same or even less talent than playmakers, but their mindset is unyielding, incessant, and oppressively constant in their daily approach to preparation and execution. They relentlessly attack and continually strive to be the best so they can win more. When they don’t, they crave winning so intensely that setbacks, critics, rejection, and obstacles become largely irrelevant.
While most people are a blend of the three styles, there is normally one mindset that heavily influences their behaviors. None are a permanent verdict. A one-time game changer who loses focus and becomes inconsistent can regress, just as a caretaker can get a wakeup call that causes a mindset shift. One thing is for sure—game-changing strategies must be accompanied by a game-changing mindset.
A Game Changer is any strategy that alters an existing situation in a significant way, allowing for a more competitive position. Because the marketplace is constantly evolving, here are five game changers for today’s (and the foreseeable future’s) marketplace:
1. Increase your capacity and your production potential. The best investment practice owners can make is increasing capacity (if they can maximize the potential of that capacity). This results in more leverage, and more leverage creates more opportunities to win.
Increasing capacity to produce more can take many forms, but it most often means adding providers and/or treatment rooms, both of which can be accomplished through acquiring another practice or forming/joining a group practice. This already has become a trend, with the average number of dentists per private practice rising from 1.6 to 1.9 in the last 2 years, an increase of almost 20%1.
Growth requires a change in practice infrastructure. The team will become even more important. Practice owners will no longer be able to manage a larger enterprise (but must still lead) and will delegate management to highly qualified, highly trained team leaders who are passionate about the owner’s vision.
Becoming a better leader and delegating management through the growth process will result in more focused, productive efforts from the owner and the resulting increase in profitability—one of the chief methods of keeping score in the game of dentistry.
2. Market your business online. If you’re going to increase your capacity, you must increase your patient base. As critically important as internal marketing is, it’s becoming exceedingly rare for that alone to accomplish new patient flow needs.
That leaves external marketing. The problem? What used to work no longer works—and that’s because the marketing cheese has moved2. People are no longer influenced by direct mail, print ads, or television commercials. They get information from their smart phones, tablets and laptops. Their choices are influenced by Internet searches and online social groups. Because of this, more dentists are embracing online marketing services and social media platforms to attract patients1.
3. Become a super GP and do bigger cases. While quality of care still matters, it isn’t enough by itself to influence today’s consumer. The three most important factors that motivate the modern marketplace are services offered, convenience, and value-added service. The general practitioner providing more dental services, including those traditionally performed by specialists, can accomplish all three. In last year’s Dental Economics survey, the number of dentists who indicated an increase in referrals to specialists was half of the previous year’s number1.
Providing more services not only attracts more patients, it allows for more production per patient – doing bigger cases. IV sedation and accelerated implant-prosthetics dentistry are two services that especially lend themselves to high-production appointments.
The super GP who embraces such procedures will be more productive by performing bigger cases—and that’s game changing.
4. Develop a transition strategy that allows you to not only win more, but win like you want, as often as you want, and for as long as you want. Traditionally, transition strategies are all about the dental practice owner transitioning out of dentistry. New strategies can help practice owners who want to transition into a new role within the practice, while maintaining or even increasing cash flow and equity for as long as they want. This is often referred to as “retiring in practice.”
The transition involves setting up a new, separate entity responsible for managing the practice. The entity should perform human resources functions, as well as handle advertising and promotion. This management portion is paid a percentage of revenue from the clinical portion. The senior owner(s) participate in the management entity, hiring additional providers to grow the clinical portion.
This is similar to how DSOs are set up, but without the outside corporate and private equity involvement, and is well-suited to the modern-day need to increase capacity—another game-winning strategy.
5. Get coaching from a practicing dentist who has successfully accomplished what you want to accomplish. Years ago, as a practicing dentist with a game-changing mindset, I noticed a void in dental consulting. The agents providing consulting services were either not dentists, dentists who were no longer practicing, or dentists who weren’t as successful as I was and/or had never accomplished what I wanted to accomplish. That’s why I formed Sunrise Dental Solutions,3 a company that provides consulting as well as coaching (two separate and distinct functions) to dentists who want to transform their practices from good to great.
Put the Game in Your Favor
Having someone in your corner to guide, direct and support you along the path that leads to your vision is a game-winning strategy. Accomplishing all five game-winning strategies allows dentists to win more often and in bigger ways by controlling the rules of the game.
1. Levin, Roger P. “A profession in transition: Findings from the 2018 Dental Economics–Levin Group Annual Practice Survey.” Dental Economics, 1 Oct., 2018, dentaleconomics.com/practice/overhead-and-profitability/article/16385046/a-profession-in-transition-findings-from-the-2018-dental-economicslevin-group-annual-practice-survey
2. Spencer, Johnson, M.D. Who Moved My Cheese? Putnam Adult, 1998.