According to data collected by the dentist’s union, there are currently approximately 5,000 dentists in Israel, most of them independent. There is a surplus in dentists, and as a result, many dentists are underemployed. Approximately 10% of dentists (500 doctors) are specialists.
Dentists can be divided into two primary groups: General dentists and specialist dentists.
There are a number of types of dental clinics:
- A private clinic.
- A clinic shared by a number of doctors, with each of them working independently.
- A dental clinic in ownership of one dentist, who also acts as manager. This dentist purchases equipment and employs other dentists.
- Chains- a number of clinics managed by a person who may not necessarily be a dentist.
- Clinics owned by insurance companies or Kupot Holim.
Customers: Defining the Target Market and Its Size, Market Segmenting
Target market for dentistry services includes the general population, segmented according to age, income level, and type of treatment. An additional segmentation is geographical- As long as no specialty treatment is required, a customer usually prefers to receive treatment in his residential zone. The industry is characterized by customer allegiance. This may impose difficulties on beginner dentists, however once experience is gained, a regular clientele is created. According to data collected by the Ministry of Health, Israelis visit the dentist’s office an average of 2.7 times per year, and spend approximately 60,000 NIS on dentistry throughout their lifetime.
The dentistry industry is highly competitive. This is reflected in a price drop and underemployment. In Israel, there is one doctor for every 1,000 people- this rate is even higher than that typical in wealthy countries. As a result, dentists may hold more than one position. A dentist might hold a number of positions, some independently and some as an employee.
There are two types of vendors: equipment vendors and medicine/material vendors. There is an abundance of vendors in the market, varying in price and quality. Some equipment vendors supply all required equipment including furniture, and even aid and consult in planning.
A clinic's medicine and material inventory is usually limited as vendors are usually able to supply materials at short notice. Medicine and material vendors specialize in a certain type of merchandise, and therefore it is customary to work with a number of vendors simultaneously.
In addition, a dental clinic is required to communicate with a service technician for maintenance and repair of equipment.
According to regulations, a dentist is not permitted to advertise, apart from displaying signs at the clinic's entrance.
The best marketing method is good, quality service (professionalism, maintaining a good relationship with the customers) in order to create a repository of satisfied and loyal customers who will later recommend services to others. Note that the customer is not usually able to assess the dentist’s work (other than in case of serious neglect) and therefore reputation is created by building trust, good, friendly service, and guidance.
Additional methods: Communicating with insurance companies in order to accept new patients, despite low prices. Keeping in touch with customers by sending reminders for dentist or dental assistant visits. An infirmary or a dental institution is permitted to advertise services.
There are two barriers in the way of a dentist interested in establishing an independent clinic.
- Creating a regular clientele. Reaching full employment at the clinic may take a long time. For this reason, many dentists hold more than one job and continue their employment with other clinics even if they have their own clinic.
- High investment threshold in equipment.
Customary human resources at a dental clinic other than a dentist include a dental technician. Medium and large clinics also employ an administrative assistant. In addition, a dental assistant may be employed. The position includes preventive treatment, cleaning, and preventive guidance.
Dental clinics are very flexible in regards to employment terms: A dentist can be hired as a full or part time employee, as an independent, or as a sub-tenant renting the clinic for a number of shifts per week.
Industry Revenue and Profitability
There are 5 dental clinic price range classifications - level 1 is the lowest, and level 5 is the highest. Revenue for a single dentist, according to dental clinic price range, for 2003:
Level 1- 787,110 NIS
Level 2- 1,144,430 NIS
Level 3- 1,312,970 NIS.
Level 4- 1,644,240 NIS
Level 5- 2,462,750 NIS
A dentist's direct expenditures include dental materials and lab expenses:
Dental material percentage:
Level 1-2- 6%, level 3-4- 5%, level 5- 2%.
Lab expense percentages:
20-24% of total revenue (13-16% of revenue for prosthetics)
The revenue data above can be increased by employing a dental assistant on a monthly or hourly basis. Revenue was calculated based on one dentist working a 38-hour week.
Typical Terms of Payment
Simple and/or single visits- payment in cash.
In case of more complex treatment, the dentist offers the customer a payment plan according to progress of treatment.
When working with insurance companies:
The doctor usually receives a monthly payment according to the number of treatments performed on insured customers, and according to a predetermined price chart. Rates are lower than regular market rates.
Material vendors: EOM+30 to EOM+60
Service technicians: Regular maintenance- cash. Repairs- up to 2 installments.
Equipment vendors: Most equipment vendors allow up to 6 installments.
Licensing and Certification:
It is recommended to check with local authorities whether licensing is required.
a professional Ministry of Health dentist’s license is required in order to practice.
A person who is not a dentist and wishes to establish a clinic is required to receive a permit from the Ministry of Health. A dentist may establish a clinic without further licensing.
Licensing updates should be regularly checked at the Ministry of Health website: http://www.health.gov.il/units/dental
Professional updates can be viewed at: www.health.gov.il/pages/default.asp?maincat=13&catId=44&PageId=900
- Dentist’s union, Bar-Kochva 49, Tel-Aviv. Phone: 03-5288054, 03-6202642
- Ministry of Health, dental health department, Rivka 29, Jerusalem. Phone: 02-5681200
Appointments are the dentist’s main method of communication with the customer. Setting appointments and verifying customer arrival can save time and resources.
Communicating with insurance companies in order to accept new patients will increase the initial number of customers, although at low prices. Some companies allow non-contractual work as a sub-contractor.
It is recommended to utilize the aid of your local business development center branch in establishing and operating the business.