dental practice ownership consulting services for associates
Many dental practice owners in United States and Canada are finding it more difficult than ever before to increase their practice production or reduce overhead expenses without compromising the quality of patient care. The need for highly specialized dental professional advisory services has never been greater due to a confluence of factors outlined below which now pose a significant threat to dentist's future financial well-being. Contact us to learn how we can help you prepare for the new realities of being a dental practice owner.
- Growing Dental Student Debt: When you factor in missed career earnings, student debt principal, and interest, a dental school graduate today can expect to sink $572,813 into obtaining their degree (Calculation: Total Debt = Dental School Debt Principal + 6.31% Interest + Lost Earnings Over 4 Years Pursuing DMD Degree = $261,149 + $91,664 + $220,000 = $572,813).
- Longer Loan Payback Periods: It takes approximately 8 years on average for a dentist’s increased earning potential to offset the cost of dental school based on the typical salary of $55,000 per year for those with just a bachelor's of chemistry degree; a pre-dental undergraduate who enters the workforce instead of going back to school earns income faster while paying down debt but forgoes a higher salary in the long-run.
- Higher Practice Startup & Acquisition Costs: The costs to build out or acquire a dental practice, particularly in urban areas where dentists and their families prefer to live has increased faster than the national inflation rate due to supply/demand imbalance and a lack of commercial real estate availability with proper dental/medical zoning.
- Practice Relocation Is Expensive: Relocating an existing dental practice unexpectedly can cost a dentist in excess of $500,000; the expense of moving, professionally reinstalling dental equipment, building new leasehold improvements, patient/staff attrition, practice downtime and changing stationary is going up.
- Longer Time to Retirement: In 2015, the average age of retirement among U.S. dentists was 68.8, up from 66.1 in 2005; from 1960 to 2014, the number of dentists in the United States increased by 127%; dentists are retiring in United States and Canada later today due to increased competition and a lack of proper business and financial planning.
- Staff Recruitment Challenges: There are significant challenges in recruiting qualified dental staff to rural parts of the country so although these regions are typically less saturated with dentists, it is becoming harder to operate them.
- Lower Gross Collections: The bargaining power of PPOs (Preferred Provider Organizations) in the United States is increasing and dentists find themselves offering discounted services without the volume to justify it.
- Treatment Plan Acceptance: Case acceptance is growing in importance and patients are more knowledgeable than ever before thanks to the availability of online healthcare resources.
- Lack of Dental Business Training: There is a lack of dental school training in business management and organizational leadership and yet it's never been more important for a dentist to have the proper business knowledge to successfully operate a practice.
- Increasing Consumer Power: The availability of more consumer choice and increased price visibility means patient financing and practice differentiation is vital.
- Greater Market Transparency: Unforgiving online review sites provide patients with an easier way to share their negative experience with millions of people; how are you creating patient loyalty?
- Growth in Dental Tourism: Increased dental/medical tourism to foreign countries due to lower transportation costs and more aggressive marketing campaigns aimed at your patients.
- More Regulation: More complex regulatory environment with a trend towards higher taxation as politicians face increasing pressure to help the disappearing middle class.
Data Sources: American Dental Association Health Policy Institute; U.S. Department of Labor, Bureau of Labor Statistics; American Dental Education Association; PayScale.