As we write this article in November 2020, we are grateful to be healthy. Covid-19 has had a profound impact on dental practices. Thus far, some of the impacts include the following:
1. Dentistry is considered to be an essential service. The demand from patients for dentistry has not wavered; indeed, there is greater demand for dental hygiene, restorative work and related diagnostic services. Many of our dental clients are generating more dental billings, but less hygiene billings.
2. Discovery that the weak link in many cases is the supply side; ability to get team/staff to do the work. Some offices are finding it challenging to attract and retain hygienists, assistants, and other team members. This has led to some dentists performing hygiene duties and enhancing their rapport with patients, as a result.
3. There is an ample supply of dental associates. Some displaced dental associates are actively looking to buy their dental practice increasing the demand for practices. Although banks have been more rigorous in their due diligence, which has led to longer times for closing transactions, financing of practice purchases is still available and at less than prime rate, in many instances. As interest rates charged by banks reflect the risk, this indicates that banks still believe that the dental business model is sound.
4. The cost of operating dental practices has increased by about 1.5% of billings, excluding depreciation. Not all practices have been charging/passing on the costs of personal protection equipment (PPE) to patients.
5. Dentistry’s emergency service nature and its related recession-resistant characteristics are its saving grace, unlike restaurants, travel and gyms.
6. Government assistance and insurance have helped dentists weather the Covid storm. We have not experienced any bankruptcies and several of our clients have:
a) Bought practices and merged it with their existing location to generate synergies and cost savings.
b) Bought another practice as an investment.
c) Bought their dental building to accommodate their practice thereby avoiding scenarios where a landlord, through demolition and relocation clauses, can significantly and negatively affect a practice’s value.
7. Our clients have been encouraged to combat fallow time by adding an operatory, expanding hours and/or tweaking the schedule. Similarly, they have been discouraged from prematurely celebrating, deferring big ticket purchases such as home renovations, cars, etc.
8. Continuous innovation and adaptation to meet new challenges has been of key importance. Many dental waiting rooms are now the parking lot. Use technology to keep patients in the loop even if they are not physically present. Review your business processes and determine what tasks can be done remotely from home.
The business model of dentistry has not been destroyed and, indeed, remains sound and intact. It has done better in withstanding and overcoming the challenges of Covid compared to many other businesses. However, like any business or profession, it is important to temper the highs and lows
The business model of dentistry has not been destroyed and, indeed, remains sound and intact. It has done better in withstanding and overcoming the challenges of Covid compared to many other businesses.