Murphy’s Law: Grow Your Laboratory with Sleep
Inside Dental Technology delivers updates on digital workflows, materials, lab techniques, and innovation in dental technology through expert articles and videos.
December 1, 2016
Volume 7, Issue 12, December 2016
Page(s): p. 14
By Mark T. Murphy, DDS, FAGD
If growing your dental laboratory were easy, you would not be reading this. Most revenue drivers require hard work, planning, and good luck. Acquiring new clients, selling more to current accounts, and general retention require a paradigm shift from technician to businessperson. “On time and in full” along with high-quality products and great customer service are simply the table stakes to get into this game. Success requires solid business acumen, leadership, a great plan, and that same good luck.
The author has written and lectured about CPR for your laboratory: conversion of prospects into clients, percentage of laboratory bill, and retention. Oral appliance therapy (OAT) using mandibular advancement devices (MADs) can help with all three of those challenges. It will help you keep clients engaged because they can serve their patients better and make more money. Their monthly average laboratory bills will grow as they order appliances from you. Finally, you will add new clients because you will be selling a product and service that many others do not offer. Even lapsed clients may come back when you reach out to them with this new solution to a problem their patients already face.
The Market
It is estimated that between 20-25% of patients have Obstructive Sleep Apnea (OSA). Although the standard treatment for many years was Continuous Positive Airway Pressure (CPAP), the compliance rates for that device are below 40%. With OAT, the compliance is double that percentage. The combination of that improved efficacy and the lower long-term costs likely will lead insurance companies to shift their focus to this predictable treatment.
With only 10% of OSA patients diagnosed today, the need for dentists to deliver and laboratories to make and sell oral appliances is a huge growth opportunity. The current unmet need in the average dental practice would yield more than $1 million in appliance therapy revenue from patients, and more than $200,000 of that would go to laboratory fees.
The fourth generation of medical devices consists of digitally fabricated products. MADs are milled from PMMA (ie, MicrO2, ProSomnus Sleep Technologies, prosomnus.com) or printed nylon (ie, Narval CC, ResMed, resmed.com; and D-SAD, Panthera Sleep, pantherasleep.com). The milled PMMA products can be ground on and relined as patients’ needs evolve; the nylon cannot. They are all smaller, thinner, and easier to wear, and they are creating a revolution in OAT. More appliances soon will be fabricated digitally utilizing different attachments and active components as this evolution matures.
How to Start
The good news for laboratories is that you can market and sell MADs without filing a 510k or other paperwork and processes with the FDA. It’s simple: Pour the models, scan them and the bite, and after seven days, the completed case is returned (depending on the manufacturer). Check with each manufacturer and adjust your delivery schedule appropriately. Many MAD manufacturers also can help set up reselling opportunities and channels.
The digital platforms will be more turnkey, and others may require some assembly. Choosing a solution that does not require significant amounts of training or additional staff will help you seamlessly integrate MAD production into your workflow. You can simply pour, scan, and send. Becoming a manufacturer involves training, managing supply chain, and assembling, so for many laboratories it is preferable to concede some margin in exchange for an easy process. The idea is to add revenue and EBITDA without staffing up or creating a new workflow.
The Math
If you have a $1 million laboratory, you likely have 65-75 active clients per month and a similar number of lapsed and occasional accounts. If 10% of your actives and 5% of your lapsed/occasional clients are working in sleep medicine, that is 10-11 dentists with the potential to spend more money with your laboratory, with the possibility that more become engaged over time. If each of those dentists sent one case per week, you could have 10 per week, two per day. At approximately $500 per case, that would yield more than $200,000 in incremental revenue and could add significantly to your bottom line. Even if you were only half that effective, you could still grow by 10%. You can sell more deeply to existing clients, retain them more effectively, and maybe even pick up lapsed accounts or prospects who have laboratories that do not offer sleep appliances yet.
That’s right: yet. All it takes is a scanner, a desire to grow, and a little luck. Actually, it is not really about the luck. A well-executed average strategy for growing your laboratory with sleep will work. Laboratories of all sizes are marketing these products. The digital highway opens opportunities that did not previously exist. Just look at the success of BruxZir and other strategic partnerships between laboratories.
As Samuel Goldwyn said, “The harder I work, the luckier I get.”
Mark T. Murphy, DDS, FAGD, is the VP of Marketing and Lead Clinical Faculty for ProSomnus Sleep Technologies in Dublin, California.
