The Latest in Area Economic and Technical Trends Exclusively to Clients and Friends of Advanced Practice Management
A Solid First Quarter:
For the mature area practices in the “Dental Dow,” production is up 5.7% and collections are up 4.6% compared to the first quarter of 2011.
This represents the most growth since the first quarter of 2005 (when production was up 6.4%)! This increase was driven by a decrease in Doctor and hygiene downtime (down 7% and 12%, respectively). New patients were up 2.6%. Crown and bridge was up 5%. Perio production was up 13%.
Overall production per patient exam was up 4.1%. Doctor productivity per hour was up 5% (to $630 for the mature practices sampled). Hygiene production per hour was up 3.9% (to about $143 per hour).
This sample is a mix of country and Metro Area practices. We feel it’s representative of the economic dental environment in our area.
We’ve all heard how most auto makers are resurging. The average American automobile on the road is 10 years old, and at a certain point, people are going to upgrade their rides. Maybe the same sort of thing is happening in Dentistry. Whatever is going on in the U.S. economy, bacteria have never stopped going to work, people continue to age and dental work needs to be done.
The Future of Dentistry: Guess!
Here are some of the variables Dentists have to consider when they look toward the economic future: the number of dental school grads, the population increase, the rise of mega-group practices, the expansion of dental services in general practices, the dramatic increase in PPO’s (and write-offs), and the aging population.
Practice growth is pretty much a reflection of the growth of the people within the practice. We see that Doctors who keep up with Continuing Ed, help the staff keep up with Continuing Ed, take time to manage and act on advice from their trusty advisers (us!) do well, even when there are plenty of negatives. More from The McGill Advisory, a very informative newsletter.
“The average practice net income increased almost 68% from $140,000 in 1981 to $235,000 at its peak in 2007, before dropping to approximately $220,000 in 2009, the last year reported by the ADA due to the economic recession.”
KDV (kdv.com), an area accounting firm that does an excellent Dental Practice Overhead Survey bi-annually, reported that incomes were down for the first time as well in the 2010 survey (from $275,302 in 2008 to $259,842 in 2010—minus 2.8%). I bet their next survey will show things improving.
KDV’s survey showed that the typical office overhead is 65% (of collections) with a 35% net. Staff gross wages as a percentage of collections averaged 26.5%. If you include staff retirement plans and other perks, total staff compensation averaged about 31% – illustrating what you already know, that staff costs are almost half of the typical G.P.’s overhead.
Who knows how it will all shake out? I sure don’t. I do know that most of those variables are beyond our control, so we might as well focus on the things that are under our control, like ourselves.
More details, check out our Survey Web Page where you’ll also see previous Economic, PPO and Technology surveys.
The Big Picture: We Have Nothing to Whine About!
Dave Dahler* from the Bank of America told me some interesting news the other day.
Bank of America does over 2,000 dental deals per year— facility expansions, new offices, equipment, etc. When I asked him what the default rate was he said, “1%.” Just 1%!
I then asked him what the default rate was on “scratch starts?” He said again, “Just 1%.” I find that astonishing. What other type of business would you have such a high survival rate, particularly when you consider scratch starts?
It’s been my experience that you rarely see a practice crash and burn unless the Dentist running it is crashing and burning (drugs, divorce, etc.). Even then, the practices themselves are amazingly durable.
We also know from the huge amount of dental data that we comb through every month (We monitor over $27 Million per month of dental activity as our clients’ “Manager Reports” hit our desk.) that practices that put steady and sustained effort into improving their systems consistently prosper.
*Great name for a banker, eh?
Las Vegas Fun and Learning
Psych Up Your Team (and Yourself):
The annual T.B.S.E. Seminar by Dave and Rich Madow is taking place this November 9th and 10th at the Planet Hollywood in Las Vegas. Your staff will love this venue because they can have a lot of fun at night and a lot of fun learning at the seminar. Dave and Rich put on a good show and always have a good lineup of speakers, so call it a big spoonful of sugar (or shot full of something!) to help the Continuing Ed medicine go down.
Speaker line-up includes:
- Dr. David Hornbrook
- Bruce Christopher
- Dr. Clint Herzog
- Dr. David Peck
- Dr. Howard Farran
SAVE $100 per attendee! Please click on this link: www.tbse.com to know more. Tell ’em “Rossi” sent you (or type in “Rossi” when you register online). I attend this meeting almost every year myself so maybe I’ll see you and your team there. Register today!
Getting More New Patients From The Internet (Part III):
By Kelly Larson
We know from our work in the field and our large client data base that the Internet has become an important source of new patients. (Patient referrals are still the #1 source, followed by signage/ visibility/location, advertising and insurance company lists). Like you, almost every week, we hear of a new Internet marketing company or product or scheme. They all promise great results—”Lots of new patients”, “You’ll be first on a Google Search” or “You’ll be on the first page.”, etc. We see that the follow through varies but is often weak.
So, in addition to taking a very measured and research approach to the Internet, we also see our job as helping act as a “filter” to help our clients sort through the various options and avoid spending their money and time on bull. So before you sign up for anything, call! We are not “all knowing” but can help you sort things out.
One of the ironies of advertising schemes is that by the time they’ve proven they work for lots of Dentists, they no longer work as well because everyone is doing it! So, you do want to be on the edge but you don’t want to be on the bleeding edge.
How Do You Know If You’re Making Progress Online?
Your website/SEO people should be able to provide your “Google Analytics”. Below is part of the data you can get off of Google Analytics (this is an actual client’s data from the first four months of 2012).
There is much more to this but here’s a sample bit. You can check your Google Analytics over time to see if your number of visits are increasing. This sample shows a pretty good rate of 73% of traffic came in by Search and they’re getting nearly 50 people a month visiting their website from that (decent for that market).
We are able to provide (and some SEO people will provide, but not all) a Google “Places Scout” report. This is a special tool that shows your ranking based on various key words, both in organic search and local search results.
PlacesScout® Google Search Results For XYZ Dental Office
As you can see, the clients went from “Not in Results” to #1 in the “7-Pack” for a Google search for the “cosmetic dentist” keyword in their area. For the “dentist” keyword, they went from #3 to #2. In local search results, they went from #8 to #1 and from #3 to #2, respectively. All this is to say that they are moving up in the search order.
We can help you sort out what really is working and what isn’t.
This will help make sure you get the biggest bang for your buck over the long haul.
Ready to give your website presence a push or want to check up on your SEO people? Just call.
Efficient-endo and Efficient-prosthetics
The always popular and practical Dr. Joe Steven is coming to town Friday, May 18th and Saturday, May 19th at the MSP Airport Hilton. This seminar is recommended for you and your assistants. APM clients get a 25% discount! Go to www.kisco.com, today!
Have a great summer!