Having some debts motivates a person to work harder and she/she will be more careful with how to spend the hard-earned money. I can afford to pay for my kids' educations but I think I will make them take out some student loans. I want them to learn the value of hard work....I want to them to accept low pay insurance plans...I want them to go through what I have gone through. I wouldn't have acquired all the tricks to keep the overhead low for my practices if I had rich parents who hand everything to me.
Absolutely there is a point of diminshing returns, here some kids are leaving Midwestern University owing close to 550K, at 26 they now have a net worth of -550K, so how does one get out of this, they have to either go work corporate somewhere they can make close to 200+ try to cover this and try to make a dent or they can borrow another 1 million to bring the net worth to -1.5million. IT is not likely nor usual l for a new grad to make 250K plus that first couple of years. Yes some can the majority probably not. Dentistry has been good to me, but I graduated over 15 years ago, the bar has been raised quite high to do real well in this field, most will make it and do fine, but if they actually tally up the time, effort, expense, etc, they may find themselves asking if it was worth it.
Speaking of corporations... Smiles Direct Club is going public next month. You can buy their public traded stocks as they sell “invisible braces”. They have grown to 300 locations and 5,000 employees. One of the founder’s father is the CEO of the company, who have also funded the company, in addition to 1-800-Contacts and Quicken Loans.
Speaking of corporations... Smiles Direct Club is going public next month. You can buy their public traded stocks as they sell “invisible braces”. They have grown to 300 locations and 5,000 employees. One of the founder’s father is the CEO of the company, who have also funded the company, in addition to 1-800-Contacts and Quicken Loans.
The ADA and the AAO are just watching all this from the sidelines.
SmileDirectClub aims for $1 billion IPO in September: Sources
The company is on track to generate $1 billion in revenue in 2019, one of the people said.www.cnbc.com
Ortho programs are still expensive - $200-300k before interest. Not sure how ortho applicants will see this development... as the future of ortho profession is on the balance, financially.
This is assuming the SDC (not DSC - still semantics) will not evolve their business model and just stick to easy ortho cases. My gut tells me that once they become a public traded company next month, they will raise more money, and expand their business and technology to more complex ortho. It’s just what start ups do... they will have a board consisting of orthodontists and highly experienced business execs... and they will do everything they can they have a long term security of their products and treatments. They WILL do everything they can to grow and take negative feedbacks and PREVENT the business shifting back to regular ortho. I wouldn’t be surprised that they partner with another corporate dental chain to boost their presence. They already did that with CVS, Aetna and Anthem. That’s just my opinion.
Oh I agree they will grow their business for shareholders (@Rainee.
..... Looking forward to seeing complex malocclusions treated at home with unsupervised (no hands on) Dr. Treatment. We'll see. Patients will ultimately be the losers.
The same patients that rather spend $1k on an iPhone than a crown? The ones who ignore everything you recommend? That’s why SDC is thriving!Oh I agree they will grow their business for shareholders (@Rainee.
Question
For me, the invisible-DSO model is somewhere between a private practice and a visible-DSO model, initially. The dentist at a invisible-DSO model usually stays longer and still sees patients like a private practice, but at some point, when that commitment ends (usually 5 years or so), typically most (seller) dentists leave and new associates come in and the practice will lose some loyal patients to the previous dentist and the DSO model comes more into gear - and you are now in more of a DSO practice than a private practice.
Gotcha so you're saying the good stuff only lasts as long as the dentist does.
Yes. The transition dentist (the seller) is the anchor. The practice, the staff and the patients are all under the same captain/seller dentist during the transition. Typically the seller dentist is close to retirement and is under tremendous pressure during the transition - because now the DSO sets the goals and numbers to produce and usually that dentist leaves at the end of his/her term. All the DSO wanted was getting in through the door quietly, and they usually bring in an associate dentist to transition the seller dentist without ownership but usually with a good compensation package. By the time the seller dentist moves on, the staff and patients have become accustomed to the associate dentist, but loyal patients to the “seller dentist” will leave. That’s given for any practice sale - DSO or no DSO.
Is there no option for a dentist to purchase the practice from the seller/DSO instead of going into an associateship. That way the new doc gets stake in the practice. If anything maybe like a partnership stake rather than ownership. Similar to how physicians buy into a large group and become a partner. But the practice still runs as if it's a solo private practice.
Very insightful post. Do you think dentists over 60 (specially 70+) working at DSO are as productive as those under 60? It’s one thing to have less turn over for older dentists, but it’s another thing to have slow dentists that may hurt the DSO bottom line.
I think (generally speaking) the distinction between dentists who want to have their own practice/business and wants to stay out of the DSO world, and those who are not good at business and want to avoid takings such risks by working for DSO’s/remain as an associate at a private practice are:
Sounds convoluted. What happens when the partial owner dentist wants to sell? I've seen these relationships and I would caution anyone looking at these partial owner situations to consult an attorney. The DSO will always have the contract favor THEM over the partial owner dentist.
Not saying you're wrong, but this would be one of the many reasons why dentists with huge debt never build up that courage to take a leap of faith to be owners.
How about the bigger picture... as a country... we keep borrowing (at a federal level) $1 trillion each year over the next decade, and the interest payments on that debt is $400-500B a year. We are in a world of hurt, not just in student loans, but also an inefficient broken healthcare delivery system, military, and so on. We are HOOKED on spending at levels we haven’t seen before.... so student loans is pegged to that bigger problem. Students will keep borrowing more and more because the system doesn’t come with a scrutiny to control the spending. We are essentially putting the future on a credit card, and we are just on borrowed time. We will all spend a large amount of our future earnings paying the interest payments on these soaring debt - which are owned by foreign nations.
I just read that if you take all of the money we've spent on wars since the early 2000's, you could pay for today's entire student loan debt and credit card debt. We're a nation addicted to ridiculous spending.
Tax cuts and increased government = deficit that will increase burden on future generations.
The term “corporation” in the dental world is typically used for dental office chains under a single entity umbrella, also referred to as a DSO = Dental Service Organization, and not the traditional a single office corporation or practice.
True. However, each dentist is still a person within a community and country that will have to face the macroeconomics that can have a direct effect on the microeconomics. The 2008 recession had an impact on dentistry, both on business/income and savings levels. The current Pre-dents will specially be the generation that will be impacted if the current crisis continues at this trajectory.
I think the ADA estimate is conservative and only represents the largest DSOs in the marketplace. If you consider the hundreds more emerging and mid-market DSOs that weren’t included in the study, the total participation is easily much higher, particularly for the under age 35 group who are graduating with big student loans.
