Decreasing Dental Visits = Decreasing Income?

I came across some interesting long term trends in the latest issue of the ADA News.  The data is derived from the ADA's Health Policy Resource Center.

The number of dentist visits is declining, especially for adults.  This seems to be a slow, long term trend, even with an increasing and aging population.  Yes, the decrease was aggravated by the recent recession, but the data suggest there are factors in place even before that.  Children's visits were more stable and seem to have recovered closer to pre-recession levels.  Over the ten year period, visits by children with very low income families (likely on Medicaid which covers dentist visits) rose from 26% to 36% perhaps dampening the effect of children's visits.

Notice that general dentist income (who primarily see adults) and dental visits trends seem to follow each other fairly closely.

"Fewer Adults Visiting the Dentist," ADA News, Volume 44, No. 6, March 18, 2013.

Data Analysis, or Gambling?

I just got back from a continuing education meeting which happened to be located in Las Vegas. I also watched the movie "21" which is based on the real life story of a group of MIT students who learned how to count cards and beat the casinos at blackjack.  They made millions.  They did not let the emotion of the moment influence their decisions.  They used simple math, counting the cards already dealt to increase their chances of a winning bet: data analysis and rather fast arithmetic.

How much of dentistry is pure data analytics and how much is gut instinct?  Well, there are two ways to look at it. First, is cold science, numbers, and analytical data analysis.  We do a clinical exam, we look at x-rays, perform diagnostic tests, ask questions.  We consult the published research.  In medicine and dentistry this might be likened to flow chart decision making, or to something called evidence based science.  We use experiments, data and facts to decide the most likely outcomes.  If we don't, we are just guessing.

Second, there is the theory that real world experience makes the difference, raw talent, esthetic sense, gut instinct.  This is actually backed up by the study that mastery comes about with many hours of practice, error, corrections, and well, experience.  The more you have done something, the better you are at accomplishing the task at the level of a master, the expert.

My analysis is that they both matter.  You have to make decisions based on real science and study of the available data.  Dentists spend four to ten years after college in graduate education and training in science and techniques. Then, there are years of continuing education classes after that.  Collect the facts, the data, analyze, compare, then decide, act.  The problem with dentistry and medicine is that there is always a lot of data that is not knowable, that is missing or not timely.  That is where experience comes into play.  That is, making decisions when you do not have all the data you would like to have.  Sometimes there is more than one appropriate option.  Sometimes you go on experience and gut instinct.  Count the cards if you can, but sometimes you develop senses that tell you the card count at a subconscious level.  I'd like to think going to the dentist is not a gamble, but as close to a sure thing as you can get.

Perceptual Ability

This is a good example of excellent perceptual ability.  Dentists have to have a pretty good grasp of three dimensional space, angles, length, etc. to be good technicians.  Artists are the best at this.  Watch to the end of this short video and you will see something amazing.

Problems with Multitasking

In my book, I stress the importance in having the ability to deal with all the demands of being a dentist in a busy office.  There are so many things to think about in a short amount of time.  A real ability to multitask would be the ideal in handling a typical day in the office.  Multitasking is often thought of as doing many things at once or switching back and forth rapidly between tasks.  We sometimes fool ourselves that that we are more productive by this kind of multitasking.  There is some research that effective multitasking is not really possible.  Studies show even young sharp minds tend to loose  cognitive ability the more things they have to deal with, thereby reducing productivity.  Have you ever tried to carry on two phone conversations at the same time.  You cannot listen to both, only one at a time.  There was an exhibit at Disney World a few years back (it might still be there in the Hollywood Studios Park), where you would put on headphones and would listen to one story in one ear and another story in the other.  It was impossible to make sense of either.

Focusing on many things at one time, effectively, is not really possible.  The goal is to focus on only one or two things at a time.  There is a talent of focusing effectively on one thing, then moving to the next item and focusing on that, eliminating distractions as much as possible.  Reducing stress also increases productivity.  This can be difficult to manage.  It seems that it's not really multitasking you should be attempting to do, but prioritizing your focus and concentration.

Here are a few articles on the subject:

"We're always multitasking, and that's the problem"  --Britannica
"Multitasking Makes you Dumber" --Annie Murphy Paul
"Teaching kids to Concentrate"  --Annie Murphy Paul
"Why Multitasking Does Not Work" --Forbes
"You can only remember three or four things at a time"  --Business Insider
"Too much stress results in poor performance" --Business Insider

Buying a dental practice (guest post)

Here is my first guest post on the subject of a new dentist purchasing a dental practice.  Abigail Widynski from 5th Avenue Acquisitions provides a basic layout of the planning process.

In my book, I address some of these topics in some detail.  The key is preparation and planning.  In many cases it may not be the best option, but in others, it may lead to a more productive professional arrangement.

There are many companies that provide services matching sellers with potential buyers of dental practices.  I do not intend to endorse any one company over another, nor do I have a professional or business relationship with any firms other than as being one of the many clients of our accounting firm Cain, Watters and Associates LLC in Dallas, Texas.  I provide this guest post to add to the information available and to get young dental students and young professionals thinking.  Here is Abigail's Post:

If You are Buying a Practice in 2013, Isn’t It Best to Create an Ideal Practice Checklist? Here’s Five Considerations for Your First Practice Acquisition.

If you’ve ever purchased a new home, or even if you’ve watch a real estate television show, you know that the checklist sets the parameters for the first viewings. Then, the reality hits: the checklist of absolute needs and the availability of homes on the market simply don’t align! Needs are re-evaluated as wants and compromise begins, doesn’t it? With a new prioritization, something that’s available becomes a ‘fit’ and the buyer is confident in their final choice. If you’ve been the one at the closing table, you understand the process!

And buying a practice is similar to buying a new home. Without narrowing criteria and understanding where the value lies within the practice, you could overlook key profitability drivers as well as preferences that impact your long-term future. Best to be prepared with a checklist. Here’s five considerations that can help you prioritize your search:

Income Requirements. You are familiar with personal and financial sacrifice and perhaps you were motivated during those long study nights in dental school by the income potential of your profession. As you look at ownership, you are probably like most who require a loan to realize their dream, and take advantage of the value proposition of being a solo practitioner!

Before you review a practice’s valuation, sit down and evaluate the costs and the monthly repayment amount that makes sense for your lifestyle. Guessing your income requirement could mean personal and practice strain sooner than later. Be honest with yourself so when you do see what the practice is netting, you can run the numbers and understand your future better!

Layout. Open floor plan versus semi-private operatories? How many operatories are needed to reflect your ideal daily patient load?  And does it matter?

Recently, I visited a pediatric dentist who is creating a ‘dental spa’ for his young patients. During his associateship, he observed that in the practice’s open floor plan, when one child became unruly that all the other followed suit. In designed his dental spa, he redesigned the space to include six semi-private operatories so that should a child became upset, the others sitting in the chairs would not watch and potentially mimic the behavior.  

As you review your work pace and the patient experience you will create, evaluate the layout and size that will be right for you. But remember: improvements can be made over time and walls can be constructed!

Marketing Strategy. Chances are that you are tech-savvy and fluent in social media! Pay-per-click advertising, a Twitter educational campaign and a Facebook success stories page are options you have to expand your next practice. These are options that dentists twenty years ago didn’t yet know about! You might find your practice’s advertising and marketing strategy is limited to referrals and the phonebook, but don’t be alarmed. 

Ask yourself when you look at active versus total patient files: Where is there an opportunity for marketing? Is this practice using only ‘old school’ techniques and outlets? You may see that you could increase patients by a basic online strategy. Or perhaps the social media and online presence is established. Are you willing to create a new marketing strategy or would you like it ready-made in your ideal practice?

Location & Proximity. An often-debated question in dental acquisitions is whether it is ‘smart’ to own or lease the real estate housing your practice. Whether you lease or own, where you are located will impact your marketing and advertising costs, as well as define your competition.

Let’s look first at location. As you look at where a practice is located, research the traffic count. How many drivers will pass by your new practice everyday? The more, the better. But only if you have clear building markings and on-road signage. You can’t alter location but you can improve visibility. 

Think about the proximity of the practice. What is the benefit of being located near the local medical center or regional hospital? Are there complimentary specialties nearby with whom you could refer patients, or eventually merge practices? 

Updates. If you’ve recently graduated dental school, you bring to your practice knowledge of the most up-to-date procedure as well as proficiency in the latest technical equipment. Just as location and proximity is a personal preference, a dentist’s decision to make equipment updates is financial and personal. Not every practice will have the equipment you were trained on, but this does not mean the practice does not realize significant profits. 

As you are making your checklist, determine if you require in your acquisition a practice with new equipment or if you’re willing to plan for this capital expenditure in the coming years. Just as in home ownership, improvements can be planned for and expedited based on increasing your profitability. 

As you’re taking the next step, keep asking questions. With each answer, move forward. It’s the New Year and your year for ownership.

Abigail Widynski is enthusiastic about two topics: growth and expansion. In her role at 5^th Avenue Acquisitions and Venture Capitalists (www.5thaavc.com), she feels privileged to talk about these two everyday. Abigail is the founder of the online and translation consultancy, Wild West Content Strategy and serves as a board member for two international children’s organizations: Hope4Kids and the U.S. Executive Board of Grain of Wheat International. Abigail is a graduate of American University and Imperial College Business School in London. Abigail invites you to reach out to her at Abigail@5thaavc.com.