WHY
ARE INSURANCEWHY
ARE INSURANCE
According to
the ADA, there are about 170,000 active dentists in the USA.
Only
three-quarters of those dentists belong to their professional
organization.
The professional
organization is in no way "organized" in the manner of
traditional labor groups or in the manner of a Nineties
corporation. There is little solidarity.
The dental
profession is traditionally practiced in the manner of a cottage
industry- by solitary practitioners or tiny groups.
As such, the
profession may be characterized as internally suspicious and
petty in its self image and market vision. Dentistry is practiced
according to "scarcity mentality".
The dental
profession has traditionally and actively disallowed mass
marketing of its members and its services.
Dentistry has
failed to build public awareness of the success and ease of its
routine procedures. The public knows much more about coronary
bypass than it does about root canal therapy.
The dental
profession has traditionally and actively stifled its auxiliary
personnel instead of promoting them as dentist-extenders.
Now, in an era when highly trained auxiliaries would allow us to
become more competitive with corporate, or reduced-fee dentistry,
Organized Dentistry fights this concept even more.
The dental
profession has failed to respond responsibly to a series of
public relations disasters-AIDS, OSHA, the Malpractice Crisis,
Reader's Digest, etc.
The service that
dentistry provides is necessary but not well liked because of
many of the above reasons.
The dental
profession has left its patients largely uneducated as to how to
judge the quality of their own care.
The
past 30 years have seen a tremendous change in the attitudes of
the public toward dentistry. Approximately
55% of the population of the United States does not avail itself
to routine dental care. While this
statistic probably has not changed, the
demographics of those who do avail themselves to reduced fee
health care has changed. Medicine has already been indelibly
changed. Hospitals, which by all rights
should have an investment in fee-for-service health care, offer
HMO's to their own employees! CEO's will allow themselves to be
seen in clinics. People are less demanding of relationships with
their health care providers, and more demanding of economy. We
live today in a bottom line society.
People
do not make purchase decisions the way they did twenty years ago.
Today's market is characterized by "Multiple Profile
Consumers". A multiple profile consumer is one who buys as a
result of acquired but not core values. For instance, a multiple
profile consumer is one who would buy a Porsche because of its
image, but would go to Wal-Mart for wiper blades.
Today,
more than ever, values are acquired as a result of multiple
influences. People buy what they value, and call into question
what they don't value. This is the trend of consumerism. This
explains the ability of Mr. Ecenbarger to have his article
published by Reader's Digest.
Sixty or
more percent of patients with dental insurance will be covered
under reduced fee or managed care plans by the year 2002,
according to industry estimates.
The
average dental profit margin is about 40%.
The gross
dental product in 1995 was $37 Billion.
Although not as big as medicine, that is
a lot of zeroes.
Corporate Conclusions
Dentistry
is a worthwhile target for acquisition. It is unorganized,
competitive, and individualistic. It has an excellent profit
margin, and the risks, liabilities,and downside are low, much
lower than medicine. It is an industry very similar to pharmacy a
few decades ago. Dentistry is anti-marketing. It has no marketing
"position" or brand recognition. It provides a service
that everyone needs, but more than half of the population only
utilizes its services under duress. In a capitated environment,
this statistic could be worked to provide greater profits.
Dentistry has much fewer strategic partners/dependent industries
than did medicine.
In a word, dentistry is a profession that is ripe for the picking.
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