Dentist net income: An analysis
The net income of dentists has declined sharply in recent years, reversing a decades-long trend of steady growth.
by Marko Vujicic, PhD
The net income of dentists has declined sharply in recent years, reversing a decades-long trend of steady growth. In an article in the Journal of the American Dental Association last May, my team at the American Dental Association's Health Policy Resources Center demonstrated that the decline in average dentist net income started well before the recent economic downturn. We showed that a broad set of factors contributed to the decline, with a very important one being a steady decrease in dental care use among the population.
Figure 1 is an update to our earlier analysis. It shows average annual net income of general practitioner dentists in inflation-adjusted dollars. The peak occurred in 2006 at a value of $219,501. By 2009, average net income fell to $191,495, representing an average annual decline of 4.4%. Since 2009, earnings have stabilized, and in 2011 the level was $192,392. Our full analysis demonstrates that the trend is similar for general practitioners and specialists, owners and employees, male and female practitioners, and for various geographic locations. All types of dentists are being affected.
While we have only two years of post-Great Recession data, the results indicate that dentists' earnings have not rebounded, and this is different than in previous economic cycles. We will soon have the data for 2012 and are watching this very closely. If earnings were to remain sluggish, this could potentially affect the future supply of dentists. Dentists' net income relative to dental education costs is an important predictor of the dental applicant pool. If current trends continue, with net income sluggish and education costs rising, this could affect the viability of several new dental schools that have opened recently or are planned.
More analysis by my team helps shed light on why dentist earnings are not rebounding. Again, a major factor is the utilization rate for dental care among the population. Adults, particularly young adults, are visiting the dentist less. Children are going to the dentist more, but this is being driven by gains among the Medicaid population. Two out of five dentists report that they are not busy enough and can treat more patients — the highest level since we began collecting this data. Clearly, there are important changes going on in how the population uses dental care. But this is for another article.
To access the full analysis, please visit http://www.ada.org/1442.aspx .
Marko Vujicic, PhD, is managing vice president of the Health Policy Resources Center at the American Dental Association, where he is responsible for overseeing all of the Association's policy research activities. Prior to joining the ADA, Vujicic was senior economist with The World Bank in Washington DC, where he directed the global health workforce policy program. You may reach Vujicic at email@example.com.