While mom-and-pop is still the dominant business model in orthodontics, the growing corporate influence on the field can’t be denied. Corporate-owned practices can offer patients cheaper pricing, multiple locations, and extended hours. And they can offer orthodontists an alternate career path.
The route to corporate orthodontics is varied. There are the recent grads, like Jeffrey McMillan, DDS, who are saddled with student loans and can’t fathom taking on additional debt to open their own private practice. There are the orthodontists who started their careers in a private practice, like Adam White, DMD, who saw promises of a partnership and years of investment in a practice dissolve. And then there are those orthodontists, like Gerald Samson, DDS, who are looking to end a successful decades-old private practice and don’t want the headache of the transition.
Orthodontic Products talked to McMillan, White, and Samson to get their take on what the corporate model offers orthodontists, and what private-practice orthodontists can learn from it.
Why did you decide to join corporate orthodontics?
Jeffrey McMillan: I was like many other new graduates coming out of orthodontic residency. It’s not uncommon for us to come out with tons of debt, some in excess of $500,000 to $600,000 or more in student loans. There’s quite a bit of pressure to set up a practice right away, due to loan payments coming due. For me personally, I was apprehensive to borrow an additional $500,000 to $600,000 to face over a million dollars in debt load. It’s daunting, to say the least. That’s the main reason why I decided to go the corporate route before venturing into private practice. I wanted to at least reduce some of my educational debt, see how corporate orthodontics works in terms of efficiency, and then turn around and use those skills from the corporate setting to transition into my own practice.
Gerald Samson: Being at the end of my career, and having been in private practice more than
30 years, what I was looking for was a way to transition my practice with the least amount of difficulty. What I had wanted was to have a young orthodontist come in with me and build their practice within my practice, and then eventually I would transition out. After trying with two different associates that just didn’t work out for me; I ended up being in a situation that necessitated me looking for other options. Joining a corporation turned out to be exceptionally attractive, because as part of the agreement I could continue to practice in exactly the same way I had been practicing.
Adam White: Most people start in corporate and then use that as a stepping stone to private practice, but what I did was the opposite. I moved from the private practice environment. Private practice hadn’t worked out like I had planned for a number of different reasons, and having that dissolve a year and a half after my residency I turned to the corporate orthodontic model. So it was my bad experience. I didn’t want to do that again, and didn’t want to put my family through that again. I’ve been here ever since—about 6 years now.
What type of orthodontist is best and worst suited to corporate orthodontics?
McMillan: Probably the best suited for corporate orthodontics are newly graduated residents, or you could say, new-to-practice orthodontists. These practitioners are looking to build up speed and get the hang of orthodontics. Also, orthodontists who are in the twilight of their career come to corporate orthodontics. Many times these practitioners don’t want the headache of running an office and dealing with all the things that are associated with the business end of a practice. They just want to come in, work, and enjoy their free time. On the other hand, orthodontists who have practiced a few years and have paid down student loans to a more manageable level may not be well suited. These practitioners are in their productive years and want to benefit from growing their own practices. In addition, those practitioners who are interested in controlling and overseeing all aspects of the practice, or who are creative and desire autonomy, may not be as well suited.
Samson: I think the orthodontists that are best suited to a corporate orthodontic environment are the orthodontists who are interested in doing orthodontics but not interested in running a business. New orthodontic graduates who don’t think they need to have the ability and motivation to run a successful business are naïve. Additionally, I think the person who is best suited to a corporate environment understands that in this environment, they will need to contribute to the common good. That means they will need to understand the corporate culture they are joining. And I want to emphasize “the culture,” because each corporation’s culture is different. The company that I am with most heavily focuses on customer service and quality care. Other corporations are highly focused on profits, and that means high volume and dollar signs first, and customer service and quality of care second. So any orthodontist thinking about corporate that doesn’t have a strong understanding of the culture would be making a mistake.
The person who I think is worst suited would be the antithesis—a free thinker who doesn’t want to follow any corporate mentality or someone who is not prepared to function for the common good of the corporation.
White: I think the person that would be best for the corporate orthodontic practice is one that is not particularly interested in having their name on the door, where it doesn’t have to be White Orthodontics. It’s more of a team player that’s really just interested in the focus on patient care and providing the highest level of orthodontic care. The corporate environment makes that possible without worrying about hiring, firing, or IT issues. So by the same token, the person that really wants their name on the door and needs to run all those things and has a deep interest in the business side of things probably would not do as well with us.
In your opinion, what are the biggest advantages and disadvantages of corporate orthodontics?
McMillan: As the provider, the advantages are that obviously it’s more of a turnkey-type situation. You come in and work, and you don’t have to worry about anything. You don’t have to worry about overhead, staffing, payroll, equipment, or marketing. You just come in and do what you were trained to do, which is orthodontics.
Disadvantages are obviously, the pay isn’t as lucrative. Moreover, you don’t have a lot of choice as faras the products you can use or are afforded. Sometimes you are beholden to certain ideologies the corporate environment throws down. Every corporation is different, however. How the patient and practitioner experience is structured varies from one corporation to the next. Different treatment modalities and options sometimes aren’t available to the orthodontist, depending on the particular corporation. Also, generally speaking, corporate offices aren’t quite as appealing as a private orthodontist’s.
Samson: One thing that’s appealing to those looking at a corporation is the benefits package. The person who goes into solo practice has to create that all themselves, and that can be a daunting responsibility. Same thing with time off. Vacation time is precious. I think all of us who have been in private practice know that when we get ready to leave for a 1- or 2-week holiday we’re concerned about getting things done for patients before we leave, and toward the end of the holiday we’re thinking about what’s going to happen when we get back. The corporate environment has all of that built in—what the vacation time is and what the schedule is going to be for the doctor who is out of the office.
White: For someone coming out of school, the biggest advantages are no overhead. You walk into a turnkey situation with a great staff that’s ready to support you. There aren’t a lot of the headaches of being a business owner like staffing and IT. It really allows you an opportunity to focus on the treatment and refining your clinical skills.
For us, our continuing education is paid for, and we have a system within our group for continuing education that’s really helpful. We have the top-of-the-line equipment. If there’s new technology that is out there, you don’t have to go out and buy it with your own money. If you want to try a soft-tissue laser, that technology is available. The corporate environment lets you do the things that you might not be able to afford in a private setting.
The negative would be no equity. If you buy or you start a private practice, you’re going to have equity in that at some point. If you are not a big rule follower, this probably would not be the best environment because we have company policies that need to be followed. I personally don’t ever see those as a hindrance. For instance, one of our policies is that every impacted tooth gets a 3D x-ray. All the doctors know that, and they know to do that. They also know about the policies for initial and final records. And you don’t always have complete control over some decisions, like bracket choices. We all use the same type of brackets. So if you wanted to use a Damon bracket and we’re using GAC, then that probably wouldn’t work in this situation. These policies or practices aren’t just guessed at. We’ve reached these conclusions based on experience and time. So if that is not your thing, then you’d see it as a negative.
How can the private, noncorporate orthodontist best compete with the corporate model?
McMillan: That’s a tough one. There are, however, many ways noncorporates can compete. For example, most corporate offices receive volume discounts; so brackets, instruments, equipment, etc, can be bought cheaply. For private or independent orthodontists, they are able to take advantage of buyer’s clubs and consortiums in order to lower their equipment overhead. Another valuable resource is your national, state, and local dental societies which talk about the benefits of the noncorporate environments and often give advice on how to compete with the “big guy.” Also, independent orthodontists can do community outreach that plenty of the corporations aren’t doing.
Samson: I think what the private clinician can offer is an image that they are not corporate at all. The solo practitioner should not be trying to compete with a corporation. They certainly don’t have the advertising dollars or the volume purchasing dollars that a corporation has. The solo practitioner’s target is orthodontic patients whose attitude is, “I don’t go to corporate orthodontists, and I don’t take my children there.” The level of customer service, knowing the individual, and offering more of the boutique service is what will make the solo practitioner successful. I think there is always going to be a place for private-practice orthodontists as long as they keep these things firmly in mind.
White: Our mentality has always been to be able to offer a high level of orthodontics at a reasonable price. The thing I always think about is the single mom who is working two jobs and wants her child to have straight teeth but can’t afford a big down payment and a high monthly payment. We’ve always been more price-driven. We look at what can we do as a larger group to absorb some of the cost and make it available to people like that. So price-wise, the private orthodontist has to ask, “Are we in line with the corporate orthodontic model?” Another thing private practices have to think about is multiple locations. For us, that’s not a problem.
Maintaining orthodontists within the same practice long-term is advantageous, but has been difficult for the corporate orthodontic model. What can corporate orthodontics offer orthodontists that would encourage a long-term commitment?
McMillan: The number one retention tool of the corporation is ownership and compensation. Maybe there can be some type of system set up so that along the way, the orthodontist can have some type of stake or ownership in the practice. That’s a big one, and you don’t see that very often as far as corporate orthodontics goes. Another retention tool, obviously, would be better compensation. Meaning, you can augment compensation with production-based systems, like the ones general dentists employ. Even more than that: Offer benefits. Some of the big corporations offer no benefits at all. So if you’re offering benefits such as health, vision, 401(k), etc, then those tend to be very good mechanisms in retaining the orthodontist for a longer period of time.
Samson: I agree with what the others said about offering a benefits package, offering a percentage ownership, and offering job security. As it pertains to job security, I think today’s orthodontist is very aware of population trends. I know orthodontists who have opened a private practice and done well for a decade and then the neighborhood dries up, and then they’re looking at a very expensive move because their practice is no longer convenient to attract new patients. They have not planned well for this eventuality. If that happens in the corporation, it’s not the orthodontist’s problem. The corporation is obviously going to have to take on the responsibility of moving the practice if they realize the problem is the lack of convenience for new patients.
White: As new graduates develop through the practice, I make sure that we’re constantly responding to their needs as they come up. That could be maternity leave or a change that they feel is warranted in the contract. Our contracts aren’t really long, so we have that opportunity during resigning to address those sorts of things. They are employees; so like any employees, they deserve to be treated well. That really is the focus of our group. We put the doctors first. The whole engine—from the IT people to the chief operating officer—really sees itself as the support team for the doctors. They put doctors first. That goes a long way in keeping them here long term.
What are the most important things you have learned in the corporate orthodontic environment that you would have missed if you were in private practice?
McMillan: For me, it’s the cultural influences. In general, orthodontic patient populations do not tend to be very diverse, but in the corporate environment, you’re getting more and more patients in the door. With that higher volume, you have a greater diversity of patient populations, and it’s extremely interesting and enriching to see and learn about those cultures. So that’s the one aspect I really enjoy. And then there’s Medicaid. Medicaid is its own beast. But learning the Medicaid process, how to deal with Medicaid, how it’s structured, how to qualify patients, what Medicaid looks for, and billing is very different from traditional insurance and private-pay systems. If I would have gone straight to private practice, I don’t think I would have learned anything with regard to Medicaid.
Also with corporate orthodontics, you become more and more efficient. As a private practice, sometimes it takes a long time to become efficient. But there is such a high pressure in corporate orthodontics to generate revenue that systems have to be in place almost from the beginning in order to turn a profit. I’ve learned how to be more efficient on multiple levels—from scheduling, treatment modalities, different staffing-type issues, etc.
Samson: From my standpoint, it’s the reality of how to run a business, including the importance of consistent customer service, of repeat business and referrals, and of doing patient surveys. I think that I understand more about negotiating for the best price and how to do that as well. I’ve also learned what they call “active listening,”–ie, listening for customer needs, listening for patient needs, and meeting those needs.
White: I don’t know if there are things that would necessarily be missed, but the learning curve is so much more drastic here because you’re stepping into a practice that’s seeing 70 to 90 patients a day. In private practice, if you start four patients in a month for the first couple of months, it’s a slow learning curve and you don’t always pick up on things immediately. The learning curve in corporate is so much more drastic based on the volume of patients. It’s very helpful.
What role do you think corporate orthodontics will play in the future of orthodontic care in the United States?
McMillan: Corporate orthodontics, like I said, is now giving more access to patients. So you’re having higher volumes of patients come into the ortho world. With more people having orthodontics treatment, it gives orthodontics and the orthodontic profession more visibility, which is a good thing. Also, corporate orthodontics is reaching out to more underserved populations, and that’s also a good thing, in my opinion. That brings a lot into play for the future of orthodontics in the United States.
Samson: There is no question in my mind that we are looking at a very similar situation as has happened in physical medicine. Medical practices were taken over by corporations, and the day of the private physician is somewhat in the past. I think the private-practice orthodontist will always have a place as long as they understand the critical aspects of running a business and the identity and image of their business. But I think corporate orthodontics is a fast-moving force. Corporate orthodontics that meets patient needs and provides excellent customer service is probably the biggest threat to the solo practitioner. While those corporations that simply want to squeeze juice out of a fruit and throw the rest away will fail, those select corporations that do and can modify their behavior for the needs of patients, the needs of doctors, and the needs of their employees, they’re going to be successful in the long run, and they’ll be something that everybody has to adjust to.
White: I think as these insurance alliances continue to grow—like those between pediatric dentists, pediatricians, and insurance companies—it will eventually branch out to orthodontists—to everybody involved with the care of the child. With this, the role of corporate orthodontics will be greater in the future. If you look at some of the things being written, a lot of people feel like corporate orthodontics is the future of orthodontic care. If you have 28 offices, you can stand to change your prices and be very competitive in that way because everything is spread over a larger area versus one or two offices. Currently, we accept more than 20 different insurance plans, and we offer a Medicaid discount. So I do think corporate orthodontics is going to play a greater and greater role. Eventually, it may eclipse private practice. We’ll see how that goes, though. OP
