Why Are Dentists’ Incomes Declining?

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Why Are Dentists Incomes Declining? September
18, 2017 Dentists incomes are on the decline. In
9 out of the last 10 years, dentists have seen a
drop in their earnings and the American Dental
Association has forecasted that 2017 will be
another down year for dentists incomes. Though
the economy has rebounded from the Great
Recession, dentists incomes have not bounced
back. What is behind dentists declining incomes?
And what can dentists do about it? Supply and
Demand The most basic principles of economics
tell us that when supply is high and demand is
low, prices will fall. This is what has happened
in the field of dentistry. Since the mid-2000s
the demand for dental services has decreased.
This could be, in part at least, due to the
economic recession. However, even as the economy
has improved, demand for dental treatment
procedures has remained low. The dental industry
is unique among most medical fields as the clear
majority of dental work is discretionary.
Patients can go yearseven a lifetime without
suffering complications from a missing tooth.
For example, there are 174 million Americans
currently missing at least one tooth. Certainly,
we all know friends or family members who have
less than perfect teeth. However, the cost and
fear of discomfort has been a sufficient
deterrent to keep patients from seeking cosmetic
or orthodontic treatment. Things are not good on
the supply side either. Despite the relatively
weak demand for dental services there is an
increasing number of dentists. This trend is
expected to continue in the coming years, driving
down prices further. Hopefully, the demand for
dental services will pick up again eventually.
With unemployment falling, more adults should
begin seeking dental care. However, there are
other factors unrelated to the current state of
the economy that are responsible for dentists
declining incomes. Corporate Dental Chains One
cause of dentists declining incomes is the rise
of large corporate dental chains. Again, the
basic economics come into play. Big corporate
dental chains have the advantage of economies of
scale. By sharing resources among many different
locations, these chains lower their operating
costs. In addition, most of these large dental
clinics provide specialty services as well. This
allows patients to receive comprehensive dental
care under one roof. The inconvenience that
patients experience when a private practice
dentist refers patients to local specialist is
significant. Studies have shown that as many as
30-42 of patients never follow up on specialty
dental treatments when they are referred outside
the dental practice. Corporate dental chains do
not have that issue and are rapidly acquiring new
patients at the cost of the traditional private
practice dentist. Thanks to their lower cost of
business, corporate dental chains can offer
services at a discount. While they may not be
able to provide the individualized care as a
private dentist, they still draw in customers
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with their low prices. To compete, other dentists
in the area are forced to drop their own prices
or lose customers. Decreasing Insurance
Reimbursements Further affecting dentists
declining incomes is a decrease in insurance
reimbursements. In the past decade, the fees
that most dentists charge for procedures have
gone up. However, the amount that dentists are
reimbursed by insurance companies has gone
down. The root of the cause stems from businesses
demanding lower premiums for their employee
benefit plans. This has forced dental insurance
companies like Delta Dental to reduce
reimbursements to dentists for dental
treatments. In addition, insurance companies have
created new lower benefit plans which are
being rapidly adopted by businesses. Dentists are
then forced to accept the new plans with the
lower treatment costs and fees. If dentists
refuse, they run the risk of losing a significant
number of patients because that dentist is now
out-of-network. Payments from private insurance
companies make up a large chunk of a dentists
income. When reimbursement rates fall, despite
rising costs, dentists are left hurting
financially. Rising Cost of Business In addition
to the low demand for dental service, competition
with big corporate dental chains, and decreasing
insurance reimbursements, dentists must also deal
with the rising cost of business. Staff
salaries, crushing taxes and regulatory fees,
equipment, and facilities are all costs that add
up quickly. New expenses are constantly emerging
for dentists. Dental practices are always
investing in new technologies. The switch to
electronic health records has also been costly
for dentists. Strict privacy and legal
requirements make implementing any electronic
health record system expensive. New Sources of
Income To combat dentists declining incomes,
many dentists are looking for new revenue sources
such as offering expanded dental treatment
services. This is a difficult task for dentists
who have been in the general dentistry practice
for their entire career. The prospect of moving
into offering more lucrative specialty services
may be tempting, but most dentists do not have
the time, training, money or desire to make such
a switch. Instead, many dentists are partnering
up with dental specialists to bring in additional
income. Every year, dentists refer out billions
of dollars worth of specialty dental services to
local dental specialists such as oral surgeons,
periodontists, endodontists and orthodontists. By
keeping those services in house, dentists can
add as much as 30 or more production revenue to
their practice. Hiring a full-time specialist is
not in the budget for your average dentist.
However, working with an itinerant dental
specialist allows dentists to offer the services
of a specialist without the high cost. Itinerant
dental specialists travel to the offices of
general dentists and perform services for their
clients. The dentist and the specialist then
agree upon a treatment sharing financial
structure where procedure revenue and expenses
are split.
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By bringing specialists into their office,
dentists can increase their income without paying
large upfront costs. It should come as no
surprise that more and more dentists are hiring
itinerant dental specialists. Matching Dentists
with Specialists The logistics of finding an
itinerant dental specialist can be tricky.
Dentists have specific procedures their patients
need at specific times. How can they find the
right specialist at the right time for the right
price? There are many new local and regional
services that help dentists find qualified
specialists. Mypractice9 is one of those
services. The online service is free to member
dentists who can post specialty dental treatment
requests such as a multi-unit implant case.
Subscribed local itinerant dental specialists are
instantly notified of the request and respond by
providing treatment proposals. The dentists
simply select the specialist they feel most
closely matches their practice culture and
clinical need. Mypractice9 also provides a huge
number of valuable resources to member dentists
(also for free) such as pretreatment check
lists, patient consent forms, and treatment
service contracts which outlines the procedures,
warranties and payment terms. This system makes
it easy for general dentists to find itinerant
dental specialists who can meet the needs of
their patients. By bringing in the right
itinerant dental specialists, dentists can see
tremendous growth in their practice. Patients
also benefit from access to the best specialists
in their regular dentists office. This all leads
to happier patients and, hopefully, greater net
income for dentists.
http//www.ada.org/en https//www.mypractice9.com
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