You are not Equivalent

[DentinBond]

The concept in economics known as Bertrand Competition goes like this:

Two or more firms are producing equivalent products or services.
The various firms do not cooperate in any way.
The various firms compete by setting prices simultaneously.
There is often a geographic restriction; in other words, the various firms are localite. Dentistry is like this. While I can very well go on Amazon and order an exotic product that's made three continents away, my dentist has to be within reasonable travel range of my home and my business. Thus, dentistry is, for the most part, geographically limited.

Then, the key assumption of Bertrand Competition is that consumers will buy from the firm with the lowest price. And why wouldn't they? It's only logical.

When firms engage in Bertrand Competition, they engage in a race to the bottom on price. And thus, on cost. The firm with the lowest unit cost of production can offer the lowest price per product or service sold, and thus will, theoretically and often practically, totally win on volume.

This, as you will have concluded already, is corporate dentistry.

More than that, many dentists in private practice also engage in a race to the bottom because they see others doing it; and further, they observe so many large corporations racing to the bottom in all sectors of the economy that they start to believe this is the normal state of capitalism.
They see Walmart ruthlessly kill their local Al's Hardware, and they start to race to the bottom themselves. After watching what happened to good ol' Al, they can't help it. It feels like the only way to avoid the same horrible fate.

Of course, the problem with a race to the bottom is: you might win.

It's actually surprisingly unlikely, though. There's always someone more merciless, more brutal, more willing to abuse employees and over-treat patients and cut costs with cheap labs and do a thousand other beastly things that are quite simply unacceptable to you. That's the brutal person, or the brutal faceless corporate business entity, who wins the race to the bottom--not you.

(Hint: Coming in second in the race to the bottom is probably the absolute worst outcome we can achieve.)

We know that industrialists seek to squeeze every penny out of every market. We know that corporate dentistry wants to drive their costs as near to zero as they can get so that they will be the obvious commodity choice. We also know that corporate dentistry aims to over-treat in the pursuit of maximum profit.

Should you be afraid of all this? Should a young dentist give up on their dreams of independent business ownership because, in essence, they see the game as one of Bertrand Competition, which is one they cannot win?

The answer is a resounding NO.

The answer is NO because, as I reviewed at the beginning of this post, a race to the bottom assumes that:
"Two or more firms are producing equivalent products or services."
That's the part you probably missed.

My colleagues, each one of you here is *NOT EQUIVALENT*.

You are unique.

You are a highly trained professional, each with your own special, unique, irreproducible, bespoke contributions to make to your community and to our profession.

You are not equivalent. We need your contribution. We need your innovation. We need your generosity. Go forth and be confident.

Race to the top.

 

[BioTic]

This is the one thing I've disliked about dentistry. There are so many dentists and you're all competing against each other. Not only is this a health field, but also a business. I've never been fond of that. Glad I saw your post.

 

[wengerout]

This is the one thing I've disliked about dentistry. There are so many dentists and you're all competing against each other. Not only is this a health field, but also a business. I've never been fond of that. Glad I saw your post.

I'm pretty sure every health field is a business (at least in the current system in the US).


Sent from my iPhone using SDN mobile

 

[BioTic]

I'm pretty sure every health field is a business (at least in the current system in the US).


Sent from my iPhone using SDN mobile

That's not what I meant. I meant in terms of a dentist working in a private clinic where he needs to get patients as opposed to a physician working in the hospital. One basically needs to sell himself to get new patients, whereas the other just needs to know how to do their job.

 

[nuk]

I agree with most of your contents except the last line. Why "race to the top"?

Many people can live happily ever after without being at the top.

 

[DentinBond]

Nuk, good question.
To clarify, I do not mean top in terms of money, or profit, or size of practice.
I mean top in the sense of the opposite of a race to the bottom on cost and volume.
Top in the sense of excellence, personal honor, accurate diagnoses, great treatment outcomes, solving oral health problems for the human being who stands (or sits!) before us, impact on the community in which the practice resides, and generosity of spirit.
That kind of top.

 

[Str82th]

Excellent post. I hope it is read by many.


Sent from my iPhone using SDN mobile

 

[setdoc7]

Dentistry is big business. Although I agree that corporate structure is geared toward the lowest price and highest volume, dentists must keep a watchful eye on the bottom line of their private "small business" offices. The same business rules apply to the private office, but under a smaller scope. Unfortunately, most dentists are not good business people, as they have little basic training in running a "small business". Whether you are selling a Maserati or a Ford, the same rules apply. Watch your money.

 

[2TH MVR]

That's not what I meant. I meant in terms of a dentist working in a private clinic where he needs to get patients as opposed to a physician working in the hospital. One basically needs to sell himself to get new patients, whereas the other just needs to know how to do their job.

1st off. Great read. Probably why Amazon is going to own everything in time. Yes ... there will always be a market for those who differentiate themselves from everyone else, but this is not as easy as it sounds. For years I prided myself on providing personalized care in a very comfortable environment. Being a people person ... I interacted with all my patients and developed rapport. As the years went by ... I always thought that my reputation as a very good orthodontist, good communicator with the GPs, and my superior bed-side manners and humor would lead to more and more new patients walking into my office.

Nope. Didn't happen. Why? I'm not a salesperson. This is the part that I HATE. The idea that I have to attract patients and SELL them on my superior work over the other numerous competitors: Corp, DSO, Pedo, GPs, Invisalign, Etc. Etc.

Again, it is not easy to "differentiate" yourself if you're practicing in an urban, popular area with tons of GPs and Corp/DSO factories.

I work 3 days a week in a Corporate office. I work 3 days a week in my private practices. I have perspective. Here's the scary part:

1. The Corp office has better software than I do. I cannot afford to update my hardware and software as often as the Corp office can.
2. The Corp fees (ortho) is almost the SAME as my private fees. My private practice is located in a blue collar part of town. Our fees are reflective of that blue collar theme. I was actually shocked to see how high the Corp Ortho fees are; and they charge in house interest on loans longer than 24 months to offer the ever-popular "$99 per month for braces". They can afford to do this. I cannot. I am not a bank.
3. OP suggests that Corp offices over-treat. Guess what? I'm pretty sure that there are a lot of private practice dentists trying to pay their large student debt, practice loans, car loans/leases, etc. etc. that may have recommended a more invasive high profit procedure than a conservative one.
4. Speaking for Ortho tx in the Corp setting. Can't over sell it. Patients can SEE their crooked front teeth.

One last mental thought: doesn't it suck that a dentist has to differentiate themselves from the Corporate Slime and also ...... your own colleagues. Therefore ... if you're successful .... that means your surrounding colleagues will be failing. There is only 1 pie that can be divided in so many pieces. I get it ..... that's BUSINESS. Not necessarily what I signed up for.

 

[DentinBond]

...... Here's the scary part:

1. The Corp office has better software than I do. I cannot afford to update my hardware and software as often as the Corp office can.
2. The Corp fees (ortho) is almost the SAME as my private fees. My private practice is located in a blue collar part of town. Our fees are reflective of that blue collar theme. I was actually shocked to see how high the Corp Ortho fees are; and they charge in house interest on loans longer than 24 months to offer the ever-popular "$99 per month for braces". They can afford to do this. I cannot. I am not a bank.
3. OP suggests that Corp offices over-treat. Guess what? I'm pretty sure that there are a lot of private practice dentists trying to pay their large student debt, practice loans, car loans/leases, etc. etc. that may have recommended a more invasive high profit procedure than a conservative one.
4. Speaking for Ortho tx in the Corp setting. Can't over sell it. Patients can SEE their crooked front teeth.

One last mental thought: doesn't it suck that a dentist has to differentiate themselves from the Corporate Slime and also ...... your own colleagues. Therefore ... if you're successful .... that means your surrounding colleagues will be failing. There is only 1 pie that can be divided in so many pieces. I get it ..... that's BUSINESS. Not necessarily what I signed up for.

2TH MVR, being a general dentist, I've always wondered about "Patients can SEE their crooked front teeth." It does seem to lead to increased transparency in diagnosis and treatment. And patients who are in an orthodontic office--they generally want ortho treatment before they even appoint, no? So the whole dynamic feels more transparent than general dentistry, and less prone to over-treatment.

I, too, wonder about the pie. Perhaps it is only so large. And yet ... perhaps not. There are certainly a vast number of Americans--some assert as high as 50%--that do not see a dentist regularly. As we know, caries, perio, misaligned teeth--all of these conditions get only worse with time. None are static, and certainly none spontaneously heal. It is probable that if all these folks decided to seek care at the same moment, that pie would explode to the point we'd never be able to keep up with the demand. Maybe I'm too optimistic, but I choose to see the dental pie as expandable.

There's one other thing that nags at me. To paraphrase the legendary Dr. McCoy, "I'm a dentist, not an economist." Still, I have slowly become convinced that there are two distinct branches of capitalism. Corporate capitalism is the first. Corporations build world-changing products and services, of course, and for that I am profoundly grateful. The computer I'm typing on; cars and roads; life-saving drugs and medical devices; the list is endless. Corporations have shaped our modern world.

Yet the capitalism of the corporation obeys a bizarre set of rules, and corporate behavior is often spectacularly harmful to the human beings in the landscape around them. Enron, Big Pharma fines that run into the multi-millions, Volkswagen's emissions scandal, the shenanigans at Wells Fargo, continued pollution with carcinogens ... really damaging stuff. Why do they behave so awfully? Corporations are obligated by their charters to maximize profits for their shareholders, and no other consideration is allowed to trump that one. If, for example, an oil company CEO decides not to drill in a sensitive environment in Alaska, which would also displace an indigenous people, that CEO will be summarily fired and another one found who will get the job done. The goal of maximizing profit for shareholders overwhelms all else.

There's no commonly used term for the other form of capitalism that I've come to believe exists, so I call it bespoke. This word, used less than it should be, means custom-made, personal, non-anonymous; all things bespoke carry the indelible stamp of the maker.

Bespoke capitalism, to me, is the pure capitalism of the Adam Smithian world of the village. The localite network, where people build relationships that often last a long time. Bespoke capitalism rewards transparency, generosity and ethical business behavior, and often violently punishes opacity, selfishness and poor ethics.

In other words--have you ever been on the wrong end of a bad Yelp review? Nowadays, everyone in the village suddenly owns a newspaper of their own ....

But this is precisely why I remain optimistic. Above all else, I'm mighty glad I chose a profession where we can remain, if we so choose, in the realm of the bespoke. Many of us in dentistry have a rebellious spirit, and the corporate world is tough on a rebellious spirit.

Somewhere in all his writings, and I regret that I forget where, Seth Godin asserted that a small business (which I take to be a bespoke one) has only two choices if it seeks success:
(1) Delight people, and
(2) Solve their problems. The more interesting the problem, the better.

In dentistry, we can certainly do (1). With a well-trained staff, good people skills, a supportive atmosphere in the face of the stress patients feel about dental treatment--this is a vast area for growth. And (2) occurs every time we solve physical or esthetic pain, and probably a lot of other times too.

At the moment, in my practice I'm actually experiencing great hygiene busyness but rather severe doctor un-busyness. We seem to have treated people to the point where, on average, their needs have decreased. One of the ethical solutions of course is to figure out how to meet more people who need us. Facing the trauma of not being busy, I plan to seek more folks who need what we do and then (1) delight them and (2) solve their interesting problems. That always works in the end.

 

[pookatooth]

2TH MVR, being a general dentist, I've always wondered about "Patients can SEE their crooked front teeth." It does seem to lead to increased transparency in diagnosis and treatment. And patients who are in an orthodontic office--they generally want ortho treatment before they even appoint, no? So the whole dynamic feels more transparent than general dentistry, and less prone to over-treatment.

I, too, wonder about the pie. Perhaps it is only so large. And yet ... perhaps not. There are certainly a vast number of Americans--some assert as high as 50%--that do not see a dentist regularly. As we know, caries, perio, misaligned teeth--all of these conditions get only worse with time. None are static, and certainly none spontaneously heal. It is probable that if all these folks decided to seek care at the same moment, that pie would explode to the point we'd never be able to keep up with the demand. Maybe I'm too optimistic, but I choose to see the dental pie as expandable.

There's one other thing that nags at me. To paraphrase the legendary Dr. McCoy, "I'm a dentist, not an economist." Still, I have slowly become convinced that there are two distinct branches of capitalism. Corporate capitalism is the first. Corporations build world-changing products and services, of course, and for that I am profoundly grateful. The computer I'm typing on; cars and roads; life-saving drugs and medical devices; the list is endless. Corporations have shaped our modern world.

Yet the capitalism of the corporation obeys a bizarre set of rules, and corporate behavior is often spectacularly harmful to the human beings in the landscape around them. Enron, Big Pharma fines that run into the multi-millions, Volkswagen's emissions scandal, the shenanigans at Wells Fargo, continued pollution with carcinogens ... really damaging stuff. Why do they behave so awfully? Corporations are obligated by their charters to maximize profits for their shareholders, and no other consideration is allowed to trump that one. If, for example, an oil company CEO decides not to drill in a sensitive environment in Alaska, which would also displace an indigenous people, that CEO will be summarily fired and another one found who will get the job done. The goal of maximizing profit for shareholders overwhelms all else.

There's no commonly used term for the other form of capitalism that I've come to believe exists, so I call it bespoke. This word, used less than it should be, means custom-made, personal, non-anonymous; all things bespoke carry the indelible stamp of the maker.

Bespoke capitalism, to me, is the pure capitalism of the Adam Smithian world of the village. The localite network, where people build relationships that often last a long time. Bespoke capitalism rewards transparency, generosity and ethical business behavior, and often violently punishes opacity, selfishness and poor ethics.

In other words--have you ever been on the wrong end of a bad Yelp review? Nowadays, everyone in the village suddenly owns a newspaper of their own ....

But this is precisely why I remain optimistic. Above all else, I'm mighty glad I chose a profession where we can remain, if we so choose, in the realm of the bespoke. Many of us in dentistry have a rebellious spirit, and the corporate world is tough on a rebellious spirit.

Somewhere in all his writings, and I regret that I forget where, Seth Godin asserted that a small business (which I take to be a bespoke one) has only two choices if it seeks success:
(1) Delight people, and
(2) Solve their problems. The more interesting the problem, the better.

In dentistry, we can certainly do (1). With a well-trained staff, good people skills, a supportive atmosphere in the face of the stress patients feel about dental treatment--this is a vast area for growth. And (2) occurs every time we solve physical or esthetic pain, and probably a lot of other times too.

At the moment, in my practice I'm actually experiencing great hygiene busyness but rather severe doctor un-busyness. We seem to have treated people to the point where, on average, their needs have decreased. One of the solutions of course is to figure out how to meet more people who need us. Facing the trauma of not being busy, I plan to seek more folks who need what we do and then (1) delight them and (2) solve their interesting problems. That always works in the end.

I really enjoyed reading this. It speaks to how with corporatism and its economies of scale, there will always be externalities that are pushed off in order to appear as the cheapest/best service when in actuality some sector of the economy is taking a hit. With a local mindset, the community becomes intertwined with the conception of the economy and therefore more care must be taken towards appeasing both ends. I think that globalism begets corporatism (or any larger sphere of economic influence gives advantage to a corporate model.)

Are you by any chance practicing in a rural area or area with minimal competition? I feel as if your "bespoke capitalism" know can only apply in certain areas of the country.

 

[DentinBond]

I really enjoyed reading this. It speaks to how with corporatism and its economies of scale, there will always be externalities that are pushed off in order to appear as the cheapest/best service when in actuality some sector of the economy is taking a hit. With a local mindset, the community becomes intertwined with the conception of the economy and therefore more care must be taken towards appeasing both ends. I think that globalism begets corporatism (or any larger sphere of economic influence gives advantage to a corporate model.)

Are you by any chance practicing in a rural area or area with minimal competition? I feel as if your "bespoke capitalism" know can only apply in certain areas of the country.

Thanks, Pookatooth.
Actually, I practice in Philly.
Philly, though, is famously a city of neighborhoods. ;}

 

[2TH MVR]

@DentinBond
You have some exceptional writing skills.

I think every one of us would love to do "Bespoke" treatment. In order to do this type of ideal treatment .... you have to be practicing in an area where there are many above income, relatively high dental IQ patients available. So you start your practice in one of these high profile, sought after locals and set up your practice. Well ... that practice had better be furnished to the nines and have the appeal that is representative of that area. This will cost more $$$ than if you opened up a mom and pop small office in a blue collar area.

Since that area is so "attractive" ..... there will be more dentists and DSOs that will move into that area. I've seen it. I happen to live in a very nice, upscale, area. Been there for 17 years. I do not practice where I live. I've seen many,many practices open and fail. The pie is only so large. The upscale, popular areas are going to be the 1st to be over-saturated. So these dentists start to "sell" free bleaching, etc. etc.

I chose a blue collar neighborhood and now I compete with Corp offices who offer $99/month braces.

I wrote another post where I stated that a person should practice in an area where they want. That worked for me 15 years ago. But smart money says that you should do some homework. Find a small rural area/town with a few large stable employers (Google, Amazon, Apple, Tesla, Etc etc.) that are local. Locate where it is easy for people to find you (close proximity to the factories, business). Offer sat and even hours. Offer reasonable fees.

 

[FeralisExtremum]

I chose a blue collar neighborhood and now I compete with Corp offices who offer $99/month braces.

I think you mentioned earlier this isn't a price point you can compete with in your private practice - out of curiosity what is the cost (to you) per month for a patient?

 

[2TH MVR]

I think you mentioned earlier this isn't a price point you can compete with in your private practice - out of curiosity what is the cost (to you) per month for a patient?

For an orthodontist ... it's all about volume of patients seen in a day. In the "good ole days" I had 4 ortho assts in the back and 4-5 employees in the front. We saw anywhere between 80-100 patients daily. Monthly fees back then were around $200 per month not including down payments and insurance payments. 100 pts X $200 = $20,000 per day. More than enough to provide myself with a great salary and pay the overhead.

Now: 2 ortho assts and 2 front office. We see about 30-40 patients a day. Not by choice. Things are just slower now For myself. Can't speak for the other orthos. Due to fewer FFS patients, less busyness, reduced insurance reimbursements, and increased PPO/HMO patient participation. You see where this is going.

To answer your question. I cannot survive on $99/month payments unless I were seeing 100 patients a day.

 

[DentinBond]

@DentinBond
You have some exceptional writing skills.

I think every one of us would love to do "Bespoke" treatment. In order to do this type of ideal treatment .... you have to be practicing in an area where there are many above income, relatively high dental IQ patients available. So you start your practice in one of these high profile, sought after locals and set up your practice. Well ... that practice had better be furnished to the nines and have the appeal that is representative of that area. This will cost more $$$ than if you opened up a mom and pop small office in a blue collar area.

Since that area is so "attractive" ..... there will be more dentists and DSOs that will move into that area. I've seen it. I happen to live in a very nice, upscale, area. Been there for 17 years. I do not practice where I live. I've seen many,many practices open and fail. The pie is only so large. The upscale, popular areas are going to be the 1st to be over-saturated. So these dentists start to "sell" free bleaching, etc. etc.

I chose a blue collar neighborhood and now I compete with Corp offices who offer $99/month braces.

I wrote another post where I stated that a person should practice in an area where they want. That worked for me 15 years ago. But smart money says that you should do some homework. Find a small rural area/town with a few large stable employers (Google, Amazon, Apple, Tesla, Etc etc.) that are local. Locate where it is easy for people to find you (close proximity to the factories, business). Offer sat and even hours. Offer reasonable fees.

Thanks, 2TH MVR. For my midlife crisis, I wrote a novel. I actually wrote a novel that explores the tension between corporate and bespoke capitalism. That's where these thoughts all come from. And what I learned in the process is--writing a novel definitely has the effect of improving one's communication skills.

I've always thought that geography and the socioeconomic status of the human beings within a certain geography determines a lot about the form of a dental practice. So what you assert above really resonates with me. I also always figured that urban practice (like mine) has the advantage of high density of population, and that rural practice has the advantage of low density of dentists. I always wondered how a suburban dentist could get on, since there might be quite a few practices nearby and just not as many new people moving into the area. I wondered, wouldn't a suburban dentist have the hardest time meeting new patients to make up for the ones who become very healthy, the ones who move away, and those patients who pass away? And yet many suburban colleagues seem to do just fine.

And then there are speakers like Dr. Dick Barnes, who always talks about how he built an extremely successful practice in the most downtrodden town. I mean, there were no jobs, a chronic drought and tumbleweeds were blowing through deserted streets, and the man was doing full arch crown and bridge.

Sigh. Geography is all probably a lot more complicated that I realize ....

 

[2TH MVR]

I think we can all agree that there are a lot of variables involved.

 

[charlestweed]

That's not what I meant. I meant in terms of a dentist working in a private clinic where he needs to get patients as opposed to a physician working in the hospital. One basically needs to sell himself to get new patients, whereas the other just needs to know how to do their job.

As a dentist, I can choose who I want to and don't want to treat. As a physician, you can't deny to treat the patients even when they don't have insurance and can't pay you. And if you make mistake, they can still sue you even when they don't pay you a dime for your service. This is the problem my cousin, who is an MD anesthesiologist, is facing everyday and he wishes he has a job like mine.

 

[charlestweed]

Most private dental offices don't accept medicaid and HMO plans. Where do you expect the patients, who have medicaid and HMO plans, to get their dental tx done at? I've seen so many parents who love their orthodontists (who did excellent work on their older kids) but have to leave them and bring their younger kids to see me, an orthodontist who works for the corporate office. That's because they switched to HMO plans and their dentists/orthodontists don't accept these plans.

2THMVR is right. There are plenty of private dental practices that overtreat and are much worse than the coporate offices.

 

[charlestweed]

For an orthodontist ... it's all about volume of patients seen in a day. In the "good ole days" I had 4 ortho assts in the back and 4-5 employees in the front. We saw anywhere between 80-100 patients daily. Monthly fees back then were around $200 per month not including down payments and insurance payments. 100 pts X $200 = $20,000 per day. More than enough to provide myself with a great salary and pay the overhead.

Now: 2 ortho assts and 2 front office. We see about 30-40 patients a day. Not by choice. Things are just slower now For myself. Can't speak for the other orthos. Due to fewer FFS patients, less busyness, reduced insurance reimbursements, and increased PPO/HMO patient participation. You see where this is going.

To answer your question. I cannot survive on $99/month payments unless I were seeing 100 patients a day.

Yup, in order to survive on $99/month payments, you have to treat high volume with the help of a lot of assistants. And the only way for you to see 100 patients/day without having to increase the overhead is to hire part time chairside assistants, who only show up for work on the days that you have patients.

There is a silver lining in every cloud. It's much easier to find the part time assistants in more populated areas, where there are a lot of GP, ortho and corporate offices. It's much harder to find part time assistants, who are willing to work 2-3 days per month, in more rural areas.

2TH MVR, I really enjoy reading your posts. You should join the Orthotown forum.

 

[2TH MVR]

Thanks Charlestweed. Just some reality for new residents to read. Lest I sound negative or resembling my avatar ..... bottom line: orthodontics/dentistry has been great for myself and my family. It's a great profession. Overachievers and hard workers typically pick dentistry as a profession and I'm sure those attributes will carry over for these residents once out of school.

Orthotown is a good read. I don't have time for any more forums LOL. I'm already on 4-5 Sport car forums which is my passion.

 

[HarryEvans]

Good to know!

 

[DentinBond]

It might very well be useful to share some thoughts on the various ways in which patients view dentistry, and for the general case, the various ways in which consumers see ... everything.

First, though, let me acknowledge that dental insurance has the potential to skew every assertion I make, in ways that, even after all these years, I do not fully comprehend. So before we start--yes, dental insurance can skew and alter and negate and invalidate the conclusions I've drawn. Even so, we need to understand how things work in a totally free market before we layer in the effects of the many forces that restrict that market. It's like learning physiology before pathology.

So. Careful observation over long periods of time has led me to conclude that each and every product and service devised by the artifices of mankind can be viewed by consumers along a spectrum, that runs from a pure commodity on the one end to purely bespoke on the other end. Recall that bespoke means custom-made, personal, non-anonymous; all things bespoke carry the indelible stamp of the maker.

Paper towels are a good example of a commodity. Oh, Bounty may indeed absorb more water and be softer than generic paper towels, and I do tend to buy that brand, but really, disposable absorbent paper is disposable absorbent paper. Many view gasoline as a commodity as well. There may be brand loyalty here and there, but mostly, motorists buy gas at the cheapest price they can. There are even apps for this. We can go even further with our examples. Bulk containers of grain or oil or chemicals are, literally, commodities. Economists actually call them that.

Now consider the couch.

-One guy buys a couch totally on the criterion of cost. He's rather bohemian, doesn't plan ahead in life, makes a low salary and simply wants a couch at the lowest price to be had.

-A newly married couple buys a couch and coffee table from Ikea. Now, we could assert that, since an Ikea couch and coffee table are mass-produced and fairly simple, that they are a commodity. And yet. This newly married couple brings their couch and coffee table home, downs a bottle of wine, has a grand old time assembling their swag, laughing all the way through the process, and then they invite their friends over to break in their new couch and watch the big game--and memories are made. The form of the couch may be that of a commodity, and the function is still that of a couch--but this couple layered their own meaning onto their couch that transformed it in some indefinable way. To them, it was no longer a commodity.

-A middle-aged couple who has been doing pretty well engages a local skilled artisan and pays ten thousand dollars for a custom-made couch and coffee table. It's bloody amazing. Heck, there's even a built-in joystick that controls a robotic cart that fetches the single-malt scotch from their liquor cabinet. This little beastie is a Couch, capital C.

-A venture capitalist searches high and low and finally finds, and pays twenty-five thousand dollars for, a vintage Paul Frankl couch and coffee table. It's a work of art, and no sane person would deny that Frankl's masterpiece from the 1920s is fully bespoke, and not in any way shape or form a commodity.

Services count as well as products. You can get an oil change from Jiffy Lube, who has scaled the process of an oil change so that it's as cheap (and anonymous) as possible. And yet somewhere out there, there's another venture capitalist of a certain age who has struck a deal for fifty thousand dollars with 70s pop icon Barry Manilow, to custom-write a song for his daughter's wedding. And another fifty grand to perform it on the happy day. We may question this chap's judgment, and perhaps his very sanity--but we all can agree that this contract for a custom-written song is as bespoke as it gets.

Do you see how this works? Everything--everything--made by human artifice exists along a spectrum. Some products and services, most people approach as a commodity. Other products and services, most people approach as bespoke--and, often, they are expensive. Yet other products and services engender complex mixed reactions, and folks layer their own meanings onto them, which leads to the complexity.

When it comes to complex, mixed reactions, cars and the iPhone come to mind. Technically, a car is a commodity--it's mass-produced on a vast scale. Yet we spend a lot of time in our cars, and some of us grow extremely attached to them. You may have seen someone wistfully talk about their first ride; some people actually get tears in their eyes when they reminisce over the car they drove in their youth. Others, though, just view their car as a means to get from A to B. And the iPhone may, again, technically be a commodity. Apple makes hundreds of millions of them. For many of us, though, our smart phone is our primary connection to the wider world. We can reach any friend in an instant, order anything from anywhere, read reviews of things before we try them, and employ any of millions of apps to accomplish things we could never accomplish so easily before. With these two examples, I want to show again that we place our own meaning onto what are technically commodities, and in doing so, we transform them and we view them as at least somewhat bespoke.

Also, it is worth noting that none of us, unless we are exceedingly rich, can treat everything in our lives as custom and bespoke. We have to make a choice due to the limits of our resources, so we pick and choose. We all end up having our own personal ideas of what should be a commodity and what should be bespoke.

Dentistry, which is a complex mix of products and services, is no different than anything else in this regard.

Now, many of us are surprised to find that some percentage of patients purchase dentistry solely on the basis of cost. That's their over-riding criterion. We are gobsmacked, flummoxed and insulted even, that some moron would blatantly ignore our superb crown margins, our flawless endo post-op films and our engaging bedside manner. How dare they! Plus, it's illogical--this is the human body we're talking about! How can someone take risks with their own body just for a few bucks?

A branch of social science called Diffusion of Innovations has incredible insights for us into the characteristics of the people who think in this way. I can post on it later if there is interest. For now, I have some advice for those dentists whose goal is to own their own practice--

Don't worry about those patients who view dentistry as a commodity. Treat them when they let you treat them, of course. But don't fret when they walk away for something cheaper.

When you meet the many other people who want the best for themselves, who view dentistry as something personal and to be valued, then knock their socks off with an amazing patient experience and rest assured in the knowledge that such people are far more likely to talk about your practice than those who view you as a commodity. Every person who you listen to and treat as the most important person in your professional life at that moment of diagnosis or treatment is a person who is ready and willing to be your megaphone. Let them do much of your marketing for you.

The other, even darker thing about dentistry and this spectrum we've been talking about is that dental management corporations are perfectly capable of commoditizing what should not be commoditized--you.

What I mean by this is, a human being who has completed eight, nine or more years of extraordinarily complex education and who now has the capability to be a vital part of a community and its health is not a commodity, not for any reason, not under any circumstances.

I personally am moderately annoyed when a patient views us as a commodity. But I'm positively outraged that a corporation could view me, and you, and you as interchangeable, disposable and temporary.

How dare they?

I'm not sure what to do about all this. I do know this though--there will always be a place, a significant place, for the private practice of dentistry in America, and each young doctor who strives for it weakens those corporations who aim to turn us into interchangeable, anonymous parts in a vast industrialized profit machine.

 

[Kurk]

It might very well be useful to share some thoughts on the various ways in which patients view dentistry, and for the general case, the various ways in which consumers see ... everything.

First, though, let me acknowledge that dental insurance has the potential to skew every assertion I make, in ways that, even after all these years, I do not fully comprehend. So before we start--yes, dental insurance can skew and alter and negate and invalidate the conclusions I've drawn. Even so, we need to understand how things work in a totally free market before we layer in the effects of the many forces that restrict that market. It's like learning physiology before pathology.

So. Careful observation over long periods of time has led me to conclude that each and every product and service devised by the artifices of mankind can be viewed by consumers along a spectrum, that runs from a pure commodity on the one end to purely bespoke on the other end. Recall that bespoke means custom-made, personal, non-anonymous; all things bespoke carry the indelible stamp of the maker.

Paper towels are a good example of a commodity. Oh, Bounty may indeed absorb more water and be softer than generic paper towels, and I do tend to buy that brand, but really, disposable absorbent paper is disposable absorbent paper. Many view gasoline as a commodity as well. There may be brand loyalty here and there, but mostly, motorists buy gas at the cheapest price they can. There are even apps for this. We can go even further with our examples. Bulk containers of grain or oil or chemicals are, literally, commodities. Economists actually call them that.

Now consider the couch.

-One guy buys a couch totally on the criterion of cost. He's rather bohemian, doesn't plan ahead in life, makes a low salary and simply wants a couch at the lowest price to be had.

-A newly married couple buys a couch and coffee table from Ikea. Now, we could assert that, since an Ikea couch and coffee table are mass-produced and fairly simple, that they are a commodity. And yet. This newly married couple brings their couch and coffee table home, downs a bottle of wine, has a grand old time assembling their swag, laughing all the way through the process, and then they invite their friends over to break in their new couch and watch the big game--and memories are made. The form of the couch may be that of a commodity, and the function is still that of a couch--but this couple layered their own meaning onto their couch that transformed it in some indefinable way. To them, it was no longer a commodity.

-A middle-aged couple who has been doing pretty well engages a local skilled artisan and pays ten thousand dollars for a custom-made couch and coffee table. It's bloody amazing. Heck, there's even a built-in joystick that controls a robotic cart that fetches the single-malt scotch from their liquor cabinet. This little beastie is a Couch, capital C.

-A venture capitalist searches high and low and finally finds, and pays twenty-five thousand dollars for, a vintage Paul Frankl couch and coffee table. It's a work of art, and no sane person would deny that Frankl's masterpiece from the 1920s is fully bespoke, and not in any way shape or form a commodity.

Services count as well as products. You can get an oil change from Jiffy Lube, who has scaled the process of an oil change so that it's as cheap (and anonymous) as possible. And yet somewhere out there, there's another venture capitalist of a certain age who has struck a deal for fifty thousand dollars with 70s pop icon Barry Manilow, to custom-write a song for his daughter's wedding. And another fifty grand to perform it on the happy day. We may question this chap's judgment, and perhaps his very sanity--but we all can agree that this contract for a custom-written song is as bespoke as it gets.

Do you see how this works? Everything--everything--made by human artifice exists along a spectrum. Some products and services, most people approach as a commodity. Other products and services, most people approach as bespoke--and, often, they are expensive. Yet other products and services engender complex mixed reactions, and folks layer their own meanings onto them, which leads to the complexity.

When it comes to complex, mixed reactions, cars and the iPhone come to mind. Technically, a car is a commodity--it's mass-produced on a vast scale. Yet we spend a lot of time in our cars, and some of us grow extremely attached to them. You may have seen someone wistfully talk about their first ride; some people actually get tears in their eyes when they reminisce over the car they drove in their youth. Others, though, just view their car as a means to get from A to B. And the iPhone may, again, technically be a commodity. Apple makes hundreds of millions of them. For many of us, though, our smart phone is our primary connection to the wider world. We can reach any friend in an instant, order anything from anywhere, read reviews of things before we try them, and employ any of millions of apps to accomplish things we could never accomplish so easily before. With these two examples, I want to show again that we place our own meaning onto what are technically commodities, and in doing so, we transform them and we view them as at least somewhat bespoke.

Also, it is worth noting that none of us, unless we are exceedingly rich, can treat everything in our lives as custom and bespoke. We have to make a choice due to the limits of our resources, so we pick and choose. We all end up having our own personal ideas of what should be a commodity and what should be bespoke.

Dentistry, which is a complex mix of products and services, is no different than anything else in this regard.

Now, many of us are surprised to find that some percentage of patients purchase dentistry solely on the basis of cost. That's their over-riding criterion. We are gobsmacked, flummoxed and insulted even, that some moron would blatantly ignore our superb crown margins, our flawless endo post-op films and our engaging bedside manner. How dare they! Plus, it's illogical--this is the human body we're talking about! How can someone take risks with their own body just for a few bucks?

A branch of social science called Diffusion of Innovations has incredible insights for us into the characteristics of the people who think in this way. I can post on it later if there is interest. For now, I have some advice for those dentists whose goal is to own their own practice--

Don't worry about those patients who view dentistry as a commodity. Treat them when they let you treat them, of course. But don't fret when they walk away for something cheaper.

When you meet the many other people who want the best for themselves, who view dentistry as something personal and to be valued, then knock their socks off with an amazing patient experience and rest assured in the knowledge that such people are far more likely to talk about your practice than those who view you as a commodity. Every person who you listen to and treat as the most important person in your professional life at that moment of diagnosis or treatment is a person who is ready and willing to be your megaphone. Let them do much of your marketing for you.

The other, even darker thing about dentistry and this spectrum we've been talking about is that dental management corporations are perfectly capable of commoditizing what should not be commoditized--you.

What I mean by this is, a human being who has completed eight, nine or more years of extraordinarily complex education and who now has the capability to be a vital part of a community and its health is not a commodity, not for any reason, not under any circumstances.

I personally am moderately annoyed when a patient views us as a commodity. But I'm positively outraged that a corporation could view me, and you, and you as interchangeable, disposable and temporary.

How dare they?

I'm not sure what to do about all this. I do know this though--there will always be a place, a significant place, for the private practice of dentistry in America, and each young doctor who strives for it weakens those corporations who aim to turn us into interchangeable, anonymous parts in a vast industrialized profit machine.

Someone has been reading Das Kapital!

 

[2TH MVR]

@DentinBond

Not to discount what you are saying, but this concept of "bespoke" dentistry is already being done. It's a common theme with consultants. Treat your patients with overwhelming service and they will love you for it and refer all their friends to you. This used to work and logically still does. But my feeling is that in this "new economy" .... this type of service is "expected" at EVERY level of practice. These are the patients everyone wants. There is more competition for these prime patients.

I hate to say this, but prior to the recession .... my practice was 90% FFS and 10% hmo/ppo. When a new FFS patient came in for an exam ... I gave them the "bespoke" new patient exam. They walked out with a fancy folder with all the information about the exam and our practice. We followed those exams up to make sure we answered all their questions. The hmo/ppo new patients. I spent maybe 2-3 minutes with them. They received a cheaper folder with fewer inserts. There was no follow up call.

Now. 2017. I welcome hmo/ppo patients because they make up 50% of my new patients. I treat them like GOLD. I'm happy they are at my office.

 

[DentinBond]

@DentinBond

Not to discount what you are saying, but this concept of "bespoke" dentistry is already being done. It's a common theme with consultants. Treat your patients with overwhelming service and they will love you for it and refer all their friends to you. This used to work and logically still does. But my feeling is that in this "new economy" .... this type of service is "expected" at EVERY level of practice. These are the patients everyone wants. There is more competition for these prime patients.

I hate to say this, but prior to the recession .... my practice was 90% FFS and 10% hmo/ppo. When a new FFS patient came in for an exam ... I gave them the "bespoke" new patient exam. They walked out with a fancy folder with all the information about the exam and our practice. We followed those exams up to make sure we answered all their questions. The hmo/ppo new patients. I spent maybe 2-3 minutes with them. They received a cheaper folder with fewer inserts. There was no follow up call.

Now. 2017. I welcome hmo/ppo patients because they make up 50% of my new patients. I treat them like GOLD. I'm happy they are at my office.

2THMVR, we remain on the same page. My practice has a very significant percentage of patients who carry PPO benefits. This goes back to before I was even there, and in all the years, I never wanted to stress so many patients by 'dropping out.' We've successfully negotiated reimbursement rates a bit, which blows to frakking smithereens this beastly assertion that flies about, that only big DMOs can negotiate anything. We all can. And we dabbled in an HMO, USHealthcare, years ago, just in case the whole dental world went that way. But it kinda faded away in my area and so I'm left with a mix of FFS and open dental insurance and PPOs. I'm definitely not a hoity-toity pinky-in-the-air-as-I-sip-my-martini spa type practice! ;} As evidenced by the appalling writeoffs in each month's Dentrix report. ;{

Like you, 2THMVR, I don't pay any attention to who has what when they're in the office for treatment. I just ethically diagnose, explain and treat. Let the credit adjustments fall where they may--every patient is one to be grateful for.

And not to be maudlin--but that's why you and I are two of the good guys.

 

[Alpha Centauri]

Beautiful. Best of luck in the future, I know you will be successful