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As cost-of-living pressures bite into bottom lines, adopting a strategic outlook can help your dental practice thrive during economic uncertainty. By Rashida Tayabali
Operating costs have risen significantly for dental practices since 2021 and show no signs of dropping. A 2022 report by CommBank Health and the Australian Dental Association (ADA) found that 96 per cent of participants experienced higher costs in the past 12 months, and 86 per cent expected these costs to remain the same or increase in 2023.
Their 2024 report shows operating costs increased by 83 per cent year-on-year, and that 78 per cent of participants expected cost-of-living pressures and economic uncertainty to impact patient demand. Fewer patients and high operating costs may mean shutting doors altogether.
Dr Mohammed Calcuttawala (Dr Cal), owner of Integrity Dental Clinic, says the cost of running his two dental practices has risen steeply, especially insurance premiums, supplies and consumables. “A box of 50 face masks cost $2.50 before COVID. During the pandemic, the price surged to $280 per box, but has since dropped to $6. Even now, it’s still more than double the pre-pandemic price. Stricter measures around infection control have increased manual labour hours and staff costs.”
A 2022 dental fees survey by the ADA found that dentists are trying to keep fee increases to a minimum. Fees rose by 3.7 per cent from 2020 to 2022 while operating costs over the same years outpaced the fee increase.
Dr Cal’s own experience confirms this. “Our fees haven’t kept up with our operating costs. We’re conscious that people delay going to the dentist or cancel appointments when they have bills to pay. While they might not be in pain, the delay in preventative care means plaque build-up, gum recession and resultant bone loss. None of this can be reversed by the time they finally come in. Treatment also takes longer as the dental problems compound because of the delay between appointments.”
As operating costs bite into business profitability, Dr Cal and his team are taking proactive measures to ensure the practices remain viable without impacting service quality. “We review our marketing campaigns every six months to track ROI and analyse cashflow quarterly. We’ve recently invested in new practice management software to automate processes such as patient recalls and instrument tracking. The software allows us to market directly to patients and send automated reminders, so staff don’t have to spend time calling patients.”
Usually, the receptionist or practice manager manages the patient database, but many aren’t trained to do it effectively. My tip is to focus on your internal marketing and ensure your database is always kept up to date.
Ameena Basile, co-founder, Dental Business Mastery
Ameena Basile is the co-founder of Dental Business Mastery and a management consultant. She and her co-founder Julie Parker help dentists get the best out of their business, be good leaders and train their teams. According to Basile, outstanding patient service is key to surviving economic uncertainty. “Build a practice with a point of difference such as excellent patient service. Dental practices need to attract a loyal, returning patient base as opposed to a new patient base who want to benefit from an advertised or discounted service. Building rapport with patients is critical as they’re unlikely to want to go elsewhere if they feel comfortable with their dentist.”
Basile says a practice’s patient database needs to be well maintained for direct marketing. “In my experience, most dentists believe their database is well managed. However, when we audit it, we often find it’s out of date and patients aren’t getting reminders on time. Usually, the receptionist or practice manager manages the patient database, but many aren’t trained to do it effectively. My tip is to focus on your internal marketing and ensure your database is always kept up to date.”
Basile believes that finding the right staff and keeping them engaged is one of the most difficult challenges facing dentists today—and will be in the future. “Invest in staff training as it’s critical for your practice’s brand and profitability. Employing the right people and training them frequently means a higher level of patient service. A high staff turnover will impact your business negatively as patients may see different service providers each time affecting their comfort levels.”
Setting up systems and processes can also help with navigating the ebbs and flows of patient demand. “For your dental practice to be well-run and profitable, it needs the right systems and processes. Automate manual processes so you and your staff can focus on providing a higher quality of patient care and save on labour. If you don’t know how to run a profitable business, seek help from an expert to help you and feel more confident,” says Basile.
Basile recommends dentists raise their prices as it’s a tried-and-tested business strategy to increase profitability. “A dentist’s job is to offer their patients the best healthcare. You can’t hesitate to increase fees because someone won’t like it. In my experience, dentists often feel bad about charging or are reluctant to raise their fees. I advise against judging what a patient can and can’t pay. How they finance the treatment is up to them. A dental practice is like a mini hospital; it has all the same costs, staff, insurance, and strict, instrument sterilisation processes. A procedure in the dentist’s chair is like a surgical procedure. You must cover your costs to keep providing a good service to patients.
“If you’re a preferred service provider for health funds, evaluate whether it’s working for you, or you’d be better off setting up processes to exit the arrangement.”
