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Getting confirmation of what you thought you knew isn’t always a welcome thing, but it’s a necessary thing.
In late July, the ADANews reported on the results of a study that showed several an alarming trend.
The earnings gap between dental practice owners and employee dentists is narrowing. In 2001-2005, the gap was roughly $23k – $39K. From 2011-2015, that gap shrank to $17K-$28K. Not only did the gap decrease in dollars, it decreased in range.
The article also noted that the percentage of dentists who own their practices is declining over time while the percentage of dentists in dental service organizations is increasing.
For the moment, dentist-owners are still doing better financially – what the article called the “ownership premium” – than other healthcare-related professions. That’s likely to change as the dental chains and DSOs continue to expand their footprint in the industry.
The Smart Money Says…
Your competition of the future will increasingly be able to take advantage of huge economies of scale to offer low prices for dental procedures. DSOs can and typically do offer lower prices for the same procedures than private dentists. That’s an edge that smaller solo and group practices will be even more hard-pushed to meet going forward.
That scenario plays out even during an economic downturn; history firmly shows that it’s inevitable that we’ll experience a contraction in the economy. When people aren’t working and money is very tight, low price rules as dentists saw during the Great Recession.
The smart money says that if you can’t compete on corporate’s playing field, maybe you should play on a different field. But it takes time to establish your own home-field advantage, so the time to begin is now.
Take the High Ground in Your Market
Dentistry has become a commodity business, but it wasn’t always that way and doesn’t have to be now. Any given market has a substantial percentage of prospects who have the means to go fee-for-service for elective dental procedures. In some markets, that segment constitutes 30 percent or more of prospects.
These “better” prospects can afford to be choosy, and they’re not overly concerned with the lowest price or what insurance will cover. Better prospects are the high ground in any market, and claiming that ground puts you on a level where the larger organizations can’t compete.
SmartBox provides a steady stream of better patients for our doctors allowing them focus on doing the dentistry they want on their terms. Our industry-leading Patient Attraction System® positions them as the dentist of choice for better patients in their respective markets.
SmartBox dentists can work less, earn more, and enjoy both dentistry and life.
Alvin Toffler, the author of “Future Shock,” famously wrote, “The future arrives too soon and in the wrong order.” Don’t wait to be blindsided.
If you’d like explore a future where DSOs and corporate dentistry are pretty much irrelevant to your success, let’s talk about it. The sooner you occupy the high ground in your market, the better.