It’s easy for dentists in smaller markets to ignore the threat posed by the corporate dental chains. But there’s news out of Texas that should serve as a wake-up call for dentists everywhere.
In October, Texas A&M University announced that it will build a nine-story, 150,000+ square foot clinical facility for dental school students. The new facility will allow the dental school to increase its enrollment by 25 percent.
Basically, the expansion will put another 25 to 50 dentists on track to graduate every year.
Clearly, there’s money in dental school education. And where there’s money to be made, people interested in making money (whether through endowment or investment) will be there.
Where Will They Go?
One thing that’s unlikely to change about dental school is that it will remain enormously expensive. Currently, new dentists graduate with an average of around $250 thousand in student debt.
Corporate dentistry has noticed, and is dangling enormous sign-on bonuses, debt repayment subsidies, and even debt forgiveness programs. New dentists are responding, flocking to corporate offices in ever-increasing numbers. Basically, new dentists are the fuel for the chain practices’ growth.
And growth is definitely in the picture. Wells Fargo reported earlier this year that many of the chains anticipate 20 percent year-over-year growth, and a doubling of their practices over the next three years.
With a steady stream of new dentists all but assured, corporate dentistry can feel confident in expanding. The chain practices might not yet be in your market, but it’s only a matter of time. If there’s money to be made, corporate dentistry will be there.
By The Time You Feel The Erosion, It’ll Be Too Late
Having a corporate practice move into your market doesn’t spell instant doom. You’ll see an advertising blitz first, and you’ll wish you could afford to match it. Over the next weeks or months, you’ll likely see your new patient numbers decreasing. You might even see some of your established patients defecting.
Corporate dentistry erodes their competitors by offering low prices that you can’t hope to match, and availability that will exhaust your staff to try to copy. The chain practices have deeper pockets than your practice, and a deeper bench of dentists and hygienists to call on.
As too many dentists have realized too late, you can’t hope to go toe-to-toe with corporate dentistry and win. You’ll have to compete differently to have any hope of winning.
Fight Where Corporate Dentistry Can’t Win
For all of its strengths, corporate dentistry has a couple of fatal flaws in its model.
The first is a trust deficit. The dental chains’ approach is impersonal at its core. Looking at from the outside, every patient is considered to be a one-and-done until proven otherwise. The stories of corporate dental patients not being able to see the same dentist twice are legion. Often, corporate patients don’t even see the same hygienist twice.
And corporate dentists face a lot of internal pressure to upsell patients on care. In fact, that’s been the focus of quite a few lawsuits. Put simply, corporate dentistry isn’t widely viewed as being trustworthy.
You can capitalize on that because at least 20 percent of your market wouldn’t be caught dead in a chain dental practice. And that segment has the ability and willingness to pay more for the right dentist.
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Even when corporate dentistry shows up in your market.