“If a dentist is opening his or her own practice, the cost of setting up the office with the new equipment such as instruments, dental chairs, an x-ray machine, and cabinetry and construction costs can be huge,” said Marvin H. Berman, DDS, a pediatric dentist in Chicago with more than 50 years of experience.
“Add to that the cost of rent and supplies and even one dental assistant, then the gross is seriously compromised,” said Berman. “It takes an average of 3 to 5 years to establish a dental practice, so while you’re building the practice, you probably won’t be grossing $159,000. But even if you assume that figure is correct, the overhead expenses will take away 50% to 60%.”
These startup and maintenance costs are a key factor in why many new dental graduates aren’t opening their own practices and joining corporate groups dental instruments. For example, 95% of dentists were solo practitioners in the 1980s. Today, more than 17% of dentists work in group practices, which are growing at a rate of 20% per year.
“Dental service organizations are very attractive opportunities for recent graduates and older dentists who do not want the responsibility of private practice but still want or need to practice,” said Rico D. Short, DMD, an endodontist practicing in Smyrna, Ga. “They provide immediate patients and immediate income. In addition, they allow the new dentist to pick up speed and confidence while not having to focus on the business.”
Yet Short also notes possible drawbacks of the corporate model, including the pressure to upsell procedures, poor lab work, and disincentives for getting to know the patients vacuum forming machine dental. Also, he said, some corporate practices may exploit insurance plans and leave patients confused about what their coverage actually entails. Still, such practices can provide good work as well.
“Corporate dentistry is here to stay and will continue to expand, but not at the exponential rate we expected,” said Short. “The dentists that choose to work there are still dentists, our fellow brothers and sisters in oral healthcare. We should continue to support them because they are, many times, seeing a population of patients that many of us would not see in our practice.”
Student debt is another significant influence dental supplies. The American Student Dental Association (ASDA) reports that the average debt per graduate in 2016 was $261,149. Plus, more than 30% of graduates had debt exceeding $300,000. It’s no wonder, then, that less than 10% of graduates are interested in purchasing a practice soon after graduation.
The good news, the ASDA reports, is that dental school graduates have a great reputation for timely repayment. They typically enter the income stream after graduation faster than their colleagues in other medical fields, which may allow for aggressive repayment. Also, refinancing after graduation is a popular option for many graduates.
Even so, dentistry isn’t always about the money.
“There is no question that the dental profession is one to be admired,” said Berman. “And once you are established and you have developed a reputation for being a conscientious and skilled doctor, you will not only achieve the $159,000, you may even far exceed it. But, no one should ever select their life’s work based on some pie-in-the-sky promise of wealth.”
Patients Prefer Personalized Care Despite Private Practice’s Decline
Historically, independence in the dental industry was the name of the game. More than 95% of dentists were solo practitioners in the 1980s. During the past 30 years, however, this traditional business model has declined in favor of the more corporate group practice model. Today, more than 17% of dentists work in group practices. While managed group practices are growing at a rate of 20% per year, private practices are shrinking by 7% per year.
But even as some practitioners move toward working in a group dental setting, many patients still prefer traditional business models that encourage the building of relationships with their dentists. Many dentists also aim for independent practice ownership as a means of providing the best possible care to patients.