Friday, December 2, 2011

Allcare Dental Management Declares Bankruptcy


Here's an interesting story that appeared the other day about a large dental association declaring bankruptcy:
Allcare Dental Management, Inc. and 14 related companies have filed for Chapter 7 bankruptcy in the United States Bankruptcy Court for the Western District of New York in Buffalo, New York. A Chapter 7 bankruptcy case is a liquidation. The names of the companies that have filed for bankruptcy appear at the end of this article.

The Allcare companies previously operated dental clinics at multiple locations in thirteen states. Although some of their locations closed earlier, most of the dental chain closed in December, 2010, when the companies were unable to obtain enough new financing or equity investments to continue in business.
One aspect of our health care system that gets relatively little publicity is dentistry. Most health insurance plans these days don't provide much dental coverage, if they they provide any at all. This has kept the price of going to the dentist from rising nearly as dramatically as medical care in general.

For instance, the crown I had to get to fix a broken tooth earlier this year, though certainly not cheap, did not cost that much more than my first crown did back in the mid-1990s. Since that time, my health insurance premiums (which include very little dental coverage) have more than quadrupled. It stands to reason that with so few people having good dental insurance and with so many being economically distressed, it must be affecting the bottom line of dental practices. I guess you could say that we are now approaching Peak Dental Care.

12 comments:

  1. break a tooth here and its $6-$700 for a root canal,and then $900 for a crown,I work with people who outwardly look middle class but when a tooth goes bad,they have to have it pulled because they can't afford to have it fixed

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  2. Yes indeed, peak dentistry is here.

    I don’t know about Allcare, but the bigger chains around here all live and die based on their medicaid billings and high patient flow—basically this is the only group of patients that has “dental insurance” anymore. The big chains survive by an economies of scale—20-30 patients per dentist/ hygienist per day, with the grunt dentist/hygienist being a hired employee receiving a fixed salary. If medicaid gets cut back, then these big chains will have to contract.

    Additionally, medicaid has to be one of the most bureaucratic, inefficient organizations that I have ever seen. Basically you to have to accept whatever they feel like paying you—again it’s only through economies of scale can this work out financially.

    The bigger private companies might offer dental insurance as an option, but, increasing numbers of employees are opting out of it because it would mean having to take something out of their pay check, which they don’t believe they can afford. Consequently, many patients only show up at the dentist’s office when they are in acute pain and it’s basically too late to do much else than yank the tooth.

    Additionally, the amount of debt that a dentist has upon graduating from dental school is just enormous, typically in the $200-300ks, corresponding to all the debts incurred during dental and undergraduate school. And, the payments start as soon as you graduate (unless you join the military).

    On top of that school debt, the graduating dentists, who have put there lives on hold for about a decade, now want to buy a house and start a family, and, to open their own practice, all of which will cost additional $100ks of debt. These new dentists have basically no chance to ever get out from under their debt.

    (Thanks for the rant-space Bill; after all, it is Friday!)

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  3. Why don't you even follow me? Where else are you going to see ConocoPhillips break up into Conoco and Phillips 66 in the wake of causing a massive oil spill on China?
    The Other Massive Offshore Oil Spill

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  4. @Crash_Watcher - that's all right. Great rant, actually. :)

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  5. @babystrangeloop - interesting stuff. I guess oil spills are only as "tragic" when the inconvenience American beach goers.

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  6. Yet another example of the breakage of a business model that supported a cushy life for a given profession for years.

    As these business model breakages pile up, hopefully more and more eyes will be opening to reality.

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  7. This explains why my dentist is trying to push so hard for all kinds of unnecessary treatments, like nighttime mouthguards, gum grafts and so on. Their explanations sound completely ridiculous, from one dental visit to another they forget where they recommended the graft to be.

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  8. @Anon - yep...I switched dentists twice in recent years until I was finally able to find one that I trust NOT to do that. He was the first one who acknowledged, for example, that there is no reason for me to get my partially impacted wisdom teeth extracted just so long as they don't cause me any pain or trouble (which they haven't).

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  9. You know so much its almost hard to argue with you (not that I really would want…HaHa). . Great stuff, just great!. . .

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  10. Must admit that you are one of the coolest bloggers I ever saw.

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  11. Thanks for writing this blog post, it was informative and enjoyable

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