There is a concept that has become increasingly relevant in today’s globalized practice marketplace – commoditization. The term “commoditization” refers to the process by which goods or services become interchangeable with one another, thereby eroding the uniqueness and value of individual offerings.
Back in undergrad, I read a thought provoking book that created a long lasting effect on my view of owning a business. In his book “The World Is Flat,” Thomas Friedman argues that commoditization is becoming an increasingly pressing concern in many industries, including healthcare.
Friedman writes that “in a flat world, you can innovate without having to emigrate.” This means that technological advances and the global market have made it easier for companies to create and distribute goods and services around the world, without the need to physically relocate their operations. This has led to a proliferation of businesses that offer similar products and services, which can make it difficult for any one company to stand out.
This trend has been particularly noticeable in the healthcare industry, where we have seen the rise of companies such as Smile Direct Club and 1-800 Contacts. These businesses offer a do-it-yourself approach to healthcare services, which can be more convenient and affordable for consumers than traditional offerings. However, they also pose a threat to traditional healthcare providers, who may struggle to compete with these new entrants in the market.
Friedman warns that this trend towards commoditization can lead to a “race to the bottom,” where companies compete solely on price rather than quality or innovation. This can ultimately undermine the value of the goods and services being offered, and lead to a situation where everyone loses.
In the case of Smile Direct Club and other DIY orthodontic slingers, this race to the bottom can be seen in the way that these companies have attempted to undercut traditional orthodontic providers by offering their services at a lower price point. However, as many healthcare professionals have pointed out, these services often come at a cost in terms of quality and safety, as patients may not receive the same level of care and attention that they would from a licensed orthodontist.
Similarly, 1-800 Contacts has commoditized the contact lens industry by offering customers the ability to order their lenses online, often at a lower price than they would pay at their local optometrist. While this may be more convenient for consumers, it has also led to concerns about the quality and safety of the lenses being sold, as well as the long-term impact on the optometry industry as a whole.
So what can we do to address the issue of commoditization in healthcare? Friedman suggests that the key is to focus on innovation and differentiation. By developing new and innovative approaches to healthcare delivery, we can create value for our patients that goes beyond simply offering a lower price point. This may include investing in new technologies, developing personalized treatment plans, and creating a more patient-centric approach to care.
Additionally, we can work to educate patients about the risks and limitations of DIY healthcare services, and highlight the value of working with licensed professionals. By emphasizing the importance of quality and safety, we can help to shift the conversation away from price alone and towards a more holistic view of healthcare delivery.
Commoditization is a significant challenge facing many industries today, including healthcare. However, by focusing on innovation, differentiation, and quality, we can work to create value for our patients and compete effectively in the marketplace. As Thomas Friedman writes, “In the flat world, you can innovate without having to emigrate.” Let us embrace this spirit of innovation and work together to build a dental practice membership network that is both sustainable and patient-centered.
Have a productive week!