Here are some of my takeaways from reading the latest gloom-and-doom “Economic Report to the Dental Profession” prepared by R.K. House & Associates Ltd (November 2013):
1. The good years are behind us. The future of net incomes for dentists is in doubt. This is due to things like the retreat of third-party insurance, increased manpower, the cost of practicing, and too much competition (page 2).
2. Dentists should start preparing for their retirement “the day you enter the profession” (page 3).
3. From 2001 to 2013, the number of dentists increased from 5,176 to 7,048 (37%), but the population to dentist ratio decreased from roughly 2,300 to roughly 1,900 (16%). Furthermore, the number of dentist hours available for every man, woman and child increased from 0.65 to 0.78 during that same period. The conclusion -there are too many dentists fighting over the same patients (page 4).
4. Preventative care is growing more rapidly than clinical remedial care, the number of hygiene hours is increasing, and hygiene production has increased. At the other end of the spectrum, dentist-provided procedures (particularly crowns and implants) have increased in fees (though not so much production vis-a-vis hygiene) (pages 5-7).
5. More hygienists, reduced hygiene fees, and the reduced costs relating to delivering hygiene services will drop, resulting in increased production (pages 9-13). The dentist will spend more time doing recall exams and managing staff (staff costs will increase as well).
6. Dental schools have apparently been graduating the number of dentists required to replace the number of dentists who should/may actually be retiring (roughly 495 dentists). There are a lot of assumptions here, but if true, this would mean that the dental schools are maintaining an equilibrium of the profession. But the entry of foreign-trained dentists will continue to put downward pressure on the population to dentist ratio (page 18). And competitive pressures may force dentists to over-treat.
7. From 2003 to 2012, advertising and promotion expenses grew by 142% (whereas total expenses from by 49%). But apparently, there is no correlation between gross and advertising and promotion expenditures (page 21). Wow! I’ll probably discuss this in a future blog… it’s all about word-of-mouth marketing! Spending money on advertising is not going to be your bread and butter way of attracting new patients. Nevertheless, this is a trend that will likely continue. And a poorly designed marketing program will likely have little results (and be a waste of time and money)
8. There is a lot of un-utilized capacity within the profession (i.e. dentists and hygienists not treating patients) (page 24).
That’s it for now. Why don’t you have a read for yourself and pick out some important lessons? There is lots of good information here.