Ontario Dentist Incomes Dropping

[Ostracized]

Hi guys.  I don't post here much any more but I just wanted to give a heads up related to the economics of dentistry.  

 

According to the not-yet-released ODA Economic Report for 2014, dentist incomes in Ontario dropped 6% from 2012 to 2013.

 

Further, the up-coming 2015 Ontario fee-guide has been announced but not yet approved.  The ODA's economists have estimated a 2.3% rate of inflation in Canada in 2015.  However, the fee guide increase has been set at 1.5% - markedly below inflation.  The reason for this is because the ODA actually believes that because of decreasing demand for dentistry, they cannot raise fees even in line with inflation.  Supply and demand is not on our side.

 

Definitely disheartening for young dentists and dental students.  The full economic report will be available in December and I'll post it then.

[Contach]

Hi guys.  I don't post here much any more but I just wanted to give a heads up related to the economics of dentistry.  

 

According to the not-yet-released ODA Economic Report for 2014, dentist incomes in Ontario dropped 6% from 2012 to 2013.

 

Further, the up-coming 2015 Ontario fee-guide has been announced but not yet approved.  The ODA's economists have estimated a 2.3% rate of inflation in Canada in 2015.  However, the fee guide increase has been set at 1.5% - markedly below inflation.  The reason for this is because the ODA actually believes that because of decreasing demand for dentistry, they cannot raise fees even in line with inflation.  Supply and demand is not on our side.

 

Definitely disheartening for young dentists and dental students.  The full economic report will be available in December and I'll post it then.

 

I don't think you can blame me for asking, but....

How did you become privy to such information?

[Ostracized]

I don't think you can blame me for asking, but....

How did you become privy to such information?

 

I sit on the ODA general council.  This information is in the agenda for the next meeting (next week).

[McMarauder]

All this means is that if you wanna be making the big bucks, you have be flexible. Look beyond Toronto, Ontario or even Canada.  We've reached a point where a sacrifice has to be made somewhere.

[ottawaliquid]

Agreed... I'd be interested in seeing the regional breakdown even for Ontario.  From what I've heard from a lot of people repeatedly is that the GTA and a lot of Southern Ontario is a tough go.  However I wonder what numbers are like for Eastern Ontario and the North

 

However, it's a big country.  What are the numbers like in Saskatchewan, Alberta and BC etc? The economy is garbage overall in Ontario these days.  And dentists are still the top 1% of income earners in the country.  So I don't think anyone should be too discouraged.  Also I know that in Newfoundland there is a dental shortage, also in the North etc.

 

Another thing is, those damn boomers are not retiring!  I know many dentists that are staying onto work into their late 60, 70's or even early 80's.  There is a dentist here in Ottawa who graduated in 1953.. 1953!  and he still practices two days a week.  I don't know how old he is but he has to be at least 84 I would think.  Once the boomers start retiring or dropping dead at their chairs there will be room for the next generation.. 

[StriveP]

Agreed... I'd be interested in seeing the regional breakdown even for Ontario.  From what I've heard from a lot of people repeatedly is that the GTA and a lot of Southern Ontario is a tough go.  However I wonder what numbers are like for Eastern Ontario and the North

 

However, it's a big country.  What are the numbers like in Saskatchewan, Alberta and BC etc? The economy is garbage overall in Ontario these days.  And dentists are still the top 1% of income earners in the country.  So I don't think anyone should be too discouraged.  Also I know that in Newfoundland there is a dental shortage, also in the North etc.

 

Another thing is, those damn boomers are not retiring!  I know many dentists that are staying onto work into their late 60, 70's or even early 80's.  There is a dentist here in Ottawa who graduated in 1953.. 1953!  and he still practices two days a week.  I don't know how old he is but he has to be at least 84 I would think.  Once the boomers start retiring or dropping dead at their chairs there will be room for the next generation.. 

 

So true. I just hope some of those baby-boomers retire soon. I'm not sure about other provinces but I do know Ontario is literally the worst place to practice dentistry especially the GTA. It doesn't help the fact that UofT will be throwing out 100+ new grads every year

[mrewmrew]

So true. I just hope some of those baby-boomers retire soon. I'm not sure about other provinces but I do know Ontario is literally the worst place to practice dentistry especially the GTA. It doesn't help the fact that UofT will be throwing out 100+ new grads every year

 

Is UofT's class size still 96 this year (referring to your 100+ new grads comment)?

 

I believe at one point UofT was graduating 128 per year.

[donnadee]

its not easy guys..nobody wants to go through 8 years of schooling only to have to sacrifice important things such as lifestyle, having the liberty to decide where to live and work. it is important to realize that happiness is not only how much you earn but a combination of multiple things. i know of countless dentists working in remote locations who are very unhappy with their lifestyle, location, having to give up relationships just for having an improved income. i know of others who have sacrificed income by working within cities but are still happy and satisfied in their decision...in the end, its easier said than done when we say that we are willing to move far up norh or live in a remote location...that lifestyle is not suited for everyone and may also not appeal to everyone entering into dentirsty now adays...therefore, it is still equally important for those entering into the profession or deciding to do so to look introspectively into it, and seeing whether they can realistically see themselves working in a remote location..if the answer is no, and they still want to continue to enjoy an income that dentists were once afforded even living in major cities, then dentistry maynot be what it once was. however, using income and lifestyle alone are still poor means of deciding a pick on which profession to go to so actual interest plays a big role, especially for a field as specialized as dentistry...my recommendation to new entrants would be to find a dentist in a big city and another in a small rural community and shadow them to see if the lifestyle suits you or not.

[ottawaliquid]

Fair enough.. but a lot of dental students can't even fathom moving to Ottawa (where the market is a lot better) than leaving the GTA.

 

Also you can be successful wherever you practice. If you are a great dentist and (Probably more importantly) a great person and great with your patients, you will have a successful practice no matter where you are.  

 

Dentist tend to be among the top earners, so a drop of 6% in income is nothing to worry about too much I would think.  It would certainly be difficult to find much sympathy with Joe Q Public.  Consider what people in the manufacturing sector are going through these past 5-8 years.  Also 8 years of school is not that big a deal.. Try doing 10-12 for your PhD and then competing in the academic world.  Or going to law school and becoming a slave to your firm for the next 15 years so you can maybe make partner..  everything is relative.

[McMarauder]

I said "if you wanna be making the big bucks, then you gotta be flexible".  This was meant for those who are in it (mostly) for the money.  If you're happy being in Toronto or wherever, but making less, then stay there.  Just don't complain about making less (re: title of the thread).

[Ostracized]

 

Also you can be successful wherever you practice. If you are a great dentist and (Probably more importantly) a great person and great with your patients, you will have a successful practice no matter where you are.  

 

I have to disagree with this.  Yes, skill and demeanor are important for keeping patients, but they don't get the butts in your chair in the first place.  You need a steady flow of new patients - especially in a new practice or take-over.

 

I can give an example of a four-story medical building in Toronto that by my count had 13 dental offices in it.  Who is going up to that thirteen office on the fourth floor?  How do they get patient flow?  The office that I work in is on the first floor of a (different) medical building with 'only' 4 dental offices.  We have good foot traffic on the first floor because of a pharmacy and a large walk-in medical clinic.  Even still, we get maybe 5 new full-fee patients per month, and probably 5-10 new welfare patients, because we still still take those poorly paying plans.  That may or may not be enough to sustain a mature office but certainly is not sufficient for a newer office.

Dentist tend to be among the top earners, so a drop of 6% in income is nothing to worry about too much I would think.  It would certainly be difficult to find much sympathy with Joe Q Public.  Consider what people in the manufacturing sector are going through these past 5-8 years.  Also 8 years of school is not that big a deal.. Try doing 10-12 for your PhD and then competing in the academic world.  Or going to law school and becoming a slave to your firm for the next 15 years so you can maybe make partner..  everything is relative.

 

 

I'll admit I'm very pessimistic about the future of dentistry.  I do believe that in Ontario at least, we are going to see average incomes for dentists dropping below 6-figures within the next 10 years.  We will also for the first time start seeing real unemployment for dentists - something previously unheard of.  My mentality is 'plan for the worst and hope for the best'.

[McMarauder]

Yes, but my point is that it's not always that simple for everyone.

Even if I *was* struggling in the city, moving rural would never ofset the loss of my spouse's income. Many, many dentists have working spouses whose careers aren't mobile and they may not even break even with the increased revenue or working more rural.

For us, the money is much better staying the city, regardless.

 

I agree that new dentists need to keep an open mind about more rural practice, but for many couples it would actually be a financial hit, not gain. There aren't a lot of job prospects in small towns for most careers.

 

You make valid points.  If I was married to someone working in the business world, I'd opt to stay in a financial hub.  Of course it's not easy or even possible for everyone to pack up and move somewhere - did not mean for it to sound like that in my original post.

[ottawaliquid]

I have to disagree with this.  Yes, skill and demeanor are important for keeping patients, but they don't get the butts in your chair in the first place.  You need a steady flow of new patients - especially in a new practice or take-over.

 

I can give an example of a four-story medical building in Toronto that by my count had 13 dental offices in it.  Who is going up to that thirteen office on the fourth floor?  How do they get patient flow?  The office that I work in is on the first floor of a (different) medical building with 'only' 4 dental offices.  We have good foot traffic on the first floor because of a pharmacy and a large walk-in medical clinic.  Even still, we get maybe 5 new full-fee patients per month, and probably 5-10 new welfare patients, because we still still take those poorly paying plans.  That may or may not be enough to sustain a mature office but certainly is not sufficient for a newer office.

 

 

I'll admit I'm very pessimistic about the future of dentistry.  I do believe that in Ontario at least, we are going to see average incomes for dentists dropping below 6-figures within the next 10 years.  We will also for the first time start seeing real unemployment for dentists - something previously unheard of.  My mentality is 'plan for the worst and hope for the best'.

You're right that most practices these day must have visibility in order to be successful.  I was involved with both practice sales and new practice setups here in the Ottawa area, so I've seen a little bit of what works and what doesn't.  I admit that I don't know the GTA market at all, but I have heard that it is tough go these days from many dentists when attending the ODA.

However I've sold practices in medical buildings (and you're right they would be a terrible terrible new setup) where the owner stayed on to transition, patients loved the new dentist and she has been practicing there for 4 years since he retired and has about 50 more patients overall.  On average a practice like that would lose 12-24 patients a year, so because she had no visibility, she had to pick them all up from referral and word of mouth.

 

With new practice set-ups, everytime we placed a dentist in a suburban mall with a grocery store anchor they saw a minimum of 25-35 new patients per  month.  One that we did in a suburb here in Ottawa still gets 40-50 new patients per month 5 years after setting up but they are in a high growth area.

 

If I were in the GTA, I'd consider setting up in Oakville/Burlington/Mississauga corridor around some of these new subdivisions.  I personally hate urban sprawl and I live downtown myself, however thats where the new patients and successful new practices seem to be (at least here in Ottawa)

[Mighty Molar]

Doesn't really matter Those with a strong business mind will still make a great income. Half of dentistry is business anyway

[Mighty Molar]

Yeah....and part of that business sense is knowing how bad your market is. So yeah...by definition everything we're talking about would *really* matter to someone with good business sense.

 

There is a difference between the general market and the segment market The general market might be bad; however, by doing market segmentation research, one could aim at the right clientele, location, etc ... to maximize gain and minimize overhead. The concept is somehow similar with niche market, but a bit broader. Consider the coffee industry which is ultra-competitive in any major cities in Canada, Starbuck Inc still shows positive profit and increases in stock value (SBUX:NASDAQ has increased 140% since 2011), meanwhile, Second Cup stock value drops by 60% within the same period (SCU:TSX) and a net loss of 390K (SCU financial report, Q2, 2014).

 

It all comes down to business strategy.

 

Reference:

https://www.google.com/finance?chdnp=0&chdd=0&chds=0&chdv=1&chvs=logarithmic&chdeh=0&chfdeh=0&chdet=1416455279405&chddm=474800&chls=IntervalBasedLine&cmpto=TSE:SCU&cmptdms=0&q=NASDAQ:SBUX&&fct=big&ei=ZmRtVIDiCYjdqQGXt4GIDw

 

http://www.secondcup.com/investor-relations;jsessionid=45F12B41E0E8B86DB9F2D036129027C8 

[seeking1]

Hi guys.  I don't post here much any more but I just wanted to give a heads up related to the economics of dentistry.  

 

According to the not-yet-released ODA Economic Report for 2014, dentist incomes in Ontario dropped 6% from 2012 to 2013.

 

Further, the up-coming 2015 Ontario fee-guide has been announced but not yet approved.  The ODA's economists have estimated a 2.3% rate of inflation in Canada in 2015.  However, the fee guide increase has been set at 1.5% - markedly below inflation.  The reason for this is because the ODA actually believes that because of decreasing demand for dentistry, they cannot raise fees even in line with inflation.  Supply and demand is not on our side.

 

Definitely disheartening for young dentists and dental students.  The full economic report will be available in December and I'll post it then.

 

Any updates on this Ostracized? Has it been released yet? Thanks and Happy New Year!

[Ostracized]

Yes it has, and it is very disheartening. The ODA hasn't yet posted a digital copy of the report on their website for me to link to. I'll see if I can get them to email me it.

[seeking1]

Yes it has, and it is very disheartening. The ODA hasn't yet posted a digital copy of the report on their website for me to link to. I'll see if I can get them to email me it.

 

Thanks!

[CPR trainer]

I would take averages and reports like this with a grain of salt. Many factors determine a dentist's income, especially how many hours someone works, number of auxiliary staff and, how one's accountant delegates practice earnings. I still think dentistry is a wonderful career and I'd encourage young grads to keep a positive attitude and continue to work hard. My practice has been growing every year and last year we did $2.3 million...no magic formula. My advice is to recognize the demographics of where you practice and concentrate on the type of work most of your patients need...don't push high end cosmetics if you're in a low income area (don't buy the equipment associated with these procedures either if your practice profile doesn't justify it). My practice is driven by a strong recall/hygiene program and basic dentistry. I do very little in the way of prosthodontics and I do not have equipment like intra-oral cameras or lasers.

I work 5 days a week, 9 hours/day, 2 evenings a week. Dentists that work part time will always bring down the average income because we're all put in the same pool.

[ottawaliquid]

Another factor that wasn't mentioned is that a lot of dentists are working longer and longer and allowing their practices to dwindle and reducing their hours from 5 days to 4 days to 3.5 days to 3 days etc.  I've seen that a lot with smaller practices.

 

There is a dentists here in Ottawa who is in his late 80's and still practices dentistry once a week at his practice.  It's just him and his wife and he books himself solid every Thursday to go in and ", see his friends"