January 20, 2019 OrthoCatapult

Low-Cost, “Limited” Orthodontic Treatment: Are You In or Out?

As we have discussed in previous posts, many orthodontic practices stifle their growth by having the reigns too tight on their minimum down payments and monthly payment fees. Worse yet, the high initial and monthly costs associated with orthodontics have created the perfect environment for low-cost, at-home treatment to gain a foothold, such as Smile Direct Club, Candid Co. and dozens of others that have appeared over the last few years. With the orthodontic industry’s attractive margins, venture capital will continue to flow into these low-cost, at-home treatment firms. Those companies continue to invest significant money into advertising and digital scan centers (brick & mortar and mobile) that continue to drive consumer demand and improve the patient experience. With Smile Direct Club receiving a $1 Billion valuation earlier this month, we think it is a safe bet that low-cost, at-home treatments services are here to stay – at least as long as this market demand is not being filled by traditional orthodontic practices. Which brings us to an important question for your practice, “Do you want to compete for these patients?”

If you’re fine with relinquishing all adult, low-cost, limited treatments to these at-home treatment services or your local competitors, feel free to skip the rest of this article. On the other hand, if you want to take ownership of all the orthodontics in your area, including adult limited treatments, please read on.


Disclaimer: The OrthoCatapult® team and Practice Catapult LLC do not promote offering limited treatment to adolescents or teenagers. Likewise, we do not promote offering limited treatment to adult patients who clinically require comprehensive treatment. We agree strongly with the professional oath, “Do No Harm”. As the orthodontic specialist, that determination is your responsibility. However, for adult patients who qualify for limited treatment, we encourage you to present both Comprehensive and Limited treatment plans. The following suggestions are regarding those instances.


Always Assume You’re the 2nd Consultation for Adult Patients

Your adult new patient exams (NPE) are comparing your treatment plans and fees to Smile Direct Club, Candid Co. and others. This includes prospective patients who are completely new to your practice as well as the parents of children you are currently treating. If you aren’t hearing it already, you’re simply not asking. Smile Direct Club will spend 3x more on marketing in 2019 than the best known orthodontic brand, Invisalign®.

Competing with At-Home Treatment

Adult consumers are attracted to at-home orthodontic treatment options for two main reasons: Cost & Convenience.

Cost

Let’s address the elephant in the room: orthodontics is expensive for most American households. Is it worth it? Absolutely. Those of us working in the profession understand the impact properly aligned teeth have on patient’s long-term dental expenses, overall health and self-esteem. However, 99.9% of consumers think of orthodontics as an elective procedure to simply improve their smile. Their value of orthodontics is almost exclusively based on self-esteem and appearance.  That’s why we see more adults seeking orthodontics after ending a long-term relationship, after being laid-off (especially white collar professionals), or with an upcoming life milestone (wedding, graduations, reunions, etc.).

Do you think most adult consumers are willing to spend $5000-$7000 to fix a malocclusion that they view as a single-tooth aesthetic problem?

When uncovering an adult patient’s chief concern, how often do you hear about a single tooth in photos? Do you think most adult consumers are willing to spend $5000-$7000 to fix a malocclusion that they view as a single-tooth aesthetic problem? The at-home treatment services are targeting these exact consumers to address their specific concerns at a price point that is palatable to them. Smile Direct Club currently costs $1850 (Pay-in-Full) or $250 Down and $80/month for 24 months (Retainers are $99/set). An orthodontist should sell “limited” treatment at a premium compared to at-home treatment services; however, the price point and payment options need to remain attractive. For these consumers, you are selling the value of seeing the orthodontist, but that premium price likely shouldn’t exceed a 50-60% premium to stay competitive ($2800-$3200). Additionally, consider the following flexible payment options as payment guidelines to compete for these consumers:

  • Down Payment: $250
  • Extended Payment Plan: 24 months
    • 0% Interest: $105 to $122 per month
    • 9.9% Interest: $118 to $136 per month
    • 14.9% Interest: $124 to $143 month

CLICK HERE to see Invisalign® Comprehensive and Limited Treatment Options shown in OrthoAccept.

We know your initial response to the Down Payment suggestion above, will be that a $250 down payment is too low given your aligner lab fee and represents too much risk. However, we recommend you discuss this patient segment with your aligner sales representative as some aligners companies offer 0% extended payment options to help you avoid the cash flow issues associated with a $250 down payment. Also, if you have a patient back out of treatment, an aligner manufacturer that truly wants to partner with you will refund your lab fees (some, understandably, require you to return the unused aligners for refund).  In our experience, most patients who default, do so in the first 6 months, so extended payments after the treatment is finished have not been an issue. Additionally, when monthly payments are affordable, the vast majority of patients make their payments, even those in higher risk categories.

Convenience

Modern consumers expect and demand convenience. As a society, we have grown accustomed to efficiencies thanks to modern technology and disruptive innovators such as Amazon, Uber & Apple. Amazon Prime has now conditioned us to expect every online order to arrive at our doorstep within 2 business days. Uber allows us to digitally hail a ride in a cleaner vehicle and at a lower price than traditional taxis.  Apple completely changed the way we buy and consume both music and movies.  Today’s adult consumers expect ease and hate waiting, including any time spent in waiting rooms. At-home treatment meets those expectations, but at the cost of clinical scope and actual doctor oversight of treatment!

When offering limited treatment, you need to focus on aligner treatment with dramatically reduced appointment intervals. Braces require too many visits with wire changes and emergencies to make it profitable at a lower price. The best protocol we have seen is the four-visit aligner treatment plan:

  1. Initial Delivery Appointment (45 Minutes): Bond attachments, hand out the entire set of aligners & provide thorough patient education.
  2. Refinement Scan Appointment (20 Minutes): Refinement Scan at the end of the active series. Hand out passive aligners or temporary retainer
  3. Refinement Delivery & IPR Appointment (45 Minutes): Change any necessary attachments. Perform any IPR. Hand out entire refinement series of aligners.
  4. Debond Appointment (45 Minutes): Remove all attachments. Bond fixed retainers and/or deliver removable retainers.

With this appointment plan, the practice is making $700-800 in production per visit. Even when considering the higher lab bill for a comprehensive aligner order (Reminder: We do not recommend using “Express”, “Lite” or “Limited” aligner products), your resulting profit per visit after removing the overhead on these cases is nearly double the average profit per visit with braces.


Are You In or Out?

As stated earlier, offering a low-cost, limited treatment option to your qualifying adult prospective patients is a choice you need to make for your practice. If you don’t, just accept that many of these adult consumers will start treatment with one of your local competitors or with an At-Home treatment service that are offering them an affordable “limited” treatment option. Either way, you own your practice’s philosophy and growth objectives.

 

The OrthoCatapult® Team

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OrthoCatapult

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