Part 1: Why would anyone want five dental practices?
November 2016 – Q & A with Pete Newcomb
Is dentistry an art, science or business? At DTSpade, we’d argue that it is all three.
But every Client decides how much time they can allocate to each. Do you invest in getting better at your craft? Do you invest in the newest equipment or staff training? Do you invest in improving operations, speeding collections or negotiating with insurance?
At best, a single physician can do one or two well. Larger practices can invest in talent to delegate, but that brings another set of challenges. Single physician practices that maintain high standards of customer care are not at any more of a disadvantage than multiple practice operations that sacrifice personal attention.
What is the proper response to life-long lagniappe?
I’ve got family on my side and my wife’s side in rural America. When I tell them that my main business is representing healthcare organizations and governments in real estate lease negotiations, I can tell what they’re thinking: You really get paid for that?
We take it for granted, but commercial real estate brokerage is a great business. It isn’t very capital intensive. There’s rarely pressure on commissions, everyone (usually) understands the model and it is (almost) infinitely scalable.
As an SIOR, a leader in the market, and business owner, what is the proper response to that? One option is to be thankful to live in a time and place where this business is possible. Another is to milk all you can out of a good situation. A third is to look for opportunities to share some good fortune through charitable giving.
I’d like to propose a few other options that perhaps hadn’t occurred to you—at least initially. I’d like to propose using our gifts within the community, within our organizations and within our households.
Georgia gains on shifts in physician employment models
- Inelasticity in demand, an aging population and changes in healthcare policy have led to steady and continued growth in healthcare employment—outpacing total non-farm job numbers and wage growth through 2024 for most industries.
- Georgia will be an acute winner due to availability of workforce and a growing population.
- Physician demand is strong, but lack of supply will require technology implementation and improved employment models.
- This will increase the need for physician assistants or nurse practitioners to fill the gap.
Capital seeking healthcare consolidation provides physicians security of employment, if they want it.
- Factors to watch carefully are:
1. Lifting of uncertainty within the market,
2. Flow of capital toward and away from healthcare consolidation,
3. Technologies that remove the complication from medical billing,
4. Compression of physician pay and/or improving hospital profitability.
What I learned from the Berkshire Hathaway 2015 Annual Report
- Tenor of American politics diminishes great advances in the U.S.
- Investment strategies of adding to existing business lines and underwriting risk based on actual default risk as opposed to competition still work and should be encouraged.
- Accurate accounting shouldn’t disregard relevant charges in favor or EBITDA valuations.
- Success comes from staying in your lane. For Berkshire, this means friendly acquisitions, large purchases and partnership with like-minded long term holders of companies.
- Burlington Northern Santa Fe, Insurance and Clayton Homes business all improved in a diminishing market, but conditions for the insurance market look difficult in the next ten years.
- The shareholder meeting will be simulcast for the first time this year. Details are below.
Warren Buffett, inarguably one of the most successful investors in history, released his annual letter to the shareholders of Berkshire Hathaway in late February 2016. The annual report he publishes through his conglomerate, Berkshire Hathaway, is one of the most highly anticipated and widely read in the financial world.