Call it what you want – Corporate Dentistry, Big Box, or Chain Dentistry – it’s more or less the same. My contention is too many solo and small group practice owners are late adapters and are truly suffering from the impact of what I call, “Chain Dentistry.”
Ironically enough, the biggest, most profound and damaging effects negatively affect Chain Dentistry, too! It’s “The Commoditization of Dentistry.” When an industry becomes commoditized, the norms are turned upside down and inside out. The general public’s perception about that industry is changed. In dentistry, the significance once placed upon the doctor:patient relationship is altered completely, if not totally eviscerated. Patient/Guest experience typically declines (due to decreasing revenues which impede delivery of a high level service). The income for even the best providers… plummets. Finally, and we’re already witnessing this, dentists migrate from being employers to being employed, or they move to larger group practice settings, so practice equity may be lost, destroyed or never realized by those providers. Over the next decade, the number of new solo practices opening their doors will continue to drop as fewer graduates are willing or financially able to afford the high cost of a start-up practice. In a matter of 15 years or less, I predict under 40% of licensed dentists will be practicing solo.
Two past examples for you to consider: physicians and pharmacists. These largely and now formerly independent solo/small group practice professions have undergone a massive transition or disruption in the last twoplus decades.
Hospital consolidation and large scale employment of physicians by hospitals, retailization of both professions (Doc-in-a-Box & CVS/ Walgreens = Dentistry’s version of
Big Chain Dentistry), external market forces (multiple recessions and a stagnate economy), and governmental interference in the insurance and healthcare industries have all been dynamics responsible for the changes. Layer on a lack of interest from solo physicians and pharmacists in remaining independent, and it’s a forgone conclusion looking for data to back it up.
I won’t go into the details, but in short order both of these industries were turned on their heads nearly overnight.
According to Medscape.com’s Physician Compensation Report for 2016, 59% of male physicians are now employees, 72% of women are employees, and just 35% of males, according to the same survey, are in private practice. Just 23% of women are in private practice. What’s more, with the advent of the ACA (Affordable Care Act, a.k.a. Obamacare), solo practice in medicine has become increasingly difficult to maintain any profit margin due to reduced reimbursements and expanding overhead due to increased regulatory compliance.
My own GP/family practice physician in small town Albany, Oregon, last year, converted his practice from heavily insurance dependent to 100% private pay/concierge. He couldn’t be happier. He reduced his staff by half, lowered his prices and improved his margins. However, the transition was scary and caused a few sleepless nights for sure.
In Pharmacy, 65% work in retail settings. 22% work in hospitals, and the rest are spread among a myriad, to include mail order pharmacies and online pharmacies, private practice, etc.
This is the future of dentistry for most dentists:
• Employment, not business ownership;
• Limited earnings, not unlimited; and,
• Outcome-based compensation vs. compensation for delivery of care.
And, based on how the marketplace is reacting, most seem to be just fine with this change, since new dentists don’t know any different and existing solo practitioners are retiring.
Don’t get me wrong: there is in fact “good” that comes from disruption and consolidation like what we’re now seeing in dentistry. For one, it forces those who want to remain independent to run a more lean, profitable practice with a focus on the business side. No longer can a practice be a “hobby” in the vast majority of cases. In those same practices where survival and growth is the mandate, I do believe the level of customer service will rise. Outcomes for patient/guest care may well improve, too.
All this begs the question: how do you fight the forces that are at work decommoditizing your practice?
There are a number of steps to optout and de-link from the industry-wide process of commoditization. Here are a few ideas:
Spy on big dentistry
Take notice of what they are doing and why; these are smart folks running smart businesses. As an example, if they’re open more consumer-friendly hours, like evenings and weekends, shouldn’t you? If they are accepting PPOs, maybe you should, too? If they are training their teams on a weekly basis, like we do in my dental office, then perhaps you should, too? What do you think these three simple changes alone would mean to your practice’s net income? I’m betting yours would increase!
Exploit big chain Weaknesses
Every organization has chinks in their armor. Find your competition’s weaknesses and “sell” against those in your marketing. Example: If patients at Big Chains never see the same provider, in your ads, include, “You’ll ALWAYS have the same doctor providing your care, Dr. Simeon McCord… you’ll get to know Dr. McCord and the rest of the team and they will get to know you. You’ll immediately know why Chesterford Ranch chooses Wellness Springs Dental®. What’s more, when you arrive, you’ll ALWAYS be greeted by name!” Would changes like this impact your bottom line?
Leverage the Ace Formula
Probably one of the most powerful approaches I encourage people to engage in is using the ACE Formula, created by my friend and expert marketer, Matt Zagula. ACE is an acronym for Authority, Celebrity and Exclusivity. You want to be and remain your community’s #1 dentist not because you’re a dentist (WHAT you are), but because of WHO. A ‘Who’ is more important and will earn more than a ‘What.’ Dr. Oz doesn’t earn what he does as a physician because he’s a physician. He earns what he does because of WHO he is – a.k.a. celebrity at work. Odds are, he’s no better a physician than most. However, he has a massive media platform to leverage the ACE Formula!
As example, to differentiate, de-link and opt-out of being lumped in with every other dentist in your community, you must become the expert local media seeks when they need commentary on an oral health related story. Hate the limelight? Write a book. In all of your marketing, offer it for free to every new patient with his or her first appointment. The book alone will lower or completely eliminate fee resistance, position you as a celebrity, launch your “authority” status to the moon, and brand you as someone different, special, exclusive. Not to mention, your marketing will immediately appear different than other purely price-driven ads, and, you can focus on marketing your book vs. a new patient exam.
These are but 3 simple ideas to help you opt out of the changes we’re experiencing.
We know there is but one constant in our careers in dentistry: change. It’s how you deal with that constant – growing and adapting, or ignoring and suffering – that counts. You have in your power, the ability to adapt and improve your situation or complain. I’d encourage you to adapt. Review your business model. Look for new ways to grow your practice. It’s more profitable, more fun and less stressful. Plus, as you grow, you have an opportunity to drive your overhead lower and lower, thereby increasing your net income.
Mr. Jerry A. Jones is a two-plus decade industry veteran, practice marketer, author and dental office owner. His dental office franchise, Wellness Springs Dental® offers solo and small groups a solution to commoditization. Information is available at www.WSDFranchise.com. Reach Mr. Jones via email: jerry@jerryjonesdirect. com or call: 503-339-6000.
To learn more about how to De-Commoditize your practice, request a copy of Jerry’s 90-minute DVD/CD program, valued at $199, How To Fight Big Chain Dentistry & WIN! at www.BigDentistryTakeover.com.