As Australian dentistry has become more and more profitable, the corporate sector now wants its cut.
Across the country, a small group of new companies is quietly buying up dental practices, trying to build the first corporate dental empire on our shores.
Ten years ago, a tsunami of corporatisation hit doctors, as medical entrepreneurs aggressively aggregated general practices. Local GPs were paid six-figure sums, slapped on long-term contracts, and slotted into vertically integrated companies that maximized shareholder returns. As a result Australia has a new class of mega-wealthy medical barons, who are as little-known as they are powerful.
In dentistry, already there are at least two companies listed on the Australian Securities Exchange with a mission to buy up dental practices, and there are more waiting in the wings.
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Perth-based Capitol Health was floated last year, and according to its recent financial report, has so far only managed to buy up three dental surgeries.
The Townsville based “1300 Smiles” listed two years ago, and has been much more successful. It now provides services up and down the Queensland coast, from Cairns to the Gold Coast.
The strangely-named “1300 Smiles” offers administrative and other services, for which the dentist pays a fee, under a signed agreement between the two parties. Not so strangely the company’s “core objective”, according to a recent statement, “is to continue to increase profits and shareholder returns while providing a rewarding environment for our staff and the dentists using our facilities.”
It’s this focus on profit rather than patients which the Australian Dental Association cites as the reason for opposing corporatised dentists. Chief executive Robert Boyd-Boland told Crikey the corporates are active at the moment, but he couldn’t say how many of the 10,000 Australian dentists had yet succumbed.
According to the financial advisory group Synstrat, corporatisation would require MacDonalds-style commodification of dentistry, and while some players may be doing OK in regional areas, corporate dentistry probably won’t succeed in the big cities. The context here is that Australian dentistry has become more profitable in the past decade.
As Australians struggle to pay their exorbitant dental bills, we can rest assured that the dentists and the dental entrepreneurs will continue their struggle to divide the spoils, for some time to come.