What Are The Factors That Will Drive Down The Demand For The Services Of All Private Practice Dentist In The New Year? Is It Just A “Sluggish Economy?”

Recent Harris Poll Says Patient Demand For Dentistry In The Future Will Drop.

Recently one dental advocacy group, Oral Health America, commissioned the Harris organization to conduct a survey indicating the future spending of Americans for dental services. Not surprisingly, the survey indicated that a sizeable segment (about 35%) of those surveyed said that they were planning to reduce their spending on dental services.

Many believe that the sluggish US economy is the main reason for the real or imagined downturn in patient volume and practice revenues. Indeed, as indicated by the chart, a bad economy can reduce patient demand for professional dental services about 25% which is definitely a sizeable amount.

Decades ago, one of the projects in a private 27-year R&D program in San Diego responded to the claims made by both dentists and medical doctors that “managed care was stealing all of the patients.” In fact, both dentistry and medicine sustained their first catastrophic crashes that put each industry into the mature stage of its life cycle. Here is what happened.

The rate of industry growth in dentistry crashed between 1987 and 1990 equivalent to ten 1929 stock market crashes; this event produced a “shakeout.” Practice brokers reported a dramatic increase in practices up for sale. Medicine crashed equivalent to twenty 1929 stock market crashes between 1990 and 1994. Then the US Hospital Services Industry crashed by the same amount between 1991 and 1999 clearly demonstrating a “domino” effect.

In fact,  there was a widespread, yet erroneous, belief among the occupational communities of doctors (doctors, dentists, podiatrists, clinical psychologist, etc.) that the dramatic decline in patient visits and revenues experienced during these classic events was due to “managed care.”

They were partially correct. Studies demonstrated that the presence of HMOs in a geographic area can indeed reduce demand for professional services by 20%, a significant amount. Comparing the effect of managed care to the other numerous causes of reduced patient visits and revenues placed the impact of managed care, back then, into perspective.

Published studies demonstrated that simple physical exercise in a surveyed community might reduce demand for services by 17%. The increase in self-care practice can also reduce demand for doctor services by a significant amount. Some reports claim that self-care has been steadily increasing for decades and will continue to grow.

As indicated in the chart, a bad economy can reduce demand for professional services by 25%, a very significant amount. However, a single negative media event can reduce demand by 33% and this reduced demand lasted for an entire year indicating that there was a residual effect. The endless stream of negative media about problems in the healthcare system has probably had an dramatic, yet unrecognized, impact on consumer demand for all types of professional services.

Consumer health education will likely accelerate as use of the Internet continues to expand. Such increased consumer health education has been demonstrated to increase delay and reduce demand by 150%. In medicine, the rise of “alternative medicine” (not shown here) also accounted for what was not only a dramatic shrinking of consumer demand but also a concomitant shifting of consumer demand for the professional services of traditional doctors.

This dramatic shifting of consumer demand for doctor services occurred mostly at the primary care level, or at the point of entry at the bottom of the orthodox food chain. One proposition is that the shifting of demand at the primary care level significantly affected the providers farther up the food chain than would otherwise be the case.

What Was Truly Surprising Was The Impact Of Socioeconomic Factors On The Demand For Professional Services. Socioeconomic Factors, Such As Education, Can Have A Powerful Impact On Patient Demand.

How is it possible that socioeconomic facts can have such a powerful impact on the demand for professional healthcare services? One clue comes from the lifelong work of John Wennberg, MD, PhD, MPH at Dartmouth. His work discovered that their may be anywhere from a 250% to a 1,000% difference in the demand for professional services between two towns that were only 30 miles apart.

This finding was certainly was not the discovery of an entirely new phenomenon; that there may be dramatic variations in the illness burden of a population was first observed by Hippocrates the Elder (circa 460-377 BC) in his work entitled “Airs, Waters, and Places.” 

For the practicing dental practitioner, it means that a thorough understanding of the demographics, the ethnographics, and the “salutographics” (health and illness belief) of a patient population is advisable, especially in a bad economy.. Plus, this phenomenon revealing significant differences in the illness burden of patient populations deflates the erroneous, simple-minded, conventional wisdom that “people will always have oral health problems and will, therefore, be forced to go to dentists.”

Finally, it is not unreasonable to argue that there is likely some type of synergistic effect among these factors. Plus, there may be other relevant factors that are not immediately apparent. In practical terms, what must be done today to ensure that the private practice is not adversely affected in the new year by such circumstances? Fortunately, there is good news.

Best Regards And Happy Holidays,

Francis A. Toto
San Diego

For more insight, check out the websites: http://www.rightmovesproject.com and http://dental.rightmovesproject.com