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New Mexico Dental Journal, Spring 2015
10
The Benefits of Group Practice
By Jonah Foutz, DDS
I
n 2000, Reed Hastings, the CEO
and founder of a small, insignifi-
cant company called Netflix, flew to
Dallas to try to convince John Antioco,
the CEO and founder of a very large,
very significant company called Block-
buster Video, to form a partnership
between the two. To make a long story
short, Mr. Hastings was essentially
laughed out of the room and the partner-
ship never came into fruition. Ten years
later, Blockbuster Video declared bank-
ruptcy, and Netflix was valued at over 28
billion dollars, which was ten times more
valuable than Blockbuster ever was! How
could Mr. Antioco not see the value that
lied within Netflix? What if the CEO of
Blockbuster had seen the value, and had
formed the partnership?
I bring this up because, if he had, I would
not be writing this article, as my current
dental practice sits within the walls of
a former Blockbuster Video. Also, with
the ever-evolving economic landscape, it
is important to form a business based
on society’s demands, and to continu-
ously fine-tune services to satisfy those
demands.
The world of dentistry is no different
than any other industry. Things are
changing. Dental corporations are
popping up everywhere and the solo
dental practice is being threatened from
all angles. The corporations have deep
pockets. They have large marketing
budgets and constant new offices that
gobble up the market share. Because
of their large number of offices, an
economy of scale can be made with labs
and supply companies that drive down
the price for services and products.
The cyclical nature of lowered costs of
production lends itself to lower prices
all around. Now, economical pricing can
be offered for dental services through
discount plans. And lower prices for
dental services are exactly what society
craves. Because of these lower prices,
people increasingly patronize these
establishments, regardless of the quality
of service. (And I am certainly not saying
corporations have poor quality of service!
I am simply stating that society will
utilize the lowest priced establishment.)
With the cost of dental school increasing
exponentially, new graduates have few
choices but to find work in a position
where there is little risk and consistent
wages until this debt can be paid down.
Corporations offer everything a new
doctor could need: a decent salary and a
stable patient base.
So what can a solo doctor within a
private practice do to maintain a decent
patient base? How can one compete?