In 2000, the U.S. Surgeon General called out dental health as a "silent epidemic" that afflicts poorer population groups even more disproportionately than the health care divide. Yet in the 10 years since, as the debate over medical insurance has intensified, little attention has been paid to the costs of dental care.
If you're not covered by a dental plan of some sort, you're going to pay a lot more than you need to for almost any procedure. That's because most dental insurance plans that pay dentists are based on discounts from the retail prices of the procedures they do. So dentists set retail prices rather high, and have to charge some patients those fees.
But you can get the lower negotiated rates yourself, even if you don't have insurance. As it turns out, large "cost containment networks" exist that organizations and individuals can sign up for. Some unions and state governments use Careington, for example, which has negotiated discount rates with about a quarter of the dentists in the U.S.
A start-up launching today, Brighter.com, takes the Careington network and offers both paid and free subscriptions to it for individuals. The site packages the discounts alongside Webbish tools to make finding dentists easier, too. If you don't have a dental plan (or a dentist), it appears to be a no-brainer to use--the free version at least.
Brighter is not insurance, mind you. The consumer-patient has to make his own decisions about the procedures he's going to buy, and has to pay the dentist directly. Being a member of Brighter grants the consumer a discount off retail prices; Brighter doesn't pay the dentists itself.
Brighter gives a worthwhile discount to any user for just signing up for the system, up to 30 percent. Family plans, at $79 a year, entitle the subscriber and dependents to more, up to 60 percent discounts off retail prices on some procedures. Business plans cost $49 a year per employee.
CEO Jake Winebaum (the guy who bought the Business.com domain name for a ridiculous $7.5 million but then managed to sell the directory service he built on it for $350 million) says that the big challenge for dentists is patient turnover. As he notes, even good dentists can be painful to go to, and dentists suffer from about 30 percent annual turnover among their client bases.
How can Winebaum keep customers of Brighter.com itself from turning over? That's where the additional features come in. The service helps members locate dentists by proximity to them, and it also ranks dentists based on user reviews, gleaned from Yelp as well as entered on Brighter itself.
I'm having a hard time finding things to critique about this business. Its membership fee is a bargain for users and could be a windfall for Winebaum's company, as the dental market is $110 billion a year in the U.S., with almost half of that being consumer out-of-pocket payments. And Brighter.com is scalable. It didn't build the cost containment network (Careington did), it doesn't own the database of dentists nor of what they charge (that's run by a company called Sikka), and getting the user review database populated has already been done by Yelp. Brighter may reach out to top-rated dentists on the service to make them aware it exists and possibly strike some deals with them, but it doesn't have to.
The weakness I see here is a potentially low barrier to entry and the lack of a network effect, but if Brighter has a good relationship with Careington, it should be able to hold off challengers.
This is not a sexy, social, cloud-based, mobile start-up. But it does look like a smart business for all involved.