JADA article outlines shift in dentists’ income since before economic downturn
April 23, 2012
By Kelly Soderlund, ADA News staff
The recession has caused an expected decrease in dentists’ income but ADA survey data shows that drop has been occurring since 2005, years before the economic downturn began.
This is according to an article set to appear in the May edition of The Journal of the American Dental Association, titled “An Analysis of Dentists’ Incomes, 1996-2009,” and penned by staff members at the ADA’s Health Policy Resources Center.
The authors found that the primary reason for the decrease in net income was because of a drop in dental visits. In a nutshell: people have been going to the dentist less frequently a troubling trend that appears to have started prior to the economic downturn.
“I think the primary takeaway is that there are things affecting dentists’ income that are more than the bad economy,” said Dr. Jeffrey Cole, member of the Council on Dental Practice’s Subcommittee on Economic Issues.
The team looked at the average net income levels of independent general practitioners (dentists who own their own practice) from 1981 to 2009, the most recent year data was available.
The HPRC used results from the ADA’s annual Survey of Dental Practice, which polls a national random sample of 4,000 to 7,000 dentists in private practice.
The real net income of independent general practitioners increased from $170,834 in 1996 to a high of $217,850 in 2005.
Starting in 2006, there was a gradual decrease and by 2009, average real net income had fallen to $192,680, an average annual decrease of 3 percent.
“Historically, net income levels for dentists have fluctuated with economic conditions. However, general practitioners’ net income levels have declined since 2005, more than two years before the start of the economic recession,” the article says.
“This inspires some important questions: how much of the decrease in dentists’ average net income is being driven by short-term cyclical movements in the economy and how much is rooted in longer-term underlying structural changes in the market for dental services?”
HPRC staff hypothesized that a number of factors could have contributed to a decline in net income. Using various data sources, they examined trends in:
- average gross billings per visit;
- average rate of collection of gross billings;
- average number of annual visits to a dentist among people who visited a dentist;
- percentage of the population who visited a dentist;
- population-to-dentist ratio;
- average practice expenses.
The authors then posed the question of whether dentists’ incomes would return to pre-recession levels. The answer? Maybe not.
There’s no telling whether once the recession is over, more people will start to visit the dentist more often.
More than 90 percent of dental expenditures in the United States are paid for out-of-pocket or through private insurance. And the number of people with private insurance has decreased steadily over the past several years.
On the public side, several states have reduced eligibility for dental benefits among adult Medicaid beneficiaries or have reduced reimbursement rates, the article said.
“Whether these trends will continue or reverse is unclear and it’s something the HPRC is closely monitoring,” said Marko Vujicic, Ph.D., managing vice president of the HPRC. “With continued fiscal pressure within state programs and the uncertain impact of health reform, there is simply a lot of uncertainty at this stage.”
The ADA is studying the potential implications of the Affordable Care Act for dentistry, as requested by the House of Delegates.
Another driving force is the future supply of dentists.
The only available data shows the population-to-dentist ratio is projected to remain fairly steady through 2020, but the article suggests that data may be ambiguous because it did not account for newly opened and planned dental schools.
“The question becomes, what happens when you get an influx of dentists?” Dr. Cole said.
It may be as simple as supply and demand, he said. If there are more dentists seeing patients, competition increases and in order to remain in business, your fees need to be competitive, Dr. Cole said.
While these statistics are alarming and indicative of a long-term issue, there is data to suggest a mild upswing for dentists. Jeff Johnson, an optometrist and a senior medical technology analyst for Robert W. Baird & Co. Inc., a financial services firm, who studies the dental market, reported the dental industry feels better than it did a year ago and said dentists are starting to see an improvement in patient volume and cash flow.
The ADA has a number of initiatives aimed at promoting oral health and dentists’ practice success. CDP will present a course at Annual Session titled Has the Economic Downturn Changed Dentistry Forever? It’s scheduled for 10:30 a.m.-1 p.m. on Thursday, Oct. 18, and participants are eligible to receive two and a half continuing education hours.
The ADA is also involved in an initiative with Sharecare.com, a consumer website co-created by Mehmet Oz, M.D., also known as Dr. Oz, and Jeff Arnold, founder of WebMD. ADA staff and trained members answer consumers’ questions about oral health and the information is posted on the website for all to see.
Millions of consumers have visited Sharecare.com seeking answers to their health care questions from health care professionals and the ADA sees it as a way to promote accurate information about oral health care.
Dr. Roger Kiesling, a member of the ADA Board of Trustees, cites all of these as good examples of the ADA doing its job of promoting oral health care and prevention. The article raises the question of whether the public cares less about their oral health, which can lead ADA officials to question the Association’s effectiveness of communicating how important care and prevention is, Dr. Kiesling said.
“I do think the ADA is doing a good job at communicating its message and helping the public understand why it’s important to be mouth healthy. I just think we’re evolving into a society where there’s this message overload and instant communication in every way, shape or form and a lot of attention-grabbing stuff that competes with this kind of message,” Dr. Kiesling said.
“As a board member, I’m excited to see such a well-done article by the ADA’s Health Policy Resources Center. Our surveys provide some of the best value for members looking to get information about the industry and trends.”