I guess most of us have experienced bullying. It comes in many forms: Intimidation, cheating, physical abuse, financial extortion, etc. The list is long and there is always another layer that pops up when you least expect it. Last week I was blind-sided when I arrived at the Arizona Dental Association’s Western Regional Dental Convention. Max and I had a booth and I was speaking two times during the three-day event. Great organization and supper group of doctors. In this setting, I was so surprised to see bullying at its worst, and this particular form of bullying will directly affect your ability to survive in Dentistry.
Our State and National Dental societies have a process of “endorsing” certain companies that interface and sell to the dental community. Our own ADA has endorsed US Bank, Health First, Lands’ End, Whirlpool, HP, Chase, Digital Dental Record, Mercedes-Benz, In Touch, Sure Payroll, Care Credit, and Wells Fargo, just to mention a few. The process is open to any business. Our State Dental organizations have a similar process.
Entering the exhibit area I was surprised to see that Patterson, Schein, and Benco were not in attendance. Talking with other speakers and with the crowd that moved in and out of the exhibit hall, it came to my attention that in their infinite wisdom, the big three (we can call them Larry, Curly, and Moe, or the Three Stooges if you like) decided that they would not attend this multistate meeting because Arizona, after doing due diligence, “endorsed” one of the other exhibitors. As it turns out, this company sells supplies at a discount. Having endorsed this company allowed its constituency to buy sundries at a price below what Benco, Patterson, and Schein were willing to offer.
When I was young, there was a kid that was my age but much bigger than the rest of us. He was huge. His parents were fairly affluent, and because of his personality and actions we avoided playing with him most of the time. The exception was a pick up football game because he owned a regulation size football and none of the rest of us had one. The problem was that he was physically abusive due to his size, bent the rules, made everything about him, and when things didn’t go to suit him, he would walk off the field with the only ball just to prove that he could. He was the basic small-minded bully who would use extortion and petty actions to get his way. Now I don’t know about you, but I think this may be a good parallel for what happened in Phoenix last week. As it turns out, the same thing happened last year in Texas for the exact same reason, with the exact same group. I am beginning to see a trend here.
Every dentist faces market pressure from ever increasing overhead, discounted fees, insurance companies, and Federal meddling every day. I assume when you are Patterson with projected revenues of $4.43 BILLION, and Henry Schein with revenues of $10.4 BILLION, that these menial economic realities don’t have much effect. Truly, the golden rule is in play here: Those with the gold make the rules. I guess in the rarefied air of big business, being small minded, vindictive, petty bullies is how things roll. They actually think this is OK. It is obvious by their actions that they think they have the right to do anything they want in pursuit of higher profit and control of the market. What they have forgotten is that we gave them their business success by buying from them, and we can take it away.
It is interesting when you think about it. My original practice was given corporate pricing with Schein that gave us a 20-35% discount on supplies and equipment just for spending a certain amount with them. In this case, the practice with a 52% overhead and 250 new patients per month was given the opportunity to make it more difficult for the average practice to compete. All three of these companies have “deals” with corporate groups and large practices to discount their prices on dental supplies and equipment resulting in lower overhead for these practices. Schein and Patterson are among the reasons that we struggle to compete against large national corporate chains, when they resist market pressures to be more competitive on the pricing of their merchandise. If corporate practices are pushing the viability of individual practices out of Dentistry, then companies like Patterson, Schein, and Benco are supplying the fuel.
We have entered an economic culture where we don’t really need a middleman to add 30-50% markups on supplies and equipment. We can find anything we want on the Internet for at least 30-40% less. The problem is that these large companies have created a “closed loop market”. They influence the best equipment companies to not sell their products to the individual or even to a smaller dental supplier. They offer pennies on the dollar for their competitors and then use every action possible to force them out of business. This has become commonplace and what happened in Arizona and Texas is another side of their petty arrogance and predatory corporate culture.
Sorry this is so long, but this really bugged me that anyone or any company could think they are above the laws of economics, fair play, or common sense. I want you to do something for me. Before you close this blog, send it to two other dentists, and then print it and give it to your Schein, Patterson, or Benco representative. Sure, it may not make any difference. But change always starts with a single action or just a whisper. While rare, sometimes it becomes a tidal wave of change that resets the culture of a business. I would love to hear from you. If we can’t set aside our differences we won’t survive the current disastrous economic trends in Dentistry.
Michael Abernathy, DDS