Changing the Dental and Medical Models

changing dental industry like ford changed auto industry

If you want to make enemies, try to change something.

– Woodrow Wilson

Some would argue that the U.S. healthcare system is broken and no longer sustainable. But what can we do? We can change, although change will certainly create waves throughout the dental and medical industries.

Dental Industry Tied to Healthcare System

The dental community is profoundly affected by larger healthcare concerns. As the healthcare community and the medical model change, changes occur in the dental industry as well.

One of the most influential factors on the dental industry today is the rising cost of healthcare at large.

Americans don’t prioritize dental health as much as they used to, and they certainly don’t prioritize it over general healthcare.

Health insurance providers don’t appear to prioritize dental health the way they used to either, and—again—they don’t seem to prioritize it over general health.

The result: fewer Americans are going to the dentist. There’s only so much money in the kitty, and when patients don’t have coverage for dental care, they don’t go to the dentist as often.

To correct this trend, we need to look at dental care from a broader view, learning what we can from the transforming medical model.

We need to look at global trends in healthcare to find a new model of healthcare and dentistry that will be successful for every patient as well as every dentist and physician, both in health and financial terms.

The Ford Model

We can learn a lot from the Ford Motor Company, which transformed the way companies were making automobiles and, as a result, transformed the automobile from a rich person’s toy into an average Joe’s everyday tool.

In 1908, automakers thought the best way to maximize profits was to build a car for the rich. At Ford, however, they wanted to produce a car that everyday people—including workers in Ford factories—could afford.

One, Ford lowered prices by introducing assembly line and mass production processes. Two, Ford paid its factory workers a higher wage, enabling them to afford the cars they helped create.

In October 1908, the first Model T Fords sold for $950. Over the coming years, Ford looked for ways to reduce production costs. By 1912, the Model T was down to $575. It was the first new car to sell for less than the average wage of American workers.

The price of the Model T would continue to drop during its 19 years in production, at one point dipping as low as $280. With each price cut, more and more consumers could afford to buy the cars.

This reduction in price meant that the Ford Motor Company had smaller profits on their cars. In 1909, the profit on each Model T was $220. By 1914, the margin had dropped to $99.

Yet sales were exploding exponentially. While profit margins on individual cars fell, the added sales volume increased total profits. Between 1909 and 1914, Ford’s net income grew from $3 million to $25 million. Its U.S. market share rose from 9.4 percent in 1908 to a remarkable 48 percent by 1914.

Ford permanently transformed the auto industry. To remain competitive, other automakers had to mimic Ford’s innovations.

Daring to Change the Model

Ford Motor Company would move against a tide of naysayers yet set in motion change. The company’s willingness to innovate improved productivity, lowered automobile prices and changed the market for cars forever.

We will certainly make enemies within the dental and medical communities as we try to make change. But we can no longer afford the status quo. It’s time to change the way we operate.

 

By Quinn Dufurrena, DDS