While this article series is centered on the specialist, be aware that if you are a generalist doing niche procedures, there is value for you in understanding the trends which will be discussed. Feel free to forward this article on to your specialist colleagues who can benefit.
Dentistry as it relates to the traditional referral model for specialists continues to evolve and change rapidly. The changing nature of referrals has a direct impact on the economic health of the specialty practice. Being aware of the biggest trends affecting referrals is the first step in equipping one’s self for good decision making.
For most specialty providers, dental specialist marketing will be an ever growing and more critical aspect of the business for those who want to have thriving practices. We’re fast approaching a point where only those specialists who market and advertise will stay among the ranks of the self-employed soloist.
Dental specialist marketing can be completely internally focused on cultivating and growing a core group of referrers which requires time and leadership, dental specialist marketing can be tilted toward a heavy focus of going directly to the consumer, or finally dental specialist marketing can be a bit of both. The ultimate primer for how to approach advertising any specialty service be it performed by a recognized specialist or a generalist with advanced clinical training can be found here.
The broad based news that most specialist colleagues will consider “bad” is that the numbers of total referrals of what used to be routinely referred services continues to trend downward. More “basic” specialty services are being treated broadly across the total pool of practitioners.
There are a number of key trends converging economically and clinically contributing to this. Specialists as individuals and as a group via their associations have limited to no control over any of the major trends. Thus it’s up to the specialty practice owner to inform one’s self and take individual action especially in respect to dental specialist marketing.
First, let’s go into the major economic trends that continues to affect referrals.
Economic Trend 1 – Dental Insurance
The first economic trend is industry specific and is related to reimbursement for services inside the 40+ year old dental insurance model. The total insurance reimbursement pool isn’t expanding significantly and the average maximum annual insurance plan benefit, in inflation adjusted terms, continues its decade long decline with no sign of a reversal. While the revenue pool and benefits have shrank, what has grown is the exclusion of services and headache and hassle to collect benefits for each patient. More effort is required to collect while more costs are gradually passed on to the patient/consumer.
Economic Trend 2 – Middle Class Wage Growth
The next economic trend involves changes in the fundamental economics and income growth in the broad middle class. In the U.S., to achieve the same inflation adjusted household income as experienced in the early 1970’s now requires two full time wage earners in a household. [For our Canadian docs, be aware that your middle class is in better condition economically!]
There’s a long list of contributing factors underlying what has occurred including everything from globalization where goods and services move from high cost production countries to lower cost countries, inflation, loss of bargaining power on wage growth, governmental credit habits, corporate rules that encourage profit taking outside the U.S., the overall erosion of the manufacturing sector, as well as monumental efficiency gains throughout production systems which translates into millions fewer employees required to product goods and services. We continue to set year on year records of record U.S. GDP with fewer workers than before the Great Recession.
The outcome of all of the above is reduced buying-power of a very large part of the middle-class continues to shrink and that reduced buying power translates into less demand for generalist and specialist services.
Nothing we can do as individuals or associations will alter these trends thus the only recourse is to manage your business appropriately and to acquire missing capabilities and business skills to navigate the changes.
We’re continuing the discussion of changes in referral patterns and how this needs to affect thinking on the specialist part as related to dental specialist marketing. Feel free to forward this article on to your specialist colleagues who can benefit.
Due to the trends discussed and that are well underway, specialists in growing numbers will be forced to embrace at least some direct to consumer advertising if they wish to not just thrive in practice but to remain independent. The ultimate primer for how to approach advertising any specialty service be it performed by a recognized specialist or a generalist with advanced clinical training can be found here.
Last week we covered the two biggest economic trends, dental insurance reimbursement and broad based middle class economic changes, affecting referrals. The outcome of these two trends is that more of the population which historically kept the average generalist busy enough so that he or she could easily and without substantial negative economic consequence refer out procedures, is shrinking. As a consequence, the average generalist looks at more ways to no longer refer out as many procedures and as a result they keep more cases for themselves and decrease referrals in an effort to maintain their standard of living.
It is a simple law of economics. One businesses “belt tightening” has a downstream effect on other stakeholders who have a relationship with the business including the specialist.
So those are the economic trends and impact let’s move on to the clinical trends.
Clinical Trend #1 – Decline in Periodontal Disease
10 years ago the president of the AAP stood up at the lectern at their national meeting and essentially said “because of declining disease rates and the broad use of inflammatory disease fighting statin drugs, as periodontists we’re going out of business unless we reinvent our specialty.” At the time this was as a very controversial statement among periodontists and yet a decade plus after his statement the trend has continued in the direction he forecast.
Clinical Trend #2 – Quality and Availability of Advanced Post-Graduate Education
Ruddle Endodontic Courses
The Misch Institute and others are all synonymous with extended or in-depth educational programs that elevate attendee abilities to perform more complex treatment.
Previously much of the knowledge contained in programs like these could only be acquired in a formal academic setting and previously the purview of mostly specialists and a very limited group of generalists. Now generalists and specialists can fast forward their learning around a specific procedure, around specific areas of interest, or elevate themselves as a “super dentist” in command of high functional skill sets in every major clinical interest.
Mid to late career generalists often find their excitement for dentistry reinvigorated after attending a more specialized clinical training. New dentists with foresight or mentoring are also now prone to take their skills to a high level quickly following their undergraduate educations.
Clinical Trend #3 – Management of More Severe Perio Cases by GPs and Hygienists
In addition to the declining inflammatory disease rates, more hygienists and generalists are trained and very comfortable at managing severe or chronic periodontal disease. Additionally, more practices have moved to laser based therapies which further improves the ability to stabilize cases non-surgically.
Clinical Trend #4 – Consumer Embrace of Better, Faster, Cheaper Clinical Options
The rule of better, faster, cheaper applies to all for profit business including clinical dental services. Look at any specialty or niche procedure area and the fastest growing segment within the niche are the ones that combine at least two of these three things.
Here are just a few examples:
In perio, practices investing in surgery reducing technology such as soft tissue lasers and treatment protocols have benefited (better and faster).
In implants, practice embracing speed oriented procedures delivering teeth on the same day as implants have benefited. All-on-4 when done well, also allows the practice to charge less for an arch of treatment. (faster and cheaper)
In orthodontics, practices embracing speed based treatments have benefited (faster).
Even in what is now thought of as a mordibund procedure by most clinicians (dentures), better and faster has come into play.
It should be noted that any clinical procedure that is better, faster, or cheaper automatically provides a market place advantage for use in EITHER dental specialist marketing or in marketing by the generalist.
An additional resource that helps the clinician to understand patient behavior when it comes to specialty services and fees can be found here.
Clinical Trend #5 – Implant Manufacturer Focus on Market Share
Another clinical trend is one that is happening as a consequence of implant companies efforts to increase market share.
Nobel and Zimmer continue to look for ways to meet company and product growth targets. One way they do this is to heavily target their efforts at getting more generalists trained to do their own implant surgery. Getting the broad generalist market doing single and simple multi-teeth surgeries will dramatically boost their implant unit volumes and their surgical kit sales.
While no longer releasing annual numbers of dentists in training, as of 2006,
Nobel had trained 245,000 professionals at their training centers. In addition, Nobel has spent at least $15M across 18 dental schools to make sure undergraduate students have exposure to the surgical phase of implant treatment which of course means exposure to their products. This has already had an effect on the numbers of generalists starting to place their own implants.
As much as the word paradigm is overused, the paradigm of the team concept of implant treatment in the US has changed as a consequence of manufacturer focus on training. Up until recently, U.S. dentists were mostly unawares to the fact that in the rest of the world generalists were placing most of the single tooth implants. The continued educational push will continue to gradually make this a universal reality.
The sum results of these clinical trends in disease, technology, consumer preference, and education all point to more procedure capabilities and higher levels of procedure skills occurring within a larger and growing group of generalists. There has never been a larger group of highly qualified clinicians in the history of the profession and the direct consequence is fewer specialist referrals and fewer traditional “team” relationships.
The most logical course of action for a specialist considering the trends is to develop a short term (12-36 month) action plan on how they will adapt to these trends. For those who want to thrive and enjoy their special status in the profession as specialists, dental specialist marketing focused on cultivating and growing a core group of referrers, dental specialist marketing going directly to the consumer, or a combination of both are the avenues to success.
Important to Know #1: If you’re a specialist involved with dental implants, perhaps you need to consider going more directly to the consumer with procedures like All-on-4. I’ve yet to see a specialty practice hurt by direct to consumer advertising. In fact, usually referrals increase when you advertise your practice. To have a discussion, go to my private calendar here.
Important to Know #2: More specialists and GPs with niche skill sets use this System for presenting specialized procedures and niche cases than any other. You can find out the reason why by taking the two week program trial found here.