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Implementing Strategy in Orthodontic Practice by Donald E. Machen, DMD and Hollie A. Machen, Esq.

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As an introduction to the topic, a definition of strategy seems necessary. Although disagreement exists as to a definition for strategy, the authors suggest the following as a working definition: the art of distributing and applying the means to fulfill the ends of a stated policy. In orthodontic practice, this presumes that a policy has been articulated.

In hundreds of consulting engagements over the past 25-plus years, it is a rare orthodontic office that has a stated “policy” before we begin to work together. To put this in perspective, it might be helpful to give several examples of generic strategies. Most of us are familiar with the low-cost strategy often described as no-frills. At the opposite end, we have a luxury or high-end strategy that attempts to maximize the customer experience. There is also a focused strategy wherein a limited array of services or service area is offered in an effort to own that market.

From this, the reader can see how having a strategy enables the business to obtain a segment of the market or a market share. By way of a further example, imagine there are three orthodontists in town. Each one has approximately one-third of the market. One day, a new orthodontist decides to open an office. Over the next several years, each of the now four orthodontists will likely have a quarter of the market. This is true, for the most part, if none of the three original orthodontists obtained a sustainable competitive advantage (SCA). An SCA occurs by developing and implementing a durable strategy. Specifically, it is a strategy that takes planning, time and resources to develop. In other words, it is a strategy that is not easily copied.

Merely obtaining a competitive advantage isn’t enough since simple strategies such as the ones mentioned previously are easily copied, at least in the short run. Also, some strategies might not be as attractive as others. Not everyone wants to be the lowcost provider, especially in orthodontics. Similarly, attempting to be the luxury orthodontic provider long term might prove to be a very difficult strategy, especially in the wrong locale or economy. Also, it might be difficult to convince the marketplace of the merit of providing only one type of treatment, no matter what the problem.

In our example of the three orthodontists, if one orthodontist had developed an SCA in the first place, he or she would likely have had more than a third of the market share. It is likely that half or more of the market would have been his. When the new orthodontist moved into town, the likely scenario would have been that the two remaining original orthodontists and the new orthodontist would have been dividing the remaining 50 percent. By having an SCA, new entrants who have done their due diligence would be less likely to move in, but in any event, one or more of the non-SCA practices would likely not be able to remain viable and probably need to move. Today’s competitive landscape is such that one of the few edges that an orthodontic practice has today is the creation of a strategy that established an SCA.

During the most recent five-year period, when the economy has been less than optimal, many orthodontists have reported declining practice census numbers. Some practices have no growth or limited growth. However, a small percentage of practices have reported increasing growth. Of this later group, there are several practices that have special circumstances, (e.g. they are the only orthodontist in their area). More often, however, these special few practices that are growing are doing so because they have developed an SCA.

Every savvy businessman strives to gain an SCA. An SCA allows market share gains with far less expenditure of valuable resources, especially in difficult economic times. In good economic times, the practice with an SCA will experience a magnified benefit over those who lack this important intangible asset. Ultimately, when a business or practice is sold, the value attributed is far greater and characterizes the final benefit that is received by taking the time to implement the systems needed to create the SCA.

While it is true that a short-term increase in new patient visits can probably be achieved by aggressive internal and external marketing, the cost is high and the results will not last. The results from implementing an SCA strategy aren’t necessarily immediate. This is because it does take some time to reorganize and create the proper office structure along with implementing the necessary procedures and protocols. However, it doesn’t take long to see the difference in all aspects of the practice from increased referrals, improved current patient satisfaction, reduced stress, elimination of negative comments, complaints and confrontations and improved communication.

However, it is important to begin the process needed to obtain an SCA as soon as possible since if you don’t, your competition might do so. Once the competition has done so, you can still obtain an SCA but it might involve more of the resources described previously.

Less than five percent of orthodontists surveyed have a strategy or strategic plan. Less than half of those practices express confidence in maintaining their current market share, let alone expanding, if either the economy should remain flat or if another orthodontist would enter the practice market. This, by itself, can be a major source of stress for the orthodontist. Also, without a strategy and implementation plan and periodic re-evaluation, the orthodontist could feel as though his ship has no rudder and might experience burn-out professionally and personally.

Our solution to these issues and our suggested method for obtaining an SCA can be accomplished with a three-part strategy. The first step is to understand where you and your practice are on the continuum of all orthodontic practices in your area. As part of this endeavor, benchmark your practice against the best of the best practices anywhere. This includes procedures and protocols, especially communication, and your organization. Each aspect must be carefully evaluated. You must be objective and see your practice as others see it. Specifically, how are you viewed by patients, parents, referring dentists, physicians, etc.? Be exhaustive. It is a humbling and sobering experience, but one that will yield much valuable information.

Next, determine what the most highly successful practices are doing. In large measure, the best orthodontic practices are doing three basic things that lead to developing a sustainable competitive advantage. They are communicating better. Their interpersonal relationships are better, and, their organizational architecture is superior.

Great internal and external marketing and advertising programs might bring patients to your office. Once the patients arrive, a three-component SCA program which includes optimal communication protocols, the appropriate organizational architecture and optimal interpersonal relationships will significantly increase the probability that they will start treatment with your office. Once started, it increased the probability that they will refer others. These new patients and their referrals, when added to your own satisfied patients and their referrals, are now yours forever. The difference is the obtaining of the sustainable competitive advantage.

Year after year, orthodontists ask for forms or samples of correspondence, such as informed consent forms, referrals forms, progress review forms, pre-finishing checklists, consultation letters and other items. However, the overwhelming majority of orthodontists do not have a strategy or a strategic plan developed toward obtaining an SCA. Consider putting the piecemeal approach aside. Devote the time and effort needed to develop something of enduring value that will pay dividends for the rest of your practice life and well beyond.

Your orthodontic practice is likely to be your greatest asset. You should care for it and protect it appropriately while maximizing its value and your overall success.

Author Bios
Dr. Donald E. Machen, is the recognized authority on risk management in orthodontic practice, having initiated the discipline in the mid-1980s. He developed, moderated and presented at the AAO’s first national risk management telecast to more than 2,600 orthodontists. He has represented orthodontists, dental specialists, general dentists and physicians in malpractice lawsuits and other legal matters as a trial lawyer and is currently a trial court judge in Pennsylvania, having served for more than 14 years. He is a board certified orthodontist maintaining a part-time practice and is on the orthodontic faculty of Case Western University Dental School and The University of Pittsburgh School of Dental Medicine. He is also an adjunct professor of Law at Duquesne University School of Law where he teaches malpractice litigation. Dr. Machen was the editor of the Legal Aspects of Orthodontic Practice column in the AJO, writing a monthly column, and has authored columns in JCO and Ortho Tribune. He lectures extensively to orthodontic groups, both large and small, focusing on developing highly effective systems for eliminating lawsuits, optimizing patient care and increasing practice referrals. Dr. Machen is the author of Managing Risk in Orthodontic Practice and is managing director of Risk Management Consultants, LLC. He can be contacted at: drmachen@orthormc.com.

Hollie A. Bernstein Machen, Esq. – After graduating from the University of Pittsburgh School of Law, Hollie spent the early part of her legal career as a litigation associate and then partner of the Bernstein Law Firm, a multi-office firm specializing in creditors’ rights. After leaving that firm to raise her three children, Daniel, Lindsey and Roxanne, she began focusing on legal research and writing as a judicial law clerk in Pennsylvania and has remained active in that endeavor for more than 13 years. Additionally, she spent more than five years counseling clients on financial issues as a wealth management advisor at PNC Bank and National City Bank, earning various designations in the financial services profession including that of Certified Retirement Planning Counselor. Presently, in addition to working with clients at Risk Management Consultants, she spends time teaching online legal research skills to attorneys and judges as a research specialist for Westlaw and acts as practice manager for Dr. Machen’s part-time orthodontic practice.
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