Did you know that dentists' average earnings peaked in 2005, and then dropped by 18%, or $40,000, by 2015? If your production has seen better days, these tips from Louis Malcmacher, DDS, MAGD, can help you increase your earnings.
How was your practice's first quarter? Did you hit your goals, or are you lagging behind where you thought you would be? Did you even set a goal to hit? No matter the answer, with the first quarter now behind us, it is time to get your act together right now.
To get you started with realistic goals, let's look at some interesting data from the ADA Health Policy Institute. These statistics show where we have been, where we are going, and what is possible for your production goals.
Let's look at dentists' earnings. In 2005, general dentists' average earnings hit a high of $219,638. (1) Unfortunately, by 2015, their average earnings had dropped by about 18%, or $40,000, to $179,960. (1) You're probably thinking, "There was a tremendous market crash and recession in 2008, and the bulk of the drop probably happened then." But that is not what the data shows. In fact, dentists' earnings had already dropped slightly before the 2008 recession. (2) Even in 2009, after the crash, dentists' average earnings were still higher than in 2015. (2) But they steadily decreased from 2010 to 2014 before leveling off in 2015. (2)
Here is what shocked me about all of this: In 2015, dentists' average earnings had dropped close to what they were in 1995. (1,2) Something is very wrong with this picture. It is hard to believe that all of the advancements we have made in dentistry haven't translated into better bottom lines for general dentists.
This earnings data is downright scary. It's time to rethink the business side of your practice and consider the investments you can make to maximize earnings for your practice and achieve the absolute best treatment outcomes for your patients.
There's one business mistake I see dentists make all the time. Dentists regularly approach or e-mail me after my courses to ask me how to make some new product that they bought profitable. But at that point, it is usually too late. General dentists must critically analyze new technologies or procedures before integrating them into their practices to determine whether they will make sense financially or improve the bottom line. There is no right or wrong investment for every practice; what works depends on your ability to integrate whatever you choose into your practice as quickly as possible to see a return.
Without a doubt, I can tell you that the dentists who have increased their bottom lines are those who have invested in skill-based training so they can offer new services to their patients. The American Academy of Facial Esthetics (AAFE) member survey results have shown a dramatic increase in earnings when procedures desired by patients are introduced into a practice. Dental implants are an excellent example. Every single general dentist can learn how to place Level-I dental implants to replace a first molar or any single-rooted tooth in safe anatomical areas on healthy patients with sufficient bone. These make up 70% of all implant cases and only require a capital investment of $10,000 or less. AAFE members have reported an average dental implant production increase of $80,000 per year. Eight years of AAFE member research also has shown that adding Botox and dermal fillers to a dental practice adds $220,000 per year, on average, with no necessary capital investment.
These numbers are clear. If you are only doing the same procedures you did 10 years ago, or if you have made some poor practice investments, your production has probably gone down by nearly 18% and will most likely continue along that path. The way to turn your earnings around is to start offering new services your patients want and give them better treatment outcomes than ever before. Dental implants, Botox, dermal fillers, and dental sleep medicine are all skill-based procedures that will help you achieve and exceed your production goals. Let's get back to 2005 earnings!
References
1. Solana K. Health Policy Institute reports dentists' earnings remain stable. ADA News website. http://www.ada.org/en/publications/ada-news/2016-archive/december/health-policy-institute-reports-dentists-earnings-remain-stable?nav=news. Published December 15, 2016.
2. Soderlund K. Health Policy Institute reports dentists' earnings as stagnant. ADA News website. http://www.ada.org/en/publications/ada-news/2016-archive/january/health-policy-institute-reports-dentists-earnings-as-stagnant. Published January 11, 2016.
Louis Malcmacher, DDS, MAGD, is a practicing general dentist and an internationally known lecturer and author. Dr. Malcmacher is the president of the American Academy of Facial Esthetics (AAFE) and a consultant for STATDDS. Contact him at (800) 952-0521 or [email protected].
