An abnormal crisis
Previous international crises, and the 2008–2013 crisis in particular, have arisen from the collapse of the economic or financial system at the macroeconomic level, having an impact on businesses (for example, through the resulting credit crunch) and society, especially as a consequence of the resulting rise in unemployment. It is quite evident that all this has an impact on the real economy, or the purchasing power of families, creating a sharp drop in demand. All of this happened in the Western world in the 2008–2013 period.
However, in the current case, it is different. The economic and financial systems in Europe and the US were rather solid before the SARS-CoV-2 outbreak, being in full economic recovery and boasting positive fundamental indicators. What suddenly emerged with the pandemic was a crisis of interconnections, or the impossibility of supplying and selling products and services owing to the need for physical distancing. In the lockdown phase, every country halted about 60% of its productive activity, causing an enormous economic shock, the magnitude of which is proportional to the lockdown duration. However, the origin is exogenous to the system, a sort of huge economic downturn that has struck the world.
It is precisely for this reason that, at the beginning, many economists thought that, when the external cause ceased, that is, at the end of the respective lockdowns, the economy would recover quickly. Experts call this a V-shaped recession, which is characterised by a rapid initial collapse, followed by a rapid subsequent recovery, and it was expected that the impact would have been limited as a direct consequence of the lockdown period. However, this was a rash and probably superficial evaluation because it did not take into account that the handling of the endemic phase would still have required a very long period of physical distancing, having evident consequences for the purchasing power of families and consumption.
In addition to the economic and financial problems that have affected and will affect the production system, and small and medium-sized businesses in particular, the methods of socialisation have radically changed. On the one hand, we need to maintain a certain physical distance, and on the other, attitudes, behaviours and prejudices are changing, and these will possibly result in an increase in social unrest. Given that this new way of life will partly reduce consumption owing to incapacity and production saturation, what interests us in this context is the possible transformation of the perception of dental practices and dental care by the population.
There has been clear and peremptory guidance for dental practices from competent institutes. We think that implementation of these principles, which provide for certain clinical protocols, patient management and the use of personal protective equipment, may be quite demanding in organisational and financial terms, but we believe that all practices will adopt them in order to guarantee the safety and health of their staff, collaborators and patients.
In all sincerity, we must always keep in mind that dentists have always worked in almost totally aseptic conditions. It is true that, in this case, we are dealing with pathogens that circulate by air, while dental practices have evolved to prohibit cross-contamination through blood, but the protective measures employed by dental professionals are already very high. The culture of protection and asepsis is already innate in the professionalism of workers in the dental field, and we firmly believe it will come naturally to employ more rigorous procedures.
As for patients, given that the relationship with a dentist is based on trust, we think it is very important to explain the procedures and devices adopted with available objective data while confirming the requisite behaviour, focused on everyone’s safety.
Our qualitative research indicates that, when a dental expense exceeds about €1,000, it is no longer the individual choice of the patient, but enters into the basket of various family expenses. The expense is then evaluated and ranked according to other family needs, which are not always related to health. Clearly, non-urgent and higher value-added services, such as orthodontics and prosthetics, could more easily be postponed, but, according to dentists interviewed in April, treatments for aesthetic purposes will suffer above all, while those that solve functional problems may be less affected.
Given that all of this will have to be demonstrated, there is no doubt that, in accordance with Maslowian theory, on a hypothetical scale from pain to pleasure (for socialising, a sense of belonging and esteem to others and to oneself) in the case of reduced financial possibilities or psychological resistance, therapies aimed at aesthetics will be the ones that may initially be reduced, because they are less compelling (Fig. 1).
“The culture of protection and asepsis is already innate in the professionalism of workers in the dental field, and we firmly believe it will come naturally to employ more rigorous procedures”
What a practice should do is learn how to sell. This is not unethical; we must put aside all the false prejudices related to semantics which could generate negative reactions. Learning how to sell signifies the greater effectiveness of transferring value in the proposal of treatments so that the patient clearly understands the importance of the treatment being proposed and fairness concerning the treatment cost. There are too many instances in which families postpone dental treatments in order to prioritise other non-health-related expenses in the hierarchy of family expenses. Even consumer credit, carried out with the support of credit institutions, is a good opportunity for encouraging access to patient care.
The paradigm of reopening: Resisting, relaunching and redesigning
It is fundamental to accept that we will no longer be able to return to the dental profession as it was back in March. The organisational system will be different, patients will be different and certain costs will inevitably increase. If we cannot endure the acceptance of this change, this veritable rebooting of the dental profession will prove difficult.
The dental practice has three important assets: its clinical expertise, its organisation (understood as structure, technologies, group of people and processes) and its base of patients. Regarding the latter, ideally, all the patients treated in the last three to five years represent a referral source for a conventional practice. However, it is different for corporate dentistry, which is more oriented towards the use of marketing to attract new patients.
Nowadays, just over 75% of the turnover of a dental practice that has been open for at least five years is generated by “known” patients, that is, those who have been treated in the past and their relatives. Therefore, it is necessary to maintain and retain the great value represented by patients treated in the past.
Following this logic, there are three phases to reopening (Fig. 2). The first, pure survival, is resistance.
The real problem with this first phase of the crisis is the lack of liquidity, which arises from the lack of revenue in the previous months and the impact of fixed costs in this period. Let us try to rationalise this situation. In Europe, dental procedures valued at more than €7 billion are performed per month. During the lockdown phase, treatments worth at least €12 billion have been suspended, not cancelled, because millions of patients under treatment have been asked not to visit their dentist (according to Key-Stone surveys, the average duration of a dental treatment is about 112 days, orthodontics excluded). They were undergoing treatments that must be resumed as soon as possible and in total safety. Then, there are millions of patients who have oral health problems to resolve and who will have to visit a dentist in the coming months. Net of a possible reduction in spending power and patients’ increased fear of the dentist, dental treatments are not consumable; they are not meals that were not consumed in a restaurant or nights not spent in a hotel. The population will return to the dentist, but timelines and ways will change.
For a practice that has not collected revenue during the lockdown period and does not have variable costs (such as laboratory, materials and medical collaborators), but has had to bear fixed costs (such as rent, utilities and staff), the latter is the true problem. In addition to supporting his or her family, the owner of a practice has had to cover the fixed costs.
Given that social safety nets, such as the use of lay-offs, can help reduce staff costs, we suggest classifying fixed costs into three categories: first, costs that are indispensable and for which payment cannot be postponed, second, costs for which payment can be deferred and, third, non-essential costs that can be eliminated during this phase. Costs do not include investments, which are essential for improving a practice’s effectiveness and efficiency, which will eventually play a strategic role in the coming months of recovery.
With regard to revenue, another important operation during the resistance phase is to create a prevision of the treatments, considering those suspended, those that could be fulfilled from proposals that had been made to patients and are pending a response, and new visits planned, not to mention all the patients to be re-contacted for hygiene visits and check-ups, children under orthodontic monitoring, patients for whom implants have been fabricated and who require prostheses, and so on.
A prevision must be updated every month, but allows one to know in advance, net of all variable and fixed costs, the probable financial requirements. These are requirements to be met by resorting to bank loans and/or personal assets. Non-financing during this phase of the crisis means heading towards a possible closure, an eventuality declared in 14% of the sample of dentists interviewed in recent Key-Stone research (in Italy and Spain), a percentage that rises proportionally with increasing age of the practice owner.
“New organisational protocols will deeply change the organisational model of the practice”
In addition to securing the practice from a financial point of view, it is essential to guarantee safety and health security to patients and collaborators, but this will certainly become an obligation and, therefore, a prerequisite. What will make the difference is a practice’s ability to organise the workflows and processes to avoid mishaps, such as overcrowding, but also excessive downtime resulting from an excess of caution without proper planning.
Returning to the issue of the great patrimony of the practice, represented by patients treated in recent years, it is essential to look after it through an organised system of direct communication. It is very important to have a well-managed patient database, allowing segmentation of patients by age and treatments carried out, among others. It is just as essential that the management of this database complies with the requirements of the new European General Data Protection Regulation.
In this phase, it is important to maintain relationships through WhatsApp, email, videos, calls and social networks. But what is important is the content of this communication aimed at informing patients, reassuring them about everything that is being carried out regarding their health and safety, and giving practical suggestions for oral and general health and for living a healthy lifestyle. While it is absolutely not recommended to generate communications aimed at selling services or treatments—it is not the opportune time for sales—it is the time, the opportunity, to strengthen your relationship of trust with patients. Similarly, it would be useless to produce information aimed at promoting services which, during this emergency phase, could appear anachronistic or not suited to the current priorities of the population.
Another important time is reopening. When a practice is ready to assist new patients, it would be opportune to communicate this and, in this case, even encourage visits. In this regard, in addition to revenue suspended during the lockdown phase, a very serious aspect to consider is that, during this period, new patients have not been acquired and new treatment plans and new treatment plan proposals have not been realised. This is a problem that will be felt in the coming months, even in this autumn season. For this reason, practices must absolutely maintain a space for the creation of new visits, although they may possibly find themselves in a crowded situation due to treatments that were left uncompleted or suspended.
Similarly, during the relaunch phase, once a practice has reopened, it becomes a priority to return to pending treatment plan proposals, for which is essential to obtain the highest possible acceptance rate. While considering possible demotivation by some patients, we suggest not soliciting responses to suspended proposed treatment plans with simple phone calls but inviting the patients to come back, to carry out a new motivational visit that serves the purpose of renewing awareness of the need and the reduction of any prejudices in order to favour the acceptance of the treatment plan.
New organisational protocols will deeply change the organisational model of the practice, and this is precisely the time to collect data and information, consider your practice’s strengths and weaknesses, and evaluate opportunities and threats. It is also the time to consider what emotional, organisational and financial resources are available and which may be necessary with the goal of structuring a virtuous business model for dentistry to come.
Asking questions about changing the competitive system, re-evaluating the positioning and pricing policy, and deciding what your practice should look like in the future are fundamental steps and must be thought through calmly, reasonably and creatively (Box 1).
We believe that the truly great problem in the coming months, or perhaps years, will not be so much that of demand for treatment, nor the purchasing power of families, but that of the objective capacity of dental practices, because there is no doubt that fewer patients will be able to be accommodated within the same number of work hours.
In order to survive this first stage unharmed, we must start to think about 2022. While the present year is economically lost, we can use it to plan for the future. Next year will also be difficult, because we will most likely still be bound by physical distancing and rigid protocols in patient management. Even the economic and social crisis may continue to have a long and clearly visible tail. However, there is a great opportunity to return to performing excellent and successful dentistry in a new competitive context and with the payback of the trusting relationship. Everyone must have his or her own vision of the future and commit to fulfilling it with confidence and trust.
We would like to offer just one suggestion: do not make hasty decisions. Use the next few months, at least until the end of the summer, to collect information, taking note of problems, flaws and areas of improvement. Use this period as if it was a beta phase for the practice. First, we need to fully understand, then design and then build. If we change the order of these factors, the risk of failure increases.
During this time, we have come to realise that the key is not hope but trust. The first refers to something that should come to us from the outside, while trust derives from that intimate feeling that whatever happens it will be faced in the best possible manner, for we believe in ourselves and we have used a rigorous method of strategy development.
Roberto Rosso is president of the Italian strategic consultancy and market research company Key-Stone.