Business
This Podcast is a continuation of the previous Podcast on the announcement of Aspen Dental opening locations in 2 Walgreens located in Florida. Please turn-in to that episode for those details. Briefly, in that episode, I reviewed data provided by the ADA which illustrated the changes occurring in dentistry, both in regard to 1) utilization, and 2) practice ownership. I also shared some distinct differences between dentistry and medicine, as it is proposed that as Medicine goes so goes Dentistry. Medicine is 5 times the size of dentistry, both in the number of providers as well as total expenditures. To equate them is an oversimplification of market forces. My takeaway points from that episode were the following: 1. The Utilization of dental care is changing. 2. The delivery setting of care is also changing as is the payment method. 3. Seniors are going to become an important driver of the dental care economy. 4. Cost, no teeth, fear, inconvenient location or time, trouble finding a dentist, as well as no perceived need are the greatest barriers. 5. Corporate dentistry as identified under-severed market segments and has created offerings to meet these needs. 6. 63% of adults do not see a dentist, that is a huge market of potential patients. 7. Your job is to make the “non-dental patient” into a patient in your practice. If we can do that there is plenty of care we call can deliver. 8. You can start by addressing the barriers in point #5; cost, fear, convenience, time, no teeth, no perceived value. 9. There is no canned, boiler-plate solution, each practice is different, with different markets and challenges. Finally, I disagreed with the following statement by the ADA: ... a lot more finance, data, marketing, and managerial expertise is going to be needed to run a successful dental practice. Will dental schools attempt to cram a mini–MBA into an already stretched dental school curriculum? Will dentists increasingly pursue training to improve managerial and organizational leadership skills? Or will we increasingly see the separation of clinical and management functions, with fewer dentists engaged in the business side, leaving that to people with MBA degrees? The ADA is convinced it will be primarily the latter. I will use this podcast episode to expand on this. A few years ago I was told by a friend and faculty member of a dental school, that his students didn't need to know anything about business because they are all going into corporate dentistry. This perspective was repeated again recently at a local dental society meeting I attended. Students should not feel they are ill-prepared to enter professional practice before they even start practice, or that their choices are limited. This, my friends, colleagues and listeners, we can not allow this to happen. Let's not make this into a self-fulling prophecy by ignoring the need for basic business skills in dental practice. Basic Business skills, well taught, will enable a greater standard of care to be delivered to each and every patient we serve. I am a dentist and oral surgeon who went back to school after nearly 25 years in practice to complete my MBA, so I can speak to this with some degree of expertise. Dentists are well capable of learning basic managerial and organizational skills needed to run their practices, an MBA is not required! It is dangerous for any organization to be overly influenced by a group think mentality. Effective organizations have a Devil's Advocate to guard against such. The Devil’s Advocate task is to bring forth alternative ideas even if they are unpopular, unliked, or in opposition to the powers that be. It is important that they are heard and considered. Dentists completely relinquishing all ownership and business functions to a Management Organization, ie, DSO is a rather extreme solution, especially when solutions exist that others practitioners have figured out. That’s why there are Business Coaches, Consultants, and Advisers as well as resources at the ADA to help educate practitioners about business practices. A Net Present Value Analysis reveals that over a 30-year dental career the difference in earnings between an owner dentist vs an employee dentist can be several million dollars. Do not freely and readily give up your greatest asset, your license! DSO's along with other Corporate Entities have done their financial analysis homework and know this, that is why they are capable of offering young dentists lucrative financial arrangements. They do this because they can! They know dentistry can be highly profitable so they can offer exceptional financial incentives. Remember, they haven't spent 8 years or longer in school to acquire the education and skills needed to gain a dental license, but you did!! Be aware of how financially valuable your license is, and never forget it! It is the greatest financial asset you have! It is also the greatest barrier to market entry! Without a license one is incapable of diagnosing, treating and then billing for services. An executive can not bill even one cent of revenue, yet can end up with even more financial incentives than the dentist working chair-side in the clinic. This just doesn’t seem right…just saying! A recent article in Healthcare Finance reports that the salaries of hospital executives nearly doubled, while physicians saw more modest increases. Between 2005 and 2015, average CEO compensation jumped from $1.6 million to $3.1 Million, an increase of 93 percent. Healthcare professionals saw 10 to 20% increases on average. Is this a good trend?? You be the judge and draw your own conclusion. I only hope this doesn’t for-tell similar disparities for dentists and dental practices as well. Comparing ourselves to medicine, the very best hospitals have Physicians as their CEO's, not Business Executives. Two of the nations best hospital systems, The Mayo Clinic, and The Cleveland Clinic have highly skilled Physician CEO's. And in fact, have been physician lead since their inception over a century ago! I believe there is a lesson there for all of us. Those that know best for the patient should be in charge. I love the quote by Dr. Toby Cosgrove, the past Cleveland Clinic CEO, who wisely and accurately states: "... it's easier to teach a doctor about business than it is to teach an MBA about medicine…” He couldn’t be more right!! An effective CEO or Practice owner does not need to know all the answers, nor should he!! The critical skill for an effective CEO is to be observant, ask the difficult questions and surround himself with a highly knowledgeable C-Suite of executives or consultants who can find those answers. Dentist leaders are uniquely qualified to bridge the gap between business and clinical practice. Because only they can see both sides, they can help their practices and organizations take outstanding care of their patients, while deploying resources and assets wisely. Remember our Tag Line to this podcast...... "It's not what you don't know that will hurt you, it's what you know for sure that just ain't so that will!” attributed to Will Rogers I am also reminded of the old saying, “he who pays the piper picks the tune!” He who controls the assets has the final say, always! You should be aware that there are other organization structures in addition to DSO's that enable one to maintain ownership and control while providing an experienced business team. The solo practitioner can create strategic alliances with a highly trusted team of coaches, consultants and advisers to provide the critical business knowledge necessary to guide your practice. Beyond the solo practice is a group practice. As the number of providers and locations increase a dedicated and professional administrative team can be better supported as well as afforded. Growing one's practice through a merger or acquisition of smaller, solo practices is a great tactic. These practices typically are owned by senior practitioners who have, over time, allowed their practices to contract by working fewer and fewer days. Acquiring these practices is a great win-win for both sides as the acquiring practice achieves growth at a very reasonable cost, and the selling practice has achieved a transition plan. Another alternative to DSO's is IPA's, no not the beer! IPA is an Independent Practice Association. In this structure, each practice in the Association remains independent. Practitioners join together within a legal structure that creates a management layer above all the practices. This management team, who represents a sizable number of practices, can better negotiate vendor contracts, insurance contracts, HR management, IT support as well as numerous other business functions. This entity may become more common in the future. Finally, one can seek out numerous educational opportunities to become more business savvy. Online classes, seminars, and books are just a few. The ADA has lots of practice management resources as well as webinars to provide excellent business and practice management education. The ADA Kellogg Executive Management Program in addition to the ADA Executive Program in Dental Practice Management is two more comprehensive programs offered to members. Please be sure to check them out. Consider the American Association for Physician Leadership too! It is how I began my formal business and leadership training. Dentists are welcome! The online courses are exceptional and highly relevant to practice. So to summarize our Take Home Points to Ponder are: 1. The delivery of dental care is changing. 2. Corporate along with Retail settings will continue to evolve. 3. The news of the demise of private practice, I believe is premature. 4. A dental license is your most valuable financial asset, it is extremely hard to obtain, only about 195,000 exist in the US. 5. Dentists know what is best for their patient, as such should be the ones in charge. 6. Dentists are well capable of managing their practices. 7. Consultants, Group practices as well as IPA's can help offload complex management functions. 8. Business knowledge, at a basic level, is readily attainable by everyone. Finally, If you are unsure how to accomplish any of these tasks, or don't know where to find such a team please reach out to us here at OmniStar Financial for guidance, we are experts in this! So that wraps things up for this Podcast. We hope that this information has created an “Ah Ha” moment, or stimulated some additional questions you can direct to your advisers. We welcome your inquiry here too at OmniStar Financial. Our contact information can be found on our website OmniStarfinancial.com . You will also find a link to sign up for our newsletter. Please share this podcast if you found it helpful, and leave a review on iTunes too. We welcome your feedback and suggestions for future podcast sessions. Thank you so very much for tuning in and listening. We are very grateful for your time and attention. references: https://doi.org/10.1016/j.adaj.2017.06.017 Practice Ownership is Declining, Sept 2017 JADA. https://success.ada.org/en/practice-management/dental-practice-success/spring-2014/shifts-in-utilization https://www.cms.gov/research-statistics-data-and-systems/statistics-trends-and-reports/nationalhealthexpenddata/downloads/highlights.pdf https://www.aegisdentalnetwork.com/news/2018/12/17/new-aspe-dental-office-opens-in-collaboration-with-walgreens https://www.ada.org/en/science-research/health-policy-institute/publications/infographics https://www.physicianleaders.org/ https://www.ada.org/en/publications/ada-news/2015-archive/may/2015-ada-kellogg-executive-management-program-registration-opens https://pmcertificate.success.ada.org/ https://www.healthcarefinancenews.com/news/salaries-hospital-executives-nearly-doubled-while-physicians-see-more-modest-increases?mkt_tok=eyJpIjoiTlRrNE1HTmxZbUkyWlRBMiIsInQiOiI2V3RPcE1FK1hDc2hSVkdBNkgyVVp1MkJHUHMwVkU0ZDlzRlcybGFyQWNWbEtSblhHZEttQUxvaXFaRXgyazZwTXRkTkd6YndscXlqUGhnU1R2TXorWnlkQnFlSVM2dnBDd1lvemdRVzVxcFprbWc1TFwvV25TamZXaE84S0o4UkQifQ==