Dental Software Buyer Trends Report – 2016

Software Advice simplifies the software selection process for dental practices that contact our expert advisors by offering free consultations on which solutions best meet their needs.

Thanks to these interactions, we have unique insights into dental software buyers’ criteria, pain points and budgets. We recently analyzed a random sample of our buyer data to highlight emerging consumer trends in the dental health IT field.

Our results were evaluated by Dr. Jennifer Dean, a dentist with a small independent practice in California. Her insights and our findings can help guide the decisions of buyers in the market for a dental EHR or practice management system.

“As the average patient has become more tech savvy, they have the same expectation of their dentist. Modern dentists not only deal in oral health, we deal in information. As such, we need to take an integrated and cohesive approach to technology.”

Dr. Jennifer Dean, Rancho Santa Fe Cosmetic and Family Dentistry

Key Findings

  • Only 12 percent of buyers are exclusively using paper at their practice, compared to 30 percent in 2014—meaning dentists are becoming more savvy about the many benefits of software adoption.
  • Nearly one in five buyers (19 percent) are seeking a replacement system because their current solution isn’t intuitive or works poorly, which shows that many products are failing to meet the needs of care teams.
  • The greatest percentage of practices (66 percent) are planning to spend up to $500/month for dental software. This is a significant expenditure considering most providers in our sample (56 percent) are solo practice leaders with limited health IT budgets.

First-Time Dental Software Buyers on the Decline

When we speak with prospective buyers, we ask what resources they’re currently using to handle operations. This helps us determine whether they are purchasing software for the first time or replacing an existing system.

Only 12 percent of providers tell us they’re exclusively using paper records. This is a big change compared to two years ago, when 30 percent of buyers were running paper-only practices.

Our data also shows the number of prospective buyers using commercial software has gone up from 41 percent in 2014 to 58 percent today. This suggests a growing number of users are so unsatisfied with their system that they’re considering replacing it.

Prospective Buyers’ Current Methods
This wide adoption of commercial software shows that health IT advocates have succeeded in their efforts to convince reluctant dental practices to invest in digital solutions. The challenges IT advocates have faced include limited financial incentives compared to general physicians, a lack of interoperability among systems and the cost of implementation.

So what accounts for that big two-year shift in dental software adoption rates? Dean cites a number of contributing factors:

  • Clinical benefits: Dental imaging technology is a better way to evaluate oral health compared to film-based radiography. Dean says digital tools, such as intraoral cameras, improve diagnostic ability and care quality because they enhance patient education and treatment acceptance.We came to the same conclusion in a survey-based research report that showed intraoral images can be an effective aid for getting pediatric patients to take better
    care of their teeth and gums.
  • Operational efficiencies: Software can help practices make efficiency improvements by automating tasks, such as scheduling and claims submission.Dean says charting templates can also make it faster to update patient records. This is particularly true for systems that allow users to customize their documentation templates with features such as drop-down menus, radio buttons and check boxes.
  • Cost savings: When you have hundreds of paper-based patient records, you need a great deal of storage space. Dean says that a practice’s square footage can be “extremely expensive” in many markets. That pricey space that once exclusively stored paper records can be better utilized by transitioning to digital ones.Other potential costs savings include reducing the need to purchase paper/postage and eliminating unnecessary staff, such as record clerks.
  • Tightened security protocols: No one wants to deal with a HIPAA violation. When implemented correctly, Dean says software “vastly enhances security for the patient’s data” compared to paper records.To understand why this is true, including an explanation of how cloud-based deployment models are preferable to server-based solutions for security purposes, you can read our detailed report on HIPAA breaches here.

We should also note that recent changes to Medicare payment rates likely influenced the tech adoption shift in our data. Dentists who have not switched over to software under the meaningful use program (MU) are getting a percentage of their Medicare payments cut.

Though the MU program is going through a major revamp right now, a dentist who feared its financial penalties may have been more motivated to buy software in the past two years so they could attest to MU in time.

Nearly One in Five Practices Unsatisfied With Current Software

When we asked buyers about their motivations for seeking software, nearly one in five (19 percent) said it’s because their current system performs poorly.

Another 19 percent indicated they were hoping to “modernize” operations at their practice or “upgrade” with a new system.

These top two responses indicate a significant percentage of physicians are not satisfied with their current software because it’s faulty or too old.

Top Software Purchase Drivers
Pain points we’ve heard from unhappy dental software users include being “frustrated with having to follow so many steps to enter treatment plans,” finding “reporting tools are lacking at best” and having to deal with “glitches.”

Dean says these kinds of setbacks are especially impactful in busy dental practices where every minute of the day is scheduled in order to see as many patients as possible. Moreover, the fact that many software systems are packaged in a suite of integrated applications means an issue with your charting module could derail billing features, too.

“When problems arise, the entire office can grind to a halt,” she says.

To avoid this situation, it’s important that software buyers read product reviews written by real users before making a final selection. Product demos with vendors can only tell you so much about a system’s long-term performance. Reviews provide an unbiased assessment of a system’s true potential and its limitations.

You can find a list of dental software solutions sorted by average user rating here.

As for the trend in our data, it will be interesting to see how it impacts industry offerings. Shoppers will become more discerning as their experience with dental software grows, which means it may soon be more common for vendors to prioritize system updates and usability improvements.

Dentists Budgeting Up to $500/Month for Software

This next data point provides a peek at real dentists’ software budgets, which can serve as a point of comparison for any practices planning for an upcoming purchase. Practitioners in our sample told our advisors how much they would spend on dental software (excluding setup costs).

Most providers are budgeting for monthly subscription-based dental software. Four percent are exclusively interested in license-based pricing models and 33 percent are exploring both options.

The greatest percentage of respondents (66 percent) are willing to spend up to $500 per month.

Monthly Subscription-Based Software Budget
Five hundred dollars per month may not be a big deal to group practices, but it’s certainly significant to solo dentists. Because more than half of our sample is comprised of single dentist offices, it was initially surprising to see such high IT budgets in our data. (See a full breakdown of our demographics here.)

Of course, part of the reason the expected costs are this high is because so many people in our sample appear to be shopping for full suites rather than best-of-breed applications that only perform one main function, such as scheduling or dental EHRs. Due to the additional breadth and depth of suite functionalities, this budgeting makes more sense.

Another point to note is the fact that so few buyers are considering license-only systems, which are typically deployed on-premise in a practice-owned server. These require remote backups of data and aren’t as convenient to update or operate remotely. In fact, one buyer told us their server-based system is “causing connectivity issues between the dental office and their head administrative office.”

Application Requirements Suggest Most Practices Seeking Full Suites

Our hypothesis in the previous section that most practices are seeking full software suites is supported by this next set of results.

While most providers (96 percent) list “patient scheduling” as their must-have application, “billing” and “EHR/Charting” are similarly in demand, with 94 and 91 percent requesting those categories, respectively.

Top-Required Applications
The fact that all of the top three applications garnered such similarly strong percentages indicates buyers favor integrated suites instead of piecing together a collection of disparate best-of-breed systems.

The exception here is digital imaging, an application that is a requirement for 29 percent of buyers. Since many imaging solutions are proprietary and come as a bundled deal with the sensor equipment they support, it’s possible the majority of practices don’t need to include imaging in a new software suite.

That said, it’s very important for buyers to check whether their existing imaging software integrates with the new dental software they’re thinking of buying.

“If these two systems are not in sync, images are easily left unassigned or assigned to the wrong patient,” says Dean. “Imaging is an enormous part of dentistry, and ensuring accuracy and consistency is paramount to proper patient care.”

It’s also possible that there are a few first-time imaging software buyers in our sample. Those folks will soon come to realize all the benefits of digital imaging as cited in a Journal of the American Dental Association (JADA) study:

Benefits of Digital Imaging vs. Film

Dentists Seeking Claims Support, Recall Systems in New Software

Claims support is the most desired software feature in this study with 67 percent of potential buyers requesting it.

Recalls/appointment reminder capabilities (59 percent) and the ability to track patient progress (58 percent) are also requested by more than half of buyers.

Top-Requested Functionalities
Though it’s been more than a year since the ICD-10 transition deadline, many practices may still be adjusting to the complex code set. This, combined with the potential cost savings of handling all billing operations in-house rather than hiring third-party services, make claims support functionalities especially attractive.

“This is a huge efficiency improvement for a practice,” says Dean.

Today’s systems enable providers to create, validate and send claims electronically to multiple insurance companies. Many allow you to attach supporting documentation, such as images, to minimize rejection risks. You can also keep tabs on what stage of the reimbursement process a particular claim is in through monitoring tools.

It also isn’t surprising to see recall/reminder systems near the top the most-requested features list. The biggest source of lost revenue for dentists is usually missed appointments, so it makes sense they’d want tech tools in their arsenal to minimize no-shows.

Practice management software allows staff to send text message and email reminders to overdue patients automatically. We’ve found patients are excited about this technology, too. In a patient survey of scheduling preferences, 30 percent of respondents cite text messages as their preferred communication channel for appointment reminders.

Preferred Communication Channel for Appointment Reminders

Implications and Key Takeaways

While it’s certainly encouraging that software adoption is becoming more and more common in dental practices across the country, our data shows more work must be done to develop long-lasting and user-friendly solutions that meet buyers’ features requirements.

That said, we hope the evidence in this report helps show that software can streamline a practice’s workflow while improving clinical outcomes.

The implications of our key findings can be separated into three groups: first-time software buyers, replacement software buyers and software vendors. Here are some parting thoughts and suggestions for each one:

For first-time dental software buyers
It may be tempting to put off a dental software purchase for another year, especially now that you’ve seen how many practices are unhappy with their solutions. However, it’s pretty clear the time is now to invest in health IT.

Between the benefits of adoption and the financial penalties for Medicare-eligible paper-only practices, it’s a no-brainer. The more practices continue to cross the digital divide, the more patients will expect tech to play a role in their care. You don’t want to be seen as the “old-fashioned” practice, do you?

For replacement dental software buyers
The silver lining in this situation is that you can learn from your current vendor’s mistakes. Take a closer look at the “purchase drivers” chart in this report to see other red flags identified by unsatisfied software users and leverage it to inform your next round of product evaluations.

For example, pay extra attention to a new vendor’s support offerings even if you’re primarily unhappy with your current system’s interface. It’s also smart to consider commonly requested features, such as text message reminder capabilities and patient portals, that you may have missed the first time you were in the market for software.

For dental software vendors
Our data shows usability and frequent updates are very important factors for buyers, so a significant amount of resources should be spent on developing these, lest you lose customers. It’s also very clear there’s increasing demand for cloud-based systems among small and midsize practices, so it’s a safe bet for sales teams to anticipate this preference.

With so many competitors out there, we encourage and expect practices to seek out real users’ product reviews as a means of evaluating your software’s functionality, ease of use and support. If you want to make a great impression on prospective buyers, encourage customers to review your system here.

Demographics

Here is the demographics data for the dental practices included in our sample:

  • Our sample primarily consisted of small practice leaders, with 56 percent coming from solo dentist practices and 26 percent from two dentist practices.
  • More than half (53 percent) of buyers have between two and five employees.
  • Not surprisingly, 53 percent expect between two and five people to use the new software they plan on purchasing.
  • The most represented segment in our sample is general dentistry (84 percent).
By Number of Dentists: Prospective Buyer Size
By Number of Employees: Prospective Buyer Size
By Number of Users: Prospective Buyer Size
By Segment: Prospective Buyer Type

Note: You can find more information about our methodology here.

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