The previous post in this series looked at dental service organizations and how their growth plays a role in driving down prices for solo practices.
The impact of DSOs is undeniable, but it’s not the strongest force impacting dentists’ bottom lines. That “honor” belongs to the dental insurance companies which have increasingly shifted more of the payment burden to patients.
The Wages vs. Prices Dilemma
By some estimates, the cost of providing dental care have risen by nearly 88% in the last ten years. Some of that increase has undoubtedly been driven by investments in more advanced diagnostic and imaging equipment as well as rising real estate values and rental costs.
Regardless, wages for earners have increased a fraction of that amount over the same period of time – barely keeping pace with inflation, if that. The upshot is that even basic dental services may be priced beyond the means of a large segment of your market.
Even patients with dental insurance are likely to choose only services that dentistry will cover, often foregoing needed procedures because they simply can’t afford it. In this scenario, the dentists offering the lowest out-of-pocket cost are the odds-on favorites to get more of those low-value patients.
Solo dentists will have to tolerate razor-thin margins to compete against DSO practices that benefit from enormous economies of scale. And with such low case values, those dentists will wind up working too hard for too long for too little. In fact, that’s the reality right now for too many private dental practices.
There’s another reality that most dentists aren’t happy to recognize. Declining insurance reimbursements won’t fund a good retirement. In fact, if you give the insurance companies and the DSOs enough time to chip away at your practice, retirement might become a difficult proposition.
Don’t Play A Rigged Game
The forces arrayed against you are enormous, but you don’t have to be a target. DSOs and chain practices market their services on price and availability because their structure and resources make those unbeatable advantages.
What about the patients who don’t much care about price? The ones that aren’t driven by what insurance will cover? The ones who can afford to pay more, and will, for the right dentist? Those patients are looking to establish a long-term relationship with dentist who like, relate to, and trust. Become that dentist for enough of these patients, and you’ve taken yourself out of the corporate crosshairs.
That’s not an easy thing for most dentists to do. Price- and insurance-based marketing is pretty much an ingrained mindset these days, and that approach is reflected on dentists’ websites, in their social media, and even in their paid ads.
You Need An Ally In This Fight
SmartBox works with thousands of dentists on three continents to help them get the better patients they need. SmartBox dentists can work less, earn more, and enjoy life outside their practices.
What SmartBox does for those dentists, we can do for your practice. With trying to sound alarmist, the time to act is now. If you read the previous article in this series, you know that DSO penetration is anticipated to reach 30% by 2021. Taking and holding the high ground in your market – better dental patients – will give you an impregnable position.
Get started by reserving your Roadmap call. It’s a free, no-obligation consultation that will show you what’s possible for your practice. Following the call, you’ll receive your customized Roadmap to success.