Where Multi-Location Dental Practices are Losing Money and They Don’t Know It

November 05, 2021

If you are looking for ways to grow your DSO or multi-location dental practice, start by taking a closer look at where you are losing money. As DSO's acquire more locations and as dental practices add locations, the parity in operations and processes across locations is a breeding ground for lost dollars. 

A major cost center for dental practices is supplies and equipment. Naturally, if you are looking for areas to save money, ordering supplies is a great place to start. Practices are often bleeding money due to insufficient inventory control, duplication of processes, and lack of formulary compliance.

Where is Your Multi-Location Dental Practice Losing Money?

Running a dental practice is difficult. With the challenges expanding exponentially in the DSO space, your vision will require twice as much productivity. You may find you need to double the productivity of yourself and others on staff.

Insufficient Inventory Control 

Of course, dental practices need supplies in stock. But how much of what types of supplies?   What can you purchase in bulk? How fast will you go through certain types of products? Are there items taking up too much space? Are there items that will expire, like pharmaceuticals? 

It’s not unusual for practices to over purchase and lose critical dollars due to product expiration. Stockroom management, although time-consuming, is an area of opportunity for practices to save money. Once you establish a system, use it across all locations and you’ll realize considerable cost savings.

Lack of Purchasing Schedule and Supply Chain Awareness

With proper inventory control you can project  needs instead of rush ordering supplies. This will save on shipping costs and allow you to ensure products are in stock. The prices of dental products fluctuate. It’s best to avoid urgent purchases where you are forced to purchase products at a higher price. Other factors to consider are manufacturer shortages, impacts to adjacent industries, or even global pandemics that can impact how fast supplies can get to your practice. 

Product Pricing and Negotiated Formulary Pricing Parity 

Take a look at the formulary prices negotiated by individual practices. Are all locations getting the same negotiated prices? Or do some locations have a “special rep” relationship. Work to get the best negotiated prices that is consistent for ALL locations.

When the situation calls for ordering off formulary, take some time to compare prices across different sellers.  At Supply Clinic the price comparisons are done for you. With an open marketplace model, there are no hidden prices.  What you see is what you pay.  You’ll also want to pay close attention to unknown sellers or pricing that seems “too good to be true”.  Supply Clinic has a strict “no gray market” policy to protect your practice. 

Accounts Payable Considerations

Accounts payable involves handling thousands of invoices across multiple locations. It’s imperative to have a system in place to catch bad invoicing and duplicate payments. Also consider adding an order approval process. Something that gives autonomy to individual practices without too much leeway to purchase unnecessarily expensive supplies. Supply Clinic ProSuite bundles a set of  tools that handle approval processes and accounts payable situations, and even do some of the work for you. Imagine not only saving on supplies, but saving a TON of time across multiple job functions.

What’s Next for Your Group of Dental Practices or DSO?

Start by getting individual practices involved in the change required for better inventory control, supply chain considerations, product cost negotiations and order approval processes. 

Next, find a platform to automate some of the processes and manage your offices with a customizable real-time approach. A procurement platform, like ProSuite, is a viable way to stop losing money by cutting down on wasted hours and costs. Reach out to Supply Clinic and find the ProSuite tier that best meets the size of your DSO or number of locations in your dental practice.