Favorite Saved

Preserving the Referral-Source Practice of Orthodontics

One of the consequences of the introduction of advertising and various alternate forms of delivery of dental care has been the division of orthodontic care between two groups with two different approaches to health care, with orthodontists as principals or employees in either one:

Business orthodontics--businessmen who are using the profession to advance the business

  • Corporate in-house health-care services
  • Corporations that own or operate dental offices directly or indirectly (retail clinics, franchises, HMOs, PPOs)
  • Primarily advertising-source private practices (general and specialized)
  • Untrained or inadequately trained practitioners
  • Referral services
  • Insurance companies
  • Professional orthodontics--professionals who recognize a business aspect to a professional practice and who use certain business methods to advance the practice

  • Adequately trained, referral-source, private, fee-for-service practitioners
  • This classification does not imply that the professionally oriented are less interested in profit. It does not make any value judgments regarding success or happiness. It does not imply that traditional orthodontic practice will remain in its present form forever. It does suggest a difference in primary motivation and its importance in the characterization of a profession.

    Orthodontic practice is and has been dependent on referrals for an influx of new patients. Referrals have usually been made by satisfied patients and dentists with direct knowledge of the competence of care, others who are aware of the practitioner's reputation, and still others who may have a favorable impression of the doctor. Without such referrals to help them make the choice of an orthodontist, people are likely to make their choice on the basis of advertising, price, convenience, or some other factor unrelated to the competence of the orthodontist. Everything that diminishes the referral process changes orthodontic practice in a fundamental way. There are a number of factors that are moving us in that direction.


    The actions of various government agencies in permitting and encouraging advertising of professional services were based on a theory that pervades economics and marketing academia that can be represented by the formula: V = Q/P, or perceived value equals quality divided by price. This theory was born in the economics of scarcity during the Depression and may have had some validity under those circumstances. It states that low price is the most desirable marketing objective and that if price is lowered perceived value will increase. Also, if price is lowered enough, quality can also be lowered to a minimum satisfactory level and perceived value need not be lowered. However, in today's economic climate of relative abundance, people tend to equate perceived value with price and expect an equivalent quality. This is especially true for services such as orthodontics, whose price is difficult to judge, and this perception is apparently true without regard to economic status. There is no reason to believe that the attitudes of bureaucrats or academicians will change in the foreseeable future. In fact, if money were available, they would have installed a national health plan by now based on the formula.

    According to the price theory of value, competition lowers price and advertising promotes competition. There never was a consideration of the effect on the professions and there has not yet been a reputable evaluation of whether implied goals are being achieved or whether the public is being well served by the alternate forms of delivery that have been spawned by the introduction of advertising into professional health services.

    Orthodontic advertising by alternate forms of delivery of orthodontic care (franchises, referral services, orthodontics by less than fully qualified dentists, closed-panel arrangements, HMOs, third-party arrangements, various corporate arrangements, preferred provider plans) is having an impact on referrals in orthodontic practices. Of these, the major advertising threat to the referral-source system is in the advertising of the franchises and other corporate forms of delivery, many of which are publicly held companies with large advertising budgets. Originally, they were advertising general dental services with the expectation that they could attract families to their facilities and retain the orthodontic treatment. Now they are advertising orthodontic treatment directly.

    Franchise and retail operations are expensive to establish and to run; they have difficulty keeping professional staff; and they have not yet gained customer loyalty in the form of repeat business and referrals. In addition, it is doubtful that even the large, well-financed companies could survive an extended competitive advertising campaign. Eventually, the "we care about you" type of advertising would be neutralized, and they would be forced into a price war. While their supposedly low fees for orthodontics are not extremely low, these companies probably cannot survive a price war. Even though some of the franchises have already failed and many retail clinics have been forced to close, it seems likely that there will be an increase in the alternate forms of delivery and an increase in their advertising. It would be wishful thinking to expect the whole phenomenon to fail. Even if established companies were to fail, there will be new ones with even more innovative ideas to try to take advantage of the opening for businessmen created by advertising.

    A small number of orthodontists advertise as a short cut, bypassing the referral system in an

    effort to increase the influx of patients. A larger number of general dentists advertise orthodontic services. It would be foolish to believe that this, combined with dentist-to-patient persuasion, does not have some effect on intercepting orthodontic patients. However, the advertising of individual dentists and orthodontists is not only inappropriate to the referral-source system-- and undignified for a learned health-care profession-- but it is likely to be ineffectual because of the unequal contest in advertising dollars between individuals and dental corporations, and also because it invites retaliation by other individual practitioners. We are already seeing numerous competing ads in the same newspaper, and their size and frequency are escalating. When enough individuals advertise, it will not only change the public's perception of the dentist and orthodontist, but it will tend to neutralize the effect of such advertising, and to encourage a movement to price advertising, which is itself inappropriate to a personal health-care service.

    If all or most of the practitioners in the community flood the local newspapers, radio waves, TV screens, and direct mail with side-by-side advertising, it is not too cynical to think that might be the ultimate solution-- that it would be self-defeating and that the public would perceive the futility and ludicrousness of it all. However, the dignity of a learned profession would be tarnished for decades to come, and all dentists and orthodontists would be well advised not to go that route.

    Institutional advertising by dental and orthodontic organizations, when properly done, does have some effect on increasing public awareness and should be supported-- even if the effect is not as great as one might like or a solution in itself to the problem.

    Professional Competition

    Orthodontists are finding it increasingly difficult to get referrals in the traditional ways because of professional competition. Not only is there a growing number of orthodontists each year, but-- more important-- there is a growing number of general dentists competing for a decreasing amount of traditional general dental work, and a growing number of general dentists and pedodontists turning to orthodontics as a source of income. With the increased interest of general dentists arid pedodontists in doing orthodontics themselves, there apparently is a decline in the number of dentists who make referrals to orthodontists-- at least in many parts of the country. The full extent of this combination of events has yet to be determined.

    A growing number of young orthodontic graduates is servicing the alternate forms of delivery out of economic necessity. Opening a private office is not only expensive today, but it offers too long a waiting period in many locations before an adequate practice can be developed. In many places an adequate practice simply cannot be developed, or the prospects are discouraging and opportunities for employment or associateship in established private practices are infrequent.

    With regard to the numbers of dentists and orthodontists being graduated each year, there is still too much misinformed government agency input into this problem, and an apparent inability of schools to reduce the number of students. In order to fill the spaces in dental schools, it is necessary to accept more than 70 percent of the applicants. While academic achievement is not necessarily the

    requisite for a good dentist, the likelihood is that dentistry will become less craft-oriented and more a combination of craft and science-- as our knowledge and control of nerve, muscle, and bone physiology improves-- and that there will be a greater need for academic achievement. At that point, dental schools may be in more trouble than they are now, with a declining pool of average or below-average students to choose from.

    It does not seem as though there is a bright solution to the dilemma of large dental graduating classes in the near term. Letting events take their course looks unhealthy, and the dental schools themselves finding a solution is unlikely. If the plight of general dentists were publicized, it would probably be difficult to find an adequate number of students willing to invest their time and mortgage themselves for an unpromising future. That the government might pull out the rug by reducing or eliminating subsidies is a likely scenario and, while it might create chaos for dental schools in the short run, it might be the best, fastest, and most effective solution to the problem that government created with its subsidies and attendant controls in the first place.

    With regard to the performance of orthodontic services by general dentists and pedodontists, there ought to be recognition inside and outside the dental profession that it takes a certain amount of education-- at least two years of graduate training at a reputable institution-- to begin to be able to diagnose and treat orthodontic problems. General dentists and pedodontists who have that training and prefer not to specialize in orthodontics ought to be entitled to treat orthodontic cases. It is not what you call yourself, but how much knowledge of the subject you have that is important. General dentists who object strenuously-- and rightly-- to the idea of denturists, hygienists, and dental auxiliaries practicing dentistry cannot in all conscience accept the practice of orthodontics by those without the education that is required for specialty practice.

    It seems unlikely that there will be an abandonment of the traditional view that general dentistry is the portal of entry of the public to all of dentistry. The concept is that laymen cannot judge their need for specialty referral. However, if general dentists are making decisions not to refer specialty work on the basis of their own economic need, the public will be better served by judging its own need for specialty work and making its own decisions about who will perform that work. Dentistry, which has been held in high esteem by the public, will sink to the bottom of the pile if it is perceived that general dentists have abandoned the concept of service to the public and are serving their own self-interest first.

    Third-Party Activity

    Orthodontists themselves are contributing to the decline of referral-source practice by encouraging third-party patients for whom the insurance benefit is part of the buying decision process. The referral process is short-circuited in many instances by the participating dentist and preferred provider mechanisms of third-party plans, and diminished when the insurance benefit is a stronger motivation to have orthodontic treatment than a recommendation based on competence. Orthodontists are treating a higher and higher percentage of third-party patients, who represent a higher and higher percentage of orthodontists' incomes; and, regrettably, an increasing percentage

    of orthodontists are accepting direct payment from the third parties, which creates a direct relationship that should not exist between third parties and orthodontists. Where there is a contract between an insurance company and the patient or his group and between the patient and the orthodontist-- and no contract between the insurance company and the orthodontist-- direct payment by the insurance company to the orthodontist creates a sense of accountability between the two that did not exist before. It increases the risk of potential loss of control of professional decisions.

    When third parties are responsible for benefits to a majority of orthodontic patients, or when third-party benefits are a majority of orthodontists' incomes, there could be a point at which control will pass from the individual practitioner to the third party regarding who gets treated, for what they get treated, for how long they get treated, by whom they get treated, and for how much they get treated. Third-party benefits may not always be the deciding factor for those who have them, but they are a growing factor and a growing element of the treatment decision for the doctor and the patient. It should also not be lost on orthodontists that third-party orthodontics is a major portal of entry of general practitioners into orthodontics, with or without adequate training.

    There is no indication that the involvement of third parties in orthodontics will decrease. The opposite appears to be the case. But what to do? As long as so many orthodontists depend on third-party payments for so much of their income, it is no solution to suggest that orthodontists not participate in third-party programs-- although they should recognize that in most cases it is not in their best interest to accept assignment of benefits.

    There is one form of dental benefit for employees that is most appropriate to referral-source practice, and that is direct reimbursement. Orthodontists must not only become knowledgeable about direct reimbursement, they must become strong, active supporters of the concept. Direct reimbursement eliminates all the controls-- actuarial and otherwise-- that third parties require, and it eliminates the substantial administrative costs that third-party involvement adds to the cost of health care. The simple reimbursement by an employer to an employee on presentation of receipted bills eliminates fiscal intermediaries, eligibility requirements, participating agreements, preauthorization of treatment and fee, fee schedules, time and expense for filling out forms, separate bookkeeping, quarrels over choice of treatment and amount of fee, submission of records, and so on. Direct reimbursement is good for employees, good for employers, and good for the profession.

    To promote direct reimbursement, orthodontists must become actively involved. It is very simple to identify the corporations in each state and to see that they receive information about direct reimbursement regularly by mail, by phone, and by direct contact. While even one knowledgeable, dedicated orthodontist could have an impact, this needs an ongoing campaign and should be staffed, funded, and pursued in every state. This is one of the most serious projects that orthodontists can undertake in their own self-interest and on behalf of the public. Adequate money and effort should be spent in an all-out effort to promote direct reimbursement.

    Referral Services

    In many states, the law regards the activities of referral services as fee splitting. In states that do not have such laws, referral services are advertising that they can refer you to the best and best-qualified physician, dentist, or orthodontist for you. Much of this advertising uses attractive physicians and dentists as the pitchmen and -women.

    Referral services are clearly not in the public interest and a parasite on the professions-- and they are engaging in fee splitting. They receive a substantial fee for their recommendations from the professionals they recommend. In states in which there are such services, organized dentistry has the duty to fight for legislation that outlaws these agencies.

    Economic Conditions

    Orthodontists are still faced with a number of adverse economic conditions. Although they are not new, they are persistent and cannot be ignored for their effects on the referral-source practice of orthodontics. One of these conditions is a generally high cost of living that causes people to set priorities in their buying decisions that-- out of choice or necessity-- do not include orthodontics. This may be the most significant single factor in reducing the number of potential orthodontic patients, in putting pressure on fees, and in encouraging people to seek alternate forms of delivery that they think may be cheaper.

    Depressed local economic conditions, which result from unprecedented depressions in formerly solvent companies and industries, can have a similar effect. Orthodontists might respond to local depressions by moving or satelliting away, but that is a difficult decision to anticipate and is often made after the fact. It is strongly resisted or overlooked by older practices, but it will sometimes be the only reasonable thing to do.

    In spite of occasional misinformation to the contrary, the birth rate is not going to increase in the near future. Evidence points to a leveling off at best or a slow decline. In any event, there will not be an increase in the child population of orthodontic age in the Eighties, and this trend is likely to continue into the next century. When a business is faced with a decline in its major market and increased competition for a diminishing number of customers, the rational businessman tries to maximize his share of the market, seeks new markets, and changes his product or adds products. In orthodontic terms-- faced with a decline in the child population and increased competition for that group-- the rational orthodontist tries to maximize his share of the child market; prepares himself and his whole practice approach to seek adult patients; and seeks to expand his services by acquiring the knowledge and skills needed to treat TMJ and surgical-orthodontic patients, and to keep up with other developments in the field so that appropriate services may be added in the future.

    Extraordinary Management and Practice Building

    People in our society today generally appreciate quality and are willing to pay for it. The question for the future is whether the economic climate may change or the effect of long-term repetitive advertising can change people's value systems with respect to quality of health-care services. But what is the individual orthodontist to do? Individual orthodontists do not have good,

    direct means to cope with forces external to their practices-- number of orthodontists and dentists, cost of living and population trends, third-party activity, and the advertising of others.

    There has been much propaganda lately denigrating traditional practice and traditional practice methods. The suggestion is that anything traditional is a relic of the ice age, has resisted all change, and is inappropriate to modern society. This is a mistaken idea. While many practices may have neglected management and practice promotion, many others have been alert to the need for excellent management of practice, staff, treatment, and patients. Nothing has been offered under the title of "marketing" that has not always been practiced very well by the more successful practitioners, with the exceptions of advertising and health-centered dentistry in a holistic practice.

    While advertising is unacceptable in a referral-source practice, there is nothing wrong with a health-centered practice. Orthodontists have long recognized that they are dealing with a whole person and not just teeth, if only because of the long-term relationship and the cooperative effort required. A concern for patients' health and well-being has always been part of orthodontic practice philosophy. Nothing suggests that this must be carried to the limits described by "holism".

    As long as orthodontics remains a referral-source practice, internal forms of practice building and practice promotion will be appropriate, and those methods that bypass referral will be inappropriate. Excellent management and practice-building methods within the practice are the best tools that the individual orthodontist can have to maximize his survival in a referral-source, private, fee-for-service practice. These are best supplemented with quiet, traditional external practice promotion in the community and in the dental society. As any external practice promotion becomes too overt-- up to and including advertising and most local personal "PR"-- it not only demeans the individual and the profession, but it helps to diminish the referral-source mode of patient acquisition. Until an orthodontist has availed himself of the best information on management and practice building, and applied those methods that have been proven to be successful in the traditional sense, he cannot assign other reasons to a decline in referrals.

    If referrals were to decline or cease to grow in spite of one's best efforts at management and practice building, it might be time to consider moving from the area-- either entirely or by satelliting away. However, this is not necessarily going to be a cure for a presence as widespread as current competition in all its forms. One could be going out of the frying pan and into the fire. And, if inattention to excellent management and practice building was the cause of the original practice decline, it is likely to repeat itself.

    Doctor Patient Relationship

    A most important and precious ingredient of referral-source, private, fee-for-service practice is the doctor-patient relationship. Orthodontists should nurture it and avoid all actions in the name of management that tend to diminish it. Orthodontists relate to patients on a professional basis, a technical basis, and a personal basis. On a professional basis, the key words are relationship management, communication, and accessibility. Diagnosis and treatment planning are the most

    fundamental professional acts, and conveying the diagnosis and treatment plan to the patient is the doctor's responsibility and the patient's due. Furthermore, it establishes the doctor-patient relationship. It is not that you cannot have an auxiliary perform a case presentation, do it very well, and have people accept that; but when you do, you are depriving yourself and the patient of perhaps the strongest opportunity to establish a doctor-patient relationship, and you are distancing yourself from the patient. You are becoming the invisible man. You are moving from a practice toward a business.

    Progress reports are in the same category. They can be done by an auxillary. They can be done by mail or phone. They should be done by the doctor and preferably in person. Similarly, post-treatment conferences are an important part of the doctor-patient relationship and of practice promotion. Many orthodontists may feel uncomfortable praising themselves, their staffs, and their treatment, and asking for referrals. In that case, the posttreatment conference can be divided, with the doctor doing a post-treatment case presentation and the auxiliary directly promoting referral while explaining the post-treatment service.

    The relationship of the doctor to patients on a treatment basis should instill patient confidence in an excellent and competent staff that is assisting the doctor with the technical tasks. The doctor should be highly visible, see each patient, and obviously be in charge of treatment procedures.

    On a personal basis, the doctor ought to have and demonstrate a genuine caring for the health and welfare of his patients. Orthodontic treatment is a long-term relationship during which the cooperative effort and the satisfying results of treatment offer opportunities to build strong relationships that often result in a lifetime of mutual affection and regard. An outstanding way of conveying that caring is for the doctor to make "comfort" calls to patients following difficult or emergency appointments and insertion of new appliances. Orthodontists who appreciate the contribution that straight teeth make to the patient's appearance, confidence, self-esteem, happiness, and success in life-- and convey those benefits to the patient-- have patients who succeed in their treatment and grow, along with the orthodontist and staff, because of the relationship and the successful orthodontic experience.


    Once before in the brief history of dentistry, advertising was permitted and ultimately rejected by the public because it introduced and encouraged poor dentistry and fraudulent and deceptive acts on the part of the worst elements in the profession. That time it took more than a hundred years. While rejection may come faster this time, it still will not come soon. We can expect everything to escalate in the direction in which it is going. However, no matter what happens in the marketplace, there will always be a certain number of people who want and are willing to pay for extraordinary health care. Therefore, there will always be a certain number of referral-source, private practicing orthodontists who will be successful. If you plan to be one of those, the facts suggest that your future lies in extraordinary efforts at administrative management, people management, treatment management, and practice building.



    My Account

    This is currently not available. Please check back later.

    Please contact heather@jco-online.com for any changes to your account.