Dr. David McFadden: So we are talking about corporate dentistry and the one thing that I have always wondered was how can a corporation in private practice, how can, what’s the legality?
Dr. Alan Paradis: Yeah well it’s a very fine that’s been drawn and evolved over time over the past 20 years or 30 years actually. The laws of most states prohibit anyone other than a licensed dentist from owning a dental office. So overtime as this oversupply of dentists has become common and as dental individual debt for dentist as they graduate from dental school has become so high. Corporations have moved into this segment of healthcare by working with a dentist license. In other words there will be a dentist that develops a large practice, he sells a management or for the corporation creates a management agreement with this dentist so that he technically owns the practice on paper but the corporation is his management firm and that’s how the running of the practice has been shifted to corporations. Now as the practices grown to get more and more locations, obviously this original doctor no longer has a part in running or even treating the patients. So their dentists hired in these various offices that are employees of the management firm but the dentist still owns on paper the practice is really insidious problem and it’s been very difficult for the state law enforcement agencies to prevent these things from happening and in fact they basically now given up. That’s why if you go to most shopping centres in nice suburban areas, right now you will see dental offices in virtually every shopping center. Those dentists that work in these offices come and go as their financial needs change. The scenario basically is a new dentist gets out of school with a couple of hundred thousand dollars’ worth of debt for their dental education. They need immediate income and the corporations are able to give them immediate guaranteed salaries, in exchange for that the dentist is under immediate pressure to produce a lot of dental treatment and this is where the problem in the patient relationship really breaks down.
Dr. David McFadden: And I would add to that the dental school debt usually is far exceeds a couple hundred thousand dollars. Now private dental school tuition is almost a hundred thousand dollars per year. SO you can imagine the pressure on that individual who graduates with a half a million dollars of debt. Needing to service that debt but starting your own practice takes three to five years to actually hit your stride. So the supply and demand for the corporate model is very, its excellent right now as students getting out with all this debt desperately need to be able to service the debt and that’s how the system really works beautifully for the corporation and not for the patient.
