Gary Wiser, DMD, MS, MBA
An essential commandment to observe in the decision-making world of business is that the benefit of your actions must exceed their cost. I have serious concerns that the benefits of the dental profession`s participation as providers of managed dental care are not even remotely correlated to the costs we incur. Dollar costs are easily measurable, so there can be little argument that dentists are providing hundreds of millions of dollars for the annual revenues of the managed care retailing companies, while receiving price controls in return.
The restrictive fees offered to the dental practitioners engaged in managed-care treatment have created multiple problems. Most obviously, more treatment must be provided for more patients to maintain satisfactory profit margins and many dentists are not adapting well to this basic transition. An additional and equally serious problem is the increasing consumer attitude to make dental-treatment decisions much like any other commodity purchase-i.e., totally price-driven with little or no regard for quality differences; differences which would be much more evident to the public with effective marketing techniques. A study of economic principles demonstrates the axiom of "maximizing utility." This principle defines the inherent need for every consumer to maximize his/her buying power to stretch income to the most satisfactory level. Dentists enjoy relating instances of patients leaving their practices for lower-cost insurance-based treatment and subsequently returning disenchanted, re-enlisting as "newly educated" patients of their practice. Based on the rapid growth of managed-care dental programs, it seems foolhardy, indeed, for the dental profession to expect a significant amount of patient reflow from these burgeoning managed-cost programs back toward indemnity-type services.
It is extremely important for each of us to understand that the principal objective of the managed-care retailing companies, being in most instances publicly-owned entities, is to maximize profits for their stockholders. It also is critical to recognize the source of these profits. The dental community provides the dental insurance industry`s profits as a direct result of its treatment efforts. Historically, the basic function of the insurance industry is to assume financial risks for its customers which the customer does not elect to assume. In the current managed dental-care environment, this risk has been transferred to the dentist. The dentist is responsible for providing the required patient services, and even though the loss of autonomy relegates the dentist basically to employee status, the managed-care company is concerned primarily with its profits, not the welfare of its employees, the provider dentists. Is it unreasonable for dentists to seek a better return from the dental insurance industry?
Most of us who have been practicing dentistry for a few years are well aware of two major weaknesses in our professional interrelationships-our divisiveness and our apathy. We would like our dental organizations and associations to carry the flag for us, but further reflection should demonstrate clearly the unrealistic nature of these expectations. Organized dental associations are not equipped to battle with multi-million-dollar insurance corporations. They lack the requisite financial resources, the expertise and the regulatory environment to assume the responsibilities for such actions. Many members of dental organizations are actively engaged in the provision of insurance-based managed care, and it is not within the parameters of organized dental groups to establish guidelines for proprietary treatment for their members or for the profession at large.
The present managed cost-dominated environment is having a detrimental effect on many dental practices. We are presenting little or no resistance to the dictums of the insurance industry. Our lack of cohesion presents the easiest of targets to their restrictive policies. The managed-care insurance companies perceive little or no threat from dentistry, as they pursue their annual goals of increasing profitability for their principal stakeholders-their corporate management, their stockholders and their employees. Realizing whatever actions we institute are subject to these constraints, what are the most viable options for our embattled profession?
At the outset, we must as unanimously as possible reject the continuation of the status quo! The dental profession has offered little or no meaningful competition to the actions of the managed-care insurance industry. It is time to utilize our competitive advantages to provide serious challenges to the retailers of managed dental-cost programs and to create more favorable alterations in the current delivery systems. What are our competitive advantages ?
Dentists provide hundreds of thousands of jobs, annually in this country, hiring business-office staff, chairside assistants and hygienists. Our prescriptions provide for the basic existence of the dental-laboratory industry, and we are the primary source of distribution for the dental-supply manufacturers. Dentists have direct relationships with accountants, attorneys, consultants and allied health-care professionals. Perhaps, our greatest strength is that we are well-regarded by the patients we serve, having earned their respect as a result of providing high-quality dental treatment and a consistent caring attitude for many generations. It is clear to see that dentistry has many probable allies, and we need not stand alone in a David vs. Goliath replay of Biblical history. Unfor-tunately, we have not consolidated our strengths in an effective manner.
Obviously, there are no simple solutions to the complex dental insurance dilemma. Our principal weaknesses-apathy and divisiveness-have been exploited easily by the insurance retailers. These weaknesses must be overcome for our strengths to become effective. Large-scale group unification, in combination with intensive, individual commitment, is required by dental practitioners to preserve traditional delivery systems and autonomous management for our profession. The time has come for dentistry to seriously consider the formation of its own corporation, with the expressed purpose of providing well-organized opposition to the directives and regulations imposed upon it by the dental managed-care retailers.
This dentist-owned corporation should eventually be national in scope for primary effectiveness, but must form at the grassroots, town by town, county by county and state by state. Cooperation at every level with organized dental associations is essential for success. However, the dental corporation will have definite goals and objectives, which will not overlap or restrict those of organized dentistry. The dental corporation primarily will be concerned in direct negotiation with the managed-care insurance industry for improving its fee structure and for promoting freedom of choice in the selection of its member dentists. Dentists who become shareholders in the corporation will believe that the long-term benefits to our profession will be better served by decreasing the number of capitation plans and closed panels. The dental corporation will advocate and work toward the continuation and the improvement of indemnity insurance and fee-for-service programs.
It is essential that this corporation enlist superior marketing expertise to clearly establish the message that high quality, caring dental treatment is not solely a function of price and cannot be purchased in the same thoughtless manner as one would buy a dozen eggs. This message must be brought before the public in general and the employee-benefit purchasers representing large groups of potential patients specifically. Many purchasing agents and corporate executives may not know that a thorough prophylaxis should take longer than five or 10 minutes, because dentistry has never explained sufficiently the benefits and the dangers to them.
For many years, the most popular complaint heard in the dental profession was the oversupply of dentists and the deleterious effect this expanded number of dentists has on the busyness of our individual practices. Maybe we have not been focusing on the side of the equation that can produce the most benefits. Let`s emphasize demand and pay less attention to supply. Why not increase the demand for dental services through more effective advertising? In general, dentistry has done an unsatisfactory job in educating the American public about the multiple benefits available to them via high-quality dental treatment. The second objective of the dentist-owned corporation will be to increase the number of people seeking dental care. People do not always buy what they need; they buy what they want! Immediate benefits will appear in many dental offices across the country as a result of effective advertising and media utilization.
As a consequence of studying the effects of successful media marketing, I have become a strong believer that an extremely high demand can be created where little or none existed prior to the inauguration of superior marketing efforts. An outstanding example is provided by the well-known DeBeers Company of South Africa, the world`s largest supplier of diamonds. Diamond engagement rings are very traditional in the United States and in many other countries around the world. They were virtually unheard of in Japan. The Japanese culture did not include the exchange of jewelry as a symbol of romance. You guessed it ! By carrying out a markedly-detailed marketing plan, DeBeers has created a most profitable new tradition in Japan. The diamond engagement ring now is a common announcement of love and impending marriage. If DeBeers can do it, why can`t dentistry?
Of course, our dental corporation will require funding. Stockholder dentists will have to pay franchising fees for the marketing campaign and for the administrative expenses involved in direct negotiations with the managed-care retailing companies and for the operations of corporate offices. Member dentists will benefit greatly from the increasing demand for their services and improved fee structures negotiated with the dental-insurance industry. As substantial membership increases, dental supply and business-office costs will be decreased as buying power becomes a more significant factor. The Federal Trade Commision (FTC) and the Justice Department should not be concerned with the dental corporation`s involvement in the "restraint of trade," because membership will not be unanimous or restrictive in any geographic area to any individual, group or study club. Although all dentists will be invited to become owner/stockholders, the independent characteristic of many dentists will preclude their personal election to participate.
Change in the business world is a constant. It is an inevitable event and must be anticipated and planned for properly to maintain equilibrium and harmony. Den-tistry`s actions to date in reaction to the managed-care programs have been largely ineffective, because the majority of us have lacked the required intensity and commitment to effect changes for the preservation of our profession. Dentists can no longer afford to reward the managed-care retailers at our expense. Time is passing rapidly, and it is not on our side. Each and every dentist must realize the threats and act appropriately. The future of the dental profession depends on our individual reactions-to gain strength we must coalesce and unify our efforts. Unified, we can present a formidable obstacle to managed-care growth; segmented and weak, we offer little resistance! Together, we can stand; divided, we are surely falling.
The author is president of Wiser Management, which offers multiple consulting services for health-care practitioners. He has practiced for the past 20 years in a corporate partnership structure involving multiple-office locations in Perrineville, NJ. Dr. Wiser may be contacted at 609-259-8850.
