Align's marketing department probably is just applying the 80/20 rule: 80% of its revenue comes from top 20% of the dentists, and if it applies a cut line at 10 cases per year, it could focus 100% of its resources on those top dentists and grow revenue faster.
Now the problem is just the law of unintended consequences. Did Align's marketing also look at where the growth is coming from? Is the growth coming from dentists doing 100 cases a year going to 150 next year? Or is the growth coming from 10 new dentists starting off doing 5 cases a year, or go from 5 to 10 a year?
As a patient, I do believe a proficiency requirement is a good thing; over the last couple years and 2 refining sets, I can see my dentist getting better with Invisalign. However, I would agree that 10 cases a year probably isn't a fair measure of "proficiency".
Align could have done this some other ways as well. For example, hike the price 2x and provide 50% discount for high volume dentists. Calling it "proficiency" is a marketing decision, and I can see how it would rub some of the dentists the wrong way.
Well thought out post. You are most likely 100% correct. Growth does not come from new providers and low submitting GP with this company( they have talked about the challenges getting new providers up to speed multiple times on earnings calls). They submit and then fall off or never submit at all. Teen and international business is where the growth is at. Patients do indeed love this move. There are postings all over the internet( all postive). Our new friends on this board( the dentists) that claim this is not true have not seen them or are just reporting what their own patients are saying. Plus they seem to always quote the case requirements but not the CE components so it wouldn't surprise me if that is all they told their own patients. I was a fellow patient too before a stock holder and I had to transfer to another provider during my treatment so I fully understand what you had to go through.
This is a good move for patients but we will have to see if this hurts or helps Align's bottom line. I am still on the side that it will help in the long run for similiar reasons as you. I am buying protection to the downside via puts but keeping a majority if not all of my long position. I will wait until the earnings call for more info. We also must keep in mind many providers are stock holders so obviously there would be downside pressure as they sell or go short. In addition the stock price was getting expensive at 13 so this downside move is no surprise.
The talk of teen patients loving Invisalign is kinda funny...no surprise there-they'd rather not have braces. Most parents who pay for their child's tx are paying for the best possible clinical outcome-a perfect smile. ALGN is not trying to advance orthodontic clinical efficacy here with Teens-they're simply trying to generate more revenue-no fault to them that's what a business is supposed to do. I don't think there are alot of practioners however,(I know there are some) who are jumping up and down about how awesome it is that ALGN is marketing directly to teens...