2 in 3 Dentists Under Age 35 Now Work For A Dental Corporation.

[Cold Front]

Just came across these (not so surprising) numbers recently.

DSOs/Corporate Dentistry is moving at a lightning speed while fewer and fewer dentists are owning their own solo practice every year.

The ADA acknowledged this, dental schools acknowledge it, almost all dentists unanimously acknowledge it today. There are many factors that have caused this to happen, but by far, the biggest culprit is the cost of dental education - which caused new graduates to have on average a monthly post-tax student loan payment of more than $3,000. This is where we are in the profession for young dentists (under 35) in 2019.

Hope for private practice dentistry

Gary Radz, DDSBryan Brenner, DDS, understands how graduating dental students can find the prospect of going into private practice daunting. He is 39 years old and runs a practice...

www.dentaleconomics.com

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[AppalachianDentalBoy]

Any solutions to this wise cold front? What would you advise doing? Search for an associate gig at a private office or buy a practice straight out of school?

 

[GypsyHummus]

Can’t blame new dentists. When you are stuck with a 500k student loan bill, the for sure 120k-150k/year associate job seems a lot better than going 500k more into debt to buy a practice.

My question is how long before dentists become like Optometrists with saturation and corporations.

 

[Cold Front]

Any solutions to this wise cold front? What would you advise doing? Search for an associate gig at a private office or buy a practice straight out of school?

I graduated 9 years ago. A LOT has changed in 9 years, and not just in dentistry, but almost everything around us did. A LOT more will change next 9 years. Any proposed solution will only lead to a search for a different and better solution in dentistry. But the one common problem and force is still high student loans.

A headline story that I came across this morning was: “According to CDC: US Birth Rate lowest level since 1986”. One of the many causes of low birth rates the article mentioned was - believe it or not - student loans preventing or delaying young people from starting a family. This is a generation phenomenon; baby boomers had a lot of kids, now we have baby diminishers as a generation.

 

[321931]

Can’t blame new dentists. When you are stuck with a 500k student loan bill, the for sure 120k-150k/year associate job seems a lot better than going 500k more into debt to buy a practice.

My question is how long before dentists become like Optometrists with saturation and corporations.

The problem with dentists is that they don't understand the basis of cash flow, equity, and growing wealth. It's true that many dentists do not learn business in dental school and it's not their fault- but one can learn. It's not rocket science.

It may "seem" alot better to play it safe and take a normal job and not go more into debt..... but....As I have told on some posts here- go and spend some money with a Dental CPA and ask them to explain the cash flow of a dental practice and I guarantee you, you will buy a practice within a years time after that.

 

[Cold Front]

My question is how long before dentists become like Optometrists with saturation and corporations.

We are en route, and will probably get there within next 10 years or whenever half the total dental workforce are employed at a dental corporation.

Aspen Dental opened a state of the art scheduling center in Phoenix about a month ago. It will employ more than 400 scheduling agents and team members. In 2018 alone, Aspen Dental Scheduling Center agents handled 1.97 million calls, and expect a 15 percent increase in call volume in 2019. If you surveyed and randomly asked 100 dentists if they know anything about this facility or how fast corporations are changing dentistry? I would wager maybe 1 or 2 at best would know.

 

[Ximilara]

Can’t blame new dentists. When you are stuck with a 500k student loan bill, the for sure 120k-150k/year associate job seems a lot better than going 500k more into debt to buy a practice.

My question is how long before dentists become like Optometrists with saturation and corporations.

Hope dentistry wont be pharmacy 2.0 ...

 

[321931]

Hope dentistry wont be pharmacy 2.0 ...

It will and won't be. I get New Patients all the time from corporate clinics. A big part of dentistry is maintaining the provider patient relationship. When there is constant turnover in the front and back and providers in clinics whose main motivation is increasing production...patients will go elsewhere. Will there be more corporate clinics...yes....but there will be room for private practice. We have been on the same block for 35 years and have patients that have charts from the 1980's still coming here because they know us and trust us.

Pharmacy? Who cares where you get your medicine from. I could care less if its from Joe, Kim, or Timmy. But dentistry and surgery? I want my hygienist I've known for years and the doctor that I've known for years. I have patients that have followed me to my practice and that literally drive an hr or two because they trust me. But I don't think most people will drive 2 hours to go their local pharmacy to get their generic medications- they will just go to the nearby store and pick it up.

 

[Svart Aske]

Not sure where they got 60%.
The ADA Health Policy Institute reports that 17.9% of dentists under 35 work for a DSO in 2017

https://www.ada.org/~/media/ADA/Science%20and%20Research/HPI/Files/HPIgraphic_0419_1.pdf?la=en

 

[Cold Front]

Not sure where they got 60%.
The ADA Health Policy Institute reports that 17.9% of dentists under 35 work for a DSO in 2017

https://www.ada.org/~/media/ADA/Science%20and%20Research/HPI/Files/HPIgraphic_0419_1.pdf?la=en

I would trust Dykema (who specializes in the DSO Industry) on this than the ADA.

 

[Cold Front]

wouldn't dykema have a vested interest to exaggerate numbers in favor of the dso?

I doubt it. Dykema is a law firm that represents not just DSO’s but many other clients from different industries..., and if anyone has inside information on DSO’s data, they would be the to go firm IMO. Yes, they have closer relationship with DSO’s, but how else can anyone know DSO’s workforce information without being on the table with the DSO’s?

You can also question the ADA’s point of view. Are they low balling the data in protest against DSO’s? Do we really believe only 17% of dentists under age 35 work for corporations? Even from a general consensus point of view, that’s a very low number.

It’s hard to come up with a solid number on how many dentists work for DSO’s - since partly it’s a “big revolving door” and part “the consolidation of the dental industry” by DSO’s (ie. new offices and buyouts, etc). Just those 2 factors can tell you more and more dentists are shifting from private practice to corporate dentistry.

 

[Blueshirts]

The problem with dentists is that they don't understand the basis of cash flow, equity, and growing wealth. It's true that many dentists do not learn business in dental school and it's not their fault- but one can learn. It's not rocket science.

It may "seem" alot better to play it safe and take a normal job and not go more into debt..... but....As I have told on some posts here- go and spend some money with a Dental CPA and ask them to explain the cash flow of a dental practice and I guarantee you, you will buy a practice within a years time after that.

I agree with you, which is why I have set a goal for myself to try to possibly start a finance club of some sorts when I start classes this July. I don't want to see a future where hundreds of people I met in D-school disadvantage themselves because of a lack of information, it hurts them and in my opinion has the potential to hurt the occupation.

 

[Cold Front]

90% of college grads with student loans are looking for 1 perk - an employer that pays their student loans. Similarly, the majority of Dental grads are also looking for employers (mainly a DSO) who can help with their student loans.

https://www.cnbc.com/amp/2019/05/15...sk-about-student-loan-repayment-benefits.html

 

[charlestweed]

If my kids chose to follow my footstep, I would encourage them to get jobs at corp offices first…instead of taking over my practice or working at a slower private office right after graduation. They can’t learn anything when everything is handed to them. With much busier schedule at the corps, they’ll be forced to teach themselves to work faster. The more cases (many times more patients than at a private office) they treat, the higher chance of making mistakes….and learning how to correct those mistakes by themselves will make them better clinicians. Working at the corp also teaches them many other things such as keeping the overhead low, dealing with slow incompetent staff, adapting to working with less ideal instruments and equipment, working late office hours and on weekends, dealing with angry patients and learning how to make them happy, staying humble, learning to appreciate the value of money that they’ve worked so hard to earn etc. These valuable lessons can only be learned from working at the corp offices. I can’t teach my kids these are valuable lessons and I don’t think they would listen to me. Many successful dentists I know on this forum (Coldfront, Daurang, Rainee etc) had worked at the corp before they started their own offices.

There are also many other advantages of working for the corps:
- Jobs are readily available everywhere. You can practice where you want to live and not have to move to rural areas.
-Some corp offices offer free CE, malpractice insurance, 401k etc
-With more patients the corp offices provide you, you can work more days and make more money. If the private office doesn’t have enough patients, the owner will cut your days.
- You can work P/T for the corp and use this income to open your own office. The corp offices don’t have strict non-competing clause like at the private offices. A lot of the GPs and specialists, whom I’ve worked with at the corp, also have their own private practices
-Knowing how to keep the overhead low, you can set up a low overhead office and charge similar fees to compete against the corp offices.

 

[2TH MVR]

I wonder what the statistics are for older dentists (>50 yrs old) using Corp as an exit strategy?

 

[321931]

I wonder what the statistics are for older dentists (>50 yrs old) using Corp as an exit strategy?

I could totally see it being an acceptable retirement strategy. Couple mil in the markets from lifetime accumulation of wealth and stock market returns, coupled with a paid off house, and a practice sale that adds another mil in the bank.....what are you gonna do with your time afterwards? Money is sorta meh, and starting a new practice makes no sense if you want to "enjoy" the fruits of your labour.

I could totally do corp 3 days a week, punch in and out, and do it for the enjoyment of a routine and still maintain my craft while I pursue my other pleasures. The money if its good or bad doesn't matter as you have made your wealth already.

My previous associateship had a dude that just did 2 days a week, then the other week 3 days on, then 2 days, then 3 days. He didn't really care about production or numbers, just did it for routine. Guy made his money already and was doing it to stay busy and bring personal happiness.

Corp is my exit strategy just to keep busy and when I want to do something else with my time and not invest my time heavily into a business.

 

[Cold Front]

Couple mil in the markets from lifetime accumulation of wealth and stock market returns, coupled with a paid off house, and a practice sale that adds another mil in the bank.....what are you gonna do with your time afterwards?

The magic number use to be $5M in savings from retirement accounts + practice sale + businesses, etc. I think it will be much higher for people in their 30’s and 40’s now, specially with social security going bankrupt in 15 years. A recession can also complicate retirement plans, and I think we will be due for 1 soon.

 

[Cold Front]

I wonder what the statistics are for older dentists (>50 yrs old) using Corp as an exit strategy?

Probably low. Older general dentists (closer to retirement) are hard to mold and produce less. They are big in ergonomics and flexible schedule (2-3 days a week), and will ask for a good pay for their time. Corporate dentistry is very demanding and would prefer younger dentists over older dentists if they have to fill a position.

 

[321931]

The magic number use to be $5M in savings from retirement accounts + practice sale + businesses, etc. I think it will be much higher for people in their 30’s and 40’s now, specially with social security going bankrupt in 15 years. A recession can also complicate retirement plans, and I think we will be due for 1 soon.

That's crazy. Isn't it crazy? The average American can't even scrounge up 400$ in case of an emergency. Where will they find 5 million?

 

[Cold Front]

That's crazy. Isn't it crazy? The average American can't even scrounge up 400$ in case of an emergency. Where will they find 5 million?

The $5M was for doctors/dentists to keep them in the same lifestyle they had before full retirement. The average American needs lot less than that, maybe $1-2M at most, but like you said - highly unlikely. The estimated median savings for 60+ Americans is $172,000, which is way below the $1-2M threshold. Unfortunately, the majority of dentists will not have the $5M threshold for full retirement either - which translates to a 4% withdrawal rate of about $200,000 a year future income (inflation adjusted for the future).

 

[charlestweed]

I don't think I really need to have $5M in the bank. I think I can comfortably retire with a passive income between $18-20k/month from the rentral properties. Hopefully, our children will pick the right profession that enable them support themselves and no longer rely on us for financial support. Right now, all of my rental properties, which I spent around $1.3M to acquire (I got good deals thanks to the housing bubble), help generate around $10k/month....so I am still $10k/month short of my retirement goal. For me to reach this goal now, I would have to sell my current house, buy 3 smaller houses, and rent them out at $2500/month each. I don't want to retire now and I love my current house.

 

[Cold Front]

I think I can comfortably retire with a passive income between $18-20k/month from the rentral properties.

I’m assuming this is before taxes, home insurance, condo fees, repair expenses, and so on - which are all landlord responsibilities. If not, that’s a sweet number.

Real estate is the way to go for retirement, I invested 3 times as much as you invested - but went the other route, commercial properties; where the tenants pay the taxes, insurances, repairs, accountant, and pay me additional money for managing the expenses.

You should expect additional income from 401k, social security (if it’s still around), part time gig, and additional future rent increases from your current properties due to inflation. So your overall numbers will be much higher than 18-20k a month.

 

[sb.tnh]

Does anyone know what is the typical annual salary that corps offer for a newly graduated general dentist? Thank you!

 

[321931]

I don't think I really need to have $5M in the bank. I think I can comfortably retire with a passive income between $18-20k/month from the rentral properties. Hopefully, our children will pick the right profession that enable them support themselves and no longer rely on us for financial support. Right now, all of my rental properties, which I spent around $1.3M to acquire (I got good deals thanks to the housing bubble), help generate around $10k/month....so I am still $10k/month short of my retirement goal. For me to reach this goal now, I would have to sell my current house, buy 3 smaller houses, and rent them out at $2500/month each. I don't want to retire now and I love my current house.

Man I hope one day the millennial generation will get a lifetime opportunity like that. I would love to buy equities and housing on the cheap. Right now, in my opinion, there is an asset bubble. Housing seems to be ok. 18-20k passive income? The normal dentist makes 150k a year. You make more then what a normal dentist passively. That's great planning.

Anyways, I do invest and contribute on a normal schedule, but I've saved a ton of dry powder so when the opportunity comes, I can setup myself for success. It might be market timing, but at the end of a 10 year bull cycle, it seems sorta nonsensical to invest now. Maybe I'm wrong, but you are def living the dream. That's legit.

 

[Cold Front]

Does anyone know what is the typical annual salary that corps offer for a newly graduated general dentist? Thank you!

It depends on location, corporation, and your negotiating skills. It could range from $130-170k for new grad. The higher end on that range putting you in more rural area where no dentist wants to live or work at.

 

[charlestweed]

I’m assuming this is before taxes, home insurance, condo fees, repair expenses, and so on - which are all landlord responsibilities. If not, that’s a sweet number.

Real estate is the way to go for retirement, I invested 3 times as much as you invested - but went the other route, commercial properties; where the tenants pay the taxes, insurances, repairs, accountant, and pay me additional money for managing the expenses.

You should expect additional income from 401k, social security (if it’s still around), part time gig, and additional future rent increases from your current properties due to inflation. So your overall numbers will be much higher than 18-20k a month.

That's right. $10,550/month gross income - $1,750/month in prop taxes - $290/month in prop insurances - $444/month in mangagement fee = $8,066/month net income. The repairs are not too bad. Most asian handymen charge very reasonable fees....$70-80 to unclogg the drain, $150 for a faucet replacement etc.

I didn't start investing in these rental properties until 2008 when the housing bubble and economic recession started. Before that, I tried to pay off student loan debts and practice loans as fast as I could. I also spent big on things like cars, furniture, home landscaping etc. My sister makes way less and yet she and her husband own more investment properties than me. That's because they started investing in the early 2000s (when the home prices were much less) and they don't lease new cars every 2-3 years like me.

What you said about the benefits of owning commercial properties are true. I am a very conservative investor. The reason I invest in residential properties is they are much less to buy and it's also much easier to find the tenants to rent out, especially in Orange County, CA. I've seen a lot of commercial buidling owners who have had hard times finding tenants to lease their vacant office spaces. My office's landlord had to lower my rent because he didn't want me to leave. And for another office of mine...it's been more than a year since I left the old office (I relocated to a new location)....that old office space is still vacant.

Yup, addtional income from 401k definitely helps. I think my practices will probably be worth nothing by the time I retire....nobody is going to buy run down offices that have low tech equipment and staff who don't know how to work with modern equipment. I will probably just give the landlords the keys, walk away, and retire.

 

[Cold Front]

That's right. $10,550/month gross income - $1,750/month in prop taxes - $290/month in prop insurances - $444/month in mangagement fee = $8,066/month net income.

The real estate investment depends heavily on where the properties are in the country and ofcourse even more importantly the “location” of the properties within a city. I’m in the Midwest, and have 15,000 sft of commercial property space between 2 buildings. 6,000 sft of that space are my dental offices, the rest between class A national tenants with 10 year leases. So a total of 8 tenants including my 2 offices. The properties are next to large and busy anchor stores (large grocery chains, McDonalds, Chipotle, pharmacy chains, etc). They are also on a very busy street, high foot traffic and high visibility. As I said, it was expensive investment for me, with a very secure and long term tenancies. Each tenant currently pays about $5k a month (including each of my office spaces), so rent roll is about $40k a month. $10k of that goes towards expenses (taxes, insurances, rash, etc), so $30k net. The total rent is projected to go up to $40k/month after expenses in 10-15 years, then $50k/month after expenses in 15-20 years. Assuming the area market holds, which I think it will based on population growth. This passive income doesn’t include 401k, SS income, and other sources of income during retirement.

 

[charlestweed]

The real estate investment depends heavily on where the properties are in the country and ofcourse even more importantly the “location” of the properties within a city. I’m in the Midwest, and have 15,000 sft of commercial property space between 2 buildings. 6,000 sft of that space are my dental offices, the rest between class A national tenants with 10 year leases. So a total of 8 tenants including my 2 offices. The properties are next to large and busy anchor stores (large grocery chains, McDonalds, Chipotle, pharmacy chains, etc). They are also on a very busy street, high foot traffic and high visibility. As I said, it was expensive investment for me, with a very secure and long term tenancies. Each tenant currently pays about $5k a month (including each of my office spaces), so rent roll is about $40k a month. $10k of that goes towards expenses (taxes, insurances, rash, etc), so $30k net. The total rent is projected to go up to $40k/month after expenses in 10-15 years, then $50k/month after expenses in 15-20 years. Assuming the area market holds, which I think it will based on population growth. This passive income doesn’t include 401k, SS income, and other sources of income during retirement.

That’s great. The more money you invest and the higher risk you are willing to take, the more profit you’ll earn. You deserve it. I am sure such great commercial property was not cheap to acquire….and monthly loan repayment amount is also a lot. I am not brave enough to take out several million dollars in business loan to purchase such type of commercial property. I am a very conservative investor. The incomes I make from my residential investment properties are not much but at least I don’t owe any money on them. At beginning, I relied on the rent money to pay the monthly mortages for these rental properties….and then I slowly paid them off with my dental income. I am saving now and plan to acquire a few more properties when the next recession hits and the home prices drop.

 

[Cold Front]

I am sure such great commercial property was not cheap to acquire….and monthly loan repayment amount is also a lot.

Yes, the debt service payments are very high, but I did this because I did a lot of research and consulted with many professionals (my accountant, my realtor, and so on) before I pulled the trigger. Big decisions like this are never made without experienced consultants. I was also in my early 30’s when I acquired the properties, and now I’m about half way point on my mortgages. Time flies! I have been on SDN forums for about 15 years now, so 20 years mortgage can go fast too, and I will probably pay off the mortgages in 5 years and have the option to fully retire early in my mid-40’s. The moral of the story is, make the most of out of your situation - SoCal, or Midwest, or in the South... and make your retirement plans very early so you can choose to retire early. I know it’s easier said than done, but with hard work, the odds are almost always in your favor.

 

[2TH MVR]

I don't think I really need to have $5M in the bank.

Yeah .... I doubt I'll be worth 5M when I retire. Everyone's values are different. If I had lived life with the sole goal of building future wealth ... well ... I would've missed out on the fun things when I was younger and had young children.

Yes ... you have to invest. No question there. But I spent ALOT of money on superficial, materialistic, non-investment stuff over the last 40 years. Boats. Cars. Beach Condos. Large house. Etc. Etc. I made good money and I liked to have fun with that money. Those are memories that I will always have.

Now ...had I lived frugally and invested everything .... well .... I would have 5M in the bank. But I don't.

This will be hard for the younger dentists to understand, but when you get older .... well .... you physically cannot do all those things you did when you were younger. Young people just do not understand. The "quality" time I have remaining is limited. I'm pretty fit for a 56 yr old. But I know when I get into my late 60's 70's .... things will start to break down.

So I choose to enjoy my hard earned money now. Regardless ... my wife and I will be fine financially.

Well the wife is calling me. She wants new furniture for the house. Off to spend more money.

 

[Cold Front]

I made good money and I liked to have fun with that money. Those are memories that I will always have.

That’s perfect too. You can’t buy time back, even with all the money in the world. You spent your time on the most valuable and important things to you. At the end, some sacrifices will be made.

I did the “delayed gratification” approach. I still travel (even though I’m taking a break from it now), spent time with family and bought things that I needed to get out of my system - a nice car, a nice home, and so on. No 2 people let alone 2 dentists can be on the same path in life. I have been very fortunate to be at the right place at the right time. If I could do it all over again, 60% of what I have done or accomplished would probably not happen at the same level or all together.

Ultimately, life is a balance of enjoying it and having a productive time at the same time. Some people do it more than the other, and in the end, it’s what makes the person happy that matters the most.

 

[321931]

That’s perfect too. You can’t buy time back, even with all the money in the world. You spent your time on the most valuable and important things to you. At the end, some sacrifices will be made.

I did the “delayed gratification” approach. I still travel (even though I’m taking a break from it now), spent time with family and bought things that I needed to get out of my system - a nice car, a nice home, and so on. No 2 people let alone 2 dentists can be on the same path in life. I have been very fortunate to be at the right place at the right time. If I could do it all over again, 60% of what I have done or accomplished would probably not happen at the same level or all together.

Ultimately, life is a balance of enjoying it and having a productive time at the same time. Some people do it more than the other, and in the end, it’s what makes the person happy that matters the most.

I feel both of you on this. What scares me the most is being an older dentist with back pains, hand problems, failing eyesight and not having a nest egg built up. I always wondered why I saw alot of dentists that just don't have their finances together at 50-60...and it sucks. I was honestly surprised by the amount of physicians and dentists who were just broke. Student loans, extravagant lifestyles- which I think maybe contributed to delayed gratification.

One of the reasons why I'm not a big spender, and a huge saver/goal orientated to be financially free by 40 is that....dentistry is a HARD job. Even though I do preach about the goods of a 4 day work week, great margins, and a chill job (if you own your business), there are some rough as hell things in dentistry that noone will understand unless you work as a dentist- and have worked for a long time. 10-20 years+.

Do not be the dentist or physician that is broke at 50. Do not be that guy. Hell don't be that guy in general regardless of your profession. But dentistry offers you a quick way to financial freedom before 50...it just so happens that alot of them don't take advantage of that. Of course you can "live your life" as the journey goes. I mean I'm taking 5 weeks off this year and going on 4 trips overseas...through budgeting well. But there is no yacht, no timeshares, no fancy car ( I just bought a preowned 2016 honda CRV), no boat, no expensive hobbies in my life- aside from video gaming.

 

[2TH MVR]

Lots of good points here. Nice that future dentists and some current dentists can see what is possible with dentistry.
Obviously starts with low DS debt. Get into private practice in the right location as soon as possible. No way you're going to pay off DS debt and enjoy investing with real returns on 120K per year before taxes. There's no way.

Regardless how much $$$$ you make ..... you still need to monitor spending. It is so easy to buy expensive stuff when you make a lot of money. You've got to start financial planning ASAP. Day 1.

Lots of pretenders out there. They love to drive the expensive cars while living in a cheap apartment. Drive what you can afford ... and then .... get something better. I leased all my expensive cars through the practice. The personal cars I bought .... I paid cash. If I couldn't pay cash ... I didn't buy the car.

Corp is fine for a guy like myself after years of private practice., But I wouldn't consider Corp if I was trying to get ahead in life as a young dentist.

 

[Cold Front]

Totally. Dentists need to be more financially literate than ever before. The world today is much different than 10-20 years ago. Dentistry itself is much different than 10-20 years ago. It’s important to learn today’s financial rules and continue to learn these evolving rules for the next 10-20 years.

Opening a practice was far less complicated in the past and they are now more complex than ever. 20-30 years ago, many cities in this country didn’t even require you to have a “permit” to build an office. Today, you need to pay 15+ different people just to put a shovel in the ground. New regulations are popping out of everywhere and for everything; from your X-ray and radiation policies to how many cars can park in front of your office. Banks evolved too, you have to read more fine prints and pay an attorney to review everything. So the private practice ownership barrier of entry has changed; more time and money is in play in everything today than before, while insurances wait at the finish line to give you more hard time and try to reimburse you less and less every year.

Reality is, in today’s business environment, you need to spend money to make money. So new grads coming out of school with just their heads above water in student loans, you will need to (unfortunately) borrow even more money (at least another $300-500k) to buy or build a new office. That’s a lot of money to stomach for a young doctor with a very minimal financial knowledge and with a large existing student loans under their belt. So majority of young doctors would be spooked and avoid or delay the private practice ownership route for many many years. This dilemma only benefits corporate dentistry, which need more transient doctors for their growth.

I also think the term “cheap dental school” has become very relative. In reality, any dental school is expensive today, but only cheap relative to the insanely expensive schools. Tuition goes up every year at every school more than inflation (4-5% vs 1-2%) - so, this has a direct impact on owning private practice down the road. Because income to debt ratios will be too high to sustain personal finances, let alone take more debt and open a private practice.

Bottom line, dentistry as a profession is changing towards corporate dentistry - in my view. The traditional financial systems that once fueled private practices are also shifting their businesses towards corporate dentistry... dental suppliers are now exclusively working with corporate offices with special accounts for better deals than a private practice owner, and now there are special DSO/Corporate loans for opening dental offices that offer better terms and rates than a solo private practice loans, and so on. So if you are considering or starting to attend dental school in the near future, you have to be prepared for these realities and challenges that are waiting at the interim finish line. Any advise most senior dentists give to pre-dents today are not completely inline of knowing the full scope of the issues I mentioned above, specially if they are dentists who graduated prior to 2005.

 

[TanMan]

Yeah .... I doubt I'll be worth 5M when I retire. Everyone's values are different. If I had lived life with the sole goal of building future wealth ... well ... I would've missed out on the fun things when I was younger and had young children.

Yes ... you have to invest. No question there. But I spent ALOT of money on superficial, materialistic, non-investment stuff over the last 40 years. Boats. Cars. Beach Condos. Large house. Etc. Etc. I made good money and I liked to have fun with that money. Those are memories that I will always have.

Now ...had I lived frugally and invested everything .... well .... I would have 5M in the bank. But I don't.

This will be hard for the younger dentists to understand, but when you get older .... well .... you physically cannot do all those things you did when you were younger. Young people just do not understand. The "quality" time I have remaining is limited. I'm pretty fit for a 56 yr old. But I know when I get into my late 60's 70's .... things will start to break down.

So I choose to enjoy my hard earned money now. Regardless ... my wife and I will be fine financially.

Well the wife is calling me. She wants new furniture for the house. Off to spend more money.

Exactly... you only live once, and you need to enjoy life when you're still young. You can't buy your youth back, nor the experiences that come with your youth. I think a lot of people are missing the big picture. It's not all about living frugally but making more money as well. If you made 200k, the most you could ever save is... 200k (assume expenses = 0, tax = 0, maybe some income based on what you do with your savings), not feasible, but not much saved either.If you ramped up your net income to 500, 750, or even 1MM+, then you would have a lot better lifestyle and/or save more if you are frugal. You will always push your mental and physical boundaries more and more until your body gives up. I would have never thought of expanding my office to what it is right now, nor would I have ever thought that I needed 2 cerecs with 4 scanners. Yet, even as I scale down, I find that I have to keep reinvesting in income producing assets in the office to meet the demands of the public. Otherwise, income levels tend to stagnate. Identifying the bottlenecks of your practice is the most important part. Where can you improve productivity and increase your production?

That's where I try to convince everyone that penny pinching on a lower income is not as good as ramping up your ability to produce more income. Don't focus on reducing living expenses as much as you should in terms of trying to increase your income as much as possible. Use dentistry as your platform to diversify. You won't have your back, eyes, and hands forever, so you should use them till it's gone. There's lots of ways to diversify, real estate is very popular among dentists, I'm more of the entrepreneurial type in that I prefer businesses. Some people prefer stocks,bonds,retirement accounts. Great vehicles if you are planning the traditional route of retirement. The restrictions on the accounts are not as good for early retirement.

The main point for new grads is that you need to have that thirst for success and drive to make lots of money. I'm starting to learn that not everyone has that drive. To describe the mentality, victory at all costs, you should not let anyone get in your way in your rise to success.... and keep on iteratively improving.

I'm probably going off on all sorts of tangents in this post, but this meme describes what you're going to experience out there in the real world, sans killing all those bicyclists., and you'd rather be in the car than those bicyclists.

 

[Cold Front]

The main point for new grads is that you need to have that thirst for success and drive to make lots of money.

That’s it. Dentistry like any other profession is a vehicle than can make a dentist successful but not without the person’s traits, so it’s about the individual before the profession. The most successful dentists have few unique things in common; very driven, hardworking, not held back by fear, they will take risks, a good long term vision, they don’t give up, and generally have an optimistic outlook to life.

I have invested in many businesses; from the obvious (dental practices, real estate, and so on) to the questionable (truck parkings, power washing, even starting a dental assistant program). I have always had the “outside the bounds” complex. It’s interesting that society puts people in boxes, and built institutions to enforce that - i.e. Dentistry. We are all told to do 1 thing early on in life, when we are capable to do many different things in 1 life span. Perhaps it’s how a society can function to an optimum level by having each person do 1 thing, but this model doesn’t necessarily benefit the individual’s growth and success reach the highest levels. It’s a paradox really.

 

[2TH MVR]

Reality is, in today’s business environment, you need to spend money to make money. So new grads coming out of school with just their heads above water in student loans, you will need to (unfortunately) borrow even more money (at least another $300-500k) to buy or build a new office. That’s a lot of money to stomach for a young doctor with a very minimal financial knowledge and with a large existing student loans under their belt. So majority of young doctors would be spooked and avoid or delay the private practice ownership route for many many years. This dilemma only benefits corporate dentistry, which need more transient doctors for their growth.

When I graduated in 1993 .... you were COERCED to
1. Associate leading to partnership leading to ownership or you
2. Purchased or started your own private practice.

Starting your own practice or buying a practice were the default direction that most new dentists took ..... since there were no other employment options. Back then .... a new dentist was forced to make the RIGHT FINANCIAL decision.

In 1993 .... I purchased 50% of an established ortho practice (partnership). 18 months later .... I purchased the entire practice. I jokingly used to say that I essentially BOUGHT myself a JOB. Partly true. I had no other choices ... like Corp.

Now .... with Corp dentistry. Young dentists unfortunately have a 3rd option that seems so enticing. CORP EMPLOYMENT. As you say .... Corp dentistry is only going to get bigger and private practice dentistry will be more challenging than in the past.

 

[Cold Front]

Starting your own practice or buying a practice were the default direction that most new dentists took ..... since there were no other employment options.

Yes, the default approach is long gone in my opinion. Employment over the past couple of decades morphed into a “networking” strategy. In the past, people didn’t move far from where they lived or went to school, and went back to the build their lives the communities they grew up in. It’s the opposite today. It’s all about the freedom to move and live somewhere the person “loves to live” and have different employment options at the same time. Dentists are not an exception to these new dynamics, which unfortunately lead to saturated markets and an imbalanced distribution of dentists across the country. My mortgage lender once told a me - the average doctor relocates every 5 years, which says a lot about the delayed commitment issues people are having these days.

So I think corporations understand the new trends and it helps their business model and make it attractive to the needs of doctors evolving “tours” in their careers.

 

[321931]

The fact is that the dentistry has gotten harder. Back then- you needed a license, hung a shingle and put your name in the phone book and you were good to go.

Today’s it’s much different and more difficult- but it’s doable. Today’s generation for some reason are more risk averse (maybe due to debt) and also have a philosophy of living life and having life experiences... traveling etc. Comitting to a practice may seem to difficult and in addition scary because it’s not that straightforward to practice ownership.

However with that being said, if you want it- no one is going to help you get it aside from yourself. Do you know how I got knowledgeable? Blogs, contacted successful classmates picked their brain, read dentaltown, took ce courses, met accountants, and paid them to explain me cash flows and prospectus. I sent out letters to old dentists within the radius I wanted to live in with offers that if they wanted to retire... I’ll buy it. Met with CPAs/ brokers and networked. I bought my practice that is highly successful from networking- it was never listed on the market.

Ironically- in my opinion- the people that lead the richest lives in terms of happiness wealth and life experiences are those that work hard play hard. To many of my classmates Sit around in associateships twiddling thumbs while debt gets compounded and going on credit to buy cars delaying home ownership and the likes is easy... but not smart. It’s like wierd. They had so much drive in dental school but get paralyzed once they graduate. Living on credit and debt... is not living.

The people I looked up to in dental school were people that had their own practice... 4 days a week debt free traveling to foreign countries, running marathons triathletes. Those people are not the people to sit around and wait for opportunity to come to them. They create their opportunities and in my opinion that is the best life. So while yes the world of dentistry is changing- but there will always be room for the people that are go getters. If you want it, go get it. I created my opportunity. Now create yours.

 

[charlestweed]

When I graduated in 1993 .... you were COERCED to
1. Associate leading to partnership leading to ownership or you
2. Purchased or started your own private practice.

Starting your own practice or buying a practice were the default direction that most new dentists took ..... since there were no other employment options. Back then .... a new dentist was forced to make the RIGHT FINANCIAL decision.

In 1993 .... I purchased 50% of an established ortho practice (partnership). 18 months later .... I purchased the entire practice. I jokingly used to say that I essentially BOUGHT myself a JOB. Partly true. I had no other choices ... like Corp.

Now .... with Corp dentistry. Young dentists unfortunately have a 3rd option that seems so enticing. CORP EMPLOYMENT. As you say .... Corp dentistry is only going to get bigger and private practice dentistry will be more challenging than in the past.

I graduated not that long after you....in the early 2000s. There were already a lot of corp offices here in CA long before I graduated. Since most private GP and ortho offices didn't have enough patients to hire associate orthos F/T, working for corp was a better option for new grads (like me), who had zero experience and owed a lot in student loan. A month before graduation, I accepted 3 corp job offers that gave me a total of 22 work days/month. When I told my other 5 co-residents how much these corps paid me, they all wanted to move to CA.....they couldn't because it wasn't easy to pass the CA licensing board exam. Like what you said before, there weren't a lot of corp job opportunities in other regions of the county. One of my co-resident (she's the smartest one in our class) stayed at my school and became the ortho program director. One went on to serve in the military and eventually set up his own office in TX. The other 3 started their own offices from scratch right after residency.

I love working for the corps and would much rather work for them than at a slower private office that pays less....and have to deal with an owner, who has different tx philosophy. I think I am in much better financial shape than some of my colleagues, who live in areas that don't have corp offices. When I still worked for Western Dental, I met an ortho who had an office in his his home state, Utah, and had to fly to AZ to work P/T for Western Dental.

With a stable corp job and guaranteed per diem pay, coming up with $25-30k (for a %10 down payment on a house) in a few short months wasn't too difficult. That's how I was able to buy and sell houses and use the profits to pay off the student loan. Having no debt + a stable income from a P/T job at corp offices made it a lot easier for me to start an office from scratch. I only needed to take out $75k loan to build a $120k office.

I don't think private dental office owners should fear the expansion of the corp offices because they target different types of patients. If patients have $$$ and good PPO plans, they usually go to the private dental offices because of less wait time and better service. Patients go to the corp offices because most private dental offices in their area don't accept their plans (HMO, medicaid). My wife's GP boss' office is in the same shopping center with Western Dental (which was opened several years after his) and he continues to do very well. He hires OS, perio, endo, pedo, and recently ortho to work for him. His office is not that big....only has 6 chairs.

 

[Cold Front]

I graduated not that long after you....in the early 2000s.

Almost 20 years later, it sounds like Ortho found itself more into the realm of corporate dentistry.

I read the other day that SmilesDirectClub plans to start 20 million cases within the next 12 months. It also has plans to go overseas to Europe and Australia soon. It’s a $6B dollar company, last time I checked.

Then there is SmilesSnap using Teledentistry (a new arm in dentistry) to diagnose and start cases on patients within minutes through apps on their cell phones.

Virtual orthodontic consultations with SmileSnap

Imagine living in a world where you can do virtual orthodontic consultations, including for clear aligners. Imagine no more. The future is here with SmileSnap.

dsonews.com

What do you make of all this as an orthodontist? Considering cost of training of an orthodontist is already unimaginable when you include pre-doctoral and undergrad cost.

 

[charlestweed]

Almost 20 years later, it sounds like Ortho found itself more into the realm of corporate dentistry.

I read the other day that SmilesDirectClub plans to start 20 million cases within the next 12 months. It also has plans to go overseas to Europe and Australia soon. It’s a $6B dollar company, last time I checked.

Then there is SmilesSnap using Teledentistry (a new arm in dentistry) to diagnose and start cases on patients within minutes through apps on their cell phones.

Virtual orthodontic consultations with SmileSnap

Imagine living in a world where you can do virtual orthodontic consultations, including for clear aligners. Imagine no more. The future is here with SmileSnap.

dsonews.com

What do you make of all this as an orthodontist? Considering cost of training of an orthodontist is already unimaginable when you include pre-doctoral and undergrad cost.

If SmileDirectClub company can attract 20 million customers to start tx with them, then that's good for them. I don't have any problem with that. This is a free market country and that's why I love it. Without bonding the attachments to the teeth and doing interproximal stripping, not a lot of dental movement and straightening can be achieved. Therefore, only people with minor ortho problems are qualified to get the limited tx from this company. Many of these simple cases are usually handled by the GPs anyway. Similar to other dental specialties, we, orthodontistic specialists, usually treat cases that are too complex for the GPs or the companies like SmileCareDirect to handle.

When Invisalign aligners were first introduced (at around the same time that I started my ortho residency), only certified orthodontists could use them. At that time, a lot of the practicing orthos and my instructors were worried that the company would later expand their products to the general dentists and the orthodontist would get fewer referrals from the GPs. And what these orthodontist feared happened a few years later. Invisalign started to let the GPs use their products. The GPs had used them on their patients but they still refer a lot of difficult cases to the orthodontists. The orthodontists don't do as well as they did in the past not because of the expansion of these clear aligner companies but because of the openings of the openings of orthodontic residency programs that pump out a lot more more new ortho grads every year.

I don't offer clear aligner treatments in my offices and I am doing fine. My offices have the reputation of providing low cost tx (low initial down payment and low monthly payments). These clear aligner tx are too expensive for many of my patients to afford.

 

[Cold Front]

These clear aligner tx are too expensive for many of my patients to afford.

I don’t think the aligners are expensive. SmileLove (another competitor to SDC) offers $1,000-2,000 cases with $50-70/month. So cost wise, these aligners are cheaper for patients - and there are coupon codes and specials that can bring the cost down even further.

Go to Reddit, and search for SmilesDirectClub. Be prepared to see 1,000’s of people/patients discussing their botched cases - each one can easily be a classic case of Malfeasance!

I honestly think there is a class action lawsuit down the line for these companies. I could be wrong, as patients signed their teeth away contractually.

 

[2TH MVR]

You get what you pay for. You want trays designed by "someone" to partially straighten your teeth with no bite correction ....... or DETAILED, specialized care throughout your treatment and into retention? The general public is not that bright when it comes to these dental products (aligners). Throw some fancy marketing out there and they are sold on it.

Like @charlestweed, I do not do aligners. I used to in private practice on a very limited basis. I hated them. Hated the results knowing that their teeth could have been so much better with conventional braces. Seriously ... where is the talent with handing patients aligners? The Corp I work for does not do them either. They know that it is not that profitable. Only orthodontists perform orthodontic treatment at my Corp.

 

[CGtoDentistry]

From a patient perspective, I'm almost finished with my Invisalign treatment (wasn't allowed to get bracket and wire in the military). My ortho is super experienced - been practicing nearly 40 years - but I'm surprised how many tray iterations it took to get the near final results. I also had an implant on one side of my mouth and there's no way that SDC could have worked with that. Get what you pay for

 

[2TH MVR]

From a patient perspective, I'm almost finished with my Invisalign treatment (wasn't allowed to get bracket and wire in the military). My ortho is super experienced - been practicing nearly 40 years - but I'm surprised how many tray iterations it took to get the near final results. I also had an implant on one side of my mouth and there's no way that SDC could have worked with that. Get what you pay for

Props to your orthodontist for using the necessary amount of trays to complete your treatment. As most of you will learn ..... the profit on procedures (ortho) is profit after expenses divided by the number of patient visits. As the number of patient visits rises .... the profit on the procedure goes down. Even though the additional trays are free (comprehensive aligner cases) .... the doctor patient visits are not. Each additional patient visit to deliver new aligners bites (pun intended) into the profit margin.

DSC successfully I might add represents what the current generation of consumers want. Online ease, convenience and relative low price. This strategy works for Amazon with commodities. It will be interesting to see how it works for dental treatment. When Invisalign 1st came out .... it failed miserably. Then they started to place attachments (kind of like braces) on the teeth. Then the aligners had something to grab onto and the results were better .... not perfect. Patients are typically not happy about the attachments. So technology over time improves the product.

To bring this back to CORPORATIONS. Certain Corps are already training their General Dentists to provide aligner treatment. Why? Because they can pay their general dentist HALF what they would have to pay an Orthodontist. It's just a matter of time before dental therapists will start to replace some dentists in the Corp setting. Why? Cheaper of course. Wonder what the treatment outcomes will be using less experienced and qualified people to provide a dental service. And of course ... the patient will be on the losing side.

 

[Cold Front]

And of course ... the patient will be on the losing side.

There is a new term floating around for a fast growing model some Corporations use these days - “Invisible DSO’s”. These are corporations (i.e. MB2 and the likes) that buy 60-90% of a targeted practice, and pay the selling dentist more than what a typical buyer dentist would pay, and retain the selling dentist for 3-5 years so the DSO can get their ROI. They also retain the practice name and staff. You will never know if you walked into an invisible DSO office that they are corporate, and the doctor and staff in most cases are not allowed to say they are now a corporate office after the sale of the practice.

These invisible DSO’s own thousands of practices and specialty practices around the country. Because they own so many practices, their profit margins are higher by lowering the purchase price of their supplies and lab fees - essentially lowering practice overhead significantly.

Imagine you are an orthodontist who receives referrals from a neighboring GP. Now, picture what could happen if the referring GP partners with an invisible DSO and starts referring patients to the orthodontist who is backed by the same invisible DSO. This occurs across all referral networks in all specialties and is a key piece of an invisible DSO strategy. This is another way DSO’s are going stealth mode and take more control and bite out of dentistry.

 

[2TH MVR]

Heartland seems to follow what your saying.

 

[CGtoDentistry]

Props to your orthodontist for using the necessary amount of trays to complete your treatment. As most of you will learn ..... the profit on procedures (ortho) is profit after expenses divided by the number of patient visits. As the number of patient visits rises .... the profit on the procedure goes down. Even though the additional trays are free (comprehensive aligner cases) .... the doctor patient visits are not. Each additional patient visit to deliver new aligners bites (pun intended) into the profit margin.

Yeah he's fantastic. Also someone I highly admire/deciding factor to pursue a dental career (I was initially interested after getting #20/29 extracted due to lingual tilt and impaction while on a ship...long story). He owns 4 offices with his daughter, completely debt free and loves what he does. Owns his house, etc.

I just made my last payment to him so that may be why he had no issues dragging the tx out. I've been doing this almost 2 years and have had 3 different sets of trays, totaling nearly 80 in number. I live in NYC currently, and I always see these ads for SDC and some new aligner company. they have brick and mortar offices here with a digital scanner. But I don't see how on earth patients can expect the results I've gotten without attachments, elastics, IPR, or that individualized treatment.

Shot on goal: I was an electrical engineering/CS major in undergrad and am taking a cybersecurity job now that I'm getting out of the military. I'll be doing my prereqs that I didn't have in undergrad at the same time. I've got my targeted list of dental schools in order. Would you recommend I still pursue dentistry with everything in mind with the corps? As long as I get into one of my schools I'll graduate virtually debt-free with the GI Bill paying my way. I think dentistry is a fantastic profession that satisfies serving others, and one that can be used to leverage income into other endeavors as you all are doing.

But it's illuminating to read about the ways corps, dental therapists, etc will impact the profession. I have a strong interest in public service still, and think that it'd be fantastic to open up a company with DTs that travel in mobile dental clinics under the license and supervision of a DDS/DMD in the intercity and rural areas. Sort of like how the Urgent Care centers that have popped up where PAs work under an MDs license. What are your thoughts on these ideas? I believe that serving as a military officer for a few years has really given me the leadership to implement my go-getter mentality. Too many guys in the military get a bit lazy with the pension and no increased compensation for performance...

 

[Cold Front]

What are your thoughts on these ideas?

Well, private equity has America in a chokehold, and dental corporations have far more resources than anyone cared to ask, and they have been planning for the past 10, 20, 30 and even 40 years. Heartland Dental was founded in 1980. Some would argue that the corporations perfected private practice model and they are curbing young dentists to work for them and buy offices from retiring dentists at the same time. Dentistry in my opinion will be in the hands of corporations within the next 10-15 years. They already have seats at dental boards, lobby for legislations that protects their businesses, have the large dental suppliers in their back pocket and have a close ties to many dental insurances and patient financing companies (like CareCredit). Some dentists may disagree with this assessment, but it’s been happening for decades now.

As far as Mobile Dentistry, there is a new company that raised $10M recently, to exclusively bring mobile clinics to large employers - they are called HENRY the DENTIST. They raised $10M and have a fleet of mobile dental practices and partnered with 70 large employers already. I can see them expanding more mobile clinics - perhaps in schools, large residential communities, and so on.

Bottom line, dentistry is not going to be the same in the future. There will be too many dental services a consumer or a patient will have to choose from. There won’t be a destination services anymore, but more convenient options, with mail services and web/app based options. Teledentistry was approved in my state last month, and for $20 a year - I can obtain a permit and work with a Teledentistry company from my home or anywhere I want. This is obviously frowned upon by dentists, but unfortunately these are just examples of where dentistry is heading.