3 Ways to Combat Pay Cuts and Recession-Proof Your Dental Practice

DentalPost is exploring the cyclical trends in dentistry recently revealed by the 2023 Dental Salary Survey that saw input from over 15,000 dental professionals nationwide. From pay cuts to burnout to competition, it’s a tough world for dentists, and we’re sharing best practices and tips for dental professionals looking to stay ahead of the curve. This is the first article in a series that navigates the ups and downs of practice ownership and management. 

As inflation pains mount and concerns of recession loom, dental practice owners are taking whatever proactive measures they can to “recession proof” their dental practice in order to maintain the integrity of their practice, team and patient care standards.

Compounded by recent years of staffing shortages and hiring challenges, DentalPost’s 2023 Dental Salary Report revealed that 2.25% of dental practice owners went as far as cutting their own take-home pay in order to give employee pay raises and avoid turnover. Even more noteworthy is that 38% of dental practice owners said they’ve never given themselves a raise.

Considering the time and financial investment that you, as a dentist and dental practice owner, have made to get through dental school, it’s time to reassess and identify better ways to ensure the stability of your dental team and practice, without sacrificing yourself.

3 Ways to Combat Pay Cuts and Recession-Proof Your Dental Practice

We understand a slight pay cut is less expensive when it means keeping your team and reducing staff turnover. The good news is there are a few ways you can fortify your practice to offer attractive salaries and benefits to your team so they stay, all while getting paid what you deserve. Despite a moody economy, you can overcome economic adversities, staffing challenges, and profit-squeezing reimbursements from insurance.

It may take a new mindset to stop putting yourself last, but it’s not impossible. Practice owners can take the path less traveled and come out on a brighter, more profitable end. By considering the following tips, it’s possible to do the same.

1.  Reconsider Your Relationship With Dental PPOs

The ADA Health Policy Institute (HPI) reports that 1 in 6 dentists is cutting ties with dental insurance. From increasing revenue to improving the quality of patient care, there are obvious reasons – and so many benefits – for quitting PPOs. 

This is one relationship you can do less with or entirely without. Insurance is that partner who drags you down and only looks out for themself. You take the abuse for years because you don’t think you can live without them. Only it’s insurance who can’t live without you and your money. 

How much are you giving insurance when you put your disbursement numbers on paper? Some doctors report giving around 33% of their income. That 33% equates to hundreds of thousands of dollars over the years. 

What insurance companies fail, or refuse, to acknowledge is that you are the one who spent years in dental school. You are the one who took on a large amount of debt to learn the trade and become an expert in your field.

Reimbursements are dwindling, yet we know the cost of everything is going up. Cutting out the insurance middleman means keeping more of what you earn. And your front office team isn’t fighting with insurance paperwork every day. Both you and your team can focus on patients and what’s best for them, not what insurance allows. 

Ending one relationship opens the door for other opportunities to help your practice thrive. After all, you deserve to keep the wealth you’ve worked so hard to build.

Our solution: supplement or replace the revenue from insurance disbursements with an in-house membership club.

In-house membership programs are gaining popularity because they empower patients and doctors to have a say in treatments. The upfront cost is replaced with affordable monthly membership fees throughout the year. 

This option creates an exclusive “club” where patients feel valued and know their best interest is at the forefront of the doctor’s mind. They don’t have to worry about their dental team taking shortcuts to fit within the limitations set by insurance.

The best part, other than giving patients red-carpet treatment, is that as the practice owner, you own the membership program and its members. You call the shots on how much you charge, how many levels you’d like to offer, and the treatments or specialties you provide.

Patients are savvy shoppers, and many seek alternative ways to afford services. There are developing trends where patients are not offered any form of dental insurance but still need regular services, such as a growing gig economy and retiring population. Memberships offer them that unique opportunity to be part of something special. And you can lead the way.

2. Get More and Better Patients

Not all patients are created equally, and you should have a say in who you work with. If you have patients who drag you down, there are ways to replace them with better ones. Amplify360, the dental industry’s premier marketing resource, calls it the “Patient Upgrade.”

Most dental practices complain of 3 types of patients: the perpetually displeased complainers, the high-maintenance demanders, and the flaky “appointment ghosters.” They all have one thing in common: they thrive on creating negative circumstances. Their negativity impacts you, your practice, and your team, not to mention their keen ability to drive down your profits. If this sounds like some of the patients at your practice, it’s time for an upgrade!

In a recent dentist case study titled “The Wealthiest Dentist in the World,” we learned of Dr. Tom Peterson, who restructured his practice to take back his life. Today he produces $4.4 million annually, working just two days per week. How did he do it? By focusing his time and efforts on attracting higher-value dental cases and patients.

Like compounded interest, you’ll build exponentially on this “upgrade” month over month, year over year, until you’ve reached your level of ideal patients. These patients are the ones who take your recommendations seriously, as they understand the value of your knowledge and expertise, are positive and uplifting, and show up on time for every appointment.

3. Recruit and Retain A-Player Employees

The ADA HPI recently reported that “despite offering incentives, including higher starting wages and health benefits, clinicians reported… that it remains ‘extremely challenging’ to hire dental assistants and hygienists.”

According to the ADA HPI’s data, “more than one-third of dentists are actively recruiting dental hygienists and dental assistants. About 25% are actively seeking administrative staff and about 15% continue to search for dentists.”

It’s never been more important to create and maintain a practice culture that keeps your team happy and paid well (without you sacrificing your pay). According to DentalPost Salary Report, a positive work environment, better pay, and appreciation are among the top ways to keep your all-stars content. Practices lacking these qualities will continue to struggle with turnover and retention challenges as top players change jobs in search of something better.    

Appreciation for their work includes having supportive and equally invested teammates, structure and flexibility in their day, and being fairly and competitively compensated for a job well done.

You can build and retain an all-star team with a thoughtfully curated office culture that ensures everyone has a stake in the business’s success. A respectful and smooth-running practice attracts more patients and profit, resulting in more pay for you.

Take Back Control of Your Practice and Salary

These three strategies can help put you back in the green regarding your own salary while ensuring you recession-proof your practice so that you don’t just survive, but actually thrive. Even if you didn’t take a pay cut and gave yourself a raise, it never hurts to reevaluate how you’re doing business to ensure you’re still doing business if things go south. By steering your own ship, you’ll have more avenues to grow your practice, wealth, and your team’s happiness.