Recession Proof Your Practice
Challenging macroeconomic conditions are ahead. Here’s how they’ll affect dental practices and what you can do about them.
While opinions on whether the US economy will enter a recession in 2022 or is in one already diverge, nobody argues that the economy has slowed and that this will persist for some time in the future Moreover, rapid inflation in the first half of 2022 has led to declines in real wages and a rise in interest ratesfor loans of all kinds.
Many of these factors have already impacted dentists on the ground, and will continue to do so for some time. So what will happens to a dental practice during a recession:
Dentistry in a recessionary environment
Consumer incomes get squeezed, and they become more sensitive to price
Most patients are reluctant to pursue dental care, when the economy is good, but as consumers have less money in their pocket, they become less inclined to pursue care and will need more financial support to afford care.
Lenders underwrite fewer loans and raise interest rates.
The impact of rising interest rates has already had a major impact on consumer lenders in three ways.
Insurance coverage drops, and consumers pay more out of pocket.
Insurance coverage tends to decline during weaker economies, driven by an increase in unemployed patients and a tendency of patients to switch to cheaper insurance coverage to save money. The net effect of these is that more patients will pay for more of the cost for their care out of their own pocket.
Inflation will drive up practice costs, squeezing practice margins
Inflation has caused prices to rise across all sectors, but dental practices can find it difficult or impossible to raise their prices enough to account for these increases. The net effect is that dentist practices will find it hard to maintain their margins.
RECESSION PROOFING YOUR PRACTICE
Despite a challenging macroeconomic environment, now is still a great time to own a dental practice. These circumstances give you the opportunity to recession proof your practice, leaving you stronger and more profitable than before. Here are three ways to recession-proof your practice.
Plug sources of revenue leakage
The easiest way to improve your performance is to collect the revenue that your practice is owed. Revenue leakage is a major challenge for many practices, and the most pernicious type of revenue leakage is collecting on open patient balances. It can be expensive and time-consuming to collect on these balances. FeatherPay makes collecting on a patient’s balance easy for your practice to implement and the patient to pay We send out automatic reminders to patients and enable modern payment options like pay-by-text, Apple Pay, Google Pay and more. The result is less open patient AR and more revenue for your practice.
Look for cost-saving efficiencies
You can improve margins by saving costs across your business. Many dental practices that were formerly hesitant to adopt new technologies or change their operations due to disrupting existing practices may suddenly find they have the resolve to implement these changes.
One simple way to save is to improve the paper statement process. Mailing paper statements is expensive and is declining in popularity, particularly among younger patients. FeatherPay uses email and text to notify and remind patients that they have a balance due, so paper statements only need to be sent out as a last resort.
Give patients flexibility in paying for their care
Now more than ever, patients need flexibility when paying for their care. Giving patients the flexibility to combine multiple payment options to pay for their care and offering multiple ways to spread out your payments and pay over time. FeatherPay consolidates all of a patients’ options into a single interface and gives them the flexibility in payment. The result is better case acceptance for your practice.
Reduce your reliance on lenders -- or create a credible alternative.
Third-party lending will always be a part of a dental practice, but forward-thinking practices have developed an internal alternative for long-time patients. FeatherPay enables dental practices to easily create and manage payment plans for patients as well as incorporate new lenders.
Warren Buffet is famous for saying, “Only when the tide goes out do you discover who’s been swimming naked.” Macroeconomic headwinds like the ones facing the US economy over the next few years will create challenges, but also opportunities for well-run practices to thrive. Tools like FeatherPay enable your practice to improve practice financial and operational efficiency, positioning your practice for success.
Click here to learn how FeatherPay can help your practice become recession proof