Fixed price dentistry
Dr Gamer Verdian and his team have built a business model for fixed price dentistry that targets the millions of patients who avoid dental care due to cost—and in doing so, may create a path for practice growth in a post-COVID world.
Nobody knows for certain what running a dental practice is going to look like in a post-pandemic world. All we know for sure is it will be different. Not just the greater emphasis on social distancing and infection control (which was always important), but in the type of clients you’ll get and the procedures you’ll undertake. You can choose to see this change as a threat or an opportunity. Whichever one you choose, remember a change in your perspective can change not only your whole life, but the lives of others as well.
As an example, look at a teenage Gamer Verdian—star basketball player at Pennant Hills High School in Sydney’s north. He’s on track to take his sporting career to the next level, to play overseas, when he cops a maxillary and left orbital fracture. And while he’s getting treated, instead of thinking, ‘Oh no, my career is over’, he’s thinking, ‘this whole facial reconstruction thing is really cool’.
A small change in perspective, but one that led him down a path through dentistry and medicine towards a goal of becoming an oral and maxillofacial surgeon. “I went and did my two years of clinical dentistry, and in those two years, I fell in love with dentistry hook, line and sinker,” he recalls.
That wasn’t the end of the story, though. His progression down that particular path has led to a suite of apps. A smartphone app is a small thing on your phone screen. But this app may well upend the way you can run your practice and create a path through the post-pandemic wreckage to the other side.
The shrinking pool
For many years, dental practices have operated on the infamous 80/20 rule: that 80 per cent of your income is going to come from 20 per cent of your patients. That 20 per cent avail themselves of the high-margin, specialised work that you’ve trained to do. But what happens when that 20 per cent pool starts to shrink?
Because that’s the inevitable result of the pandemic washing through the economy. The split in the middle class between those with job security and those on contracts gets wider. The contracted class have less disposable income, less security, fewer prospects—a combination that already bedevilled the 30 per cent of Australians who never visited a dentist.
If you’re going to keep making the same living from the profession that you did in, say, February, one of two things need to happen. Either the world economy needs to change again, or you need to change the practice’s business model.
Luckily for him, Gamer Verdian was already looking at ways to change dentistry’s business model. He had been inspired to do so at a course at Harvard Business School, taught by Professor Clayton Christensen. An influential academic, Professor Christensen introduced the concept of ‘disruption’ as an economic driver in his book The Innovators Dilemma. That idea has gone on to explain the growth of companies like Netflix and others.
I think dentists are starting to realise that the world is changing. The dental patient 20 years ago is very different to the dental patient right now, and it’s the market that determines what type of dentistry they’re after.
Dr Gamer Verdian, founder, Dental 99
Under Christensen’s definition, disruption results from innovation that entirely transforms a product or solution that historically was so complicated only a few people with a lot of money and skills had access to it. A disruptive innovation is often a much more simple, low-grade solution that’s more affordable and accessible to a larger population, which opens it to an entirely new market.
“One of the things that he talked about is sustaining innovation, which is where an industry builds and builds and builds their technology that ends up servicing 20 per cent of the population,” Dr Verdian says, “Which is what dentistry does. If you look at all the technological advancements over the last 50 years, that’s pretty much all been based on building better high-end technology for high-value treatments. Then you have better crowns, better implant systems, digital scanners, better root canal therapy systems, and so on. But the irony of it all here, especially in this country, is that we have 30 to 35 per cent of the population that will never visit a private dentist, and one of the major reasons is cost.”
Harvard-bound
What makes a dentist want to study at Harvard Business School? In Dr Verdian’s case, it was basketball—the values he learnt playing the sport informed the way he approached his dental career.
“I think the currency system that’s learnt in sport, which is measured day to day, week to week, is it teaches you life lessons,” he says. “The harder you work, the better an athlete you become, right? It’s blatantly obvious, and the better athlete you are, and the better your teammates get, the more likely you are to be successful in sport. Because those results are quantified on a minute by minute basis in sports, you learn those lessons pretty quickly, and in high volumes, and they never leave you. In business, those lessons are not as immediate, but they’re still applicable in a different environment.
“And other things like dedication, commitment to a cause, not giving up despite adversity, all those things come into play in both scenarios.”
He also counts his blessings with the mentors he had as a young dentist. “My first job was with a dentist who had three dental practices, and it was really a baptism by fire. He pretty much said, ‘You just work in the practices when I’m not there, and then the days you’re not working, just come and shadow me.’ So I’d spend the whole day in the deep end seeing patients, and I’d spend the rest of the night learning and studying on all the things I did wrong during the day, or things that I could have improved on.”
That was followed by a role at Dental Lounge, whose founders Mark Braund and Daniel Adamo taught him the fundamentals of being a great dentist and running a great business. “If you spend any time in here, you’ll see why,” he adds. “It’s the environment that’s produced by the founders, and it trickles through to everyone. Everyone is helpful, everyone’s invested in each other’s growth, there’s decades of clinical experience available to help learn and teach whoever comes in.”
But after a while he yearned for a new challenge, and executive education came to mind—he was acutely aware that dental school taught you how to be a good dentist, but not much about finance, leadership, and other business skills. “And the thought process was, if I’m going to do executive education, I might as well do it at the best educational institution in the world.”
The changing world
Learning about the principles of disruption from Harvard, Dr Verdian realised dentistry as an industry was ripe for it: there was a large underserviced part of the population, and technological advances were pretty much all pitched at the top of the market. But he needed to find a way of managing dentistry’s high fixed costs without compromising the patient experience.
We really don’t see ourselves as just a dental company. We see ourselves as a technology/dental company. We encourage innovation, and innovation is at the core of our beliefs.
Dr Gamer Verdian, founder, Dental 99
His solution was to develop fixed price delivery of dental services through an app. “Our four core services are check-ups and cleans, where all your X-rays and examinations and photos are included; all fillings including examination and X-rays and photos; simple or non-surgical extractions; and toothache management, at the fixed price of $99,” he explains.
All pre- and post-appointment details are managed through the app, including payments and relevant health fund and Medicare transactions. Dental 99 operates its own practices in Sydney and is currently rolling out a franchise model where partnership is created between Dental 99 and a prospective dentist in opening a greenfield Dental 99 practice as well as the Dental 99 Uber model where existing practices can use the app to fill in space in their own appointment books.
Dr Verdian admits the initial reaction from the profession has been “mixed”: “I think in any sort of disruption, this does happen, where more established dentists would look at our model negatively and see it as bad for the profession,” he says. “But there are a lot of dentists that are early adopters, and have an innovative and forward thinking mindset. These are the guys that are approaching us and wanting to get involved.
“I think dentists are starting to realise that the world is changing. The dental patient 20 years ago is very different to the dental patient right now, and it’s the market that determines what type of dentistry they’re after. And there is a huge market of plenty of Australians that just can’t afford private dentistry in the current shape or form and will very much welcome our model. The onus is on us as a profession to try and accommodate them.”
Dental 99 isn’t the only fixed-price provider of dental services in the market, but Dr Verdian believes his model can weather any competition because of the technological edge it has. “Anyone can open a dental practice now and do four services for $99,” he says. “What we have found is that it is impossible to make this profitable without our technology. No matter who comes to market with a competitive model, we will be four years ahead in innovation.
“We really don’t see ourselves as just a dental company. We see ourselves as a technology/dental company. If you come to any of our offices, you will see that we have a Google-type atmosphere, where we encourage innovation, and innovation is at the core of our beliefs. To make this work, we have to continually and relentlessly innovate.”
The future
This interview was conducted just as the pandemic restrictions on dentistry were being lifted. And growth in patient numbers is convincing Dr Verdian that his thinking is sound. “What I’m seeing now, based on the patient interactions we’re having, is a lot more people are looking for a more budget conscious model, and the word of mouth about dentistry is spreading like wildfire,” he says.
“As we come through the COVID-19 pandemic, people are thinking where they can cut costs. And we’re seeing a lot more of that. The search to cut costs—especially in what might be seen as a discretionary spend in dentistry—will drive more people into Dental 99. This week, we’ve had our best week, and I can’t see that changing.”
Source: https://bitemagazine.com.au/fixed-price-dentistry/
Photos: Arunas Klupsas