The rise of outsourcing in the United States gained significant momentum in the late 20th century, marking a pivotal shift in the way businesses approached non-core functions. The 1980s and 1990s saw a surge in globalization, technological advancements, and increased competition, prompting many industries to explore more efficient and cost-effective business models. Companies, including those in the healthcare sector, began outsourcing various tasks, such as billing, customer service, and information technology, to specialized service providers. This strategic shift allowed businesses to tap into global talent pools, leverage economies of scale, and focus on their core competencies. The outsourcing trend has since evolved, with orthodontic practices now considering it as a viable option to optimize their operations and enhance overall practice management.
Given this summary of outsourcing, one should not blankly assume that outsourcing leads to efficiency and cost savings. In fact, the opposite order is what makes sense. Out or insourcing should be done with the goal of efficiency and cost saving. In this blog post, I would like to focus on the efficiency and cost-effectiveness of the clear aligner fabrication for startup offices.
The most common area of outsourcing for most orthodontic startup practices is in their clear aligner fabrication. Most commonly using a big company such as Invisalign or Angel Aligners to fabricate aligners and package them ready for use. The opposite to this would be systemizing in-house aligners from the get-go from day one. In truth, at the time of writing this article, no clinician can truly insource the clear aligner manufacturing process entirely; at the minimum, you would need the software to section teeth and stage movements. This being said, in-house aligners provide more opportunities for clinicians.
Do in-house aligners increase the efficiency of an orthodontic startup office?
There is one area in which startups do better than established offices, which is capacity. There is going to be a lot of downtime for the doctor or the team in between patients or on admin days. The downtime can certainly be used by having the team focus on in-house aligner fabrication. There is nothing more efficient than having someone else make your clincheck, for you to finesse it and again, having that someone else fabricate and package the aligners.
The in-house aligners, however, have better turnaround time. You can scan today and see your patient later on the same week to deliver their attachments and aligners. The average turnaround time for outsourced aligners is about 3-4 weeks. Invisalign allows providers to “rush” cases and have them back the following week.
Are in-house aligners more cost-effective than outsourced aligners?
To answer the above questions, we need to do some math and make some assumptions. For the purpose of this argument, I use Invisalign and Angel Aligners as examples of outsourced aligners and use their pricing to compare. For in-house aligners, I’d use Archform as an example of a pretty cost-effective aligner system. At the time of writing this article, Invisalign has a promotion which allows some discounts for a comprehensive case to allow the final lab fee to land around $1400; Angel Aligners also has a promotional pricing of $850 lab fee for a full case. Here are probably the most conservative cost breakdown for in-house aligners:
1. Software use: $50 per case
2. Resin cost per arch: $1.5
3. Aligner plastic per arch: $2.5
4. Packaging bags for aligner set: $1
5. Other auxiliary materials such as alcohol for wash: $0.5 per set
6. Assuming your RDA is paid $20/hr and takes them 15 mins total for print/wash/trim/fabrication: $5 per set
Total cost per set of aligners: $14.5
Please note the above numbers do not include the cost of the hardware purchase and repairs. The resin used is a generic resin such as Elegoo and the printers are entry-level Epax or Phrozen 3D printers. If dental-specific printers or resin are used, the cost will be even higher. Considering the lowest fee for a comprehensive case out there from a reputable company, Angel Aligners, which is $850, your cost with in-house aligners will essentially be the same as outsourcing if you were to use a total of 27 aligners per arch in your treatment; this is inclusive of all refinement. Comprehensive cases often need more than 27 aligner sets during their treatment. In short, in-house aligners are only cost-effective in mild limited treatments.
For full objectivity, I am comparing the least expensive set of in-house and outsourced aligner fabrication processes. Comparing the Angel to more expensive in-house setups makes outsourcing even more cost-effective. Comparing in-house aligners to Invisalign makes in-house a more affordable option in cases needing less than 50 sets of aligners.
How does aligner fabrication affect your cash flow?
Cash flow is likely to be the number one pain point for any startup practice. Outsourced aligners usually come with Net60 financing, meaning the entire lab bill is due in 60 days. Lab bills can be particularly challenging for startups when the cash flow is not there to support it. On the other hand, in-house aligners are the unbeatable champions of cash flow in the short and mid-term range. You only pay for what you need, so if you require 20 aligners, that is what you pay for. This approach can significantly reduce the stress on the practice's cash flow.
My overall take on insourcing clear plastic is that clear retainers must always be made in-house, but insourcing clear aligners helps in short run with alleviating cash flow pains but can actually be more expensive in long run for comprehensive aligner treatments.
Disclaimer: Dr. Kevin Baharvand has no financial interest in any of the products or services mentioned in the blog.
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