Michelle Hardy explores the reality behind the Laingbuisson report indicating that dental practices with membership plans have fared relatively well despite the economic challenges of the last few years.
The Laingbuisson review of the dental market confirmed that the last few years have been financially challenging, which came as no surprise, as well as providing fascinating reading in terms of looking to the future.
In The Business of Dentistry Magazine issue 11, the author of the report, Philip Blackburn, provided a useful summary of just how hard it has been, calculating that the value of private dentistry fell by 22% between 2009 and 2013.
This is a startling figure; however, let’s consider it in context. Not every practice has fallen foul of an extreme outcome and, this figure can be used as a framework from which to recognise your achievements. Before this statistic was brought to your attention, you may have thought your efforts were poor but, looking at the market, perhaps you now see you have actually achieved relative success.
Set for growth
The report also indicated the decline in private dentistry value had reached its lowest point in 2013 and the next five years are likely to result in impressive growth. This is very reassuring, of course, but it is not time to rest on our laurels; we have learned important lessons over the past few years.
There is, for example, the value of offering dental memberships to patients. The number of people on membership plans and the value of the membership market was affected by the world wide economic burden but it outstripped the private dental market as a whole to a considerable degree.
Evidence further substantiates this idea; practices with reasonably sized plans reported they were somewhat protected from the worst of the financial pressures experienced by many fee-per-item private practices. To a degree, the reasons why are not hard to understand. There is the obvious security offered by monthly plan payments, the fact that pre paid memberships create a bond with the practice that offers greater incentive for patients to attend.
There’s also some surprising figures emerging from the field that indicates patients signed up to a plan are generating more income for the practice than routinely attending fee-per-item patients. This may be due to the fact that fee-per-item patients rarely pay, as an example, for two examinations and two hygiene visits in a 12-month period, whereas you would receive 12-monthly payments from a plan patient.
There is also a suggestion that plan patients, by virtue of that regular attendance, form stronger, deeper relationships with the dental team. Much depends on the characteristics of an individual practice, such as the clinician’s treatment philosophy, available services and effectiveness at internal marketing, but it seems fair to suggest the more a patient visits a practice, the greater the opportunities to engage.
Times are changing
All these apparent benefits have certainly raised interest in membership plans among pay-as-you-go private practices, as well as being of interest to practice owners feeling uncertain about their future within the NHS. When transitioning from NHS to private dentistry, membership is likely to be a key consideration for the future.
As Philip Blackburn states: ‘The plan market has an underlying strength, which was evident during the economic downturn when it remained resilient compared to a volatile private self-pay market’.
With the membership model having proved its value during the recession, it now looks set to achieve an even higher level of success as the market continues its recovery.