Change Before You Have To

Written by Dr. Marc B. Cooper, Wisdom for Leaders. 

THE BACKSTORY

Dentistry has always been a big part of my life. A dental student, a certificate of training in periodontics, an advanced degree in immunology, the U.S. Airforce as a periodontist on a large SAC/MAC base, a practicing-periodontist-practice-owner, an associate professor, a practice management consultant, an industry consultant (dental insurance companies, clearinghouses, biotech, suppliers, investment bankers, equity partners, DSOs, various dental societies, and numerous dental groups). After forty years in dentistry, I believe I have become an elder in this industry.

Those dental client engagements eventually allowed me to work with other healthcare segments – hospitals and hospital systems with senior executives, board directors (profit and nonprofit), and primary, secondary and tertiary physician groups (hospital-based physician groups, small independent physicians groups, to giant IPAs).

And the combination of all these engagements allowed me to be an independent contractor with a few large consulting entities working with Fortune 500s such as G.E. Capital, Intel, and Boeing.

The impact of all these engagements provided me with the unique opportunity to learn, grow, and develop as a consultant, coach, teacher, speaker, and entrepreneur. And on this path, I have gained not only knowledge but wisdom.

Wisdom, not only about the healthcare industry and its stakeholders but also about myself as a self. My work provoked and supported self-examination, self-discovery, and self-understanding, which is fundamental to wisdom.

ELDER ADVICE

As an elder, I have a successful and experiential-based history behind me. As an elder, I have long-term and honorable relationships throughout the healthcare industry who tell me what’s going on for them and their strategies based on how they see the future. So I get to hear their side of the story. I get to see the future from the input of highly successful people who are very much at stake for the future of their companies – senior executives, CEOs, board directors, investors, directors and managers.

What I hear in dentistry is a slight arrogance in their speaking—speaking as though they have a lock on dental care delivery—a discreet egotism in the way of who and how dental care gets provided. But beware, the light at the end of this tunnel may turn out to be a train. Dentistry’s reliance on the past to dictate the future may not be the most brilliant move.

Dentistry thinks it’s in the driver’s seat. Why? Because the dental industry has consistently demonstrated unstoppable growth. The stakeholders and shareholders believe dentistry will continue to deliver – time after time, year after year – consistent growth even under the most horrendous circumstances.

This veil of arrogance is only reinforced because dentistry has outperformed nearly every other industry over time – it has never lost money – ever. So there is no wonder why investment bankers and equity partners are falling all over themselves to get into dentistry. Hard to find year-over-year growth with consistently large margins.

As an industry, dentistry has existed in an autonomous configuration untouched by the maladies of medicine. Dentistry has not been under the same context, regulations, expectations, reimbursement structures as medicine. As a result, dentistry has managed to keep itself far apart from the healthcare system.

The demand for dentistry stays higher than supply, only adding to its sex appeal as an investment opportunity. Moreover, with the inflow of millions of dollars, mergers and acquisitions are running rampant, new kinds of business expressions and dental practices are emerging. As a result, DSOs are in total momentum.

Dentistry is believed to have an unstoppable financial upside. The current belief by the investment community is dentistry is Shangri-la  – an unstoppable financial bonanza. But economic, moral, and ethical forces are now beginning to crash the dental shores.

Unfortunately, the waves are accompanied by the ever-increasing winds of the cash-strapped healthcare industry’s stakeholders, who are witnessing worsening patient health outcomes and spirally costs. Dentistry could dramatically impact both.

Dentistry has been proven to lower every shareholders’ costs – patients, providers and payers – improve patient health outcomes, and decrease utilization. As a result, dentistry is now being asked to move from the bleacher’s section to take the field. The US$3.8-$4.1 trillion healthcare industry, where only 5% is dentistry, knows their costs and outcomes will be so much better than dentistry’s 5%.

According to the Kaiser Family Foundation, the average annual cost of health insurance in the USA is $7,470 for an individual and $21,342 for a family as of July 2020. So here’s the bottom line, dentistry will be compelled to change because U.S. employers typically fund roughly three-quarters of this bill as of July 1, 2021.

So employers, who pay the payors, and employees whose co-pays are rising quickly, constantly have to increase healthcare fundings but with an inverse result on their ROI.

Sure Covid made everything worse, but this trend line was going downward way before Covid. So employers feel that they are paying more for less.

And with the ever-increasing number of untreated populations and its downstream healthcare costs without dentistry, Medicare is knocking loudly on dentistry’s door.

The apparent future is the integration of dentistry into the healthcare system. But unfortunately, dentistry doesn’t realize this is not a choice, rather it is a fait-de compli.

The advice from this elder is integration is a future that shall be, and I strongly suggest those in dentistry be thinking about how best to adjust to this new reality. Ultimately employers are the customers – they are the ones who sign the checks. So my recommendation to dentistry is to change before you have to.

More info on Dr. Marc B. Cooper can be found on LinkedIn
or visit his consulting website Wisdom for Leaders.

Originally published in LinkedIn. Reprinted with permission from author.

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