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Second quarter economic confidence survey results show downturn

The debt ceiling debate revived discussions about unemployment, job losses and the state of the economy, which are all topics that have never been far from the minds of dentists and other small business owners.

Image: Confidence level

The national economy continues to take its time improving and dentists, like many small business owners, are feeling the pinch. Second quarter results from the American Dental Association’s Survey of Economic Confidence show a downturn in some of the indicators measured.

“The downward movement seen in the indicators is consistent with past second quarter performance dips, indicating a seasonality effect in the economics of a dental practice,” according to the survey’s executive summary. “In addition, the U.S. economic recovery has been slower than expected in the first half of 2011; the unfavorable results of the second quarter 2011 survey are consistent with the perception of the general economy.”

The survey asked dentists whether eight metrics of their dental practice—gross billings, collections, adjustments and write-offs, accounts receivable, volume of new patients, open appointment times, treatment acceptance rates and net income— increased, stayed the same or decreased from the previous fiscal quarter. The survey also asked dentists about their confidence in the current economy.

A number of dentists, four out of 10, indicated their net income in the second quarter was lower than in the first quarter. On average, dentists also projected their net income for all of 2011 would be 3.4 percent lower than in 2010.
Other findings include:

  • The largest percentage of respondents, 40 percent, reported their gross billings as staying the same in the second quarter, while 37.6 percent reported a decrease and 22.4 percent an increase.
  • Collections stayed the same for 41.4 percent of dentists surveyed, decreased for 38.7 percent and increased for about one-fifth of respondents.
  • Practice expenses remained the same for more than half of those surveyed but 39.2 percent said expenses were higher.
  • Only 15.8 percent of dentists reported an increase in new patients, while the rest of those surveyed said their clientele either decreased or stayed the same.

More than 45 percent of all dentists surveyed said they were not at all confident in future economic conditions but younger dentists remained optimistic. One-fifth of dentists under 35 were very confident about future economic conditions, compared to only 5 percent of those in the 65 and older age group.

Dr. Michael Halasz, who chairs the Council on Dental Practice’s Subcommittee on Economic Issues, maintains the dips seen in the quarterly surveys year after year have a lot to do with patients making an effort to use their insurance benefits at the beginning and end of the year.

“I hate to sound like a broken record, but I am not surprised at all by the survey results,” Dr. Halasz said. “The numbers mimic 2009 and 2010. That being said, if we continue to mimic those years, in the third quarter, the numbers will continue to decrease. The good news is that the numbers should go up in the fourth quarter, again, because of insurance utilization.”

The ADA Health Policy Resources Center, which conducted the survey, reports the downturn in the second quarter results was similar to last year’s findings from the same time.

“The drop in confidence this year was less severe than last year,” according to the executive summary. “The weaker downward movement in the second quarter of 2011 is hopefully a sign of better times ahead.”