“Adapt or perish, now as ever, is nature’s inexorable imperative.” — H. G. Wells
The future for dentists remains incredibly bright. Most dental schools still have the luxury of choosing students from highly talented and intellectually blessed candidates. General dentistry was ranked by U.S. News and World Report respectively in 2015 and 2016 as the #1 and #2 career, with orthodontics displacing general dentistry in 2016!4,5
However, the dental practice landscape has also been marked by major, permanent changes, necessitating a vigilant need to constantly monitor the greater economic environment.6-8 Dunning and Lange, for example, assert the formerly termed “platinum age” of dentistry has now been somewhat tarnished.6 Why?
First, the expenditures ($) for dental services appear to have flattened and may not rebound amidst the ebb and flow of economic conditions. Meanwhile, utilization (those going to the dentist for services) has increased for children and dropped for adults.9-11 Further, and brace yourself for some sobering statistics, the total number of dental care visits in the United States, across all settings, decreased by 7% between 2006 and 2012. There were approximately 271 million dental care visits nationwide in 2006 compared with 252 million in 2012.9 By way of a staggering, summary statistic: this means approximately 19 million fewer dental visits in 2012 vs. 2006. Over this same time frame, the US population increased by 5.3%, and the number of practicing dentists increased by 9.4%. As a result, average dental care visits per capita and per dentist decreased substantially. Even though more people now seem to have dental coverage of some kind, such as Medicaid, preferred-provider, etc., patients still struggle to access care and still need some expendable income for any deductibles or co-pays.12
Second, dental student debt has skyrocketed, prompting studies about its influence on recruiting students and impact on career decisions. As of this writing, average debt hovers around the $225,000+ area, with lower averages for public dental school graduates and higher for private dental school graduates.”13 [Some argue that as of this writing the average dental student loan debt is approaching approximately $270,000.7] The lower average debt of $225,000 at a blended 6.5% rate over 10 years results in a monthly payment of $2,555. Without factoring in rather strict limits on the tax deductibility of student loan interest and income taxes owed on with after-tax/ take-home income, a recent graduate would need to earn on average $30,660 in annual income just to make a $2,555 monthly payment ($2,555 x 12). This indebtedness redefines the economic landscape for associateship positions and for obtaining practice purchase loans. From another perspective, if an associate earned 33% of collections, s/he would need to generate $93,000 in annual revenue just to make student loan payments ($93,000 x .33 = $30,690), without factoring-in limits on tax deductibility on student loan interest or income taxes owed on gross income.
Third, new dental schools have been and are being created, and this may eventually saturate the market with an excess number of providers, especially in some markets.14,15
Fourth, decreased reimbursement schemes from some dental insurance companies are putting increased pressure on practice profit margins, presenting an ongoing challenge to dentists.12 Summarizing an aggregate data set, Boechler asserts that ‘although the dentists and hygienists are working more hours on average each month, their net production per hour and per patient represents a smaller percentage of the gross.16 This is due to the increased use of insurance as payment, leading to higher adjustments and a smaller percentage of net production.bUnfortunately, for dentists, with the ACA [Affordable Care Act]…this trend is likely to continue into the future.’ In other words, dentists can expect to work longer hours and realize increasing pressure on profit margins.