Corporate Dental Branding- What Dental Consumers Need to Know

Dr. Michael W. Davis maintains a general dental practice in Santa Fe, NM. He serves as chairperson for Santa Fe District Dental Society Peer-Review. Dr. Davis also provides a fair amount of dental expert legal work for attorneys. He may be contacted via email: MWDavisDDS@comcast.net
 

   

Corporate Dental Branding- What Dental Consumers Need to Know

A brand is a name, term or symbol which one company uses to differentiate its products and services, from that of another company.¹ Corporations employ numbers of different strategies in branding. Healthcare professionals are generally fairly ignorant on corporate branding practices, as this is not an element of their formal education. By contrast, those parties which beneficially own corporate dental practices retain individuals well-skilled and well educated in all forms of retail sales, marketing, and finance. Their abilities include a plethora of differing and complex branding methodology.

In its simplest form, a chain of corporate dental clinics may seek direct brand recognition by consumers. They may market “outstanding dental care at reasonable prices”, all associated with their brand. Branding may be part of a marketing program to generate public goodwill via broad mechanisms, ranging from well-publicized charitable events to sponsoring a NASCAR driver.² Branding may also be associated with the business model of dental Medicaid care.

Unfortunately for the corporate dental industry, many of their more established brands have become associated with abuses to the public welfare.^3-9  

(Author’s note: References only cite a mere handful of well reported abuses generated from corporate dentistry, disclosed by government officials.) 

Dental clinics managed and directed by non-doctor corporate management often have a troubling record, which the public is witnessing. Likewise, dentists who may be employed in such workplaces are also witnessing abuses to the public interest generated and facilitated by brand-name companies in corporate dentistry. As such, many in the public are avoiding dental services offered by branded corporate dental practices. Further, these branded corporate practices are finding employee/doctor attraction and retention increasingly challenging. One corporate chain recently reported over 10% loss in total dentist staff for a one-year period.¹⁰

Crowd Sourced Branding-

Numbers of branded corporate dental groups are increasingly discovering their branded identity has negative consequences. In fact, the term “corporate dentistry” is an example of “crowd sourced branding”, in which the public assigns a company a brand (positive or negative), versus the traditional method of branding, in which a company designs their branding scheme.

Some dental corporations have fought back by explicitly marketing their distance from “corporate dentistry”. One such ad from a corporate dental chain openly states, “You Hate Corporate Dentistry and So Do We”. The veracity of their claim seems highly suspect, especially when one views their multiple settlement agreements with multiple states’ attorney generals. However, corporate dental management is evidently far more concerned with negative fallout of crowd sourced branding, versus presenting truth in the public marketplace. 

To further counter the negative public impression of corporate dentistry generated by crowd sourced branding, numbers of corporate dental chains market the misrepresentation of doctors, and not faceless Wall Street types, as owning dental practices. The reality is very different and highly disturbing. 

Numbers of dental chain corporations establish specific individual doctors to act fully as sham-owners, who have no control of management, the sale of “their” asset of the dental practice, or control of clinic bank accounts. In fact, these shame-owner dentists have no idea how the funds generated by “their” dental clinics are allocated; depositions in the Small Smiles mass action lawsuit made that abundantly clear.

Other corporate dental chains establish a group of dentists acting as sham-owners, via the accounting mechanism of a professional corporation (PC). Again, these doctors have no true and valid ownership privileges of dental practices, as beneficial ownership passes to non-doctor corporations, often private equity investment firms. Some of the world’s largest and most well-known private equity firms currently are or formerly have been the beneficial holders of corporate dental chains, which direct patient dental care. Examples include Morgan Stanley¹¹, Valour Investments Ltd.¹², Carlyle Group¹³, American Capital Strategies¹³, FFL Partners¹⁴, Gryphon Investors¹⁵, MSD Capital (holdings of Michael Dell  family)^16,17, etc. 

Obviously, private equity firms of such financial standing have great influence on political leadership, inclusive of legislation and enforcement of existing statutes. The big lie of dental service organizations (DSOs) “only controlling the non-clinical aspects of a dental practice” are completely fallacious. Corporations at this higher platitude easily alter and amend the public discourse, in order to manipulate public perceptions (“astroturfing”).^18-20

Multi-Branding Strategy-

A single DSO may operate multiple dental clinics, each or several under different brand names. The downside is that marketing costs may be higher, as each brand requires unique and individualized marketing programs. An upside is that if one clinic brand experiences regulatory sanctions or legal liabilities and associated negative press, the entire chain of clinics operated by the DSO may generate little to no bad attention.

One example was the needless overdose and death of a pediatric dental patient in West Phoenix, AZ, and multiple examples of physical and psychological child abuse, inclusive of alleged Medicaid fraud, by dental clinics managed by the Small Smiles Dental organization. Yet, various clinics assumed brand names such as Medicaid Dental Center, Smile High Dentistry, Wild Smiles, Smile Starters, and Carolina Dental Center avoiding a direct link to Small Smiles Dental (a/k/a Forba). Efforts to mask a direct connection with Small Smiles Dental may have been viewed as an attempted mechanism to deflect civil and criminal liabilities away from senior corporate directors.^{21, 13}

Often times, doctors and other clinical staff employed by corporate dentistry, which utilize a multi-branding strategy, have no idea of the overall corporate scheme. They take their orders from middle manager supervisors, some of whom may be doctors (some licensed and others not). Those pulling the strings at the top of the corporate pyramid may be completely unknown to those providing direct patient care, at the pyramid’s bottom. Regardless, those at the top have daily access to every production metric of every clinical producer (dentist and hygienist), in their employment, within each and every clinic they control.

Stealth Branding-

Since the public’s perception of corporate dentistry is too often negative, numbers of corporate directed dental clinics engage the practice of stealth branding.²² Nowhere on-site in their dental facilities is a corporate name, logo, or graphics. There is nothing visible to connect their dental clinic to the corporate brand.

Employees of these clinics may have no idea their ultimate supervisors are distanced corporate financiers and administrators. Perhaps initially, a doctor sold a practice or few practices to a DSO. That doctor would realize those clinics were now beneficially owned and controlled by a corporate entity. Subsequent employed dentists may be fully unaware and ignorant of true ownership, and only directly answer to a mid-level manager.

Similarly, a DSO may establish de novo clinics (startup clinics) under a nominee owner dentist’s name. Naturally, clinic control rests in the hands of corporate beneficial ownership, not a facade shell company dentist owner. On-site employees may have complete ignorance of their company’s structure, which is by corporate design. Truth and full disclosure of ownership is not an issue some in corporate dentistry wish to reveal.

Stealth branding allows for corporate dental managers to escape “sins of the past”. The consumer dental public falsely views the dental facility as a totally unique entity. Past abuses by a corporate chain will not be connected to this individual company or a corrupt industry. One might ask, “Is stealth branding an opportunity for a corporate do-over to get it right? Or, is stealth branding another cover-up with design to cheat the public out of their money?”

Conclusion-

The public should be entitled to full disclosure of beneficial ownership of their healthcare facilities. This currently is not the case, and great efforts may be made to hide facts. State and federal regulators, government auditors, and the general public making healthcare decisions for their families merit full disclosures. Unfortunately, corporate dental violators face few consequences for hiding or misrepresenting truth.

Healthcare is not a marketplace act, like the buying and selling of ordinary goods and services. Patients are at a distinct disadvantage in the doctor/patient relationship (contract), by lacking a doctor’s expert skill and training. Patients must rely that their doctors will place their interests to the fore.

By contrast, the free market business world, inclusive of the private equity investment industry, has a distinct obligation to place the interests of their investors and generation of profits to the fore.  This conflict of interest to the doctor/patient relationship (contract) couldn’t be clearer. Corporate control and beneficial ownership of healthcare clinics, including influencing decisions of their employee doctors, is not in the public interest.

Techniques used in corporate branding are employed by highly educated elite business people. These are business professionals who operate at the top of their game. They can often buy and sell politicians and government officials with money they consider “chump change”. Dentists attempting to service student debt loads over $1/4 to 1/2 million are ripe for ethical corporate compromise.  When this corporate third party enters into the doctor/patient relationship (contract), without the knowledge or consent of the disadvantaged party (the patient), the patient loses.

New paradigms need to be established, in which patients win. Full disclosures in healthcare services, ownership, and clinical direction must be created, and most importantly lawfully enforced. Patients require complete assurance that their doctors only work in their interests. This must be backed by enforcement of existing statutes, which today is rarely the situation.

References

1. Brand. Wikipedia (last modified 12, 02, 2016). https://en.wikipedia.org/wiki/Brand

2. Staff report. NASCAR.com. Danica extends deal with aspen dental. http://www.nascar.com/en_us/news-media/articles/2015/9/18/danica-patrick-aspen-dental-sponsor-renew.html

3. NY AG Eric T Schneiderman. AG Schneiderman announces settlement with Aspen Dental that bars company from making decisions about patient care in New York clinics. June 18, 2015. http://www.ag.ny.gov/press-release/ag-schneiderman-announces-settlement-aspen-dental-management-bars-company-making

4. MA AG Maura Healy. Aspen Dental to pay close to $1 million to settle allegations of deceptive advertising, charging for services not provided- thousands of consumers in Massachusetts to receive restitution. Dec 22, 2014. http://www.mass.gov/ago/news-and-updates/press-releases/2014/2014-12-22-aspen-dental-aod.html

5. Office of Public Affairs US Department of Justice. National dental management company pays $24 Million to Resolve Fraud Allegations- Medically unnecessary dental services allegedly performed on children. Jan 20, 2010. https://www.justice.gov/opa/pr/national-dental-management-company-pays-24-million-resolve-fraud-allegations

6. US Attorney’s Office- Central District of IL. Illinois dental management company to pay $3 million to settle allegations of improper billing, dentist registration. Apr 11, 2008. https://www.justice.gov/archive/usao/ilc/press/2008/04April/0411.html

7. US Attorney’s Office- Western District of OK. Oklahoma dental clinics pay over $5 million to settle allegations of false Medicaid claims for dental restoration procedure. Oct 30, 2014. https://www.justice.gov/usao-wdok/pr/oklahoma-dental-clinics-pay-over-5-million-settle-allegations-false-medicaid-claims

8. State of WA Department of Financial Institutions Securities Div- Consent Order. In the matter of determining whether there has been a violation of the Franchise Investment Protection Act of Washington by: Comfort Dental Group, Inc., Rick Kushner, Neil Norton and Graig Bears. Order No. S-11-0766-12-CO01. May 1, 2012. http://www.dfi.wa.gov/documents/securities-orders/S-11-0766-12-CO01.pdf

9. Joint Staff Report on the Corporate Practice of Dentistry in the Medicaid Program. Finance and Judiciary Committees US Senate. June 2013. https://www.scribd.com/document/157218706/Senate-Report-on-Corporate-Dentistry

10. WVUE Fox 8 New Orleans (sourced from Birner Dental Management Services, Inc). Birner dental management services inc announces results for 3q 2016. Nov 14, 2016.  http://www.fox8live.com/story/33701484/birner-dental-management-services-inc-announces-results-for-3q-2016

11. ReachOut Healthcare America. Wikipedia updated Dec 4, 2016. https://en.wikipedia.org/wiki/ReachOut_Healthcare_America

12. Hagan D. Disgraced Texas “All Smiles Dental Centers” & Dr. Adrian Martin Codel. May 6, 2012, Dentist the Menace online dental blog. http://blog.dentistthemenace.com/2012/05/disgraced-texas-dental-centers-all.html

13. Small Smiles Dental Centers. Wikipedia updated Nov 21, 2016. https://en.wikipedia.org/wiki/Small_Smiles_Dental_Centers

14. FFL Partners. Current portfolio investments (accessed Dec 3, 2016). http://www.fflpartners.com/portfolio/current

15. Business Wire. Gryphon Investors Acquires Smile Brands. Aug 18, 2016. http://www.businesswire.com/news/home/20160818005574/en/Gryphon-Investors-Acquires-Smile-Brands

16. MSD Capital. Website accessed 2016.http://www.msdcapital.com/businessprinciples.htm  

17. Hagan D. Michael and Susan Dell- Shame on You. Dentist the Menace online dental blog; June 18, 2012. http://blog.dentistthemenace.com/2012/06/michael-and-susan-dellshame-on-you.html

18. Davis MW. Astroturfing by the Dental Support Organization Industry. Dec 1, 2015; Dentist the Menace online dental blog. http://blog.dentistthemenace.com/2015/12/astroturfing-by-dental-support.html

19. Davis MW. Dental service organizations: truths revealed by financial insider (interview w/ Dr Kevin Cain). June 25, 2015. Dentist the Menace online dental blog.http://blog.dentistthemenace.com/2015/06/exclusive-dental-service-organizations.html

20. Davis MW. Basic economical models of large scale corporate dentistry. June 5, 2015. Dentist the Menace online dental blog. http://blog.dentistthemenace.com/2015/06/basic-economic-models-of-large-scale.html

21. Barrett S. Massive dental fraud uncovered. Dental Watch (last revised Aug 23, 2011). https://www.dentalwatch.org/news/forba.html

22. Experience Branding. Stealth Branding (Feb 21, 2010 blog entry). https://aodaniel.wordpress.com/2010/02/21/stealth-branding/