The "organ" of dental implant collection: private institutions are afraid of falling into a price war while stealing joy

On September 22, 2022, when the official website of the Sichuan Medical Insurance Bureau finally hung the "Announcement of the Centralized Procurement of the Interprovincial Alliance for Oral Implant System" (hereinafter referred to as the "Announcement"), the collection of high-priced dental implants finally entered the substantive promotion stage
from the research.

In the past few years, dental clinics have been an extremely rare track in the medical field that has been on the uphill, while people complain about the sky-high price of dental implants of "one tooth and one BMW"; On the one hand, the stock price of the private chain institution Tongce Medical has soared, and capital has entered in a big way; Dentists have been poached by private clinics with high salaries and have become one
of the hottest professions.

Li Ming (pseudonym), a public hospital administrator, had the foresight to choose dentistry
when he went to the sea a few years ago to set up a private clinic.

His predictions have been correct for the past few years
.

For a long time, small alloy implants and crowns have been successfully installed in the mouth of patients at a packaging price of about 20,000 yuan, and have become an important part
of dentists' income.

The National Health Insurance Bureau tried to squeeze out the middle water with collection and procurement
.

The rise and fall of the stocks in the hands of the trader, the increase or decrease of the doctor's remuneration, and the way the private clinic obtains customers have all changed
because of this reform.

The challenges of dental implant collection are also unprecedented
.

How to let these high-end manufacturers take the initiative to join and reduce prices, rather than triggering a low-end alternative to high-end fighting, is the effect
to be achieved by this collection.

Its complexity also lies in the fact that it involves two different procurement and pricing systems
, private and public.

The answers to these two questions have not yet been found
in the dental implant collection pilots in Anhui and Ningbo.

But the chemical reaction of the collection has already happened
.

But when September 8, 2022, the National Medical Insurance Bureau gave the overall price of medical services for one tooth in public hospitals no more than 4500 yuan - about 50% higher than the previous forecast of more than 2000 yuan in the dental field! Although it is lower than the price of 6,000-9,000 yuan in public hospitals before, it is higher than the service price
of private dental clinics.

An industry insider pointed out that the price of medical services is set loosely, in addition to the medical insurance bureau reducing the price of dental implant packaging services in public hospitals, and using market means to attract private institutions to participate in the
collection.

The price of medical services is set loosely, in addition to the medical insurance bureau reducing the price of dental implant packaging services in public hospitals, and using market means to attract private institutions to participate in the
collection.

But for the highly market-oriented, privately enterprise-led dental implant sector, lax prices for medical services have actually become the "maximum price.

In order to circumvent the "price war", medical institutions and manufacturers are adjusting their strategies: as early as the end of last year, a dental chain was ready to transform the high-end market and completely abandon the low-end market; The Swiss high-end brand Szomann has specially launched a low-end line - Wolan, with the purpose of using collection to seize the market
.

-01-

-01-

Not only price reduction, but also standardized governance

Not only price reduction, but also standardized governance

When the implant collection suddenly arrived, cutting through the shortcomings of the past few decades, the dentist clinic bosses around Li Ming were more skeptical
at first.

Born in a public hospital, Li Ming is familiar with two distinct systems
, public and private.
He keenly perceives that dentists' incomprehension about collection is different from the worries of public hospital doctors about shrinking their income when they face zero markup and quantity procurement of drugs, and they are more out of a worry
.

From the list of implant dentistry collection in Anhui and Ningbo, they saw the same domestic brand, and the lowest price was as high as 2,000 yuan - this is a brand
rarely used in clinics in the past.
They are worried that these domestic brands use the "floor price" to squeeze into the collection and procurement of their own provinces, but the quality and supply cannot be guaranteed
.

"If the products collected are of general quality, the products that have entered the collection are used, and there is an accident, who is responsible?" This is a destruction for the brand that has been painstakingly built
.
Li Ming said frankly that doctors are accustomed to high-end imported brands with guaranteed quality, because these brands can be guaranteed for life, and brands with high success rates and poor quality have a high
probability of falling off after planting.
If this part of the high-end brand can reduce the price, he is even willing to not make a penny on consumables, only to earn the medical service fees he deserves
.

A medical insurance expert who participated in the survey of dental implant collection stressed that "domestic substitution is not the most important purpose of collection"
.
The Health Insurance Board will respect the market
.
Domestic implant research and development time is short, technically unable to compete with imported mature brands, policymakers will also consider domestic quality issues
.

A medical insurance expert who participated in the survey of dental implant collection stressed that "domestic substitution is not the most important purpose of collection"
.

On the other hand, due to the scale of production, the price of domestic implants may not be reduced
.
Even if a domestic brand squeezes into the collection and procurement at a low price, and the production capacity is limited and cannot supply the market after the collection, it is also the situation
that the medical insurance department is least willing to see.

"The medical insurance bureau for the purchase of dental implants with volume is mainly to standardize the charging behavior, the rebates, non-standard parts of the water squeeze out, if there is a capable domestic brand can gradually expand the share, we are in favor, but can not eat a fat person, all at once replaced
.
" He said
.

"The medical insurance bureau for the purchase of dental implants with volume is mainly to standardize the charging behavior, the rebates, non-standard parts of the water squeeze out, if there is a capable domestic brand can gradually expand the share, we are in favor, but can not eat a fat person, all at once replaced
.
"

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Can small profits be sold more?

Can small profits be sold more?

Some insiders have given an optimistic prediction that when the collection reduces the price, the dental implant that originally belonged to the improved medical demand will become the basic demand of the people - the market for billions of lost teeth will open
.
This almost laid the foundation for a situation
of small profits and high sales.

But that's not the case with all dental clinics
.

But that's not the case with all dental clinics
.

Dental clinics can be divided into two factions: one is capital-driven, they never hesitate to spend on advertising and patient education, and they are accustomed to asking doctors from public hospitals to fill their faces; The other type is the entrepreneurship of doctors, often starting from a clinic, trekking through the long cycle of medical return on investment, relying on lip service to brand degree
.

Those clinics that rely on the reputation of famous doctors to expand their customers can earn their due medical service costs with peace of mind and are not affected by the collection
.
But more players in the market are the former, with advertising and marketing to expand customers
.

They are accustomed to overwhelming advertising, accustomed to the low-cost drainage of customer acquisition model - through the "1980 yuan, 2980 yuan a tooth" such an attractive price, attract patients to the clinic, and then convince patients to use better quality, higher price products
.

This low-cost brand used to drain the flow will eventually be accepted
by less than one-tenth of the patients in Li Ming's clinic.

"High-end products can also have about 15% to 20% of profits, and low-end products have no profits, just a tool for
drainage.
" Kong Lin (pseudonym), head of a dental implant chain in Shanghai, said
frankly.

Low-end products have no profit and are just a draining tool

When the price of consumables falls, dentist interests are directly impacted
.
"In most clinics, doctors' income is tied to consumables
.
This is similar to the impact of orthopedic cardiac stent collection, and the workload of doctors will increase, and the income will be reduced
.
”

Li Ming's biggest worry is whether he can exchange price for volume
in the end.
If the profit is small, but in the end there is no overselling, the operation may be unsustainable
.

In 2021, global capital will fight in the Chinese oral market, and even Internet giants such as ByteDance will also enter the game
.
In nearly 60 cases of investment and financing mergers and acquisitions, the amount involved has increased from 10 million yuan to 1 billion yuan, and major dental medical institutions are almost close to each other
.

Labor costs are also rising
.
Tongce Medical's 2021 financial report shows that the labor cost is 835 million yuan, accounting for 55.
76% of the total cost; Another listed oral company, Arrail Group labor costs accounted for 54.
65%
of the total cost.

"The huge profits of dental implants are in the upstream manufacturers, and when they go to the terminal clinic, the profit margins are very small, and they have not yet taken into account the rent, water and electricity, and depreciation
.
" Li Ming believes that if the price of consumables is reduced, but it does not bring about the growth of volume, and there is no oversale after a small profit, a paradox
is formed.
When revenues aren't enough to support exorbitant operating costs, some clinics have had to close their doors and decommend
.

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Patients are shunted to more cost-effective public hospitals

Patients are shunted to more cost-effective public hospitals

Collecting has broken the customer acquisition mode of low-price drainage - once relying on information asymmetry can play a trick of "low-price drainage", but after the unified reserve price after the collection, it cannot be played at all
.

Once relied on information asymmetry to play a trick of "low-price drainage", after the unified reserve price after the collection, it could not be played at all
.

Clinics should find another way, and while spending their efforts on other channels to obtain customers, Kong Lin will also worry that patients who were originally attracted by low prices will be diverted to public hospitals
with "higher cost performance".

Taking a high-end brand in Switzerland as an example, the price of a public hospital is at least 178,000, and the purchase price is 6,000 or 7,000 yuan
.
But their clinics have lower prices, with an input price of nearly 4,000 yuan and a price in the range
of 10,000 to 11,000.

"We are a chain agency, and the amount of implants used in a year is much more than that of public hospitals, so the premium space is large and the purchase cost is low
.
" Kong Lin said that manufacturers want to take the volume, do the flow, and do not want to lose the private market, will give them a sincere cooperation price, they will earn 10% of the profits
from it.

If purely from the price point of view, the reserve price given by the manufacturer to the private chain institution is not much
different from the price after the collection.
Kong Lin even boldly predicted that when the price of products in public hospitals drops by 60% or 70%, even if it is higher than the price given by his own clinic, it will bring an intuitive feeling to the people - the price of dental implants in public hospitals has been
reduced.

If purely from the price point of view, the reserve price given by the manufacturer to the private chain institution is not much
different from the price after the collection.
But it will bring an intuitive feeling to the people - the price of dental implants in public hospitals has been reduced

Some patients, who had been overwhelmed by the price of dental implants in public hospitals, may re-enter the doors
of public hospitals.
Kong Lin predicted that some customers with health insurance would definitely lose
.
They have "better options" and may choose dental laboratories with designated health insurance points, lot hospitals, and so on
.

In the entire private dental market, less than one-tenth
of the medical institutions have medical insurance fixed points.
Institutions that enter medical insurance are often stomatology departments in private general hospitals, while dental specialty medical institutions rarely enter
.
Kong Lin believes that these general hospital dentistries with medical insurance fixed points will take advantage of the opportunity of collection to amplify their advantages
.

Of course, the dental departments of these general hospitals are also more active
in responding to the collection.

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The determination of the Health Insurance Board

The determination of the Health Insurance Board

When the news of the implant collection first appeared, the heads of some private dental clinics admitted that when collecting reports, they would be "more conservative and would not be discussed"
.

When private clinics choose to cooperate with manufacturers, in addition to price factors, they will also consider whether manufacturers provide customer acquisition channels - this is completely different from the procurement system of public hospitals
.

"Some manufacturers will give us attractive cooperation policies and do some value-added services for us, such as full gifts and gift support, including recommending experts and organizing public welfare activities
.
" The above-mentioned person said that it is unlikely that private medical institutions will give up this part of the cooperation of manufacturers that provide preferential treatment but cannot enter the collection and procurement in order to collect
.

In order to urge large private chain medical institutions to actively participate in the reporting volume, a plan once discussed by the Medical Insurance Bureau was to promote price limits by administrative means through the linkage of the two departments of the recruitment office and the price
department.

Each medical institution, whether or not to participate in the collection, the volume report notice will be required to write "yes" and "no"
.
If you write "no", what is the reason for writing it? "It's really about forcing them to participate
.
" If you don't participate, why don't you participate? The reasons or circumstances of their participation or non-participation may be made public
.
The local health insurance bureau official said
.

But the absolute executive order can not make a policy long-term, the health insurance bureau to give the killer is to adjust the price of medical services, to give private living space: clear public hospital dental implant medical service fee limit of 4500 yuan
.

The killer is to adjust the price of medical services and give private living space

This measure is a price limit for public hospitals - taking the single conventional implant of public medical institutions in various provinces as an example, the average cost of medical services is more than 6,000 yuan, and in some places, the cost is more than 9,000 yuan
.

But for private dental clinics, it is given sufficient room
for price adjustment.
Kong Lin rarely received a medical service price
of 4,500 yuan.
He calculated that if the price of collection is reduced by half, coupled with the adjusted price of medical services, the entire fee will earn 1,000 yuan
more than the previous package price.

But for private dental clinics, it is given sufficient room
for price adjustment.

Private dental clinic operators who pay attention to brand sales hope that the dental implant market can separate technology and consumables and return to the essence of medical treatment
.
However, the market is uncertain and uncertain, and Kong Lin and Li Ming are very worried about the emergence of spoilers
in the market.

"In the back, the market will still fight for the price
.
" The state originally said that you set 4500 yuan no problem, but the private medical institutions themselves price war, will be lower and lower, is likely to fall to more than 3000, and then fight again, down to more than 2000 .
.
.
"

This is an unexpected game, after the medical insurance bureau pressed this "price adjustment button", medical institutions began to fight a price war
.
Eventually, people will be able to enjoy dental implant services
at a lower price.

This is an unexpected game, after the medical insurance bureau pressed this "price adjustment button", medical institutions began to fight a price war
.
Eventually, people will be able to enjoy dental implant services
at a lower price.

In order to avoid the price war of vicious competition, Kong Lin began to lead the transformation of the
clinic.
Previously, the proportion of dental implant business was too high, and a single structure tended to be more risky
.
After adjusting the structure from the internal, reduce the proportion of dental implants and expand the proportion of
pediatric dental business.
In the area of dental implants, he decided to abandon the low-end brand market and transform
into the middle and high-end.