A Look Ahead
Pent-up demand for oral care may kick-start the industry in 2010, especially for service-minded dentists ... and the reps who serve them
By Laura Thill
True, the past several years have been hard on the dental industry. Between job losses and general concerns over the economy, patients have held back on scheduling treatments and, in some cases, routine appointments. But, that doesn’t mean the need for good dentistry is less today than it was a decade ago. And, as more patients realize they can no longer delay treatments, experts anticipate the industry will pick up.
"2009 has been interesting," says Sheri Doniger, DDS, a Lincolnwood, Ill.-based dentist. "Our office was lucky, but I’ve heard across the board from practices that are struggling to those doing amazingly well. Patients have not been coming in for preventive maintenance appointments as they have in the past due to decreased or no [dental insurance] coverage. Elective procedures are not being requested and treatment plans have been on hold."
Some experts believe that the economy’s impact on the dental industry has varied by region and specialty. So, while many dental practices are experiencing a decrease in patient visits and expensive treatments being scheduled, "the overall loss of net income and decrease in gross billing was more regional than [national] in 2009," says Fred Freedman, director of marketing, Dental Trade Alliance (Arlington, Va.).
Lori Paulson, vice president, marketing and dental programs, National Distribution and Contracting (Nashville, Tenn.) agrees. "Different parts of the country have been impacted [by the economy] differently," she says. Patient scheduling and office billing in the Northeast and Midwest have been "spotty," she notes, while parts of Florida "have been hurt very badly for the second year in a row. And, this has been compounded by the [downturn in the] housing market and other issues." In addition, she believes such specialties as endodontics and orthodontics have been hurt as patients delay their or their children’s treatments.
Indeed, some dental sales reps are feeling their customers’ pain. "Although my territory (Dallas/Fort Worth, Texas) has been somewhat unscathed by the recession compared to other parts of the country, dentists I have talked to who say they are affected by the economy claim to be down 12 to 15 percent over previous years," says Scott Boldt, a sales rep with Midwest Dental (Wichita, Texas). According to the Kaiser Foundation, "36 percent of families have cut back on regular visits to the dentist because of costs," he notes, adding that some of his customers are just now seeing a decrease in patient visits. "Undoubtedly, the big concerns for dentists this past year have been a substantial increase in no-shows or cancellations and more patients [opting to] have their teeth pulled vs. a restoration."
Roger Levin, DDS, CEO, Levin Group Inc., a Phoenix, Ariz.-based dental practice management firm, believes those dental offices with better practice management systems in place have – and will continue to – fare better in tough economic times. For example, a dental practice with a lot of unscheduled patients who are overdue for their appointments is less likely to do as well as a practice that manages patient scheduling more efficiently, he points out. In the last year, Levin has seen a 3.5 percent drop in median production and a 7.8 percent drop in compensation at dental practices (Dental Economics Levin Group Annual Practice Survey).
Dentists appear to have two major concerns and several "less major ones," Levin says. "Based on the Dental Economics Levin Group Annual Practice Survey, the average number of new patients dropped from 33 in 2008 to 27 in 2009. And, new patients generally constitute 40 percent of a practice’s revenue." The second major issue for dental practices is a decrease in case acceptance, as more patients are delaying treatment due to the economy, he notes.
Other concerns include an increase in no-shows/cancellations, a drop in collection rates and a drop in team morale. "A dental staff [inevitably] becomes concerned and bored when the practice slows down," he points out.
The year ahead
Experts are cautiously optimistic about the year ahead and the impact the economy will continue to have on the dental industry. Many agree, however, the industry will pick up soon. "We don’t have a crystal ball, but at some point, the general population needs to visit their dentist for routine check-ups, receive proper oral health maintenance and address those more serious dental procedures they have postponed," says Freedman. "As the economy improves, patients should have more disposable income and [greater] access to insurance for oral healthcare."
Levin agrees. "I think the economy definitely will improve, as there are many forces (e.g., government, banks, etc.) working to help," he says. In fact, he believes "2010 will be the best year in the last three." And, as more patients feel more optimistic, more will say "yes" to treatment, he adds. "More patients who have put things off for a while will feel compelled to seek treatment."
While Doniger agrees the economy is on the upswing, she believes "recovery will be very slow. Some are predicting it will take several years," she says. Nevertheless, she points to the increase in home sales in some parts of the country, particularly in areas where there were more foreclosures, as a positive sign. And, many first-time buyers took advantage of the first-time homeowner’s tax credit in 2009. "This is great news for dentists as more new families in the area will translate into more new patients," she says. Still, "there is a contingent of patients out there who only work within the benefit dental dollars they are given, so a lot will depend on [their] perceived view of the economy as weighted against their own personal needs, such as employment status, cash flow, etc."
Likewise, dentists will gauge their plans to add new equipment based on their "gains and losses from fiscal 2009," she anticipates. That said, implants undoubtedly will continue to be a big procedure in the coming year. "Immediate load implants are definitely the direction many are headed in," she says. "Digital radiography [also] continues to gain supporters. I do not [expect to] see any changes in these procedures. I would hope more aesthetic and elective procedures will be performed [as well]. But, again, dentists will look at their patient base and attempt to assess their financial acceptance level to determine their strengths in the coming year."
Boldt agrees that "opportunity awaits us in the digital X-ray market. Many offices have still not made this switch, and dentists who said they never would [do so] are finally realizing that [holding onto] film is like [holding onto] the horse and buggy," he says. "When they perceive the economy is on the rebound, I see many of the laggards finally making the switch." He also anticipates more dentists in 2010 wanting to replace traditional wall-mounted X-ray systems with handheld systems. And, he believes cone beam technology will become more prevalent as more dentists place implants.
Paulson predicts 2010 will see continued sales growth in such products as composites, preventive products, such as varnishes and rinses, and even digital impression technology. "Digital impression technology costs between $80,000 and $100,000," she says. "This is [good] news for distributor reps."
"2010 may turn out to be a record year for digital dentistry," says Freedman. "Funds and the stimulus bill have been put aside to convert all medical records from paper to digital files, and the dental industry will follow the lead of the medical industry." Indeed, suppliers have seen an increase in laser sales this past year, he notes, as well as products that address "the heart of dentistry," such as disposables, composites, anesthetics, resins, burs, adhesives and infection control products.
"Younger dentists entering the profession are demanding newer equipment and digital products that they used in dental school," adds Freedman. This includes new generations of software, computers and office equipment that can improve productivity. These are the justifiable costs of doing business." And, many of these dentists are attracted to the new products and equipment they see at dental trade shows, he explains. "All of this will contribute to an increase in sales of large equipment in the coming year and beyond."
Communication is key
Dentists who spend more time talking to, and reaching out to, their patients to show them they care, and those who sell the value of their service will fare better than those who don’t, say experts. "The bond between dentists and their patients needs to be fortified with honest communication," says Doniger. Dentists must understand that "patients cannot merely be a number on a spreadsheet. Patient communication is key to achieving a great working relationship, better [patient] understanding and higher treatment acceptance rates.
"Dentists need to explain to their patients that oral healthcare cannot wait," she continues. "There is a plethora of documented evidence that links periodontal disease to diabetes, heart health and pre-term low-birth-weight babies."
Indeed, dentists need to be more proactive in promoting their services and educating the general public about the importance of proper oral healthcare, says Freedman. "Many people don’t realize the connection between overall systemic health and proper oral health," he says. "The more patients understand the need for certain procedures, the more willing they are to make and keep appointments."
Dentists must reach out to their patients now more than ever before to ensure the wellbeing of their practice, adds Levin. "The word is ‘proactive,’" he says. Customer service is very important, and newsletters and e-mails are an excellent way for dentists and their patients to stay connected. "Dentists should take time for conversation and get to know their patients on a personal level," he says. They should also provide excellent financial options and flexible payment plans, he points out. "And, they should follow up, either at night to see how a patient feels [following a procedure] or with the patient’s insurance company."
Boldt recently sat down with a few of his most successful dental customers to learn what makes their practice tick. He learned that it pays for dentists "to be proactive vs. reactive," he says. Yes, it’s an overused word, but important just the same, he points out. "Before dentists start seeing empty chairs in their ops and spending more [free] time surfing the net, they should review the insurance plans they are accepting and possibly take on more. Better to keep those chairs filled than to have nothing at all.
"Dentists shouldn’t let their egos get in the way of their success," he continues. "They shouldn’t blame their slowing practice on the economy. Decay does not know a recession!" As more patients opt for a wait-and-see treatment approach, dentists must take the lead in selling their services, he adds.
Helping dentists help themselves
Ironically, as dentists learn to become better salespeople, sales reps are finding they must become better educators. "Yes, reps are salespeople, but today they can sell more and more through education and relationships, rather than [simply] product and price," says Levin. "Distributor reps can be a terrific resource to dental practices by helping dentists navigate and understand new technology and products, [which in turn] helps dentists better explain it to patients."
Distributor reps can play a host of roles with their dental customers, says Freedman, including that of "advisor, consultant, friendly voice of reason, a source of economic incentives, a provider of technology and educator. Any literature, publications and videos reps can provide for the practice can [help dentists] persuade reluctant patients to take care of their teeth."
Especially as technology continues to change so rapidly, "reps will have to better understand and communicate these innovations to the dental staff," he continues. "Top reps will schedule lunches and seminars for the dental staff, and they may include more manufacturer reps to help explain the intricacies of equipment and software." In addition, reps will have to become "better versed in the benefits of pharmaceuticals. And, with many dentists postponing retirement, there will be a need for reps to advise them on tax benefits and other advantages of selling, expanding or retrofitting their practice."
Doniger speaks for many dentists when she says, "We may not be making that thousand-dollar purchase every other week, but distributor reps should be understanding." Dentists want to see value-added products, that is, "those with a proven track record that will [facilitate] patient comfort and satisfaction."
Distributor reps are becoming increasingly valuable to dentists, she continues. "They have the ability to see [products] that are out there, [as well as] those that are up and coming. Dentists may attend dental meetings, read online reviews, take colleagues’ recommendations and attend courses, but the reps have the knowledge of a wide array of products. They should offer advice on a variety of products at a range of price points – not focus on one or two favored brands."
Being a consultant to dental customers means much more than providing a fee analysis and helping them schedule their patients more efficiently, adds Boldt. "My primary goal is to provide value every time I visit an account," he says. This can only be accomplished by truly understanding each customer’s needs, he points out. "As a mentor once told me, ‘Become the dentist’s most trusted advisor.’"
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