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Jason Wood is Reese’s special guest on this Dentist Money™ Show. Jason’s law firm, Wood & Delgado, specializes in helping dentists with a wide variety of dental-related legal issues. In this episode, Reese asks Jason to look into the future and project what the dental industry might look like in 10 to 20 years. Jason’s vision may surprise you as current trends indicate major changes. Find out what can be done to fight the takeover of dentistry by large conglomerates.
Take a peek into the future of dentistry with an industry expert.
Reese Harper: Hey “Dentist Money” listeners! It’s Reese Harper here. Jason Wood from the law firm Wood and Delgado is my special guest on this episode of “Dentist Money”.
Reese Harper: My relationship with Jason goes back quite a ways. His firm specializes in helping dentists with leases, partnership agreements, and associate contracts, and other business associated legal needs. Jason’s experience as an attorney is top notch. But his experience outside of the legal specifics and into career advice is pretty unusual for someone in his profession. Today I asked him to do some crystal ball gazing and tell us what he sees in the future of the dental industry. And, typical of Jason, he doesn’t hold anything back as he offers up a few of his well-formed opinions. You’ll want to hear where he thinks dentistry is headed and how those future trends might apply to you.
Reese Harper: Before we get started, I wanted to remind you to join the Dentist Advisors discussion group on Facebook. You can sign up for free at dentistadvisors.com/group. I also wanted to remind you to book a free consultation on our website with one of our dental specific advisors. Just pick one of your days off, find a time during lunch. We even have some options on Saturdays. Book your free consultation at any point looking at our calendar by clicking the “Book Free Consultation” button.
Reese Harper: Thanks, again, for listening, and enjoy the show.
Speaker: Consult an advisor or do your own due diligence when making financial decisions. General principles discussed during this program do not constitute personal advice. This program is furnished by Dentist Advisors, a registered investment advisor.
This is “Dentist Money”. Now, here’s your host: Reese Harper.
Reese Harper: Welcome to the “Dentist Money” show, where we help dentists make smart financial decisions. I’m your host, Reese Harper, and I’m excited to welcome a return guest and good friend, Jason Wood, back to the show.
Jason, how you doing?
Jason Wood: I’m well, sir. How are you?
Reese Harper: Good, man. How’s sunny, southern California this morning?
Jason Wood: It’s not bad. I’m not there, but I hear it’s nice.
Reese Harper: Oh, are you vacationing right now or something?
Jason Wood: I’m up in Idaho.
Reese Harper: Oh, nice.
Jason Wood: Yeah.
Reese Harper: My hometown. I didn’t know you ventured up into-
Jason Wood: Your hometown? You call Idaho a town?
Reese Harper: It’s like one city. It’s like one big place. You’re either in Boise or Sun Valley or Coeur d’Alene, where are you?
Jason Wood: You’re pretty good.
Reese Harper: Okay.
Jason Wood: Coeur d’Alene.
Reese Harper: Okay, nice. There’s only three options. That’s cool. I grew up in southern Idaho, so closer to Boise.
Jason Wood: Okay, very nice.
Reese Harper: That’s some of the default podcast jokes only are understood by people from Idaho. Shout-out to everyone there right now.
I just drove by your office visiting family.
Jason Wood: Oh, that’s right.
Reese Harper: It was during a time where I knew you probably wouldn’t be there, so I didn’t pop in.
Jason Wood: Thanksgiving? Yeah, I was gone.
Reese Harper: Anyway, I’m excited to go through kind of an annual State of the Industry with you. As my listeners know, I have a few guests that I really feel like add unusual value beyond their craft. More than just an attorney, I feel like you’re a consultant and an advisor to a lot of people in a lot of different ways. For me, that makes for an always interesting interview. So, in addition, most of the stuff we’re going to talk about today is legal, but you’ll be able to get a sense for Jason’s background outside of just technical legal issues and transitions and a variety of issues. Like partnerships and DSOs, MSOs, different groups.
Tell me a little bit about the industry in general right now. I know every year I’d like to at least get an update on dental law. Maybe your perspective about what’s changed. What should our listeners know about the current State of the Industry as it relates to dental law in general?
Jason Wood: Well, I think that the two biggest topics… I’m sure there’s more… but that one’s that typically come to my mind are insurance reimbursement rates and then, the continued growth of corporate dentistry, private equity, things like that. I don’t know which one you want to tackle first.
Reese Harper: Let’s talk about insurance reimbursements. Why does that come to mind right now as opposed to … maybe more than any other year?
Jason Wood: There’s been a continued, albeit methodical, step-by-step, suppression of fees. Most of your listeners probably are aware. And if they’re not, hopefully this podcast will help them understand it a little bit. Delta Dental, the biggest insurer, has over the last decade had a concerted effort to suppress… I love using that word “suppress” because it conjures up amazing images of what we have seen… whether it’s a suppression of votes, suppression of an ethnicity. But the word “suppression” has a lot of connotation associated with it from an emotional, transformative kind of issue. So, I use the word “suppression” because there is a concerted effort to suppress reimbursement rates.
There is a concerted effort … and I’ll just use the word “media” … in terms of making dentists the bad guys. And, as a result … and unfortunately, they picked the perfect prey because dentists, in general, tend to not fight back. They tend to be individualistic rather than bonding together. There’s definitely been a suppression of fees because overall, dentists will just take it. And as a result, the insurance companies, by and large, have been very successful at either not increasing fees or downright knocking reimbursement rates down. There’s been some interesting legal battles that have been sprouting up in Washington and other places regarding this. What dentists need to realize is that if you are not actively, on a yearly basis, trying to fight the insurance companies, they’re going to nickel and dime you. And they’re going to continue to nickel and dime you.
You need to be very active with respect to negotiating your insurance reimbursement rates. You need to make sure you know what’s in your contracts because more and more procedures are either being included or, in other contracts, excluded from being accepted.
Reese Harper: Do you recommend that they have someone in their office continue be on the phone with insurance carriers doing this on their own? Is this something that you … Do you have a list of five providers that you like people to reach out to to assist in this process? What’s the solution that you think… or maybe number of solutions that you advise people to take when it comes to protecting their reimbursement rates?
Jason Wood: I think that the understanding that a dentist can no longer just be a clinician. It kind of is crystallized in this concept of the providers need to be on top of insurance. They need to be active. They can’t just farm it out to an office manager. They need to understand it in depth. And I think, as a result, that also transforms how they view their practice in general. They become a better business woman, a better business man as it relates to the nonclinical aspects of a practice. And, so, I kind of place that towards the top because once a dentist gets into the intricacies of insurance, in many ways, they become more confident in the nonclinical aspects of the practice. Which then… It’s shocking, but they become better overall. And, thus, I think they’re going to find strength, if you will. That’s the word that comes to my mind.
Reese Harper: I think there’s a lot of value in what you’re saying, though, around [crosstalk]. Pricing is one of the things that entrepreneurs struggle with generally. Understanding the price of their service. Understanding how much their services cost. What each… in dentistry’s case… what each procedure really costs them. Understanding whether you make money doing certain procedures for certain amounts of money from certain carriers is a really critical, fundamental part of managing a business.
But it’s very overlooked, I think, because it’s kind of automated. It’s kind of like when you buy a dental practice, that part is already a, albeit mediocre, it’s a functioning system. It exists. It’s in place and they don’t… I think they wait to sort of tackle that until… in most cases, never tackle it. But like you’re saying, when they do tackle it, and when they do focus on it and make the time to understand the cost of each procedure. The cost of what they really want to earn and for each type of procedure. Whether it’s the cost of hygiene or the cost of their own time. It’s really critical to know that. I think once they do learn that, it gives them a sense of confidence that they didn’t have before. Because it takes so much effort and so much work. It also opens up the conversation around not accepting insurance, and then, how would that hurt me or help me? And what about membership plans.
Jason Wood: Yeah, all of that. And membership plans. If I go out of network. It’s all these scary concepts when it’s perceived or looked at in a vacuum. But when you start chipping away and realize that it’s something that can be mastered, I think it takes on a whole new approach. And there’s a ton of help. And oftentimes, solo practitioners, or even smaller multi-practice owners, they feel that they’re an island. They need to understand that they’re not.
Reese Harper: Let’s bump onto our next topic. We talked about insurance reimbursements, which is really critical. We also talked about membership programs, which I think is a really good reminder. What about leading into this DSO conversation, which is the second thing you kind of mentioned about the industry. If insurance is so important, you can see why DSOs and MSOs are having success, right? Because that’s a big area of competency that oftentimes they bring to the table. We’re going to take this insurance game really seriously.
Talk to me a little bit about your feelings on… Specifically what my audience is interested in is probably, number one, what are the things that are happening within DSO or MSO that can allow a dentist to… Why is it an attractive option for some people? And then, what specific things do people have to do in order to compete effectively and continue to maintain their entrepreneurial side as solo to multi-location practice owners? Probably add one more thing in there, if you can remember, which is, some people want to know if this is for me. Why don’t I just build the early stages of a DSO myself and enjoy the financial upside from that? And manage it and learn and grow? I know you have experience working with clients in all these different business models. Let’s start with the state of the nature of the industry as it’s changing relating to group practices and DSOs right now.
Jason Wood: What I tend to tell people who are thinking about forming a DSO is how many practices do you have? How many practices do you want to end up with? Because so many clients are being told by certain individuals, “Oh, no. You need to form a DSO.” Well, the vast majority of the time, the answer is no. You really don’t. It’s just a way of fleecing the dentist for fees. Unless they are at a certain stage, they don’t need the DSO structure. It’s not worth the cost. It’s not needed. There are better ways of working on overhead controls and negotiating prices and things like that. Rather than having to pay for these… DSOs are not cheap to form.
If your goal is to sell the private equity. If your goal is to do a roll-up. Or to sell to a bigger DSO or something like that, the answer is eventually, you will need to create a DSO. Because the more familiarity there is with your model, the better the purchase price you will have. However, when you have two practices, three practices, four practices, you don’t need the DSO. You can create that down the road. Because as long as you’re the owner, you can do whatever the heck you want in the future. It’s only when you’re going to outside sources. When you’re going to bring in non-dentists or something else where you would need to restructure how you are doing things. You can get the price savings, the negotiations, all those other things in order to lower the overhead through a multi-practice model by not having to move and steer yourself towards a DSO.
First, if you want to establish a DSO, I typically recommend that you have a minimum of five to six practices. Why do I recommend that? Well, your practices should be at a sufficient level on terms of revenues. To be able to then support a centralized staff, centralized billing, centralized whatever, so that when you go to create the DSO you are also reducing redundancies. But you don’t need to create the DSO to avoid redundancies. You just need to be on top of it. But it can make economic sense right around the five or six practice location to do that.
I still believe that you don’t have to pay the cost of the DSO and things like that to get to get those redundancies dealt with in an efficient manner. But you can do it right around the five or six. I can’t tell you the amount of people that we have that come to our office that say “Hey, I’ve got two, three, four practices. I’ve been told I need to create a DSO. And, again, I’m totally fine after I explain… and I tell people, “Hey, if you want to give me money to create a DSO, I will.” But here are the things you need to consider. What are you trying to do? What is your goal?” Are you trying to sell to one block. I want to sell to a bigger DSO. I want to sell the private equity. I want 25 practices. Tell me, give me your vision. Versus “Well, actually, I want to bring on minority partners, I want to do this…” Those are really important information tidbits that somebody needs in order to properly create any type of structure.
If I want to do a DSO and I want it to look like, say, Pacific Dental, that brings on minority partners for individual locations. Or even a localized partner structure, that’s kind of important to know about ahead of time. While you are creating these additional practices, because if we create the wrong DSO structure, now all of a sudden, it’s two, three times as expensive to be trying to fit the dentist’s model.
I always have concerns because, oftentimes people come to you and they don’t really understand where they want to be. One of the reasons why people were going to the DSO model was because they didn’t think they could have access to capital. The banks have changed. They have taken on a more liberal approach as it relates to multi-practice ownership. So you’re not having to go after outside private equity so early anymore. You can get to five to 10, sometimes to even 15 million in outside loans before having to tap into the private equity market. You can retain that ownership longer, which then will attribute a higher overall return to you by going to the banks and lending institutions instead of outside money. And, thus, having to give up ownership for your practice.
Reese Harper: It might be the best way to build wealth for you. It really might. For me, personally, the amount of being able to raise a little bit of capital, grow my company, create some liquidity for myself, see the asset that I have the most experience in, grow like crazy. That’s been by far my best investment. Because I’ve chosen to take it past the point of providing for me a great lifestyle. And it was never a money decision. I really was interested in seeing more people take advantage of the financial philosophy that we have established through our process, our elements platform. And I thought I want more people to experience that because I really think it’ll help. And the only way for me to do that was to push a larger operation. And a lot of people might feel that way about a dental practice. They feel like they’ve got a really unique way that maximizes comprehensive oral health or total oral health. They really feel like it’s having a big impact on people’s lifestyles and their overall wellness and hygiene. They just want to see that methodology or treatment path or that team have a bigger impact. That may be the best path for you, right? That may be the best path.
Tell me about, as we wrap up here, about the dental industry’s future. Is it going to get… What’s the opportunity look like? Is it going to get worse?
Jason Wood: It is solely based up on the individual doctor and their choices. We are definitely at a precipice. The choices that this generation of dentists make will shape and alter the future of the dental industry. If people choose to forgo ownership and, instead, are comfortable being long-term associates for corporate players, then this industry will suffer the consequences of those choices. And dentists will end up like pharmacists. Like optometrists. Like MDs. Who are all making substantially less than what they made when those industries were owned by individuals. We have seen a very troubling change over the last decade, but it’s really the last six to eight years, where young doctors are in droves forgoing ownership rather than working for corporate dentistry. Using them the way that they are using you. Getting [inaudible]. Getting all of these things under their belt and then going and acquiring a practice after one or two years of being an associate somewhere else.
If the numbers do not change and young doctors do not become owners, they will the suffer the consequences of not being able to have an industry where ownership is a possibility. Are there still small pockets for pharmacists out there to own their own pharmacy? Yeah, there’s probably less than 500 in the country. And that’s a total speculation. But MDs, unless you’re a specialist on things that are not typically covered by insurance, you work for some large conglomerate.
Dentists really have a choice to make in particular… And I’m going to pick on females for a second. The female dentists, if they keep believing the lies that they are told. That they can’t be doctors and mothers and own a practice, then this industry is doomed. We have more than 50% of the outgoing classes are female. And, unfortunately, the rate of female doctors desiring to become owners is less than half of the male counterparts. I will just tell you right now, my most successful clients tend to be females who are in partnerships with other female doctors. And they have amazing livings. Livings… Wow that was nice. Amazing lives. They’re able to have successful families, and they’re not bound to the practice. I don’t want the practice to be an anchor. I can tell you that there’s no better industry to be an owner and a mom than the dental industry.
And one word of caution: If the private equity corporatization of dentistry continues… and I think we touched on this last time… in all of human history, there has never been a rise in individual wages when corporations take over an industry. There’s always a suppression of wages. Out of all the overhead associated with a practice, the largest overhead is the dentist. That will be on the first line, the first chopping block, is dental wages. And you’ve already seen that. If you look at the ADA, if you look at the reports coming out, wages for dentists have dropped. Primarily because of reimbursement rate reductions, higher overhead, corporatization. The easiest way out of debt is the pathway ownership. Unfortunately, dentists are being told that that’s not correct. And, yet, if they actually examined it, they would see that the people that are telling them that have vested interests in making doctors believe that.
Reese Harper: This is great insight, man. I want to continue on this topic just for a few minutes because I think that this is one that maybe you and me have some unique insight into. My experience looking at other industries, many industries go through cycles similar to what the dental industry is going through right now. Pharmacy is a classic example. There’s pharmacists that were making seven figures running small pharmacies and still some are. And now, I’ve got really close friends who are really seasoned hospital pharmacists that are struggling to get into the six figure range. Or just over the six figure range.
It’s a classic case study of how an industry gets turned around. What can happen though… The hardest part of business is building something for someone that they’re willing to pay for. Building something for someone that they’re willing to pay for. A pharmacist isn’t doomed to low wages. But someone has to go create a pharmacy or an experience or a service for people to get appropriate levels of choice. Meaning, you have to do something for me that’s not being done.
You have to do something different. Something personalized. Something that actually is valuable for me to want to pay for it. That’s capitalism. You have to do something I want to pay for. And the pharmacist says, “You know what? We don’t just fill pills here. We do that, yes. But you know what we do offer? Our pharmacists are the most capable, the most competent, the most experienced people in this city. And we actually understand medicine unlike anything you’ll ever have experienced. And rather than just giving you an option, we actually know more than most of your doctors know. Yeah, we get paid more than your doctor because we charge for this service. This is how we charge”. I’m making this up on the fly.
You charge the customers for that service experience that they’re going to be able to have custom medicine selection, vitamin selection, holistic recommendations, nutrition recommendations. You’re going to provide them with something they’ve never seen somewhere else and that will cost some money. And the corporation that comes in and says, “We’re going to make everyone work for less and cut costs and drive things down”. Well, you’re never going to take it over, but you’ll see a cycle happen where… You see this happening with local craft foods and organics right now. You see it with craft beers. You see it with all of these very… People are craving more. They’ll pay more for more. It’s a differentiated model, right?
Jason Wood: Absolutely.
Reese Harper: That’s what’s working in my industry. I am not as cheap as Vanguard’s personal advisor services and I never will be. I’m never going to be the person that’s going to staff a phone call center with financial advisors who are making 10% of what the dentist is making and we expect them to give advice to a business owner at 30 basis points. What do you want us to do for $1,000 a year? I can’t get anyone paid anything to give you advice at that rate. These are the cycles.
We have that and people make a ton of money, then corporations come in. And they cut prices and they offer something to the public. And the public is kind of dumb sometimes. And they go, “Yeah, we just want it cheap, cheap, cheap, cheap, cheap, cheap, cheap, cheap. Just save me money. Cut my costs”. Then the public after a couple of years realizes “Cheap wasn’t good for me. I kind of didn’t like cheap. Maybe cheap’s not good. My mouth hurts still. I’m not getting good service. My dentist doesn’t even know me. He’s changing every time and the hygienist is rotating every time. Are these guys getting paid enough to be here? Do they even care?”. No, they don’t.
Jason Wood: I doubt the consumer is-
Reese Harper: They don’t think that.[crosstalk]
Jason Wood: I doubt the consumer is thinking “Are they getting paid enough?”
Reese Harper: They should! They should think about that and go, “Are they getting paid enough? Maybe that’s why they change on me every time”. If you were paying them enough, they would come and show up for your appointment, I promise. They would never not be there. But they’re not getting paid enough. Ultimately, what will happen is, the opportunity for dentistry is in front of you. You have to be something to someone. And it has to be really good. If it is, people will pay you for it. And you don’t need insurance, even. If dentists who choose not to be a commodity will succeed. They’ll succeed. But, if you choose to be a commodity, you’re just going to suffer the consequences of that industry. It’ll go through the phase. It’s not because you’re doing it. That’s the nature of capitalism. It’ll go through those cycles and, eventually, you’ll see these dental practices rise up that cost twice as much as the purveying cost is. And people are going to pick it. That’s what happened to iPhone. Think about Apple. It was crazy to spend… and still is-
Jason Wood: $1,000 for a phone.
Reese Harper: Yeah, twice as much for a phone. Three times as much. People don’t care. Why? Because it’s not excessive. It just meets the needs of the market. Things that are commodities will go the way of the commodity. If you think dentistry is a commodity, then you might as well get out of the industry right now. If it is a commodity, it’s going to be real cheap at some point. If it’s not a commodity because you’re innovative enough and creative enough to not let it be one. Because you know it’s not and you understand, yeah, it could be a commodity if we just do a crappy job. But if we treat it like the art that it is and the total comprehensive oral health experience that it really should be. And we treat the whole body and we care about it, then you won’t be a commodity. People will drive hours to see you. I want to leave that message because I feel like commoditization of industry is the cycle of any industry but it doesn’t have to be the story for you and your practice. But you have to wake up and see that that’s happening.
Jason Wood: I’ll leave you guys with this: That the physician income now… again, I’m using another industry to show what can happen… physician income is much less than what it used to be prior to MDs losing their independence. So much so that… you can Google this if you want… but, doctors now… I’m talking MDs… on an hourly wage make three cents less than teachers do. On an hourly wage that you extrapolate over a career. That’s shocking in itself, but understand where they fell from, as well.
Doctors used to make a lot more money, but what are they allowed? Two things that they allow… and I say allowed because, again, they thought they were an island. They thought that they were unique and could just continue on as normal. Two things: One. Insurance reimbursement rates plunged. Why? Because they allowed insurance to control. Secondly, they lost their independence. Conglomerates, hospitals, so on and so forth, gobbled up[crosstalk]. And then suppressed wages.
So, doctors now make a lot less per year, even though the cost of being a doctor is higher than it ever has been. I’m sure people are starting to hear the word “dentist” in there, as well, since it’s, what, 300 grand to be a dentist? When you extrapolate over a career, it’s just not worth it. You’re making, obviously, there’s the altruistic. I want to help people, blah, blah, blah. And that’s wonderful. I love it. Great. But, for a lot of people, they think that the pathway to financial independence is by being a dentist and things like that. And I can tell you with a lot of historical evidence backing me up, that if you do not become a practice owner and the industry suffers the way physicians, pharmacists, optometrists… anyone remember the local hardware store? If we suffer that route, you will never be out of debt. That’s the scary part.
Reese Harper: I think that the-
Jason Wood: Happy Christmas!
Reese Harper: I liked this counterpoint of this really depressing side of this and the optimistic side because these are the truths. There will be people during the entire decline of any industry that will not suffer because you don’t have to… We’re talking, and I know you’re broadly generalizing here, what the industry does is not what individuals do. Some of you will not commoditize and some of you will… Like my wife drives over an hour one way, in traffic, to get to her dentist. She passes something like 200 dentists to get to her dentist. And there’s no insurance. I know I pay more for this experience than I would pay at probably at any of the ones she passes along the way. Plus the car trip, plus the commute, plus the time.
Jason Wood: But the experience for her, the service, the value of what’s being provided far exceeds the cost, and that’s why she’s willing to do it.
Reese Harper: Her physician also doesn’t accept that her primary care physician, our kids’ pediatrician, doesn’t accept insurance. And I’ve seen the P&L of multiple of these practices. I know their financial situation fairly well. This is not a practice that is suffering. You don’t have to suffer the telltale signs of industry decline. I’m in the same boat. Getting your investments managed is free. Fidelity launched a mutual fund series now, zero expense ratios. You can put your money in it. There’s no cost anymore. But there are a hundred jobs in financial planning, a hundred at least, that need to be done whether you hire me or you do it on your own.
Same thing with law. There’s a hundred jobs that have to be performed regularly. There’s jobs that have to be performed on an annual basis, quarterly basis. These industries exist for a reason. Law has been around since Mesopotamia. Thousands of years. They exist for a reason. It’s hard to understand laws. It’s hard. And it takes a specialist.
So, you could also say anything… I’m being critical of myself before I be critical of any other industry. You could say that financial planning doesn’t need to exist because it’s free. It’s cheap. You can get it online. But the experience that our customers are having. The reason. The time that we’re saving them. The way at which their net worth is growing. Their total, comprehensive financial health and the direction it’s moving at is simply better than the alternative.
There isn’t an alternative solution that’s being presented that’s better. Not just my business, but a lot of independent, we’ll call them local, organic craft specialists in financial planning, are succeeding. The Northwestern Mutuals, the Mass Mutuals, the Merrill Lynches, the brokerage firms, the Edward Joneses, the Raymond Jameses, they’ve really tried to pivot and adjust. But it went corporate for 50 years. Then consumers are like, “But they’re just selling me weird products.” And you see that happening in dentistry. You’ll see that happen in dentistry where these DSOs start realize that there’s not enough margin in the services. So, guess what? Now we’re going to start getting paid on the supplies. We’re going to mark up everything. We’re going to get paid under the table. We’re going to get paid third party. We’re going to have reimbursement arrangements with equipment vendors. You’ll see it happen.
Jason Wood: All that stuff, yep.
Reese Harper: It happened in finance. If you’re willing to be honest and provide the best service possible and be the best in your craft, there’s always room for a really great living. That was my point. With pediatrics, with pharmacy. And I know that you agree with that. Your practice is evidence of that. You’re definitely not the least expensive person that people can call. You never will be. But, ultimately, the value in which you’ll provide someone in one hour of interaction or five hours of interaction, or in a transaction far exceeds the cost. As long as that’s always the case, there’s always going to be great businesses to be built out there that are not only impactful, but very they’re profitable. [crosstalk] scared about it too much. They’ve just got to go do it.
Jason Wood: Here’s the thing though. You, myself, practice owners, things like that… You, I control where we go. Versus… and I’ll take your industry… the Vanguard person answering the phone. He can’t do or she can’t do what they want. They’re governed by whatever the higher-ups say. They can’t provide true independent advice. They have to be governed by whatever it is that Vanguard wants to do. A dentist has to see the same thing. If you want to be able to control your own future. If you want to be able to provide what you want to your patients… Because I think we’ve all see the PBS specials of how non-dentists are really pressing down on clinical choices of doctors, then you need to own. If you want your future to be independent. Not just your financial future, but your clinical future. [crosstalk]
Reese Harper: You’ve had to make that choice. You’ve had to make that choice, man. I’ve had to make that choice. I left the corporate financial services world because I was uncomfortable with the future of advice control. My independence, my autonomy, my ability to think and serve my patients, my customers the way I wanted to, was in question. That’s been a huge value in your own life and own firm. I’ve seen that manifest in the advice you give. What your able to say. Your candor. It isn’t something that you… And I’m not saying every industry needs to be that way. That was my point earlier. Commodities can be commodities. If it’s toilet paper, there’s not as much price fluctuation there. The significance of the impact on human development of that product, that is a true commodity. But a service is not a commodity. And it never will be. Especially something as critical as dentistry.
Jason Wood: You can’t make it become a commodity. I understand there’s outside factors, outside forces that want to make it a commodity. They want to make it a cost only issue when… Who wants to go to the lowest cost provider when it has to do with something that is about their health? If you have cancer, you don’t want to go to the lowest cost provider to help you on something that can save your life.
Reese Harper: Great topic, great topic.
Jason Wood: I’m still optimistic about this industry, but I do stress that it’s the individual choices that dentists will make over the next five to 10 years that will be transformative for this industry. And that can be positive or negative. I also think that there are outside forces like interest rates, rate of returns and things like that in the private equity market that can also have an impact over… One of the reasons why private equity is literally dived into this industry is because the rates of return everywhere else and the low interest rate environment are almost nonexistent. Where are we looking? Oh my gosh, have you seen the profit margins in dentistry? So, there’s outside forces that are playing into private equity, as well.
But the primary issue is you, the person listening to this podcast and making the decisions for your future in terms of where you want to be. Where do you want to be in two years? Five years? Ten years? Where do you want to be with your family? Where do you want to be financially? Where do you want to be clinically? In terms of your future, you need to be asking these questions. And, quite frankly, you need to be asking them before your done with dental school. Because the decisions you make today impact tomorrow. And tomorrow impacts next year and so on and so forth. Lo and behold, five years have gone by and you’ve wasted the opportunity of creating your own future by working for somebody else.
I will tell you this emphatically: Nobody needs to work for somebody else for more than two years. And if you’re worried about that… Well, I don’t know the business side of dentistry. If you are confident in your clinical skills, the business side will come. And you can pay a consultant to teach you systems and teach you efficiencies a lot less cheaply than working for somebody else. It might cost you 20 grand for a consultant to come in and teach you efficiencies and systems. But that 20 grand, if you apply them, can have an astronomical impact on your future over the next few decades. Don’t allow fear to control your future. That never works out for anybody.
Reese Harper: All right, Jason. That’s great advice, man. I really appreciate you taking the time today. And looking forward to seeing the comments and feedback I get on this episode. It’s definitely ruffle some feathers in a good way. I like it.
Jason Wood: Well, and like I said, I know I ruffle feathers. I know I might shock a little. I do respond if people have questions or want to throw flaming Molotov cocktails at me or anything. But, seriously, I value the individuals in this industry. I really have a passion for this industry and education.
Reese Harper: Thanks so much for taking the time, man. We’re going to have all your contact information and all your services information in the show notes. Just really appreciate you coming on. Look forward to having you again soon.
Jason Wood: No problem, Reese. Thanks for being not as worried about having me on again.
Reese Harper: Yeah, dude. I never am. I really appreciate it. Thanks a lot.
Jason Wood: All right, man. Bye.
Reese Harper: Catch up soon. See you.
Our thanks again to Jason Wood. As you move into the future, you’ll definitely want to consider some of the facts that Jason presented about DSOs and practice ownership trends. You can go to his website at dentalattorneys.com to see his firm’s full suite of services.
I want to remind you to join the Dentist Advisors discussion group on Facebook. You can go to dentistadvisors.com/group to join for free and ask any questions that you want one of our advisors to respond to. Also, book a free consultation at anytime at dentistadvisors.com. You can click the “Book Free Consultation” button. Find a time that works for you on a day off, during a lunch break, even on some Saturdays.
Have a great day and carry on.