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At $28 million, dental marketplace Brighter is one of the most well funded healthcare startups in Los Angeles. Armed with that war chest, the company is going after a huge market opportunity.
“The US dental market is $140 billion in size,” said Jake Winebaum, CEO of Brighter.com. Compare that to the total US advertising market, which is about the same size, and you might ask yourself: why aren’t more people investing in dental?
“It’s complicated and not particularly sexy, but there is a real need,” said Winebaum. “Only 36 percent of Americans go to the dentist in a given year and you’re supposed to go twice a year.”
People don’t usually go to the dentist because of costs. “Even with insurance, patients typically have a fairly high co-pay, typically 50 percent,” said Winebaum.
Previously, a non-existent market for dental services meant patients had few options: pay high fees out-of-pocket or delay care until something really hurts.
“Which is why price transparency and consumerism is so important in dental care,” said Winebaum. “We wanted to provide price transparency for a variety of services.”
The website lists prices at individual dental practices for services like check-ups and cleanings, crowns, bridges, dentures and root canals. In all, they have pre-negotiated prices on 150 dental procedures.
In fact, “we’ve taken it well beyond just price transparency to actually lowering the cost of care,” said Winebaum. Brighter negotiates prices with each local dentist based on a fee schedule that outlines fair prices for a given area. Winebaum said patients pay on average 52 percent below the retail price.
And dentists are actually in favor of being listed on Brighter because “they get patients who otherwise wouldn’t come,” said Winebaum. In fact, they pay to be part of the network. There is a lot of pent-up demand for dental care that isn’t being fulfilled because of cost concerns; an online marketplace is the perfect release for that demand.
For a dentist to join the network, Brighter qualifies the practice based on their education, certification and clinical data. And after each appointment the company surveys patient and dentist to check-in on each experience. According to Winebaum, dentists listed on Brighter have an average Yelp score of 4.5 stars.
The idea of buying services within an online marketplace is not new, but within healthcare it is surprisingly fresh. Buying healthcare online has long been impeded by a traditional way of doing things - that is, purchasing healthcare via insurance. When patients buy healthcare via insurance they have little incentive to pay attention to the cost of individual procedures, thus little incentive to shop around.
Unfortunately, this system of paying for care through health insurance is a lot like buying a ticket to a healthcare buffet, a meal which patients paid an upfront fee for, then consume with little regard to waste (costs). In America, all that gluttony has added up to the highest healthcare costs in the world.
In contrast, Brighter’s price transparency and competitive marketplace is like consuming healthcare à la carte. Dentistry, in particular, was a good industry to try out this new à la carte way of doing things.
“What is difference about dentistry than healthcare? Over half the population doesn’t have insurance,” said Winebaum. So they aren’t particularly wrapped up in the health insurance model. Dental insurance also tends to have caps on its maximum payouts and high co-pays, meaning even patients with insurance tend to pay out of pocket.
In addition, to being more exposed to out-of-pocket payments, dentistry procedures are more simple in nature, compared to medical treatments, making them easier targets for consumerism. The average dental patient can make sense of cavity fillings, crowns and root canals, making that patient a decently informed consumer of those services. However treating heart failure, a brain hemorrhage or kidney failure are services more difficult for a patient to understand and qualify, making those services more difficult to list on a marketplace.
Lastly, dental is a better starting point because dental practices are far more plentiful and open to building a marketplace than hospitals might be. There are hundreds of dentists in Los Angeles competing for patients compared to only a few hospitals. Because of lack of transparency and price competition between hospitals in Los Angeles (and US cities more generally) prices for procedures vary wildly (see the Wall Street Journal map). Compare that to Brighter, whose prices, do to competition, tend toward equilibrium.
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“What you see in Brighter is what you will see in healthcare more in the future,” said Winebaum. "But it will take longer in healthcare.”
For Brighter, choosing dentistry was a conscious choice to disrupt an industry that was ripe for results within a few years, rather than the decade plus time span it might take to straighten out healthcare.
“Dentistry lends itself to a consumer approach more than healthcare more broadly,” said Winebaum. “Our vision is turning patients into consumers.
Brighter has about 30 employees and the online marketplace is just established within Los Angeles currently. However, this week the company is expanding into Orange County and in the first half of this year has plans to expand to the rest of Southern California.
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