There’s a widely held belief that the dental industry is recession-proof. While this concept is appealing, most savvy dental service owners know that it isn’t entirely accurate. With a recession looming, we can expect new challenges for the dental economy. Now is the time to prepare.
As inflation persists and reaches new heights, pressures mount for dental practices and DSOs, who can no longer afford to conduct business as usual. For the dental economy to survive, technological innovations are necessary. Costly solutions such as relying on third-party vendors or spending time on manual processes are at odds with the economic reality most dentists face.
Some dental practice owners may try to weather the storm by relying on traditional methods, putting the old recession-proof adage to the test. But the answer lies in innovation. Dental practices today must implement technology that reduces costs, improves efficiency, and centralizes operations. Here’s how cloud-based dental software can help dental practice owners prepare for economic uncertainty, and remain resilient in the long-term…
The Power of Centralization
In contrast to relying on third party vendors, which come with their own costs and technological complications, centralization allows dental services to optimize workflows while achieving cost reductions. Moving these operations in-house can present a more streamlined solution with better oversight and more effective governance. It can also help us avoid data blackboxes, encourage better decision-making, and cut maintenance and upgrade fees for outdated third-party equipment.
Claim appeals and denial management can also benefit from centralization. Staff handling claims appeals will be more effective and face fewer roadblocks, since centralized systems aggregate all relevant information for those who need it. Centralized systems can also increase timeliness, which is key for claims appeals and overall operations in a dental practice. It’s worth noting that cloud-based systems also allow claims appeals to be handled remotely, opening up staffing options for offices facing worker attrition.
Currently, many dental offices use multiple different payment systems to manage claims appeals, requiring revenue cycle management teams to manage claims through multiple vendors, and resulting in companies over-spending on equipment and labor. These systems also don’t allow a scaling DSO to access the underlying data necessary to create competitive reports for both regional and executive teams. With every additional vendor and process, the payor and cash flow data lose its integrity. While outsourcing claims to a third-party vendor might work for smaller practices, or groups, collection fees eventually add up. As EBITA multiples decrease, understanding these margins will help practices get a higher evaluation.
Knowing When to Outsource
A business may run on data, but people power drives decision-making and enables growth. Unfortunately, many dental service offices are struggling to retain and recruit staff. Amid record dental worker shortages, dental practice owners have had to look to outsourcing as a means of maintaining operational continuity without affecting customer satisfaction. While outsourcing isn’t an option for all dental staff needs, it can be beneficial for certain job roles. Call centers, for instance, provide the scale and flexibility needed to meet patient demand. Centralization can make outsourcing easier, by providing better oversight and standardizing workflows. Call centers using a centralized software system will be better equipped to manage schedules and book appointments, regardless of the agent’s location.
Insurance eligibility is another area that is ripe for outsourcing. DSOs can no longer afford to pay in-office staff to sit on the phone with insurance companies, or to manually enter benefits information into spreadsheets. Automating workflows such as electronic remittance advice and eligibility checks allow on-site employees to do more with less, helping to streamline processes through an easy-to-use, one-stop platform.
Historically, dental offices have had high margins, allowing them to rely on staff for time consuming tasks such as the manual data entry of Explanation of Benefits. However, recent staffing shortages and competitive provider wages are forcing groups to become more efficient. By reducing time spent on more rote and repetitive work, workers will have increased availability for more creative and engaging tasks. A recession is rarely a good time to increase hiring and staff resources, but by digitizing workflows, dental practices get more done with less.
Empowering Your Data
Dental practices are data-intensive organizations. From patient records to radiographs to employee information and beyond, the sheer amount of files to collect, store, and maintain can increase the risk of data silos and inefficiencies as a practice grows. HIPAA compliance and other privacy protection requirements can further complicate efficiency.
It’s because of this that data is both a key asset and the greatest obstacle in implementing new technology. A modern solution focuses on standardization, ensuring all data—from analytics to billing to clinical data and beyond—is easily accessible and interoperable.
Think of the physical filing cabinets that dominated the record rooms of every 20th century dental practice. Oversights and data loss were common in a system that was prone to human error. Different types of data would be stored (and often forgotten) together.
In contrast, digital best practices allow data to be stored at scale, formatted correctly in bulk, and accessible only to those who require access. Staff no longer need to waste hours or days collecting and arranging files, and can more easily access the complete picture of a patient’s health. Standardizing these systems reduces time, making it easier for dental offices to respond to medical crises and engage in same-day decision making.
Most importantly, this type of data centralization can allow businesses to reach a higher level of information security. Fewer third-party integrations mean a reduced risk of ransomware attacks and other risks created by external exposure. Two-factor authentications and enterprise logins ensure better governance and privacy protection, while off-site cloud storage keeps records secure and available for HIPAA audits.
The Future of Dental Practice Technology
Dentists aren’t new to implementing technologies that create better health outcomes for their patients. Neglecting the latest tools and systems that support their own practices is like forgetting to brush—problems go unnoticed at first, but quickly spiral into debilitating issues without proper care.
The scalable systems provided by centralized, cloud-based software provide resilient, long-term solutions that can account for uncertain futures. In 2023 and beyond, dental practices will need to depend on getting by with less, leveraging automation to replace systems that were once time- and labor-intensive.
It’s important to keep in mind that the cheapest system available isn’t necessarily the best. Dental practice owners can get the best sense of real potential by evaluating the overall return-on-investment in the months and years after new technology is deployed. These figures reveal the true cost and resource savings provided by cloud-based practice management software—and why growth-minded owners must act today for what lies ahead on the economic horizon.