“I love dentistry. I’d even do it for free. In fact, sometimes I do. And so do you. The difference is I know when I’m doing it for free.”
~ Omer Reed
To The Dentist: Thinking about your practice long-term
[dropcap3]I[/dropcap3]n a recent column in his Dental Town publication, Howard Farran wrote that in our current economy a dentist should reduce fees and join the discount dental insurance plans in order to stay busy and survive the downturn. He also recommended using low cost—read “cheap”—dental labs for work that requires a laboratory. This week, I just want to throw in my 2 cents. My opinion? Howard’s wrong on this one. Since Dr. Farran has an MBA and is one very bright dentist, I even wonder if he was kidding. But it wasn’t the April 1st issue, so I guess he was serious.
I had my annual tax meeting with my accountant last week and at the end of our review of my practice I asked a question: “How many of your dentist clients are signed up with the discount insurance plans, and how are they doing?”
For a few seconds he just shook his head. It looked like I’d struck a nerve, if you’ll pardon the expression. “I have 500 dentist clients in my practice. About 325 of them are on the plans. Most of them wish they weren’t. But once you’re in, it’s very hard to get out. I had a young man in here just a few days ago, sitting in the chair you’re sitting in now. We reviewed his practice in detail. How many patients did he see during the year, what work was done? At one point I said to him, ‘You did 270 crown restorations last year for no pay. Zero.’ By the look on his face, I thought he was going to cry.”
“Suppose you were an idiot, and suppose you were a member of Congress. But I repeat myself”
~ Mark Twain
Here’s the situation as I see it. Thanks to a number of factors, including our own government’s actions, we’re in an economic down turn. There are a couple of possibilities that could unfold over the next few years. The American economy could collapse and we’ll be like Greece, begging for bailouts from other countries. If that happens, all bets are off anyway.
But I am optimistic. We’re Americans. We know how to get things done, including righting this ship. In a few years we should be enjoying a robust economy again. What if, those few years down the road, you’re a “Preferred Provider” (preferred by the insco, not necessarily by your patients) and you’re doing the same work for a 30% to 50% reduced fee. How much more work do you have to do, how many more hours will you spend in your office for the same take home pay? You had better be running a real well-oiled machine, or you’ll have less take home pay. This economy will improve. Will you still be stuck with a decision made in a bad economy?
“The dentist is often the lowest paid staff member. Maybe it’s a good thing he doesn’t know that.”
~ Omer Reed
The decision to join a discount insurance plan is a long term one. You won’t be able to simply stop when the economy improves. Getting out of the plans takes some real planning, some real number crunching with the help of your accountant. Be prepared for a tough time in your practice for at least a few months when you drop even the worst of the plans. Even in a strong economy, you may still be the dentist who has to use a less than top quality lab because you can’t afford to do otherwise.
Am I telling you to avoid those plans in no uncertain terms? I can’t say that unequivocally. I know a few dentists who are top-notch practitioners, and they still participate in some discount insurance plans. In general I’ll say this: If you’re not a Preferred Provider in one of those plans, please think twice before becoming one, and even then, sit down with your accountant and take a very serious look at what a 30% discount means. If you’re already in the plans and wishing you weren’t, a serious strategy for getting out is required. Again, request the help of your accountant. My point is, don’t make a short-term decision that will run your life and your practice for years or even decades to come. Times will change. Take the long view. Just look at a couple of pictures that make the point:
These Inca walls were built so precisely that not even a sheet of paper or a knife blade will fit between the rocks. There was no mortar used, yet these walls have survived numerous storms and earthquakes for centuries. How was it done? No one knows for sure. It is thought that each stone was shaped and smoothed painstakingly to fit the adjacent stones with great care and accuracy. Think of these walls as a symbol of Care, Skill and Judgment—and that is what you really have to offer your patients.
Back to the title: Your short-term decisions will have long-term ramifications. If your practice is going to have to have long-term growth and thrive not just survive, then your relationships with patients will need to have longevity too. And your dental restorations will require longevity. Look to improve those three. Think in terms of care, skill and judgment. You can’t have all of those things at a 30% discount. Just my opinion.