2001 JCO Orthodontic Practice Study, Part 3: Practice Growth
This final part of our report on the 2001 JCOOrthodontic Practice Study will highlight thegrowth that has occurred in case starts and grossincome over the two years since the previousstudy. We will also present tables comparingpractices of female orthodontists to those of maleorthodontists, and practices affiliated with managementservice organizations to traditionalpractices.
The methodology of this 11th biennial surveyof U.S. orthodontists was outlined in Part 1(JCO, October 2001), which also discussedtrends in orthodontic economics and practiceadministration during the 20 years of PracticeStudies. Part 2 (JCO, November 2001) coveredthe factors that appear to be related to practicesuccess in terms of net income and case starts.The complete results, methodology, and questionnaireare published in a separate volume(2001 JCO Orthodontic Practice Study, IndexPublishers Corp., Boulder, CO, 2001).
As in every survey since 1983, respondentswere asked whether their practices' case startsand gross income increased, decreased, or stayedthe same compared to the previous year. In thepresent Study, therefore, they were comparingfigures from 2000 to those of 1999.
The percentages of orthodontists reportingincreases in case starts and gross income werethe second highest ever (Table 17). Growth percentageswere slightly behind those of the 1999Practice Study, however, perhaps giving somesign of an impending economic downturn.Orthodontists who had been in practice theshortest time were the most likely to be growing,as in every previous survey (Table 18). Mostpractice age groups showed less growth than inthe 1999 Study, the exceptions being case startsfor 2-to-5-year-old and 16-to-20-year-old practices.There were many more practices thatstayed the same in the 11-to-15-year group comparedto 1999.
The other groups that showed more growthin both case starts and net income in the 2001Study than in the 1999 Study were low fee andlow net income practices, metropolitan practices,and those in the New England, East NorthCentral, and Pacific regions.
Expectations for 2001
As in past reports, the respondents thatreported increasing, decreasing, or staying thesame in case starts or gross income in the precedingyear were the most likely to predict thesame results in the following year (Table 19).
Despite the minor slowdown in growthsince the 1999 Study, respondents were generallymore optimistic about future growth than everbefore (Table 20). The only groups that predictedless growth in both case starts and gross incomefor 2001 than had been predicted for 1999 were2-to-5-year-old and 11-to-15-year-old practicesand rural and West South Central orthodontists.
Reasons for Lack of Growth
As usual, respondents who did not reportincreased case starts in 2000 were asked to ratethe degree of influence of various factors (Table21). Local economic conditions, which had beendeclining in influence since the 1993 Study,showed a slight increase from 1999. Competitionfrom other orthodontists, general dentists, andlow-fee practices was rated about the same as inthe previous study. Availability of child patients,now considered a minor factor, has been showinga steady decline in influence since the firstPractice Study in 1981. Managed care and managementservice organizations were seen to havelittle impact on growth.
Breakdowns by Sex of Orthodontist
This is the second biennial report in whichwe have broken down selected variables for comparisonsof male and female orthodontists. Thepercentage of female practitioners has risen graduallyover the 20 years of these surveys and nowstands at 8.6% overall. In fact, nearly 19% of allrespondents who have been in practice 10 yearsor less are now female (Table 22). Geographically,higher percentages of female orthodontistswere found in the East than in the West.
With women's practices an average 8.6years newer than men's, there was naturally asubstantial difference in practice size (Table 23).Female orthodontists had significantly higheroverhead rates, although fees were about thesame and net income per case was not significantlydifferent. Women reported slightly lowerpercentages of adult patients, but slightly higherpercentages of third-party and managed-carepatients. Female respondents also reported workingfewer hours per week and spending less timeat courses and meetings.
As shown in Part 2 of this series, smallerpractices tend to make less use of managementmethods, delegation, and practice-building methodsthan larger practices do. The only managementmethods used by equal or larger percentages of female respondents than male respondentswere office procedure manual, written jobdescriptions, individual performance appraisals,measurement of staff productivity, delinquentaccount register, and measurement of case acceptance(Table 24)--a similar list to that of the previoussurvey. As in the 1999 Study, women wereless than half as likely as men to employ communicationssupervisors.
The only tasks delegated more routinely byfemale practitioners than by male practitionerswere insertion and adjustment of removableappliances and fee presentation (Table 25). Fewerthan 10% of the female respondents routinelydelegated bonding, archwire adjustments, progressreports, or post-treatment conferences.
The only practice-building methods usedmore by women than by men were: expand practicehours; participate in dental society activities;gifts to patients and parents; no-charge initialvisit; practice newsletter; personal publicity inlocal media; advertising by yellow pages boldfacelisting, newspaper, and TV; and managedcare (Table 26).
Management Service Organizations
Only 6.3% of the single-owner practicesincluded in this survey were affiliated with managementservice organizations--down from9.8% in 1999. The MSO affiliates were muchmore evenly distributed by years in practice thanin 1999, when they tended to be older (Table 27).The highest percentages of MSO affiliates wereagain found in the Mountain and West SouthCentral regions.
MSO practices reported significantly moreemployees, cases, adult patients, and managedcarepatients than other practices did (Table 28).They also had significantly higher gross income,but when management fees were factored in,they had higher overhead and a less substantialadvantage in net income. In fact, their mean childcase fees and net income per case were lowerthan those of traditional practices.
MSO practices were generally positiveabout the effects of their affiliation, with meanpositive ratings slightly higher than those of the1999 Study (Table 29). When the percentages ofrespondents calling the effect of affiliation eitherhighly positive or somewhat positive were combined,the highest positive rating was for grossincome (71.1%) and the lowest for referrals(52.6%). Conversely, the highest negative ratingwas for referrals (15.8%) and the lowest for caseacceptance (2.6%).
Affiliates of MSOs were much more likelythan other practices to use the managementmethods surveyed, the only exception beingdelinquent account register (Table 30).
MSO affiliates were also more likely toroutinely delegate most of the tasks listed, withthe exceptions of x-rays, cephalometric tracings,removal of residual adhesive, fabrication ofbonds, insertion of archwires and removableappliances, progress reports, and patient education(Table 31).
A majority of the practice-building methodsin the survey were used more by MSO practicesthan by others (Table 32). These were: openone or more evenings per week; open a satelliteoffice; entertainment of, education of, andreports to general dentists; follow-up calls afterdifficult appointments; entertainment of and giftsto patients and parents; seek referrals from staffmembers and from other professionals; improvescheduling; improve case presentation; improvestaff management; patient motivation techniques;no-charge initial visit; no initial payment;extended payment period; practice newsletterand website; personal publicity in local media;all forms of advertising except yellow pagesboldface listing; and managed care.
Results of the 2001 JCO Orthodontic PracticeStudy indicate that the economic prosperitythat began around 1990 may finally be slowing,but that orthodontists in general are still betteroff than they were two years ago. Although casestarts did not rise as rapidly since the 1999 Studyas they had in the previous four years, thereseemed to be plenty of available adolescentpatients and even a slight uptick in adult patients.With orthodontists able to raise their fees 4-5%per year and overhead apparently under control,median net income showed a healthy 17%increase over the past two years. In the spring of2001, at least, when the Practice Study questionnaireswere filled out, orthodontists were as optimisticas ever about their future prospects.
As has been true for the entire 20 years ofthese surveys, the most successful practicesappear to be those that make the best use of managementand practice-building methods and thatdelegate as fully as possible to staff members.Improvements in internal and external marketingstill offer ample opportunities for growth to thosepractitioners who seek it.