How to solve Dental Market Problems

This chapter describes a vision of how the dental market can be better. The ultimate goal is to achieve optimal market equilibrium.

Optimal equilibrium of a market is traditionally described as a point with higher quantities of services provided at same or lower prices. However, Denther doesn't aim for increasing the quantities of dental services but rather to increase the quality of provided services. Total quality of provided services is measured in Denther as the average overall dental health of patients. Similarly, prices are measured as the average annual cost of dental services per patient. In other words, Denther should result in long-term increase of overall dental health of the population. This is explained in more detail in Dental standards. Such market dynamics would have a profound impact on dental service providers as well. Easier access to better dental services means that patients can change and choose between providers as they will at negligent costs. Good providers are awarded by the market by high demand for their services, and bad ones are forced to improve or leave the market. Since in the current market providers almost never leave the market however bad they were, Denther market will, by definition, be a market with better services. Good health services can be defined as services which result in higher overall health. This also means less need for these services in the future. In other words, throughout her lifetime an average patient will spend less time and money on dental services and keep a higher percentage of healthy natural tissue and teeth. Changing the market equilibrium is possible by changing demand and/or supply. Denther brings significant changes to both. Where possible, Denther will pursue the perfect competition marketplace conditions.

Efficient dental market

Separated services

The first and most important characteristic of the efficient dental market is the separation of services. Currently, services are tied together although their providers have conflict of interest. For example, the interest of a patient is to get the most accurate diagnosis possible. On the other hand, treatment providers have an interest to provide as many treatments as possible to earn more. If the same provider gives the diagnosis and treatment, she is in conflict of interest and can resort to an opportunistic behavior. Separating the services is the key to prevention of opportunistic behavior on the seller side. In Denther, a dentist can recommend overtreatment, but he can't confidently expect to be the one providing this treatment. If dentists can’t expect to get more work by advising overtreatment, they will have no motivation for giving such bad advice. If she does decide to advise unnecessary treatment, she should be punished by the market. In the new market, a chance that the patient will choose the same dentist for diagnosis and treatment can be pushed to zero by protocol. Further, bad advice can be almost completely eradicated by obligatory reviews. Each service in the industry is clearly defined and consumed independently. Providers can specialize for one of these and achieve better results. For example, a dentist who doesn’t perform treatments, doesn’t have to invest into expensive equipment. In Denther marketplace, these services are always provided by different providers:

  • Examination
  • Diagnosis
  • Treatment
  • Review
  • Insurance

Standardized services

Perfect competition cannot exist if services or goods are not fungible. In the dental market this means that a patient has to have more providers of the same service. To achieve this it is necessary to set standards for services in the dental market. Separation of services is extremely hard if different providers use different standards. Patient is limited in the number of providers of diagnosis to those which are able to read his examination documents. Also, she is limited in the number of providers of reviews to those able to see both examination documentation and diagnostic report. Denther marketplace has standardized specifications of outputs of all the services so they can be used across the market. Every service provider in Denther marketplace is able to access and fully use relevant outputs of other providers. This are further explained in Dental standards. Key technologies used to achieve these characteristics of services are dental imaging and internet.

No barriers to substitute

Supply can be defined as a number of choices available to a customer at any certain time. When measuring the quantity of available choices, it is important to take into account how often patients actually change providers. Currently, perception is that the number of choices is equal to the number of dentists. But this is an illusion. In practice, patients are generally loyal to one provider for most of their life. Besides maybe general health practitioners, this kind of relationship is unique in the health industry. Denther marketplace designs the relations of market participants in a way to remove or decrease these kinds of bonds. Rather than using psychological techniques to acquire and keep a certain number of long term patients, dentists in Denther marketplace invest their time into increasing their Denther score.

Specialized providers

Breaking bonds between patients and dentists will unleash a huge demand for providers to compete for. This will be an opportunity for dentists to specialize for certain kinds of procedures. Specialization will yield a lot of efficiency benefits. One dentist who does 10 root canals every day will be more efficient and better at doing root canals than a dentist who does 1 per day. It also makes sense for this dentist to invest in better equipment for doing root canals. It will also make it cheaper for them to do it and competition will drive the price down near to the cost level. Currently you are not able to find a dentist who specializes in some relatively rare condition, in more efficient market this should be possible. Instead of having one dentist for most of your life, you will probably use 10-15 different dentists for each kind of condition you have. No barriers to entry Lastly, the full effect of the open market can't be achieved if there are limitations to who can participate in it. Denther will provide one global marketplace for dental services accessible to any provider and buyer on the same terms. Further, since every service is reviewed, providers will not be allowed to participate based on traditional certifications but rather their Denther score. To become a provider you need to gain a certain experience and success levels in Denther. It doesn't matter where you live, do you have a degree of any number of years of experience. This point will create a high pressure on dentists in developed countries who are not able to specialize for services which can't be provided with the same quality for lower price by a dentist in some poor country. Eventually, the price of diagnosis and review will fall drastically, while keeping the same quality. Dentists in rich countries will use their location advantage to provide less expensive treatments (the ones where flying to a cheaper country to do them is not cheaper than doing them in a rich country).