what should an unsuccessful dentist do?

[charlestweed]

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I see that you've done well as an ortho... This is something we can all aspire to and wasn’t my point of criticism. I'm not saying the dentist is the bourgeoisie.

In most other professions there is a tendency for the valued skill (in this context the dentist) to be transitioned from a position of power and autonomy to a position of labor.
This is done by saturation of the skill - either by diploma mills, lower entrance requirements, changing laws to include foreign labor, midlevels... etc. This occurs because someone who has little interest in dentistry (or career “X”) has capital and thinks they can make money off of it (Wal-Mart was my hypothetical example). They will naturally come to view a professional like a dentist as an expensive pair of hands. The tendency is to then diminish their role and compensation as much as possible in order to achieve maximum profits for those who are running the operation. If they achieve this model they can now operate loss leaders in areas to gain monopoly or more realistically others will do the same and create an oligopoly on the market making it impossible for owners like you to compete.

This may sound extreme but it has happened to many professions. The owner who does this is who I was referring to as the bourgeoisie - not you.

This chain owner, whom you refer to as the bourgeoisie, has actually helped create jobs for many new grad dentists. Many people have been saved from unemployment because of this owner’s interest in making huge profit. The surplus of dentists (an increase in number of dental schools is the main culprit) has made it more difficult for new grads to find good paying jobs at non-chain private offices because these good jobs are usually taken by the experienced dentists who have been out for a few years. With huge amount of student loan debts, it is too risky for many dentists to start or to purchase a practice. Therefore, the next best solution for them is to work for corporate dental offices. Many of my ortho colleagues wish there are chain offices in their areas so they can apply for the associate jobs.

I am not trying to defend corporate dentistry. In my opinion, the only way to reduce the dependency on the chain offices for associate jobs is to shut down a couple of dental schools (instead of creating more new ones) and to accept fewer students each year. Fewer dentists = less competition = easier for new grads to start a successful private practice.

 

[DentinBond]

Excellent points, Charlestweed. There are some trends that you remind me of that bear mentioning.

First, the U.S. population is slowly growing, largely due to immigration. In other words, if no one came or left, I believe the data show a flat population level. So the net effect is moderate growth in the total number of us here.

A few years ago, there were about 166,000 U.S. dentists, including those in military service and institutions. There were appx. 4,000 graduating, and 6,000 retiring, in any given year.

http://bhpr.hrsa.gov/healthworkforce/reports/factbook02/FB301.htm

http://bhpr.hrsa.gov/healthworkforce/reports/factbook02/FB304.htm

When the economy tanked, I feel fairly certain that no dentist retired unless they had to or had planned exceptionally well for it. Working for a few extra years while the stock market comes back up is the only rational strategy. So we are seeing less practice transitions right now than there were in the recent past.

It stands to reason that, looking at age demographics of dentists and the slow but positive changes in the economy, that between five and ten years from now there will be a very large wave of retiring dentists. Couple this with a growing population and a higher demand for dental health and esthetics, fueled by the steadily higher standards in the American workplace, and the future looks very bright indeed. Add better technology to the mix as well.

I'm not inherently an optimist, mind y'all, I try to be objective. And with that I'd say that the severe debt load of recent grads is balanced out by low interest rates and the above trend information. Corporate dentistry will also find less of an audience as more and more people look for a remarkable experience in any business they deal with. Corporate is not going away, and in fact it probably shouldn't go away entirely, but it will always remain limited in my view. The business model of making as many average products and services for as many average people as possible is running out of gas. I'm telling you, read Linchpin. It will jump start you.

Or have a go at my friend Anne McCrossan's blog as she carves out an understanding of the "socially fit business":

http://www.visceralbusiness.com/managingsocialmediaorsocialorganisation/

The one hard thing is, recent grads have to be willing to take more risk and buy a practice early. I did it and yet waited too long myself- should have done it in half the time I did.

Safe is now risky; it's risk that's safe in this economy.

 

[charlestweed]

The one hard thing is, recent grads have to be willing to take more risk and buy a practice early. I did it and yet waited too long myself- should have done it in half the time I did.

I too waited too long (4 years) to start my own practice. I should have done this a lot sooner. Working for a chain office made me realized that I would never become rich if I continued to work here full time.

 

[7 Iron]

I too waited too long (4 years) to start my own practice. I should have done this a lot sooner. Working for a chain office made me realized that I would never become rich if I continued to work here full time.

Do you guys think that it's a bad deal to become an associate in an established office (particularly when you are fresh out of school)? My personal dentist has 2 associates who have been with him for at least 5 years.

 

[charlestweed]

Do you guys think that it's a bad deal to become an associate in an established office (particularly when you are fresh out of school)? My personal dentist has 2 associates who have been with him for at least 5 years.

No, it is not a bad deal at all if you are a type of dentist who doesn’t like to deal with the stress associated with running a business. Many dentists (myself included) are afraid to borrow more $$$ to start a business when their student loan debts have already exceeded $300-400k. Just like the pharmacists and optometrists who work for Walmart, your dental income will eventually hit the ceiling limit if you continue to work full time for a chain or for another dentist.

Your income will also reach the peak when you own your own practice. However, you can do more when you have your own practice. For example, instead of referring your patients out, you can start hiring the dental specialists to come work for you. You can expand your business by setting up additional offices and hiring more associate dentists/specialists.

 

[yappy]

Do endo tend to work in their own practices... what I mean is own a practice - or do they uselly work for GP's who have decided to incorperate more endo into their practice?

 

[Stroszeck]

THe two endodontist i know in southern california (LOS ANGELES) are going from office to office, there is a huge saturation of endodontists here. I think its mostly though because most GPs do their own endo, but i could be wrong.

 

[beijingdds]

THe two endodontist i know in southern california (LOS ANGELES) are going from office to office, there is a huge saturation of endodontists here. I think its mostly though because most GPs do their own endo, but i could be wrong.

Doc, you are not wrong. So Cal is a special market to work for. Endodontist friends of mine are forced to relocate because they can't find enough jobs here. Somewhere in the midwest, they can make a killing(2000 USD or more each day), but not here in LA. All the GPs are doing their own molar endos, as a fact, a lot of practices won't hire you unless you can do molar endo. The only cases we refer out are endo surgeries/retreats, but most of time patients choose to have the tooth extracted and implants placed.

 

[Stroszeck]

Yes thats what I have seen and heard as well. Unfortunately it really does seem like endodontist-type endo (retreats, surgeries etc) is really dying at an alarming rate thanks to implants. Its really a shame.

 

[yappy]

I wonder who will do the endo then? I've talked to GP's who dont do molar cases because of hidden/hard to find roots. They said they felt more comfortable sending them to an endo rather than risk a reteatment. Do you think this will be a viable area of dentistry in the next 20 years.

 

[Stroszeck]

Well the endodontists will still obviously do those toughies, but what happens is the NATURE of endo practice is changing. No longer are GPs referring out endo, but rather they are hiring endodontists to join the practice (either as associates or as partners) and that is DRAMATICALLY reducing the bottom line for endodontists. Suppose you did 5 root canals at $1000 each as endodontist. Well in ur own private practice all $5000 goes straight into ur pocket. You work though for someone else and you only collect 35-50% depending on ur contract...all of a sudden ur income is now half or less! Not to mention that endodontists work their butts off to get into endo etc and now they're left with a fraction of their worth doing incredibly difficult endos and surgical cases.

 

[charlestweed]

Well the endodontists will still obviously do those toughies, but what happens is the NATURE of endo practice is changing. No longer are GPs referring out endo, but rather they are hiring endodontists to join the practice (either as associates or as partners) and that is DRAMATICALLY reducing the bottom line for endodontists. Suppose you did 5 root canals at $1000 each as endodontist. Well in ur own private practice all $5000 goes straight into ur pocket. You work though for someone else and you only collect 35-50% depending on ur contract...all of a sudden ur income is now half or less! Not to mention that endodontists work their butts off to get into endo etc and now they're left with a fraction of their worth doing incredibly difficult endos and surgical cases.

Don’t forget that when you have your own private practice, you have to pay rent, supplies and staff salaries…not all $5000 goes straight to your pocket….and it is not easy to consistently have 5 endo cases every day. Many of the busy endo offices are busy because they accept low-reimbursed HMO plans.

In-house specialty is a double-edged sword. There has been a steady decline in new patient consultations at my wife’s private perio practice because the GPs in the area hire in-house periodontists. To make up for this loss, my wife works as an in-house perio at 7 different GP offices. When she does in-house perio for the GPs, she gets 50%, which is a lot better than what she makes at her own private office. Her income has increased significantly because of these in-house perio services. She is happy because there is no headache associate with running a business.

The same is true for endo. Many of my endo friends either work at established endo practices or do in-house endo at GP offices and they are doing very well. Only 2 of them (my dental school little sib and my classmate) have private endo practice.

 

[Stroszeck]

Charles, you ALWAYS make really great, insightful posts. The only thing is that most people want to OWN their own practice. Yes, it can be a headache, but 15 or 20 years down the line at least you were your OWN boss and not some other persons mule and you call the shots. Isn't that why everyone got into dentistry in the first place?? Being a traveling specialist after so much hard work just doesn't seem right, or maybe thats just my opinion.

 

[charlestweed]

Charles, you ALWAYS make really great, insightful posts. The only thing is that most people want to OWN their own practice. Yes, it can be a headache, but 15 or 20 years down the line at least you were your OWN boss and not some other persons mule and you call the shots. Isn't that why everyone got into dentistry in the first place?? Being a traveling specialist after so much hard work just doesn't seem right, or maybe thats just my opinion.

Getting referrals from the GPs is the biggest challenge that many owner specialists are facing right now. Oversaturation of dental specialists in both big cities and rural areas has created the opportunity for the GPs to hire in-house specialists; thus, it becomes harder for the private specialists to run their business. Doing good works on the mutual patients is not enough to make the referring GPs happy. You have to have good communication with the referring GPs. You have to send gifts and visit their offices often. You have to write the treatment reports for every patient to the referring GPs. You have to assist the GPs in restoring the implants that you place. For endo, you have to be available to accept all emergency endo cases (ie acute pain, broken endo files) that the GPs send to you. To make things easy for the GPs, my wife usually sends necessary implant parts (ie impression copings, abuttments etc) to the GPs...the GPs don't have to figure out what type of implants my wife placed....all the GPs have to do is to take the impression for the implant crowns.

It is actually not that bad to travel from GP office to another. Being a traveling specialist, one doesn't have to deal with the problems that I mentioned in the above paragraph. One doesn't have to pay the office rent, write the paychecks to employees, and pay for other operating expenses. Unlike the GPs who are stuck at 1 office, the specialists can go to multiple offices to make $$$. When an in-house specialist comes to work (once a week, once a month, twice a month etc), the GP office usually saves enough cases to keep the specialist busy the whole day. And that's the beauty of being a specialist...highly paid procedures, shorter work hours, fewer work days.

The reason I am doing OK at my private ortho practices is ortho (and pedo) don't rely heavily on GPs for getting new patients. I can get new patients from walk-ins, local newspaper ads, word of mouth, insurance companies etc. The reason pedos are doing well is many GPs hate treating kids. Without GP referrals, endo, OMFS, perio practices will not survive.

 

[Stroszeck]

Charles, do you think if the economy eventually improves these problems will start to go away? Also, how can there be oversaturation of specialists?? There are VERY few graduate programs graduating only a few specialists each year...so how can rural areas also be saturated?

 

[ortho lurker]

Charles, you ALWAYS make really great, insightful posts. The only thing is that most people want to OWN their own practice. Yes, it can be a headache, but 15 or 20 years down the line at least you were your OWN boss and not some other persons mule and you call the shots. Isn't that why everyone got into dentistry in the first place?? Being a traveling specialist after so much hard work just doesn't seem right, or maybe thats just my opinion.

If it makes financial sense, why not be a traveling specialist? I think the new model for saturated areas is to open your own office part-time, and travel the rest of the week to be full-time. Yes, in an ideal world there are no dental chains or in-house specialists, but it's a free market system so everything is up for grabs. Here are some advantages of being a traveling specialist with at least a daily minimum (% production on top of or production bonus would be even better):

1. No business loans!!
2. No financial risk as an associate. If your practice fails it may lead to financial ruin and years of bad credit if you declare bankruptcy.
3. You don't have to worry about collections. If the patients don't want to pay or the insurance checks are late, it's not your problem. As a business owner, if your patients are late or don't pay at best you can take them to collections and get a % back. As an associate, if your boss is late or doesn't pay, you can take them to the labor board where they will enforce the owner to pay or face fines or possible shut-down of the business.
4. If it's a slow day or if there are patient cancellations, you are covered with your daily minimum. Isn't it great to know that you will make a profit every day that you work? You can spend days as an owner with little or no reward or even a loss so you could be tying up your time for no gain. Return on investment is also not in your vocabulary so you don't have to worry about putting more $ into something to see if it will work.
5. The only payroll you have to worry about is cashing in your paycheck.
6. What lease? You don't have to worry about annual 3% increases and bogus increases in building operating expenses. If you don't like your job, can walk away anytime. If you don't like your practice you have to think about selling it or staying put until your lease is up so that your landlord won't come after you.
7. Marketing and groveling for referrals from GPs are not necessary. You don't have to shine their shoes, wipe their ***, you get the idea.
8. No worries about general building liability insurance, overhead insurance, worker's comp insurance, b.s. insurance, etc.
9. Staffing issues including holiday, vacation, & sick pays, maternity leave, etc. are excluded.
10. Staff embezzlement isn't a concern of yours.
11. You spend your evenings and weekends NOT thinking about work. Office inventory, maintenance issues, office remodeling, bookkeeping, and payroll taxes are not concerns of yours.
12. The only overhead that you have is gas money to go to work. As an independent contractor, you can even write off the miles that you travel between offices. Rent and CAMs, commercial electricity and phone bills, , I.T., office equipment, lab bills, armamentarium, and disposables are not concerns for you!

Don't think that business owners are making ten-fold profits off of you. They too are taking a risk and have to pay the bills & overhead. I agree that you can make more per day as a successful owner and can therefore work less if you choose. If it's just about the bottom line however, then I would rather make average or above average salary for your profession as an associate then make below average as an owner. You also hear about these new business owners who quit cold turkey with all their associateships and devout full-time to their business, only to look for jobs again 3 months later when they find out it’s not so easy. Perhaps it would be wiser to drop a few days or locations first (if your employer allows you) and at least keep your foot in the door in case you need to rely on your old job.

 

[yappy]

So in the case of the inhouse specialist vs GP owner; is the GP net income greater than the specialist? If so it doesnt make much sense financially to specialize in dentistry does it.

 

[ortho lurker]

So in the case of the inhouse specialist vs GP owner; is the GP net income greater than the specialist? If so it doesnt make much sense financially to specialize in dentistry does it.

The overhead for a GP is typically in the 65-70% range so a GP owner has to gross over $1 million to net $300K per year which is NOT EASY to do. The overhead for a traveling specialist is 0% so everything they make goes in their pocket. If the monthly goal is $25K net to reach this $300k net a year figure, you need a daily average of a little over $1K if you work a 6 day a week schedule or $1250/day on a 5 day a week schedule. These daily take-homes for specialists are not that unheard of as you hear of oral surgeons and endodontists bringing in over $2-3K per day, and orthodontists reporting earnings of $1500-2000 per day in some areas. The average salaries of dental specialists are higher than the average salaries of gp associates so if you play the percentages you will do better as an average specialist. However, there are GP owners who do better than everyone else but keep in mind that they are outliers and not the norm!

 

[charlestweed]

Charles, do you think if the economy eventually improves these problems will start to go away? Also, how can there be oversaturation of specialists?? There are VERY few graduate programs graduating only a few specialists each year...so how can rural areas also be saturated?

No, I don't think they will go away. Oversaturation of specialists was a problem when my wife and I finished our residencies 10 years ago. This problem has not changed and it actually gets worse. Instead of seeing a decline in the number of specialty practices due to the retirement of the older specialists, we have seen a steady increase in number of new specialty practices in our area. My endo friend, who has a practice in a rural area, told me that he also sees a similar trend.

The number of post grad programs is not as small as you think. There are specialty programs in most dental schools. There are also hospital-based programs.

Here are a few more problems that many young rookie (and future) specialists have to face:
- Huge amount of student loan debt.... they borrow 2-3 times more than what many of us, veteran specialists, had to borrow. This will set them back 4-5 years. It will be harder for them to get a business loan.
- There are more hands-on CE classes that teach the GPs to place implants and to do ortho. More implants means less endo cases for endodontists.
- An increase in number of GPs (due to the opening of new dental schools) will force the GPs to work harder to survive the competition. The GPs will try to do more difficult procedures and refer fewer patients to specialists.

I am not trying to scare you. Specializing after dental school is the right thing to do. The GPs have experienced much worse problems than us, specialists. The new grad specialists just have to run smart business. If they choose to become specialists, they must accept the fact that they have to go door-to-door and beg the GPs. They have to do what Ortholurker suggested in the above post: start a small low cost practice and work as in-house specialist at different GP or chain offices. It is not wise to spend $300-400K to set up a new practice when you also have $300-400k student loan debts.

 

[charlestweed]

If it makes financial sense, why not be a traveling specialist? I think the new model for saturated areas is to open your own office part-time, and travel the rest of the week to be full-time.

Many traveling specialist do very well when they split the production percentage with the GPs. Working as an in-house specialist at a GP office is not like working for a boss...the GP respects and treats an in-house specialist as if he/she is a business partner. My daily income is highest at my sister's GP office (too bad, she only has enough patients for me to work there 1day/month). My daily income at my own private practice is the 2nd highest. And it is lowest at the chain offices.

 

[JamieMac]

The overhead for a GP is typically in the 65-70% range so a GP owner has to gross over $1 million to net $300K per year which is NOT EASY to do. The overhead for a traveling specialist is 0% so everything they make goes in their pocket.

Great post... but two comments:
(1) 65-70% average overhead depends on MANY factors. Location being the big one, but often underestimated is one's ability to effectively manage resources. If you want to be in a city like NY, SF, or even in Chicago... you're stuck with a substantial overhead cost. Wages tend to be higher in these areas as well due to cost of living.
(2) If you are in an area of saturation, doing 1M is definitely going to be a challenge. If you're willing to venture out a little from the bigger cities, a 1M gross is realistically attainable. I know more than a few that are doing it now...with lower than 65% overhead as well.

I think you're post is right on, but again depends on the perspective/situation.

 

[ItsGavinC]

I am not trying to scare you. Specializing after dental school is the right thing to do. The GPs have experienced much worse problems than us, specialists. The new grad specialists just have to run smart business. If they choose to become specialists, they must accept the fact that they have to go door-to-door and beg the GPs. They have to do what Ortholurker suggested in the above post: start a small low cost practice and work as in-house specialist at different GP or chain offices. It is not wise to spend $300-400K to set up a new practice when you also have $300-400k student loan debts.

This is wonderful advice. 👍

 

[DentinBond]

The GPs have experienced much worse problems than us, specialists.

Actually, have a look at The McGill Advisory, May 2010, the 20
09 Practice Economic Review. To summarize:

"General dental practices fared relatively well in 2009, maintaining acceptable profit margins despite the severe recession". McGill goes on to cite extreme geographic and other variation, affected by foreclosure and unemployment rates. Also "cosmetic" and big-ticket practices were more severely affected. My bookkeeper, who has about 70 dental practice clients in three states, can also attest to this.

"Among the specialties, periodontics and orthodontics were affected the most by limited consumer spending for items deemed discretionary." Endodontists and pedodontists were least affected.

The November 2010 issue, interestingly, deals with specialists and their marketing efforts. While a GP myself, I am fascinated by specialist marketing in dentistry because of the two audiences involved- patients and other dentists. I'm always talking Permission Marketing, mind you, never Interruption Advertising.

 

[ItsGavinC]

Endodontists and pedodontists were least affected.

As a pediatric dentist, the economy hasn't hurt my practices. What has hurt are lower insurance reimbursements, but even withstanding that, I'll be making more this year than I did last year. And, that's with me working MUCH less. Last year was 40 hours/week and this year is around 27 hours/week. We simply had to adjust our business model slightly.

 

[7 Iron]

As a pediatric dentist, the economy hasn't hurt my practices. What has hurt are lower insurance reimbursements, but even withstanding that, I'll be making more this year than I did last year. And, that's with me working MUCH less. Last year was 40 hours/week and this year is around 27 hours/week. We simply had to adjust our business model slightly.

27 hours a week.. man you have it made 😀

 

[beijingdds]

Charles, do you think if the economy eventually improves these problems will start to go away? Also, how can there be oversaturation of specialists?? There are VERY few graduate programs graduating only a few specialists each year...so how can rural areas also be saturated?

Dr Stroseck
I totally agreed with you. I think if you work for a GP office as an associate, even the ferking manager would run you over and micromanage you. You have no saying whatsoever in terms of appointments, insurance billing, materials to use etc...and you have to put up with a lot of their bull****. Yeah, it is a little hassle to own a business but it is worth it at the end. In addition, I think people who can be successful financially are not the ones who do the job themselves but MBAs and business people. Dentists, does not matter what kinda of specialists you are, we are a just a high paying labor.
The investors and owners are ultimately the most beneficary of this business. Plus, I hardly know anyone paying 50% production for specialists, it is more like 35% or 40% tops.

 

[briansle]

whatever happened to MrLantern??

 

[rav4182]

this is such a depressing thread, makes me think there is some truth to dentists having the highest suicide rate. Everyone i've talked to has said nothing but good things about the job outlook for dentistry. After reading MrLantern's post i'm gonna make sure to get LOR's and contacts from dental school.

 

[newyorkblork]

this is such a depressing thread, makes me think there is some truth to dentists having the highest suicide rate. Everyone i've talked to has said nothing but good things about the job outlook for dentistry.

Put back the Prozac... If I'm remembering correctly, MrLantern is in NY and can't or won't move. Read the first few responses to his post.

Also, read his post carefully before you get all blue... 9 resumes? What field can land you a job out of 9 (presumably) scattershot coldcall resumes? If you land a job with 9 resumes you're either a lucky SOB, have great connections, or are some master of resume/interview skills. I sent out more than 9 resumes trying to land an unpaid internship as a recent college graduate.

After reading MrLantern's post i'm gonna make sure to get LOR's and contacts from dental school.

Good thing to do, but... You weren't gonna do that until you read this? ;-)

 

[bigmike7104]

wouldn't it be easier for a specialist to open a practice or find a job than a gp in a city?
on sites where they show you how many dentists by specialty,in LA it was between 50-150 for each specialty yet for gp it was over 1000.

 

[bigmike7104]

bump