THE EDITOR'S CORNER
The most recent evidence that we have about the economics of orthodontic practice is published in this issue of JCO (Orthodontic Economic Index--1978 by Bud Schulman). Along with the AAO Manpower studies of 1974 and 1976, this Index is a major source of information, since it is an annual survey and permits us to know the trends.
Looking at the Index we can see that orthodontists have been subjected to a combination of unfavorable economic trends over the past seven years. Gross Income rose slightly and then leveled off for the past four years. Since Gross Income is roughly made up of Patient Starts multiplied by Fees, a substantial increase in Fees has been nullified by a substantial decrease in the number of Patient Starts in the average practice, keeping Gross Income level. As Costs increase with a level Gross Income, Profit declines. The declined Profit is further eroded by continuing Inflation. Thus, increasing Costs and continuing Inflation combine to reduce the orthodontist's Purchasing Power substantially every year.
The Index gives us documentation that the same story is being repeated year after year. Taking 1977 as an example, Fees were increased substantially, but still only able to counter a sharp decline in the number of Patient Starts. Cost increases were held to a minimum. And yet, the average orthodontist saw his Profit decline by 1.5%. Through this combination of decreased Profit and continuing inflation, the average orthodontist has lost 60% of his Purchasing Power since 1970, 8% in 1977.
How many times must orthodontists be subjected to the same experience before perceiving that the actions that have been taken so far have not been adequate?
There are three ways in which the individual orthodontist in his own practice can influence these economic factors--increasing fees, controlling costs, and adding new patients. Orthodontists have been doing what they can in increasing fees and controlling costs. The key lies in the decline in number of Patient Starts. We must face the fact that practice building efforts and opening satellite offices may have been effective for some, but Patient Starts declined in the average practice. We have supposedly seen great increases in third party programs and in interest by adults in orthodontic treatment, but Patient Starts declined in the average practice. This is the factor that must be reversed and it must be reversed quickly. Increasing Fees and controlling Costs must continue, at least while they are important in maintaining a favorable economic balance. At the same time, orthodontists have to take a realistic look at how they are going to increase Patient Starts.
The individual orthodontist in his own practice can try to increase Patient Starts by renewed efforts at practice building, by changing his location, by opening a satellite office, or by seeking outside assistance. It would seem, however, that only a limited number of orthodontists will be helped enough by individual effort so long as we are a growing number of orthodontists in a diminishing child population and so long as we remain a child-oriented specialty. So, while individual effort is important to the individual, it seems unlikely to solve the economic problems of the average orthodontist.
The attention of orthodontists to the child population should not diminish in any way. In fact, every effort should be made to extend the benefits of orthodontic care to children who need it, but do not receive it. At the same time, there is a huge potential new market among adults, which we have not yet found a way to enter. We are waiting for adults to trickle into orthodontic offices. And, while we wait, the decline in the number of child patient starts per orthodontist is not being balanced by an increase in adult patient starts, which results in the net annual decline in Patient Starts that we have been experiencing.
It seems clear that some sort of group action is required to pool resources of mind and money, with the immediate goal of stimulating greatly increased Patient Starts among adults. For the moment, we would do well to concentrate on this one major effort with the potential to succeed at least as a first step in an economic recovery. Once orthodontists become accustomed to shared problem solving, there is a great deal more that can be accomplished in this way.
The danger that we face, apart from the economic stress that has already come to many practices, is that we may wait too long to accept the reality of the message of the Index. Without some change in the trends it exposes, the average orthodontist will reach a point at which he has neither the resources nor the will to attempt a solution to the problem. If that becomes the case, the survival of the individual and of the specialty stand in great jeopardy.
