A shift in practice: The challenges of the pandemic recovery period

Australian Dental Association

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7 February 2023

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5 minute read

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Dental practice

What sets some practices apart in the race for patients and people? The Dental Insights report uncovers the challenges and initiatives for the profession in the "New Normal".

This article was first published in the ADA's News Bulletin, February 2023.

You can now watch a webinar on this topic at the ADA's member-only CPD Portal

As a member organisation, one of the services the Australian Dental Association looks to provide is benchmarking resources for those who own or wish to own a practice. This includes our biennial fee survey and our triennial practice survey.

This year in lieu of the Practice Survey we joined forces with the Commonwealth Bank of Australia (CBA) to take a deep dive into the operational, financial and market shifts in the sector, the results of which are collated in the Dental Insights Report (DI Report). A big thank you to the 500 members who took the time to complete the survey. Here, CEO of CommBank Health, Albert Naffah, and two key industry professionals comment on the research findings.

Dental Insights Report

The research shows that while a multi-speed recovery remains underway, macroeconomic headwinds are presenting new challenges for practices. In fact, the majority are concerned that the escalating cost of living will constrain patient demand while operating costs remain elevated.

Given the resulting pressure this can put on margins, it’s no surprise to see a contingent of practices that expect lower profits in the year ahead. However, the prevailing view is
that of moderate optimism, as many practices expect better operational and financial conditions ahead.

“While it’s evident there are headwinds for the dental industry as living costs rise for patients and operating costs increase for practices, the report highlights a groundswell of confidence,” said Mr Naffah.

“Addressing these challenges is high on practices’ agendas, and we are seeing many planning proactive initiatives. Increasing effciencies has become the top priority while generating patient demand and using culture to find and keep good staff isn’t far behind.”

How practices are planning to respond

Practice decision-makers are prioritising a range of initiatives in the year ahead, broadly centred around driving patient demand, lifting effciency, and enhancing the patient and staff experience to better engage both.

One strategic response stood out above the others. The most common initiative was adapting systems and processes in search of effciencies and greater productivity. Reducing or restructuring costs came next, with most practices intending to move ahead with one of the two strategies.

“Changing the way practices operate through the use of digital technologies means that as well as improving the patient experience, there is also the opportunity to increase the number of patients that can be seen by a practice,” said Andy Yeomans, Chief Operating Offcer, Smile Partners that owns, manages, and advises some 35 orthodontic clinics across the country.

To get more patients into the practice and increase loyalty, decision-makers are also focused on offering new services and around a third are investing in sales and marketing.

“Marketing is crucial for any business targeting growth, so we invest in digital marketing,” said Dr Beng So from Geelong Family Dental Care. “We use search engine optimisation and write articles to educate patients about the services our practice offers that others don’t.”

Technology was also being earmarked for further investment among over one in two practices. Improving care and the patient experience were the principal motivations. Dr Janet Woon from Advanced Dental Spa said her focus was on making the experience convenient and flexible.

“We use Podium Chat, so patients can engage with the practice when they need to. Online bookings are very popular now. We also use HealthEngine to give patients the flexibility to book appointments when they want to outside of normal business hours,” said Dr Woon.

Amid widespread staff shortages, three-quarters of practices said they could not operate at capacity or achieve their growth objectives. Many are changing how they approach finding and keeping staff, including many actively fostering a supportive culture and driving employee engagement.

What sets growth-focused practices apart

Despite navigating a number of challenges, almost half (47%) of all practices are concentrating on growth in the year ahead. A significant proportion (44%) are seeking to maintain revenues and almost one in 10 are planning to exit or wind back practice operations.

Comparing the traits and activities of growth-focused practices and those intent on maintaining revenues shows some substantial differences in approach.

Growth-oriented practices are leading the response to the industry’s challenges. They have an outsized focus on effciencies, employee engagement, sales and marketing and staff recruitment, suggesting that competition for patients and scarce resources will only intensify.

The following are some of the areas of emphasis that may support a case for growth-focused practices to pull ahead of the rest:

- Priorities for the next 12 months – they are more likely to be adapting systems and processes for effciency gains, investing in sales and marketing, and focusing on employee engagement.

- Digital patient experience – more likely to flag investment in website enhancements, new digital channels to support the patient experience, and payments and claiming solutions.

- People and culture – a stronger focus on regular team building and social events, learning and development and regular performance and salary reviews.

- Offsetting rising costs – more likely to be seeking alternative suppliers, introducing new services, and extending operating hours.

Spotlight on green dentistry

Sustainability in dentistry is an area the ADA is actively working on so it made sense to add some questions to the survey tool to seek dentists view on this important and emerging topic particularly in relation to the role that dentists can play in minimising the environmental footprint of the practice. The results show that green dentistry is alive and well across the industry, even if many practices believe there’s far more to be done.

While 70% of practices said they were not convinced the industry is responding well to the challenges and opportunities of green dentistry, 41% have made it a moderate or strong focus on sustainability.

A closer examination of the green initiatives in-practice shows even more widespread activity, with the fastest growing areas including sourcing sustainable products, increases in renewable energy supply and using biodegradable sterilisation and cleaning solution.

With almost every practice participating in some way, there is a strong foundation for the industry to build its green credentials and have a positive impact on patients and the planet.

To read the Dental Insights report and learn about the industry’s views on financial and operational performance, outlook, and strategies to tackle some of the issues ahead, please visit the CommBank Foresight page

Things you should know

The report has been published for general information purposes only. As this information has been prepared without considering your objectives, financial situation or needs, you should, before acting on this information, consider its appropriateness to your circumstances, if necessary, seek professional advice. The Bank believes that the information in the report is correct and any opinions, conclusions or recommendations are reasonably held or made, based on the information available at the time of its compilation, but no representation or warranty, either expressed or implied, is made or provided as to accuracy, reliability or completeness of any statement made in the report. Any projections and forecasts are based on a number of assumptions and estimates and are subject to contingencies and uncertainties. Different assumptions and estimates could result in materially different results.

The report refers to data sourced from an online survey of 473 dental practices that occurred during July-August 2022. The survey was undertaken by ACA Research on behalf of the Commonwealth Bank. All analysis and views of future market conditions are solely those of the Commonwealth Bank.