As an independent dental owner, you’ve spent your career devoting your time, energy and resources into your practice. While it might be tempting to coast into retirement, it’s more important than ever to focus on cost reduction and efficiency efforts for your practice. This will ensure your practice is best positioned for a transition and that you’ll receive the maximum financial benefit from an eventual sale.
Effectively (and sustainably) increasing your practice profitability requires a dual-approach:
- Maximizing productivity & reimbursement rates
- Managing operating expenses (cost management)
Typically practice owners focus on the first component; however, they spend little (if any) time evaluating and determining ways to reducing their operating expenses. In order for your practice to reach its full profitability potential, both components are essential.
Most dental practices chase pennies by price shopping and purchasing from multiple distributors in order to “save” on supplies, which actually has the opposite effect and leaves thousands of dollars in savings on the table. Developing a comprehensive cost management strategy for your practice helps you identify all savings opportunities for your practice and can:
- Directly impact your practice’s EBIDTA (earnings before interest, depreciation, taxes and amortization) and your ability to deliver high-quality, cost-effective care.
- Enable you to work smarter, not harder by streamlining your ordering process and leveraging your total purchase volume to achieve cost savings with a primary or dual-source distribution partner.
- Address other factors that affect your practice’s bottom line, such as contract value and terms, patient outcomes and team engagement.
- Allow you to reinvest the money you save on operational expenses back into other areas of the practice, including retention and engagement programs for your team.
While the benefits of cost management are significant, most dentists aren’t even sure where to start and have little to no experience negotiating and managing distribution contracts, let alone the time or staff to support a true, comprehensive cost management program.
Joining a group purchasing organization like Independent Dental Solutions (IDS) provides independent dental practices with (FREE) access to the group’s lower, contracted rates on supplies, equipment, lab and other purchased services through Midway Dental and more than 25 other vendor partners. Rather than spending clinic hours scouring the web for savings, IDS brings the savings to you, offering its members an average of 23% savings on supplies alone compared to the previous year’s spend.
For more in-dept practice support, regardless of the distributor and vendors you utilize, Dynamic Dental Advisors (DDA) can help you:
- Review your profit and loss statement;
- Identify cost savings opportunities for your practice across all the vendors you do business with;
- Negotiate and implement contracts with each vendor on behalf of the practice;
- Establish benchmarks and monitor key performance indicators to track your practice performance; and
- Conduct regular contract compliance audits and business review meetings with vendors to drive accountability.
No matter what phase of your career or level of support you need, the team of cost management experts at IDS and DDA are here to support your practice and ensure you’re operating as efficiently and cost-effectively as possible so that when you do transition your practice, you will receive the maximum financial benefit.