I recently read the results of the Dental Economics®/Levin Group 2010 Practice Survey in the November 2010 issue of Dental Economics®. Some of the trends that were reported are in direct conflict with our experience (i.e., 51% of doctors have increased their production in the last six months, and average new patients per month increased from 2009 to 2010). I find these statements alarming. In our daily conversations with dentists from across the United States, including dentists in every size community and every specialty, we do not find that practices are growing!
What our personal interviews and research show is that there is a great deal of variance in type of practice, size of city, and oversaturation of dentists. Some states - such as Texas, North and South Dakota, Iowa, Illinois, Missouri, Nebraska, Idaho, and Wyoming - have better economies than, say, Nevada, Florida, California, Arizona, Oregon, and Michigan.
Another key factor is the type of practice. Practices that we see growing (and by growth I mean not just in revenues but in net profit) are health-centered, relationship-centered, and comprehensive (in that they are more than single tooth/commodity dentists). Generally, we see that dentists with a prime focus on cosmetic dentistry are down 30% or more. We see more and more general dentists actually competing with specialists for treatment needs of patients, especially implants, orthodontics, and endodontics.
I don't think lumping all dentists and all specialties together is accurate at all. There are four distinctly different business models in dentistry. Level I (tooth-centered) dentists represent 60% or more and have the greatest competition for new patients. Their average treatment plans are less than $1,000 per patient. Thus, they require large numbers of new patients in their volume- and production-based practices. This group is enticed by the quick-fix marketers and hucksters of the lecture circuit. These dentists, according to our experience and discussions with ADA executives, are down 20% to 30% or more.
The next group of dentists, Level II dentists - with more technical training - need fewer patients because their treatment plans exceed $3,000 on average. The success of this group varies with size of city, as well as age and patient base in the practice. If the practice has a patient base of 2,000, we see these practices holding their own or perhaps down 1% to 15%. Again, the smaller the community, the less the competition, and the better these practices are doing. In some smaller communities, the problem isn't new patients but rather keeping up with the demand. Level I and II practices seem to do well in these sized communities, and poorly in larger communities.
Level III practices (of which there are a pitifully small number and percentage) are still thriving. Level III is such a different professional and business model that it is literally a different profession. It is truly the road less traveled in dentistry. This is a relationship-based, patient-centered practice.
These dentists are highly trained but also have the desire and skills to form meaningful relationships with their team and patients. This group is not the quick-fix or fixer group of dentists. They are much more evolved and developed, and they usually focus on health first and fixing later. This group is doing well, no matter what size community or type of specialty. They see fewer patients and form deeper relationships. They form "coaching relationships" with their patients and have totally different intentions and goals. The focus of this practice model is on the patients, and they do better for their patients and themselves.
Level IV dentists are similar to Level III except they are the endodontists, orthodontists, periodontists, and restorative dentists who have far more complex problems to treat. They re-treat the problems that lower levels of dentists cause through either undertreatment, overtreatment, or defective treatment.
I personally have practiced through four recessions. The fifth and current one is by far the longest and most difficult economic time I have seen. To suggest that dentists are up 15% to 20% is a far cry from the truth we see every day. If you doubt my words, talk to dental supply companies and dental manufacturers.Dentists are the first to feel a recession and the last to come out of a recession. My grandfather, Martin Cain, practiced dentistry in Cheboygan, Mich. He used to say, "You can tell the state of the economy by the amount of loose change a dentist has in his pocket."
I welcome comments or thoughts at [email protected].