5 strategies for dental procurement to increase efficiency and savings

When Angelina Davito stood on the stage at the DentalForum meeting in Bonita Springs, FL, on September 10, she had two questions: What was the biggest success you had with your procurement strategy this year, and what was your biggest challenge?

Davito is the senior director of strategic sourcing at Heartland and she emceed the event that brought together procurement specialists, dentists, and CEOs. Attendees call it "dental speed dating" because they get matched with vendors they've selected for fast-paced meetings and in-depth content sessions.

Procurement is a hot topic this year as leaders try to streamline costs without sacrificing quality of care. One of the biggest challenges that attendees shared is that their doctors don't always realize the impact their buying decisions have on the overall financial health of the practice.

Five attendees shared systems they've implemented to increase efficiency and savings.

Dr. Viren Patel, CEO of Smile Obsession

Dr. Viren Patel.

"Smile Obsession currently operates 15 locations with a team of 30 dentists and lacks a formal procurement system. Originally developed when we had just three locations, our formulary is now implemented from the outset of every new acquisition or de-novo establishment.

"As a branded entity, we mandate adherence to this formulary by all staff and practitioners to ensure uniform quality and consistency across all locations. Our objective is to deliver a consistent patient experience at each site, striving to build a best-in-class brand. Uniformity in procedures and materials is essential to maintaining the high standards and consistency that define our company."

Aziza Abed, CEO of Empire Dental Arts

Aziza Abed.

"Empire Dental Arts has eight locations. We do not have a formal procurement system, but the process we implemented saved over $200,000 in just the past year.

"The first thing I do is create a formulary. If it's an acquisition, I base the formulary on the practice's existing product list. If it's a de novo, then I base it on the quality and cost of products that my doctor-partner utilizes in his day-to-day practice.

"I also network on the backend with manufacturers so they can put in place the prices we negotiated with the distributors. My Henry Schein rep, for example, will put in the formulary across all the practices and also set spending limits so the practices cannot order more than the allotted amount without approval.

"Our management team monitors the cost of goods closely on the monthly profit and loss statements (P&L) and reviews the numbers with the practice leaders to elevate their understanding of the impact that adhering to the formulary has on EBITDA. The senior leadership meets quarterly to review our spending, upcoming promotions, and new products. We also have ongoing in-house continuing education (CE) around the products on the formulary to help educate and engage our doctors and team members."

Angelina Davito, senior director of Strategic Sourcing at Heartland

Angelina Davito.

"Heartland implemented Dentira as our preferred procurement platform for clinical supplies purchasing in 2021, when we had about 1,500 supported offices.

"The tool itself was incredibly easy to implement. We achieved full adoption by all practices in two months. The biggest challenge we faced was letting the tool do its job and recommend the best products at the best prices rather than having users narrow their search for SKU numbers of products they historically purchased.

"Since its implementation, our supplies spend as a percentage of revenue has decreased by 25%. However, it's important to note that a procurement tool alone cannot fully transform purchasing behaviors, so they align with a formulary. A coordinated change management plan led by doctors, executive leadership, and operations is essential for success."

Abigail Castro, procurement specialist at GPS Dental

Abigail Castro.

"We implemented Dentira's procurement module when we had 35 practices in Q1 of 2023, with a plan to onboard new acquisitions as they went through the integration process. We now have about 100 practices.

"Implementing a procurement system was one of our top priorities for several reasons. We wanted to have visibility into which vendors each office was buying from, the items they were purchasing, and the spend we were doing with each vendor.

"GPS Dental is an autonomous DSO, so it can be a little challenging to gather information from so many different sources. Having a place where we could track and pull different reports from was a game changer!

"We also wanted a simpler way for us to handle budgets and approvals. Not all vendors have approvals or budget capability, so to add a budget and an approver for all vendors really improved our supply spend. It's also very important to GPS to truly provide support for our offices. We wanted to take as much of the burden away from the offices as we could so they could focus on their passion of treating patients.

"We knew Dentira would really help them by taking away the long hours it takes to create their carts, find applicable promos, compare vendor pricing, and track their orders. It definitely takes time to adjust and learn the system but after the initial implementation, it becomes such a timesaver for everyone."

Thomas O’Toole, director of procurement and logistics at Aspen Dental

"There are multiple things I recommend when evaluating a new or existing system. For example, companies that support a wide network of locations should have an automated system where they can build out their formularies.

"Locations should be able to look at the contracted supplies that are available to them as well as have the ability to add items currently not on a formulary. The system should also be able to tell them both preferred and global products, utilize an approval hierarchy, and be able to send the data electronically to distributors and direct manufacturers.

"The capability to electronically share data is also very important for my teams so we can both review and analyze the data on our end. A procurement system should follow the requisition to purchase order to accounts payable as a completely integrated system with a wide range of controls built in."

Increasing same-store growth

The attendees at DentalForum stressed that procurement management is only one lever dentists and team members can pull to streamline costs and increase revenue. Check out these two articles for more ideas: 8 clinical tips to increase same-store revenue and 10 operational changes to generate revenue.

Beth Gaddis is the editor in chief at Planet DDS, a dental technology company specializing in cloud-based practice management systems, digital imaging, and dental marketing services. Previously, Gaddis was the marketing director for two large dental service organizations. Prior to entering the dental industry, Gaddis was a journalist for 16 years in a variety of roles, including as a TV news producer at the CBS affiliate in Boston. You can connect with Gaddis on LinkedIn.

The comments and observations expressed herein do not necessarily reflect the opinions of DrBicuspid.com, nor should they be construed as an endorsement or admonishment of any particular idea, vendor, or organization.