DENTAL PRACTICE AS A BUSINESS AND A PROFESSION

The dental practice has many characteristics of both a profession and a business, although dentistry and business management come from entirely different mindsets (Box 18.1). Dentistry (and therefore dental education) is scientific, procedural, and dogmatic. Most procedures have a right and wrong way to do them. Management is much less dogmatic. In fact, management teachers praise students and practitioners who do things differently than everyone else as innovators. They encourage students to try something different, even if it does not work. (Imagine the opinion of dentists to another practitioner who tries a new way of cutting an alloy cavity preparation!) Dentistry teaches us to conform; business management teaches us to be different. Dentistry teaches safe, proven, tried, and true methods; management teaches innovation and experimentation.

A dental practice is a business. A business is an individual or group effort to distribute goods or services for a profit. This is done by providing an economic good or service the public wants and needs. A business tries to make a profit. In fact, this profit motive separates businesses from public organizations, which are often held only to standards of accountability and not losing money. Society expects business owners to treat customers fairly and honestly, but not necessarily to look out for the customer’s best interest. In fact, there is always some tension between the business and the customer as each tries to gain in a transaction. Dental practices are businesses in that society expects them to generate income, pay bills, and follow regulations like any other business.

Dental practitioners are also professionals. Society has created the professions and granted them certain privileges. To be considered a profession, members must possess special knowledge that the public does not have. Gaining this knowledge often involves long training requirements that are unnecessary for other vocations. Because the professions hold this advanced knowledge, society allows them to regulate themselves through licensure, education standards, and disciplinary actions. They are then relatively free from lay control. The knowledge that professionals hold and apply is necessary for the ongoing functioning of society, not something from which only a few benefit. Because society grants so much authority to the professions, it also expects members to place the good of society above personal interest. That is not to say that society expects a vow of poverty from the members of professions, but it does expect professionals to do what is best for patients, not just for their own pocketbooks. If professionals abuse this power, society can unilaterally change the rules through legislative actions.

Dental practitioners can satisfy both views in their practices when they understand these differences. In interactions with patients, concern for the patient must drive suggestions for treatment, and the treatment itself must be given by a professional. Business interests must not dictate or even influence patient interactions and care delivery. The structure within which a professional delivers the service is the business of dentistry. Here, systems and methods are established that allow a dental practitioner to profit from dental care. The hazy line that separates the two often leads to tension for the practitioner. Which side “wins” if a given insurance plan’s reimbursement for a procedure is too low to allow for adequate profit but it is in the patient’s best interest? Such problems lead professionals to rebalance business and professional interactions continually.

To add to the problem, the dentistry that is done in the practice is technically based. That is to say, dentists need to know the science and have the technical ability to do excellent dentistry. However, this is only a starting point for a successful practitioner. When this technical discipline is applied, it is done to people who bring their own set of wants, needs, preferences, and desires to the practice. These behaviorally based factors form the basis of doctor–patient and business–customer relationships. Dentists want to be the most proficient technical dentist with hand skills that amaze colleagues, but without a behavioral skill set that allows them to apply those technical skills, they cannot be successful.

To accomplish all of this, dentists must not only practice the art and science of dentistry properly, they must also practice the art and science of management. Practice management is based on a huge body of science and history in the business world. Its basis includes mathematics, psychology, sociology, and logic. Each manager applies management information differently, depending on their situation, needs, personal style, and frame of reference. Although management has a large scientific basis, its application, like dentistry, is more of an art applied to the science on an individual, day‐to‐day basis. As a practice owner and manager, a dentist’s job is to learn and understand the basic principles of management and then apply them to best meet a practice’s needs.

DENTISTS AS ENTREPRENEURS OR SMALL BUSINESS OWNERS

Many people believe that entrepreneurs and small business people are one and the same. In fact, studies have shown that the two types of people (and their resulting businesses) have different sets of goals, strategies, and needs from the business. Neither is right nor wrong. There are many obvious examples of dentists who fit into either type. People’s view of themselves, the dental profession, and the practice’s objectives will help them understand where they “fit in.”

Entrepreneurs are builders. They try to gain market share and to make the business grow rapidly. Their purpose is to take over or acquire other businesses or sell the existing business to someone else. This means that the entrepreneur must use aggressive business practices, both externally and inside the business, to gain the speed of growth required by outside venture investors and initial public offerings. They may “mortgage the farm” or family fortune to finance the start‐up phase of the business. They have a riverboat gambler’s sense of calculated risk: they do not play the game without knowing the rules, the odds, and how to use them to their advantage. They investigate possibilities, estimate the chances of success and failure, and calculate the expected return from each possibility. Only then do they decide if a venture has an adequate financial return to pursue. They are maximizers. Adequate is not enough. If they can make $1 million this year, they will try for $2 million next year. Every city has dental entrepreneurs who accumulate offices, grow and sell practices, or build networks. Their vision is different from the individual lifetime practitioner’s.

However, most dental practitioners approach their practice like a small business owner (Box 18.2). Few dental practices fail as business ventures. People enter dentistry to be safe, not to take risks. Dentists understand that their income is limited by their personal skill and ability and by how much time they devote to their practice. Many could make more money if they worked longer hours, but they choose family and personal time instead. Most aspiring dentists do not plan to be rich, but they do plan never to worry about money. Because most dental services require that the practitioner personally deliver the service, the size of most practices is limited. Growth involves adding highly trained (and compensated) professionals. Most dentists want to satisfy themselves and others they are in contact with. Once they have established an adequate income, they may take Wednesdays off and play golf. Although they take some financial risk when establishing a practice, most dentists do not continue to grow the practice once it reaches a certain size and style.