Trends in Dental Practice Sales and Associateships in the Current Economy

Trends in Dental Practice Sales and Associateships in the Current Economy.

C. Steven Wolff

Abstract

Recent experiences would suggest that there is a significant discrepancy in the number of doctors retiring and transitioning their practices and the number of younger practitioners wishing to assume ownership and build a career. Peaks and valleys in dental school enrollment over the last forty years should have produced an abundance of retirement aged doctors wishing to place their practices on the market to a smaller pool of buyers. Such is currently not the case. Doctors in their sixties have experienced recent stock market downturns in 2000 and 2008, the “9-11” tragedy and a drop in both the value and liquidity of the housing market.  The ready access to refinance or second mortgage funds may even find some doctors upside down on personal, vacation and investment real estate. All of this combined has had considerable negative impact on their net worth. Health care costs continue to increase and most dentists are personally responsible for their premiums. Combine all of this with the current low level of secure returns on invested capital along with a significant increase in life expectancy over the last two generations and many decide they are simply unable to retire as planned. The fear of running out of money is stronger than their will to pursue retirement. This article examines in some detail the reasons for this imbalance and the effects they are having on practice transitions, practice values and the market for associate employment. We will also explore what the future may hold for both retiring and new career doctors.

Key words: Practice transition; Practice value; the Great Recession; Diminished retirement portfolios; Life expectancy; Associateships, Dental management companies.

doi:10.5436/j.dehy.2011.2.00047

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The “Wal-Martization” of Dental Practice

 

 

 

 

 

The “Wal-Martization” of Dental Practice.

David O. Willis

 

Abstract

The economic environment of dental practices is undergoing rapid change.  Franchise and network practices are increasing in number because of many underlying economic factors, including supply and demand for services, banking requirements, student debt, proliferation of managed care plans, and healthcare reform.  These franchise practices compete very effectively with traditional solo dental practices, leading to the “Wal-Martization“ of dental practice, in which dental services are bought and sold more as a commodity than as an individually unique service.  These chains compete with private practices on efficiency, convenience, insurance plan participation, and aggressive marketing.  There are advantages and disadvantages for both the patients and dental practitioners for participating in this practice mode.  This paper explores the reasons that these entities are growing, and offers suggestions for independent solo practitioners to compete with them.

Key words: Dental management companies; Dental networks; Franchises; Practice management.

doi:10.5436/j.dehy.2011.2.00046

Full Text: PDF