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November 2, 2009

For more on this topic, go to www.dentaleconomics.com and search using the following key words: Dr. Roger Levin, annual practice survey, practice overview, practice production, collections, billings, overhead, wages, benefits, doctor satisfaction.

Editor's Note: This is Part I of a two–part series discussing the results of the most recent practice survey, conducted by Dental Economics® and Levin Group. Part II of the series will appear in the November issue of DE.

How is dentistry doing? In light of the economic downturn experienced throughout the country since last fall, many of you might expect the answer to be “bad,” “awful” or “terrible.” Fortunately, that is not the case. The results of the Dental Economics®/Levin Group 2009 Annual Practice Survey show dentistry to be holding its own, with relatively modest dips in practice production and new patient visits.

Although it was not a great year by any means, dentistry remains a resilient profession as dentists continue to prove themselves as resourceful entrepreneurs who can adapt to changing times. Some recent trends include:

• Median annual gross production declined by 3.5% since last year
• Average doctor compensation dropped 7.8% since last year
• Average new patients per month fell from 33 in 2008 to 27 in 2009 (but still an improvement from 25 in 2007)
• 24.8% of responding dentists experienced high or extremely high stress compared to 22.5% from last year

“I think we will look back on 2009 as one of those ?weather–the–storm' years,” said Dr. Roger P. Levin, Chairman and CEO of Levin Group, Inc. “There was a lot of turmoil and chaos in the economy, and dentistry has had its share of challenges, but all things considered many practices are in a good position to take advantage of the expected recovery in 2010.”

About the survey

In the third year of conducting this survey, our goals remain the same but carry an even more important role in helping dentists across the country get a true sense of how they are faring in this economic period. Our survey strives to:

• Provide the most up–to–date information available about dental practices
• Enlighten readers about the trends occurring in dental practices and the dental industry as a whole
• Inspire and empower dentists to make positive changes that result in near– and long–term success

We hope dentists will use the survey data to benchmark performance, validate best practices, and start making necessary changes to jumpstart practice growth.

Drawing on its 24 years as a leader in dental practice management, Levin Group designed the survey, and collected and analyzed the data to provide dentists with accurate, comprehensive information about the state of dentistry for comparative purposes.

This year's survey asked general dentists to provide practice data in seven critical areas:

• Practice overview
• Practice production
• Collections and billings
• Procedure mix
• Overhead
• Wages
• Doctor satisfaction

The number of responses varies from year to year and different doctors respond each time. The survey represents a cross–section of U.S. general dentists, ranging from solo practitioners to large group practices, from dentists in rural areas and small towns to those in suburbs and large cities.

Thanks to all the dentists who took the time and effort to respond to this year's survey.

Practice overview

This part of the survey contains the demographic information provided by the dentists who participated in the DE®/Levin Group 2009 Annual Practice Survey. Of this year's respondents, 81% were male, which is reflective of the dental profession in general. Sixty percent of responding dentists were 46 years or older, with 42% in practice longer than 25 years.

A plurality of responding dentists (35%) were located in medium–sized towns (10,000 to 100,000), with 28% located in major metropolitan areas of 500,000 or more and 23% in large towns (100,000 to 500,000). Forty–eight percent practiced four days a week, with 43.8 percent taking three to four weeks vacation last year.

Practice production

In the critical area of practice production, there's good news and bad news. Even though practice production dropped compared to the 2008 survey, 39.5% of surveyed dentists said they increased their production during the past six months.

More importantly, 43.9% of this year's respondents are confident that they will increase gross production compared to their production from 2008.

Only 28% of dentists said they expected production to decrease, with another 28% expecting to remain flat. The median increase over the 2009 period was expected to be $25,000.

“I find it a hopeful sign that, despite a difficult economic downturn, a significant percentage of responding dentists are expecting to grow this year,” said Dr. Joe Blaes, editor of Dental Economics®. “The industry still has a long way to go, but this is a truly positive indicator for brighter times ahead.”

This year's annual median production was $800,000 — the same as in 2007 and a 3.5% decrease from 2008. An area that remained flat was median doctor production, which was $600,000 for both 2008 and 2009.

Mirroring annual doctor production, daily doctor production also remained flat at $3,200. Average annual hygiene production remained steady at $147,500 in 2009 compared to $147,958 in 2008. The same was true for daily hygiene production, which rose slightly from $1,002 in 2008 to $1,088 in 2009.

A positive sign for practices was the higher number of active patients, which increased from 1,897 in 2008 to 2,300 in 2009. But with hygiene production remaining flat, it could mean that while a practice has more total active patients, they could be visiting the practice less frequently. Instead of twice–yearly hygiene visits, patients may be stretching out intervals between appointments to nine months or longer.

“A strong recare program is critical to long–term practice success,” said Dr. Levin. “The hygiene department is a gateway to other practice production. When hygiene production flattens out, overall practice production often does the same.”

Collections and billings

This year's survey offers mixed results in this category. This year's respondents collected on average 92.7% of their fees compared to 94% in 2008. The tight economy is making it more difficult for some patients to pay their dental bills.

As people are faced with job losses and foreclosures, paying dental bills may take a lower priority. In response to the weakening economy, doctors are doing a better job of collecting their fees at the time of service, with 65% of account receivables considered current compared to 62% last year.

Unfortunately, A/R older than 90 days increased from 9.4% in 2008 to 13% in 2009. This obviously indicates some patients are taking longer to pay their bills. “Offering a variety of financial options can help patients receive recommended treatment while paying in a timely manner,” said Dr. Levin.

Conclusion

This year's data shows the challenges faced by dental practices in an economic slowdown. While there are some notable bright spots (44% of surveyed dentists expect to increase production this year), most of the key categories indicate flat or slightly declining results as compared to 2008.

To put things in perspective, even while the United States is still in the midst of one of the worst economic slumps in its history, the dental profession continues to be an outstanding profession that enables dentists to make a healthy living.

“I was pleasantly surprised by these results. Even during this widespread slowdown, dentists continue to find ways to be successful. And to me, that's great news for our profession,” said Dr. Blaes.

In next month's issue, find out how you rank against other practices in the important areas of procedure mix, overhead, staff wages, and doctor satisfaction. Also, you'll see how practices have performed in those areas compared to last year. Click here to view survey results...

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