One of the most exciting events of the year for orthodontists is the product show at the American Association of Orthodontists (AAO) Annual Session. Like children in a toy store, doctors walk up and down the aisles trying to decide if they’re ready for the “next big thing.” Common reasons given for investing in new technology include making more money, improving patient care, and enhancing one’s own lifestyle.
This article, the first in a two-part series, will dig deeper into those reasons and, hopefully, prompt you to examine how you justify your product purchases, both big and small, before the next AAO Annual Session.
Generating More Income
Practice profit is the difference between the fees generated by services provided (income) less the cost of providing those services (expenses or overhead). Many times, doctors buy technology believing that not only will it pay for itself, but it will actually increase practice income. Increasing income in an orthodontic practice can occur if the technology attracts new patients, increases case acceptance, or provides additional services to current patients for which they will pay more.
Attracting New Patients. If a product gains name recognition with the general population, it has the potential to attract additional patients to practices that offer it. Two examples of this phenomenon are Invisalign clear aligners (Align Technology Inc) and the Damon bracket system (Ormco Corp). In each case, the manufacturer invests heavily in direct-to-consumer advertising that leads consumers to doctors who provide their product. Because of the additional costs of these marketing campaigns, doctors typically pay more for these products.
Increasing Case Acceptance. Technology can also generate additional income if it increases case acceptance. Some technologies may convince patients that they will receive better, faster, or more convenient care. Examples include CAD/CAM generated brackets or wires and self-ligating brackets. Other technologies help orthodontic teams better communicate the orthodontic problems that exist and how they will be addressed, and assist patients in making the decision to get treatment. Case presentation software and Cone Beam Computed Tomography (CBCT) fall into this category.
Generating Additional Fees. The final way that new technology can generate more income is if existing patients are willing to pay higher or additional fees for it. Examples of this include devices or procedures that accelerate tooth movement (vibration, micro-osseous perforation, etc), make treatment more aesthetic (clear aligners, tooth-colored appliances, or lingual braces), or allow the patient to achieve results otherwise not possible (ie, TADS). If patients value the differences these technologies promise, they may be willing to pay more for them.
A second way to increase profits is to reduce practice expenses or overhead. This can happen if the technology makes treatment more efficient, reduces the size of staff required, or allows a practice to keep services “in-house.”
More Efficient Treatment. One of the most compelling arguments for new technology is that it increases treatment efficiency. This can take place by shortening treatment time, reducing the total number of visits, or shortening the amount of time a patient is in the chair. Technologies in this category include self-ligating brackets, treatment accelerators, CAD/CAM-generated wires and brackets, and clear aligners. The ability of these technologies to shorten treatment time or reduce the number of visits is a debate that is beyond the scope of this article. If they can do what they claim, however, it would reduce overhead costs because patients could be seen less often. Remember, however, that practice income increases only if the vacated appointments are then filled with new patients. Technology in this category merely increases practice capacity.
Reducing the Size of the Staff. The biggest expense in any practice is payroll. Technology that allows a practice to provide the same care with less team members reduces overhead by reducing payroll. Reducing the number of staff members also reduces the issues inherent with additional human employees (sickness, family problems, etc). Technologies that claim they can reduce the number of staff members needed to provide the same level of care include self-ligating brackets, CAD/CAM wires and brackets, and clear aligners.
Eliminating Outsourcing. There are some products and services that are cheaper to obtain from sources outside of the practice when the volume required is small. 3D-printed models and retainers fall into this category. There is a break-even point, however, where the amount being paid to an outside party could finance the acquisition of the technology needed to generate the product or service in-house. Once a practice exceeds this volume, creating the product in-house could then theoretically reduce practice overhead.
Improving Patient Care
Another justification for the purchase of new technology is that it will allow orthodontists to provide better care to their patients. This can take place in the form of a more thorough diagnosis, a more enjoyable treatment experience, or better final results.
Improved Diagnosis. The best example of new technology that claims to improve diagnosis is CBCT. Doctors who routinely use this technology feel that the amount of information provided justifies the additional expense. They feel that they are better able to identify orthodontic and non-orthodontic issues than with traditional two-dimensional radiography, and therefore provide better care because of these findings. Again, the debate over whether CBCT should be used routinely or whether it actually increases the level of patient care is beyond the scope of this article.
Improved Patient Experience. Many manufacturers claim that their products make overall treatment time shorter or allow longer intervals between appointments. Products making these claims include CAD/CAM systems, self-ligating brackets, tooth movement acceleration, and clear aligners. If patients can get the same results in less time or fewer visits, the additional cost of the treatment may be justified.
Better Final Results. Some doctors justify spending more on technology because they believe it allows them to offer better results to their patients. Examples of this argument include self-ligating brackets (which some doctors believe allow them to reduce extractions and produce more aesthetic smiles) and CAD/CAM wires systems (which have been shown in some studies to produce better ABO scores). The decision as to whether the additional cost of these technologies justifies their expense is a personal one for each practitioner.
Enhancing Personal Lifestyle
Some orthodontists invest in technology believing that it will improve their lifestyle. This can take the form of less time at the chair, less time at the office, or the mere enjoyment of using the technology itself.
Less Time at the Chair. There is no question that improved technology has decreased the time orthodontists spend bending wires. Pre-formed bands, the Straight-Wire Appliance, and bondable brackets have allowed practices to grow because more patients can be seen in the same amount of time. The relatively recent introduction of self-ligating brackets and clear aligners has also shortened the time that the doctor must spend with each patient at a routine visit. Even if a doctor wants to remain at the chair for social reasons, appointments are less stressful if fewer manual appliance adjustments are required. Technologies that allow the orthodontist to determine the required movements and adjust appliances via software (such as CAD/CAM-produced wires and clear aligners) have also been reported to reduce appointment stress. It is important to note, however, that time saved at the chair may require additional time in front of a computer during non-clinic hours.
Less Time at the Office. Because some technological advances facilitate remote diagnosis and treatment planning, and reduce the number of patient visits, technology may allow doctors to spend less time at the office. Some orthodontists prefer to spend more time in front of their computer at home than sitting chairside at the office. Technology that reduces the number of visits also means that the same number of patients could be seen on fewer clinic days. These are the claims made by those offering CAD/CAM treatment systems, self-ligating brackets, and clear aligners. Less time at the office means a better lifestyle for some.
The “Got to Have It” Mentality. Many orthodontists buy technology just because they enjoy learning about and experimenting with new things. If a doctor wants to stay “on the cutting edge,” he may elect to invest in a technology that cannot be justified financially or clinically. Younger orthodontists who grew up with technology may find that given the choice between digital and traditional treatment, they just feel more comfortable in the digital world. In other words, sometimes doctors choose to invest in technology, ignoring the financial and patient care arguments, simply because they want it.
Thinking through the rationale for making purchases beforehand can help orthodontists make more informed decisions on the product show floor. Practices should determine their primary reasons for investing in new technology and take into consideration how the technology will affect their finances, patient care, and lifestyle. OP
In the next issue, part two of this series will discuss how the maturity of a practice, tax implications, and plans to sell a practice all factor into the purchase of orthodontic technology.
Greg Jorgensen, DMD, MS, owns a private practice in Rio Rancho, NM. He served as the chairman of the American Association of Orthodontists (AAO) 2017 Winter Conference where the theme was “Technology: Balancing Profit, Lifestyle, and Patient Care.” He also served as the general chairman of the 2016 AAO Annual Session in Orlando, Fla.
Charles Loretto is a partner and investment advisor representative at Cain Watters and Associates. He regularly speaks to dental schools and residency programs, study clubs, dental symposiums, and state and national dental meetings. As a partner of National Dental Placements, his team aids in the practice transition process; and as a partner of Elite Dental Alliance, his team leverages the buying power of its members to help dental professionals save on everyday business purchases like corporate dentistry can.