Howard Speaks By: Howard Farran, DDS, MBA, MAGD
Publisher, DentalTown Magazine

Running a business is like driving a go-cart. You have a gas pedal and a brake pedal. If you start to have a line forming outside your front door, you will have patients waiting longer than three weeks to get an appointment. This is known as excess demand. There are two methods to deal with this patient excess. One is to hit the gas pedal and produce more dentistry in less time. The other way is to hit the brake pedal and raise your fees.

From 1992 to March 2000 the stock market created what is now referred to as “The Great Bubble.” During “The Great Bubble” it was very common for dentists to have excess demand. It was very common to have to wait weeks to get into the dental office. Many dentists adjusted to this line waiting outside their front door by hitting the brake pedal and raising their fees. This usually had little effect in decreasing demand. This is what we call Price Inelasticity, where Price has little effect on Demand.

During these times if a patient line formed waiting outside your door it made good economic sense to hit the brake pedal and raise your fees. Why should a patient willing to pay $100 for a cleaning have to wait two weeks to get in when the hygienist is busy cleaning another patient’s teeth for $80.

During the boom years many dentists dropped all of their PPO dental insurance plans. About 5-10% did not even participate with Delta Dental which historically has always been the market leader in USA style indemnity insurance.

If the dentist did not want to raise their fees, and a patient line was forming outside their front door, the other managerial economic options would be to hit the gas pedal by either increasing Capacity or increasing Turnover.

Increasing capacity could be accomplished in numerous ways. You could simply add additional operatories. You could add an associate dentist. You could sell a dentist partnership ala Rick Kushner. The new associate dentist or partnership dentist could utilize your existing operatories for more hours per week, thus increasing the productivity of the existing operatories.

The other method is to increase your turnover, which is simply increasing your speed. We used to do endo in three one-hour appointments. With K3 rotary NiTi files by Kerr we can do the majority of molar root canals in one 60 to 90 minute appointment. Most materials come in fast set instead of just slow set (also known as dental school speed). We can use a RootZX by J. Morita to find our working length. We have powerful curing lights, like the Sapphire Light from Den-Mat that cure composite faster and deeper than ever before. We have self-etching bonding agents like Simplicity from Apex Dental, AdheSE from Ivoclar Vivadent, Unifil Bond from GC, Clearfil SE from Kuraray, Shear Bond Strength from Bisco, Xeno III from Dentsply Caulk or Den-Mat’s Tenure Uni-Bond that eliminate placing and rinsing off the 30-40% phosphoric acid. You can anesthetize with Septocaine instead of Lidocaine and get twice the numbing in half the time. You can go with digital radiography like Trophy from PracticeWorks or Dentsply Gendex and save all the time developing and mounting radiographs. The list of time saving dental materials and techniques is nearly endless.

In March of 2000 “The Great Bubble” collapsed. Since then we have been in a recession. America has lost over two million jobs. America has gone from running $250 billion surpluses to $250 billion deficits. Where there was boom there is now bust. Where there was little to no boom, there is little to no bust. Today many dental offices practicing in post boom times have excess capacity. Where there was once a line waiting four weeks to get in, there are now holes in the daily appointment schedule. When you have excess capacity you have to reverse many of the things you did when you had utilized all of your capacity.

Maybe it’s time to reconsider taking indemnity insurance and even a PPO or two. Southwest Airlines is the only airline thriving in today’s economic downturn. Wal-Mart and Home Depot are booming! Meanwhile many dentists are still convinced all of the money is made from a Nordstrom’s style take out “Boutique” dental practice. In an economic downturn you have to work harder over all, for less money per procedure, to take home the same amount of money you were accustomed to making during “The Great Bubble.”

At least once a day in my Today’s Dental family practice in Phoenix I see a laid off high-tech worker mourning the loss of his/her once high-flying, high-paying job and career. This patient’s number one and two questions are, 1) “How much is this going to cost?” and 2) “Do you know if my dental insurance will cover this?” It makes me feel lucky I am a dentist. For me, the easiest way to adjust my income is simply deciding how much, how hard, and how long will I work. I know the laid off worker would love to trade shoes with those options any day!