**Dental practices co-located with medical centres**

 

Clients seeking to setup or purchase a dental practice that is co-located with a medical centre often ask me whether they should have similar or aligned branding or keep things separate.

Currently, one of my practices is located within a medical centre. I have others that have a GP clinic in the same centre.

On every occasion, my branding has been completely separate.

The practice that is part of a medical centre is within a Mater Health Centre. For those of you in QLD, you will know Mater and they are a very well trusted brand in healthcare. Their oncology care is second to none and many have encountered their brand either directly or through a family member. Being inside their centres brings a degree of brand equity and I would have jumped at the chance to name ourselves Mater Dental or the like, but there is no way they would have allowed that (and rightly so).

However generally speaking, there are very limited benefits to co-branding if you are running a different business to the doctors. Basically, if co-branding occurs and you have no idea of how the doctors run their practice and who they employ, you risk reputational damage based on patients grouping you the same as the doctors.

As a general statement and from my own experience, bulk billing doctors will have less of a focus on the patient experience compared to doctors that charge a co-payment. As private dentists, that are not ‘underwritten’ by Medicare, our businesses are heavily reliant on word of mouth referrals. If we align ourselves with doctors that continually run late, have sub-par communication skills and poor reviews we risk this reputation transferring over to us. This can be disastrous for a dental practice. My point is simple: if you have no say over the business activities of another practice, do not brand the same as them!

Now let’s look at the other side, while it may be tempting to brand the same as a long-standing successful practice, I question what additional benefit there is other than proximity. If the doctors who are well liked are telling their patients to see you and if you have some advertising in their waiting room, then even if you don’t have the same branding, you will still get a degree of transferable goodwill by just being co-located. I don’t see a benefit to the same branding. Patients will occasionally still be unhappy with the doctors and at least they will continue coming to you. If they think you are the same business as the doctor, they probably won’t.

Short anecdote. There was a shopping Centre I was eying off in a suburb about 30 mins south of the Brisbane CBD. It was along a busy road and there were no dentists in the suburb. There were also no dentists in the adjacent few suburbs (back then). I was uncertain about it but then I heard that a big and busy, 8 doctors surgery had moved from another location into the Centre. All non-bulk billing doctors, many long established and with an excellent reputation. I pulled the trigger and started in the same Centre. I sold that practice and I think they had 30-40 bookings in the first week they opened. 2nd chair went in within a year. There has since been an increase in competition but they are doing well overall! Excellent numbers for a start-up. This practice was co-located but not branded the same and I think the doctors surgery has a part to play in their broad success.

 

As an aside and something to be aware of, if the dental practice is subleasing or leasing of a doctor who owns the premises then there is risks around the lease. For example, the doctor may not be open to renewing leases when they expire or they hike rents significantly on renewal. The doctor knows they will be able to get another dental tenant in if you leave given the fitout present and also given they can refer patients from their own practice. Essentially, they can take any goodwill built up by the previous dental tenant and transfer this to the new dental tenant.

 

To summarise, get an idea of the doctors surgery and their reputation. Be very cautious about being within a medical centre and aligning your branding with doctors with a poor reputation. You gain nothing but risk significant adverse effects.

 

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