Recently, the Wall Street analysts at RW Baird released their findings on dentistry's second quarter of 2012. Click here to see what they had to say about such topics as equipment spending and patient demand for dental services.
We asked Dr. Brad Guyton, chief operating officer at Jameson Management, Inc., for his thoughts on some of the data points presented in the Wall Street findings.
Has patient demand remained stable with first quarter trends?
Dr. Guyton says, "Yes. Our long term clients are seeing mid-single digit to low double digit incremental growth over Q2 2011, while our newer clients (less than 18 months) are seeing a 34 percent increase in production over last year and 33 percent increase in collections. Q2 is trending positively in line with Q1 directions. Most non-client dentists we speak with are reporting low to mid single digit growth in patient demand."
According to the 2012 dental survey, there is a positive impact from the "3+ million jobs added to U.S. nonfarm payrolls over the past 18+ months on general dental utilization," as seen in new patient visits and appointment booking. Have you seen a rise in new patients since summer 2011? What do you attribute that to?
Dr. Guyton says, "Yes, we've seen a modest increase in patient visits. We attribute this less to the 3 million jobs, as the percent of those incremental jobs with dental benefits has not been disclosed and the average level of compensation is unknown. We are more apt to attribute this increase to the dentists feeling more optimistic about this anticipated, albeit slow, recovery. This optimism leads to greater dentist confidence in marketing investment for their practices. In addition, during the recession, dentists were apprehensive to invest money in the market; many found it prudent to instead invest in themselves. These investments included small low-cost technology upgrades for their practices and clinical education to improve treatment outcomes and expand their treatment mix. This is similar to typical consumer behavior in a down economy when homeowners tend toward fixing up their own home, instead of looking for a new home. We believe the small practice investments are beginning to come to fruition as we cycle out of the trough of the recession. It's a small, but notable incremental impact."
The survey says the demand for higher-end dental is stable with summer 2011. Do you agree?
Dr. Guyton says, "I would agree and upgrade stability to mild optimism as we're seeing an uptick for patients who have weathered the storm and put off larger restorative and cosmetic cases. These patients are now beginning to come into the office after a few years of ‘hibernating’ or deferring treatment to now consider moving forward. I wouldn't say they're flooding in, but there seems to be greater interest than last summer."
Is the demand for lower-end dental stabilizing at the same rate as higher-end dental, or is the growth in one slower than the other? Why do you think that is?
Dr. Guyton says, "Lower cost dental procedures seem to always stabilize prior to higher cost procedures, simply because more people can afford lower cost preventive and restorative treatments. So, yes, as in most economy recoveries, we have seen greater stabilization in lower cost procedures. With the addition of the 3 million jobs, some will have dental insurance benefits, and this will enhance the lower cost stabilization over higher cost, as most plan maximums encourage patients to only pursue basic needs. Higher cost procedures are more dependent on the patients’ needs and wants as well as the clinical capabilities and case presentation skills of the dentist and the dental team.”
Brad Guyton, DDS, is chief operating officer at Jameson Management, Inc., where he and other clinical, practice management, and marketing advisors help improve the lives of dental professionals worldwide through in-office consulting, speaking, webinars, products and more. Read more at www.JamesonManagement.com or reach Guyton at (877) 369-5558.