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Industry Trends: What’s in Store for Dental Practices

17/04/2017


​​​​​​​ In large urban centres, dentists are seeing increased competition for patients along with rising costs to purchase and run a practice. Here’s what to look out for in terms of these and other top trends expected to impact Canadian dental practices this year.

In general, dentists across Canada are focused on attracting and retaining patients at a time when there are many more dentists now practising, with strong competition for new patients.

As consumers, patients are looking for value. With most Canadians enjoying relatively good dental health, the average spend per person on dental services is $350 a year. On average, two-thirds of Canadians see a dentist; cost is the main reason that that number isn’t higher, as not everyone is covered by insurance.

To reach more patients, dentists have been expanding their service offerings, for example with a greater emphasis on cosmetic dental procedures such as braces, veneers and teeth whitening.

Changing Demographics

More women are entering the dental profession, with 55 – 60 of per cent of graduates who are female.

In general, younger Canadian dentists - men as well as women – are seeking work-life balance. As associates they can earn anywhere from $180,000 - $250,000 per year, without having to shoulder the financial burden and responsibilities associated with being a practice owner.

The cost of schooling is a significant barrier to setting up a practice: it’s not unusual to come out of dental school owing up to $250,000 in student loans and lines of credit. With the average cost of setting up a dental clinic approximately $1 million, and the cost of running a dental practice continuing to rise, graduates are increasingly choosing to work as associates.

However, fewer dental positions are available for graduates, and in some cases, Canadian graduates will be competing with foreign trained dentists for positions.

Urban vs Rural Practices

Overall, dentists are working longer, with male dentists retiring at nearly 69 years of age on average - a trend that’s unlikely to change in the near future. This means that younger dentists are finding it more difficult to find practices to buy: there is a great deal of demand but little supply, leading to higher prices for those practices that are available for purchase. Over the last five years prices have risen anywhere from 25 to 30 per cent on average, with practices in large urban centres being particularly attractive, as the majority of dentists typically prefer to work and live in cities.

Opportunities exist in smaller centres; rural centres remain underserviced.

For dental clinic owners, it’s now easier to hire associate dentists, particularly in large urban centres. In some cases this is resulting in a decrease in the percentage of payments that associate dentists are paid, from the industry standard of 40 per cent of collections, to 35 to 30 per cent.

Foreign-trained dentists are seeking to buy practices, as are dentists looking to acquire practices as investments.  Corporate dentistry is expanding; consolidations are occurring as very large groups are purchasing dental practices in order to own multiple clinics.

New Fee Guide for Alberta Dentists

In Alberta, dentists have historically billed at higher rates than anywhere else in Canada. To address this, Alberta’s NDP government has asked the Alberta Dental Association and College to draw up a fee guide, which is due out before the end of the year.

It’s expected this change will impact those Alberta dentists who have been billing at higher rates.

MNP can help you navigate changing industry trends. We identify issues that need to be addressed, and develop customized plans if you’re starting out or purchasing a practice. We determine strategies to help you optimize business performance while minimizing taxes.

For more information, contact Calvin Carpenter, CPA, CA, Vice President, Professional Services, at 780.451.4406 or [email protected]

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