Current Dental Industry Trends

GUEST

Anders Bjork Vice President, Strategic Intelligence and Analytics California Dental Association

The Transcript

Art Wiederman: And hello, everyone, and welcome to another edition of The Art of Dental Finance and Management with Art Wiederman, CPA. I'm your host, Art Wiederman, Welcome to my podcast. We are now in our fifth year of doing these podcasts and I do try and keep my pulse, you know, my finger on the pulse of the dental profession. And today my guest is one of the best resources that I can muster to talk about what's going on in dentistry. His name is Anders Bjork. And Anders is the vice president of Strategic Intelligence and Analytics at the California Dental Association. I asked him if it sounds like he might work for the CIA or the FBI, but no, Anders Anders is a numbers guy, and that's why he and I get along. I got to meet him in late March. At the CDA seminars that we did in Southern California, which I'm going to talk about in a moment. And Anders does lots of work in regarding to healthcare intelligence, helping with strategic planning for the CDA and helping the members of the CDA as to what their concerns are. What are they worried about? What are they happy about? What are dental students doing? What are the trends out there? So we'll talk about some trends. And the great thing about having, Anderson, is that, you know, he's studying these trends every single day of his professional career, not only in California, but a lot of information he gets from the ADA. So we're going to get to Anders in a moment. I'm real excited about that. I usually learn something from all of our guests, and I'm sure I will from Anders. I first want to thank our wonderful partner Decisions in Dentistry magazine. Go to their website WWw. decisions in dentistry. com. They have great clinical content. They have a fabulous website with great articles from the top clinicians in the world. They have over 140 continuing education classes that you can purchase at a very, very reasonable cost. And again, we're starting to work with them on the business side of dentistry. So we'll have more about that as we come on down the line. WW W dot decisions in dentistry tor.com this this podcast will air at the end of May, which means we will be past tax season. So we want to make sure that everybody is taking a deep breath after filing your taxes. Hopefully you didn't have to write too big of a check. You know, our clients, we plan out pretty well in the months of October, November, December, so they usually know where they're at unless there's something they don't tell us. So you're getting close to your second estimated tax payment. If you are either a partner in a partnership or a sole proprietor. So you might want to just kind of check in with your CPA, check in with our folks at eide Bailey. I am I should mention also that I'm a proud dental division director at the CPA firm. I barely I'm located in Tustin, California. If you are having any issues accounting wise, financial wise, anything wise regarding your business, feel free to give me a call. 6572793243. And my email is a wider meant at eide Bailey.com that's eide bailey.com and be happy to talk to you. I get emails regularly every single week from listeners who have questions about all kinds of fun stuff. I'll give you another well, maybe one of the last warnings because we're coming to the end of this, at least for 2020. If you get solicited on the phone via email or on Twitter or Instagram or Facebook or a plane flying over your house, that you can get $26,000 guaranteed from the employee retention tax credit. Be very, very careful. The IRS has added the employee retention tax credit as one of their dirty dozen. They call it tax scams. And the credit is not a scam, folks. It is a 100% legitimate credit that was created by the CARES Act in March of 2020 to help business owners who suffered from the pandemic. But unfortunately, there are a lot of bad players out there who are basically telling you that if, you know, if you go on the computer, you qualify for this credit. So be very careful because you might have to pay it back with interest and penalties. And I do think that there are going to be a lot of unhappy people who are going to apply for this credit to a year or two, three, four or five years from now are going to have to pay it back. I also want to share with you that we had our first two live seminars with the California Dental Association. In fact, Anders and I were both fortunate enough to present. We did one of them at a wonderful brewery downtown San Diego on a Thursday evening. We had a great crowd there. The food was fantastic. They had beer and wine and we had a great time. So we had we started out with Anders presenting on metrics, a lot of which is what we're going to talk about today. I talked about a little bit about the profession and how to stay out of debt for young dentists. These these live seminars I'm going to tell you about the ones we had coming up in June that we'd love you to attend. These life seminars are intended to help younger dentists and dentists that are just starting out in the profession during the first five or. You know, five years or so in a career to decide what do you want to do? Do you want to own your own practice? Do you want to buy a practice? Do you want to start one? You want to be a partner in a partnership? Do you want to work for a large DSO? What? What do you want to do? And we went all through that. Katie Fanelli from the Sea, from the CTA, did a great presentation and then we had our partners created partners at Bank of America. Talk about financing. It was wonderful. So Thursday we did it in downtown San Diego at a brewery, and then Saturday I was in heaven, folks. We did it at Topgolf. And I tell you what, I've been to a Topgolf once and it is just so much fun. So we're we're giving the lectures. And I actually told the audience we had I think we had close to 100 people in the audience on Saturday. I said we shouldn't do create presents at the Anaheim Convention Center. We should do it. We should really do it, do all of that. I think all events Henman and Yankee and all these should be done at a topgolf because it's just too much fun and get to play a little golf after that. And we had a great audience and, you know, great participation and again, the same speakers. So I want to let you know that our events here in California, we're going to be doing them in Northern California. The registration will be open probably sometime in early May. So by the time you hear this podcast, you will be able to register. So the dates are June 10th. And as of the date of this recording, we don't have an actual physical location. We believe it's going to be somewhere. It'll be somewhere in the San Francisco East Bay area. They just haven't come up with a location yet. So that'll be Saturday morning, June 10th, and then Thursday, June 22nd, that will be in the Sacramento area. So what I want you to do is go to WW w.CDA and sign up for these these courses are fantastic, great information, good food. And if you are looking for a career path or some ideas of what do you want to do, maybe want to change, maybe you are working for a dental group and now you want to go start out on your own. You've got some of the best minds in the in the country that are going to be talking to you. So June 10th and June 22nd, we'd love to see you. All right. Let's get to my guest. As I mentioned, Anders Bjork is the vice president of strategic Intelligence and analytics for the California Dental Association. He is up on trend in the profession. He does market and member research. And today we're going to talk about, you know, how did the dental profession come back since the pandemic? What kind of spending, how much money is the public spending on on dentistry? I was talking at the at the meeting about the fact that credit card debt has gone from $770 billion in the middle of 2021 to just short of $1 trillion. That means at the end of 2022, that means people are spending money and they're spending money on dental care. And we'll talk about dental school applicants and our dentists happy with what's going on. What's he seeing? So without any further ado, Anders Bjork, Welcome to the Art of Dental Finance and Management.

Anders Bjork: Good afternoon, Art. Great to be with you. Thanks for having me on.

Art Wiederman: Well, thanks. Thanks to you. And you did, by the way, a great, great presentation. I mean, I'm a I'm a numbers guy and I love statistics. So tell us a little bit about what your professional journey and what you do for the California Dental Association.

Anders Bjork: Sure. So you actually we met last week for the first time. Your your reputation, your reputation had preceded you. Of course, it was great to make the connection and looking forward to doing some other some other of these seminars with you. So your listeners will probably get a kick out of the fact that when I was an undergrad, I actually was thinking about going to dental school and even went so far as to go and visit UCSF with another classmate of mine who did become a dentist. But the following term I took organic chemistry, and that was enough to convince me that that wasn't the path, that.

Art Wiederman: That was the end of that. Like, yeah, yeah. If there wasn't a number involved since it had words that, yeah, it just wasn't for you.

Anders Bjork: But yeah, I did like the lab. The lab was great. We called it Betty Crocker cooking, but. Oh. So. So then I, you know, I went on and did some other things, and then I eventually went back to business school. And when I was in business school, I got exposed to to a guy named Michael Porter, not one of my professors. He's a Harvard Harvard Business School guy. And he's he's very famous for writing about competition, competitive strategy, you know, competitive marketplaces. And in particular, he has something that's very well known called Porter's Five Forces, which is about how firms make decisions to enter markets and things like that. So this really kind of turned me on to something that I that I hadn't understood before about market competition and the ecosystem that every business is and how things interrelate. And so I was working at the time for a company called VSP Vision Service Plan, and it's the largest I care benefits provider probably in the world. It is in the US, and I took a role there doing competitive intelligence and eventually grew and managed the market research team there. And it really got interesting to me after DSP, I went on to work for Sutter Health, which for your non California listeners, Sutter Health is an integrated health care system. Last time I checked, seventh largest in the country with about $14 billion in revenue. So big system, 26 hospitals and I worked in the strategy and business development area doing what I do I think best. And after doing that, I went to work for one of the Blue Cross Blue Shield affiliates, Blue Shield of California. Fun, little fun fact. Blue Shield and Blue Cross are separate in California, where they aren't in many other markets that they operate in. I didn't love the the the plan side of it, the insurance side of it. And so I had a couple of friends from business school who were connected to CDR folks let me know that CDR was looking for somebody who did the kind of thing I did. And I went in and met with the management team at CDR and really liked the people, and it seemed like a little bit of an outlier in terms of what I should be doing. But I like the mission, I like the people, and I'll be celebrating ten years here in April. So I found a good fit to the second part of your question. What do I do? You kind of hit it already. I do health care intelligence, you know, primary and secondary market research. I do all the research with our members to figure out what's going on. But most importantly, and I think most relevant for what we're going to discuss today is I'm a student of the dental profession, not the clinical side of it, but the business side of it. And I mentioned that Porter's five forces, because I'm seeing a lot of movement and really kind of like what I'm interested in is what I'll call the tectonic plates of the profession, right? I'm not talking about opening up a practice. I'm talking about different ways, different modalities of practice and how they're affecting one another. So I will I will kind of end it there, because I think that's a good segue way to start our conversation.

Art Wiederman: Okay. I mean, you've seen a lot of changes in the last ten years since you start. Well, before we get into some of the topics, what do you think off the top of your head is the biggest change that you've seen in the dental profession since you started at CDA?

Anders Bjork: I would say the growth of DSOs to surpass the tipping point, you know, and if you're if you're a fan of Malcolm Gladwell, you're familiar with that term. If you're not mathematically, the tipping point is 16, 16 and a half percent of the market, plus or minus. And when I began, DSOs were a single digit percentage of the market. And I think that they are probably past the tipping point and and definitely an influential feature of the landscape.

Art Wiederman: Well, we do we do know that will touch on those as we go along here. So let's start off now according to the ADAS. My survey. I mean, it looks like let's talk about schedules and dental practices. I know that when the pandemic hit, obviously dental offices shut down, 98% of them shut down. They you know, there weren't mandatory shutdowns in most areas. They were voluntary. We had to shut dental offices down because there was no vaccine and it would have turned the dental profession into tens of thousands of Superspreader offices in March, April, May. So so dentists shut down for 8 to 12 weeks. But then we start looking at, you know, when they came back, dental schedules. Look, you know, from what you've shared with me and what we've talked about, they look pretty good. What trends are you seeing in how people how dentists are doing these days as far as their schedules go?

Anders Bjork: Yeah, a great question. I think to you know, you tease the AIDS Health Policy Institute, the work that Dr. Marco who just sick and his team do, it's available. It's in the public domain. So if you're interested, you can look at that. But Marco's team has been tracking that through the pandemic. It has been this return to schedule through the pandemic. And as as of lately, as of the past couple of months, things are sort of mid-eighties in terms of, you know, 85% of return to schedule, at least what dentists can recall from prior to the pandemic. And there's, you know, a variety of reasons or a variety of contributors to that. The single biggest one is patient cancellations and in fact, sort of less than 24 hours, what I would even call same day cancellations and no shows which are really difficult for practices to recover from. So that's a big issue. You know, dentists obviously still say they don't have as many patients making appointments as they would like to see. They are having staffing issues, which I imagine we'll probably talk a little bit about later in the discussion. We will. And and there are some COVID safety protocols still that are affecting things. As you said, practices shut down very, very early in the pandemic that was based on guidance from leading, recognized and respected health care bodies such as the Calgary Department of Public Health here in California. We followed and teamed with them on that kind of guidance than most. Most states did that for the first at least first couple of weeks of the pandemic.

Art Wiederman: So when we talk about kind of, you know, the challenge, as you said, mid-eighties, as far as as far as dentists having their chairs filled before the pandemic about what was it when we didn't have a pandemic, what were you seeing? Was it pretty consistent? Was it in the eighties? Was in the nineties when the 70 what? What was it?

Anders Bjork: Yeah. So that's a that's a good question. To me, simple answer is we don't have a baseline because we weren't asking these questions. So, you know, it's fair. I mean, I would interpret your question to say, you know, we'll use it, we'll use an index of 100. Right. If you're, if you're, if your full schedule is 100, what are you typically at? And I think it's a it's a good question. One we don't know the answer to. I think just based on dentist answers presently, we're probably talking, you know, generally in the 95 to 100 index, although we do know that there were staffing issues prior to the pandemic. So when we get into staffing, we'll talk a little bit more about that. But that was probably preventing some 100 index scores in in schedule formats.

Art Wiederman: And it really depends on how you run your practice doctors. This is why that I've encouraged my listeners, my clients and anybody who will listen to me to work with metrics programs to understand what patients have not been in. I mean, if you have a thousand patients in your patient base, you could have three or 400 of them who haven't been in the last 18 months or don't haven't had three appointments. I mean, that's what's going to take that 83 to 85% up into the nineties And the practices that do that and really manage their patient base are going to be higher. And the ones that don't and just well, whatever it is, it is they're going to be lower. So that's about managing your business and, and making that effort. How about health care spending? Now I mentioned earlier that, you know, people are starting to put money on their credit cards. Again, credit card balances in the last 18 months have gone up about 20 to 25%. I think it was $986 billion. Even though credit card interest rates are over 20%. What are you seeing in regards to health care spending in California and in the country?

Anders Bjork: Yeah, So, you know, nationwide, health care spending has exceeded pre-pandemic levels. So we see over time, we obviously see a steady increase in health care expenditures. If you look at any any data that comes out of the government that tracks this and then, you know, as you have kind of intimated, when the pandemic hits, that spending falls off rapidly. It comes back pretty quickly. Although we only recently surpassed pre-pandemic levels, we have not exceeded pre-pandemic levels in dentistry. If we consider the period of time immediately before the pandemic began as that index point of 100, I think off the top of my head, we see medical spending is at 101 something so just slightly above and dental is at 92.6 going from memory. So about 93% of what it was prior to the pandemic. So we have a ways to go there. But we also know that there still is a small portion of the population that is reluctant to go into medical and dental offices at this time. So I think that's what you're seeing there.

Art Wiederman: I think that population, from what I hear from my clients and in the lectures I give and the doctors that I talked to, I think it's decreasing because here here's the thing. Patients in their minds for the most part, believe if it doesn't hurt, they don't need to go to the dentist, Right? Well, I teach the doctors and they know this. I don't have to teach them this is that if something is starting to hurt, yeah, they get to come in. But dentistry does not get better. Dental health does not get better if you just leave it untreated. And that's why when you know, when we had the pandemic, there was all this pent up demand of people that had to get in and then they couldn't get in. So, you know, spending is I think it's I think the numbers were up in the low hundred billion dollar range in this country. Isn't that about right?

Anders Bjork: Yeah, that sounds about right. I'll talk my head.

Art Wiederman: Yeah. So let's talk a little bit about team members and finding employers. We know that the number one challenge that dentists have in this country, it's not only dentists, it's physicians and accounting firms and law firms and architecture firms and manufacturers is finding, you know, finding people who work for them, finding team members. How has employment been affected by all this? Is it increasing or decreasing?

Anders Bjork: Yeah. So. Couple of things to talk about here are, you know, first and foremost, I already mentioned that as we entered the pandemic, we were already working with our membership in California who were struggling to find enough staff for their offices, typically in the areas of dental assistants. You know, the data indicate that a single dentist can employ between two and five dental assistants, depending on what their specialty is. And so when we when we have a lack of individuals to be able to fill those roles, it can really be felt in the production or practice. So we had already started some things around 2018 working with our members to try and increase the the awareness and interest in dental assisting as a profession, trying to encourage people to go in, to go into that profession, to create a pipeline. And of course the pandemic hits and everything goes haywire. You know, practices didn't know whether they should furlough or layoff or fire employees. And so it was really a wild, wild West for a couple of weeks until things got figured out. But when all was said and done, the problem was a lasting one. And that is that a lot of dental assistance and hygiene has left the profession and some of them didn't come back. You know, some of the reasons why if you look at hygiene and assisting, it heavily skews female, predominantly female, And a lot of people who were who had young families in the pandemic were affected negatively by daycares and schools closing. And so in many cases, those employees who literally do not have the ability to work from home, there is no from home hygiene or assisting, had to, you know, potentially involuntarily leave their jobs. And again, some of them found other jobs doing things that would allow them to work remote and things like that. They just never came back. So when we look at it nationally, we see more demand. We see a greater shortage of hygienists outside of California than in California. We have a greater demand for assistance in California. That's not to say that hygienists aren't needed in California. It's just a bigger problem elsewhere. This also has, you know, has had an effect on on admin staff, too. They have sometimes left the profession and gone to work in other areas. But we are starting to see a little bit of comeback from employees who left other roles. Some people took the pandemic as a, Hey, you know what? I never really liked waiting tables on Friday nights anyway, so I'm going to find something else to do now. And so we're really trying to tap into people who have some level of basic customer service skills to to potentially consider going to work in dental offices where there is, you know, steady employment, but a safe white collar environment typically working, you know, Monday to Friday typical our seldom evening sell the weekends, oftentimes benefits, etc., etc. versus being a barista or a server in a restaurant. And you know, nothing wrong with those roles. It's just for some people, they took this as a sign that it was time to change professions.

Art Wiederman: We were talking, you and I were talking at one of the events we did in Southern California about hygiene and how, yes, we do know that I think the statistic I read was that somewhere between nine and 12% of the hygienists in this country have left the profession. But one of the things that that organized dentistry should do, I'd be interested in your comments on this is a lot of people don't know what a great profession being hygiene, justice. I mean, you can make a very you can make a very nice income, You're well-respected, you work in a great office, You're helping maintain people's total health. I mean, as CDA and other organizations, are they trying to get the message out to the public about, gee, the dental profession, not only hygiene, but but the rest of the jobs in in in a dental office? It's actually a pretty good place to work.

Anders Bjork: Right. And, you know, hygiene has their own organizations, right. The California Dental Hygiene Association, the American Dental Hygiene Association. And we do work we do try to work with them to promote the benefits of working in those fields. We've done some of our own stuff around hygiene called Smile Crew, California Smile cruise. K If people your if your listeners want to go out and check that out and this has been a promotional campaign to get people interested in assisting because we do see some who become interested in assisting eventually go on to hygiene. You know, sometimes they'll either start looking at assisting and say, Oh, well, I could do hygiene instead, or they might do assisting for a few years and then graduate up towards a hygiene role. So that's where we think the pipeline begins.

Art Wiederman: So the one thing I just want to point out again before we get into some of these other topics is how important it is, especially at this time. In our history, if you will, for dentists to lean on their local dental associations and their state and national dental associations to lean on. You know, here in Orange County, we have a wonderful group, the Orange County Dental Society. We have the CDA. You have the ADA, you have the AG. All of these are resources to you doctors. And you would be shocked. I mean, as I you know, I've been in dentistry for 40 years and I knew what a great organization CDA was. But when I started talking to Anders and Katie Fanelli and Sarah and all the great folks at CDR, I had no idea of all the different things that they that they can do to help. So I think andas it's really important that people reach out to their local, state, national dental societies and say, you know, can you help me with some ideas of how to find people? And you guys have all kinds of resources. I mean, you're not an employment agency for hygiene, is that we know. But but you have lots of resources, don't you?

Anders Bjork: We do. And I think most members are really not aware of the depth and breadth of what we can do to help them. Echo in your comments, Art, I really would encourage you, regardless of where you're listening from, to get in touch with your association, your local, your state. If you have questions about the business of dentistry and, you know, even some clinical areas that that associations can wade into with dental boards and things like that. But we really we really try to be of service to our members because of course they are our customers. We want to help them. We have a lot of resources available to them. And so definitely would would encourage those of you who are struggling to answer questions around dentistry or you have a problem you're trying to solve, reach out and see how we can help. And if we can't help, we will point you to people who might be able to. So that's what we what we're also trying to do.

Art Wiederman: Now, this this podcast, as I mentioned earlier, Andres is going to air a couple of weeks after CDA presents in Anaheim, which it's now the end of March. I'm real excited about that. I will say I was excited and had a great time there the next time I talked to the audience. But I would encourage you doctors, whatever state you're in, every single state dental association has a presence, a booth. They are at their state meeting. So you just go into their their booth or their, you know, CTA. They have a huge area for CDA and all the different folks that work there and just say, you know, these are my challenges. Can you help me here? Can you help me here? I think you'd be really surprised. All right. Let's get back to talking about kind of some of the things that you're doing now. Let's talk about it seems like younger people, younger team members don't have a dentist, younger team members. They seem to be leaving the profession a little more than older people. What are you seeing?

Anders Bjork: Yeah, this is you know, you heard me talk about this when we were together. I'm really fascinated by this and kind of astonished that it doesn't get more airtime because this is you know, this is findings. This is both data and projections from the US Bureau of Labor Statistics. So this isn't you know, this isn't a rinky dink outfit that's that's collating and presenting this information. And basically what we're talking about is when we talk about labor force participation, which is what, you know, that's fancy economists talk for who's working. We see decreases in participation across every age range that the Bureau of Labor Statistics tracks. It's most noticeable at the youngest end of the spectrum, those aged 16 to 19, which has gone from 52% in 2000, so just over two decades ago to a projection of 28% by 2030. So it's basically cut in half the number of late teens who are in the workforce. Well, we don't care about late teens, right? You know, they're not working for us. Well, we do care about them getting a foundation and some skills so that when they do come to work with us, we don't have to teach them some of those basic things, like showing up on time and and respecting the chain of command or or, you know, being able to take direction, having a schedule. But we also see decreases across every age range from 20 up to 54. Now, after that point from 55 on the Bureau of Labor Statistics and economists see that some people are able to retire early. And certainly in our country, age 65 plus has been considered the traditional retirement age. So the interesting thing we're seeing there is the participation in those buckets is going up and is projected to continue to do so. So, for example, I'll take the 65 to 74 year olds in 2000, 19% or 19% of them were still participating in the workforce. That's forecast to be 32% by the time we reach. The end of this decade, 2030. So the good news and bad news here. The good news is people are healthier longer. They're able to contribute to the workforce longer, which can be a very good thing, especially for seniors who are trying to maintain some level of mental acuity and engage with others. The bad news is, and I'm preaching to the choir here for what art does, but these people may not be adequately financially prepared for retirement. And we really hope that they are still working because they have to. But in either case, it's just a very interesting phenomenon because, you know, and I think just sort of intuitively, we feel that's when we go out and about and there's help wanted signs everywhere and things cost more money. And a big part of this, I believe, is because we are seeing these decreases in labor force participation, which is really important.

Art Wiederman: And do you have any anything in your research as to why younger people are not participate? I mean, it's not like after the pandemic the government said, oh, well, you younger people don't have to work as much. You know, we'll just going to give you everything. Now, we won't get into the discussion about $600 a week of unemployment. That's another conversation for another day. But, you know, I mean, it hasn't changed. You still got to go to the market and foods cost more. And gas here in California is $5 a gallon. So what are these young people? Are they just kind of, you know, are are they all becoming TikTok phenoms and making millions of dollars that I mean, how are they doing this? What and why?

Anders Bjork: You know, so at the younger end of the spectrum, the thing that we didn't talk about when we were at these workshops was the you know, the data clearly indicate that a college education is the pathway to higher earnings in one's lifetime. And so I think, you know, certainly people understand that getting that getting some level of education beyond high school pays dividends throughout one's life. So I think at the younger end, we see people more focused on education, focused in high school, on getting into college, and when they're in college, on staying in college and excelling. So I think that explains the 16 to 24 range pretty well with my own kids. You know, I've got one in college and I've got one about to graduate high school. We told them their job was to do well in high school, and that was very different from my upbringing where, you know, I went to high school, but I also had a job. But I don't really have a great explanation for you as to why the labor force participation is down across the other buckets. And as I as I've noted before, this is a decreasing percentage of an increasing number because our population keeps growing, but the labor force participation is shrinking. So that has a double edged. You know, we're it's more people.

Art Wiederman: I wonder if younger people are being a little more entrepreneurial and maybe there's more of them are starting their own businesses, which doesn't hit the labor force numbers. Right? That that could be it.

Anders Bjork: Yeah. There there could be some of that, you know, contracting types of jobs. I really hope it's not, you know, a glut of people doing GrubHub driving and things like that. I really hope that's not what's driving this. I don't think there are enough to affect the numbers this way. But let's let's go with the optimistic output that you've just provided and that hopefully they're becoming entrepreneurs.

Art Wiederman: Well, I can tell you that every single time I drive down my street, there is an Amazon truck on my street. So maybe maybe that's what they're doing. I don't know. So let's talk now for a second about dental school and dental school applications. And when I look at the numbers that you that you posted when we were doing our webinar, our live I keep saying webinar, I've been doing webinars so long, I'm I've got webinar on the brain, our Lives seminars that we did. And by the way, folks, I can't tell you how much I love doing live seminars. And I'll mention just before we get into the question here, is if any of you are meeting planners or you have study clubs, I would love to speak to your study clubs, whether it's virtually or in person. If it's in person and you're anywhere near a golf course, I'm much more interested, of course, but I just keep forgetting I have three happy places on a golf course, on a fly fishing lake or stream and in front of an audience or this microphone like I'm doing right now. So if you have any interest in that, you know how to get a hold of me. But back to the dental school applicants, it looks like the number of applicants andas has dropped 10 to 15%, but dental school enrollments have gone up. I think the the applicants have dropped from the mid 11 thousands per year down into the 10,000. If I remember your numbers and dental school applications are up over 6000. Dental school acceptances are up about 6000. You're talk about that a little bit.

Anders Bjork: Sure. So the information, again, a very credible source for this information, which is the American Dental Education Association out of Washington, DC, they put together some great research, as does HPI, and you can go take a look at it on their website if you'd like to talk more. But what you're talking about, art, is that, yeah, in 2011 we had a little over 12,000 applicants for dental schools and that number drops. It's stable for a few years and then it begins to drop. And in 2020, that number was just under 11,000. So, you know, it's just under a 10% decrease, not a huge decrease, but it's real numbers. And then on the other hand, the number of first year enrollees in 2011 was 5306 and by 20. It was over 6200, so we had almost an 18% increase. So, you know, your listeners can't see my hands, but the applications are declining. My hand is going down and the first year enrollees are increasing, my hand is going up. So what does this mean in the long run? Well, you know, I think it means that there could be a degradation of the quality of dentists, because if we have fewer people applying and more people enrolling, then statistically you're going to have a you know, in the long run, you're going to have a different looking pool. I suspect some of this is a reaction to the cost of dental school. Some people just aren't applying because it's cost, you know, $500,000. In California. I think nationally, $300,000 is the average debt. Yep. If you want to if you want to specialize, it goes up from there. So the money is becoming an issue. And I do have some concerns about that, obviously. But, you know, I don't I don't think we reach an equilibrium point here. You know, I don't think we ever get to a point where it's like, okay, gosh, the applicants and attendees are 1 to 1. But, you know, it is it is a trend that we're paying attention to. It'll be interesting to see what what happens in the coming years.

Art Wiederman: But as our population grows and our population in this country is growing, we are going to need more. Dennis There's a balance just under, I think I read 200,000 dentists in the country for what, 350 million people. So we're going to need more dentists to come into the profession. So let's talk about private practice and we'll get into a little bit about DSOs and stuff like that. So ownership rates of private practices, I mean, I think we kind of know where this is going. But, you know, there's there's, you know, maybe talk a little bit about I know that you've got gender parity and trend towards younger dentist, not only in the oil prices. Talk a little bit about what you're seeing in that area.

Anders Bjork: Sure. So, yeah, you know, the punch line you already kind of covered and that is that we do see a decline in the number of private practice owner dentists across the country. We see this decline regardless of age and regardless of gender. It is more pronounced for younger dentists and it is more pronounced for women. Women have. Always. For the time that we've been tracking, women have been less likely to be private practice owner doctors and less likely to. Practice as solo dentist as well. But. You know, as a as I said, this is more notable at the at the early age of practice for younger dentists. We do expect that it's taking dentists longer to own a practice, if that is in fact their professional goal or desire. Part of that is probably the debt issue that you and I are both very aware of. And the other part of it is that there are an increased number of practice modalities for dentists to choose from for a very long time. The path of dentists was you become an associate in a private practice, work with the owner dentists for a number of years, and then that dentist retires and sells the practice to you. So we see many more models today. We see. We also see dental education starting to teach. You know, for a long time, dental education was about was about teaching a dentist to work on their own. More dental schools are now teaching dentists to work together, and I think that's having an effect on the way people choose to practice when they graduate. So we do see, you know, pairs and trios and foursomes of dentists buying into a practice together. Maybe it's a GP practice, maybe it's a multi-specialty practice, but there's a lot of benefits to that. And you as a CPA know many of these rights share the risk, share the cost, share the call to cover the practice. You can take a vacation, somebody has your back, but it's also a more social way to practice and can be more rewarding. And of course, the other you know, the other aspect is some of the some of the absorption is by DSOs and DSO, like groups that are accumulating practices into entities looking to achieve economies of scale. But those are taking you know, those are removing some of the private practice opportunities from the market as well.

Art Wiederman: And again, you know, when a dentist leaves dental school, the reality is they're coming out with 3 to 500000 of debt, more if they've either gone to a PR or to specialty school. I had at a husband and wife dentist that I worked with on a practice transition and they both had $900,000. And I just I just couldn't my head was about ready to explode. But I want to make it clear to my audience and if there's any and I know we have a lot of younger dentists that listen to our podcast, the possibility and the reality of practice ownership is not a fantasy. It is real. It happens every single day, you know? And if you are just sitting here saying, Geez, my only choice is to go to work for somebody, that's not your only choice. I mean, I always recommend, Anders, that a dentist go to work for somebody. Go to work for a couple different people, work in different offices, learn the good, the bad, and the ugly about, you know, how to present cases and how to manage the business and how to deal with people. And then, you know, after maybe two, three, four or five years where you've worked in, you know, different places or you've worked in one place, it's doing it right that then you're ready to to own your own shop and, you know, call your own shots. And it gives you, as you and I have talked, the best opportunity for autonomy, the best opportunity to make more money and to meet your financial goals. I mean, and so I think, you know, while, you know, while things have changed, like you said in the profession since you started ten years ago, private practice ownership is real. It is doable, it is financeable. And there are dentists every day buying practices that are being very successful in what they're doing. I mean, you're seeing that, too, right?

Anders Bjork: Yeah, absolutely. I mean, I think one of the things that strikes me is the stakes are higher today because of the debt, because of the cost to acquire a practice. So I think a lot of dentists are a lot of grads as they enter. They're a little bit nervous about, gosh, I don't want to make any mistakes, right? I don't want to go out and open my practice and and be too slow and unprofitable. There isn't as much margin as there was once upon a time. So I do think a lot of grads talk about going to work for a DSO as a as a way to build their skill and their speed while getting a guaranteed salary. And in fact, our data HPI is data and others indicate that, you know, going to work in a DSO after graduation is, you know, as I said, we're past the tipping point. But the data also indicate and I was just reviewing some ADA findings that I didn't even have when you and I chatted last week that show that, yes, you know, within five years and then within ten years, the vast majority of respondents to the AIDS research indicate that, you know, even though within within the year of graduation, there may be more of a spike looking at DSO employment within five years, in ten years, it's pretty dramatic to see how many dentists want to. Or how the aspiration on there in practice. And in fact, in our own primary most recent primary research, nine in ten dental students that we interviewed said that they want to or hoped to own a practice if they were able to write.

Art Wiederman: And I have never and you have never we never talk about one way of practicing is better than another. You should or shouldn't be in a DSO. You should or shouldn't be in private practice, right? It's like anything else. You know, when I was a CPA, I started at Deloitte, the national firm with Deloitte Haskins and sells. Some of my friends started in small local CPA firms. You know, it's the same in every profession. There's big, they're small, there's good, there's bad, there's good players, there's bad players. I mean, you know, working at a DSO, I happen to know some of the DSOs and the training that these DSOs provide to some of these, Dennis is really, really good. So there's really good and, you know, there's good about everything. You just have to decide what is for you. Which kind of brings me into the next conversation, which is the, you know, the ages of where dentists are now. And from what you shared with me and from what you presented at the courses we did, it looks like there's there's a lot of retirement age dentists and a lot of younger dentists, but not that many in the middle. Talk about that for a minute.

Anders Bjork: Yeah. So I love I love generally generational research. I mean, I think, you know, there has been a ton of press over the past decade around or around millennial research. And millennials have been a target because they are the largest cohort in our history. And so, you know, but the reality of it is every every generation blames the generation behind them for the problems and vice versa. So it's kicking the can down the road. But you're absolutely right. When we look at the distribution of dentists over time, we do see a fairly large group of boomer dentists who are age, you know, sort of late fifties to early seventies. And we also see a very even larger group of dentists who are age 30 to age 40. And that's because, you know, before the millennials were the largest group before them, the boomers were the largest group. The millennials are largely the boomers. So what is this mean? I mean, to me, art, it means opportunity, because those boomers who are predominantly private practice owners themselves are going to be looking to exit the profession and for the good of themselves and their patients probably over the next 5 to 10 years. So those millennials who are coming out of dental school and sharpening their skills wherever they may be, I think if they are keen on taking advantage of this opportunity, there will be a tremendous opportunity. There's going to be a lot of practices that change hands here over the next ten years. So if you're listening to this and you're thinking about buying a practice, you know, get in touch with your local dental organizations, get in touch with a broker, a banker, try and get some ears to the ground to figure out what's happening, because, you know, biologically, these people can't practice forever.

Art Wiederman: Well, and if you look at it, go back to 2008 and when we had an economic meltdown. And it's frightening. I mean, I talk about this in my lectures and on this podcast about how close how close we came to 1929 all over again, right? I mean, I had clients calling me in October of 28 saying, Art, I'm scared. Do I need to pull my money out of the bank? I say, No, you don't want to do that. That's what's creating the problem. That's what that's what the Federal Reserve dealt with a couple of weeks ago. Well, again, you know, this is airing in May, so it's a couple of months ago when you're listening to this break with Silicon Valley Bank and Signature Bank is that bank failures and runs are created by fear. So, you know, we're in a very strong economic position right now. And the thing is, for doctors that are looking, like you say, who want to own and I think most dentists who go to dental school, I think your statistics show it was I mean, close to 90, 90% of dentists who go to their school ultimately want to own their practice because the baby boomers, that's me. I'm going to be 64 in August. The baby boomers run, I think, what, 655 to 64 maybe, or a little older? I don't know exactly. But there's lots of these doctors all over the country that are retiring and because of not only because of 28, but because of this pandemic and now the uncertainty in the markets, There are you know, we do we should joke about this, but some people swore on one case became two or one case. And so a lot of doctors are even holding off a little more Andas before they look at retirement and they might be working into their seventies. A lot of doctors, you know, people are more fit. They're they're taking care of themselves better. So they have the ability to talk. Work longer they want. And the thing is, is that I see doctors of this age group love this profession, not the younger doctors don't, but the doctors I work with in their fifties, sixties and seventies. They been in the professional all and they love it and they like to work. A lot of them can work because they want to. Some have to work because they have to. It's like that any profession. But I mean, let's address that. There's a lot of dentists out there who in the next 5 to 10 years are going to be selling. And there's opportunity for young Dennis, Right.

Anders Bjork: Absolutely. And I think, you know, I don't I don't think it's a best kept secret, but a lot of these dentists would love to pass their practice on to another young dentist who they believed might have the profession that they enjoy. As you said, they feel passionate about the care they provide to their patients in their community. You know, and one of the things I really heard you say, well, last week was, you know, figure out the community you want to be practicing in and be a part of that community. And that's who these doctors are. So when they look to replace their their practice owner to the next generation, they would love to see somebody continue that legacy for them. And I mean, I think that's you know, we joke that when when any of us go to sell our house, we'd love to see it go to a young family who will make good memories there. So, I mean, I'm not trying to sound sappy here, but a lot of these dentists would love to see a continuation of service to their patient base. And, you know, so again, if you're listening to this right now and you're thinking about that, don't be afraid. You know, you talked about this, too. You know, don't be afraid to go out and get in contact with some dentists in your area or an area that you think you want to live or practice in and say, I'm interested in, you know, in continuing the practice of dentistry that you have set up kind of thing. But I think there will be a tremendous opportunity for dentists, not only in number of patients. You already talked about the growth of population, but in the number of practices that are going to turn over here. And if we can get past the sort of economic downturn that we're in right now and we get a little bit of upswing in the market, I think a lot of people will feel comfortable to say now's the right time for me to sell my practice because the money I saved is finally worth something.

Art Wiederman: You're absolutely right. Let's finish up this discussion to Andrews is great. I love I love talking with you about this. Let's talk about some of your survey information. So let's start off with what were some of the biggest concerns of graduating seniors coming out of dental school entering this profession?

Anders Bjork: Yeah. So for seniors coming into the profession, you know, they have they have a few concerns. And I'm looking I'm talking somewhat about ideas, data, ideas, the American Dental Education Association. And some of it is around our own primary research covering dental associations, research. So first and foremost, I'll skip to the punchline. Most graduating seniors are concerned about the business aspects of practicing dentistry. Big are they didn't go to business school. They went to dental school, and they're concerned about how difficult that is going to be. Well, this is a this is a concern that is actually held by long practicing dentists as well. They all are all dentists, but not all. Many dentists suggest that they struggle with some aspects of managing a business. So don't worry about I would say don't worry about that so much if that's you, if you have great clinical skills and you can, you know, as you as you say, if you can develop a relationship with your patients, if you can learn how to communicate with them and earn their trust, the other pieces will fall into place. Some people may gravitate towards practice ownership and find it easier than others. It's okay to struggle with it a little bit, but some of the other things that graduating seniors talk about, you know, they do have concerns for leading a successful team of employees. Will they be seen as credible? Can they be a leader? They, of course, struggle with the legal and regulatory context because, you know, mean if they didn't go to business school, they sure as heck didn't go to law school. So that's you know, that's another difficult piece of it. But but those are the those are the primary things. They do also worry about paying back student debts. And some of the things that we saw pop up as a result of of the pandemic were, you know, how it affected the feelings of isolation, both in terms of their training and dental school, because, of course, the graduates who are coming out now spent some or most of their dental school. In a pandemic lockdown, learning remotely, but also this inability to find mentorships and find personal relationships with other dentists, too. To learn more about the profession and create connections, I think that's that may be a little bit of a struggle as dentists graduates go out into the world and try to form relationships with dentists who may be looking to sell their practices too, because it's just a little bit of a less comfortable thing not having as much practice in that area.

Art Wiederman: Now, we talked about a little bit about, you know, dental school grads having to join and wanting to join DSOs because they've got to start paying their debt off. And when I when I was in accounting school at Long Beach State when I graduated in 1980, the the national CPA firms literally came to our school. You would sign up assuming you had the right grade point average, and most of us did. And, you know, I interviewed with a bunch of national I mean, they literally had a sort of a silver platter. It doesn't work that way in the dental schools. They don't have you know, hundreds of dentists would come to dental school and say, it's career day. We need somebody. It doesn't it doesn't work that way. So, you know, dental school grads, more of them are joining DSOs. And then maybe talk about what percentage of the profession is now good practice and because you see a lot of numbers on that.

Anders Bjork: Yeah. So your your CPA analogy is a good one. You know, those big firms go to you. They they were then and they probably still are, even though I think when you when you entered, they were the big eight, then the big six, then the big four and the final.

Art Wiederman: Yeah. They're now their final four.

Anders Bjork: It's Deloitte, Andersen, Ernst and Young. But so you know, those firms go to the schools and they outreach to the schools because it's a plentiful source of, let's face it, less expensive labor. As you enter the firm, you do the same work of any CPA, but you don't command as high a salary. The reason why you don't see hundreds of dentists flocking to dental school events is because they can't take time away from sheer size to do it. But DSOs and group practices can because they can afford to have somebody on staff who is recruiter who is a talent spotter. So they do show up to those events. And, you know, there's nothing wrong with that. As you said, there's DSOs are a great, great place to learn and learn. And dentists may stay there, too. They may like it. So the trends that we're seeing, according to the American Dental Education Association, you know, growing up slowly, we saw it from 2015 to 2019. This went from a little under 12% to a little over 16%. You know, so taking up a percent or two a year and then the pandemic hits and it basically doubles. And so for the past three years, we've seen 30% of graduating dental seniors indicate that they do plan to start their career working for radio. So, yeah, and, you know, it makes perfect sense because one of the one of the trends that I talk about is through the pandemic. If you had a private practice owning dentist, employing an associate and the patient volume falls off, guess who's going to work? The owner is going to work, right? What you kill. And so the associates were on or underemployed through that period. So they they found opportunities within DSO. So that makes perfect sense. And it'll probably it'll be interesting to see which way that trend goes over the next couple of years as things are finally getting post-pandemic. Does that drop a little bit or does it increase? Because we have now, you know, literally the last pre-pandemic data point was the tipping point 16 and a half percent. So, you know, DSOs are growing, group practices are growing. So these are physician owned, you know, either multi-unit or or multi multi partner can be multi-specialty. Those are growing. Many dentists are seeing even on a local level, the economies of scale they can achieve by buying a second or third or fourth practice, spreading their staff across it. You know, there's many management tools now in terms of software and and practice management that they can that they can employ. But those are those are a different set of concerns. But certainly we do see growth from dentists looking to drive some of the waste out of having so many individually owned and run practices.

Art Wiederman: Yeah, and one of the things I see doctors, if you are going to start your own, shall we call it Empire and you're going to own two or three, five, ten practices. You want to make sure you have a good management team behind you, a good dental coach, consultant, mentor who can help you set up systems because once you get to 5 to 7 to 8 to 9 practices, now you're talking about layers of h.r. And i.t. And a cfo and now you're talking about an all consuming thing that you're dealing with. Is that what you really want? And. So and again, it's all about choices. I'm not saying it's good, I'm not saying it's bad. And I've never said it's good or bad, but this is what's happening. And I see that about we're approaching 30% ownership, either group practice or DSOs in this country. That sound about right to you, Anders?

Anders Bjork: Yeah, it's really difficult to measure.

Art Wiederman: It is hard.

Anders Bjork: I do I do hear a lot of numbers. I mean, I would say it's probably somewhere between 20 and 30%. Yeah. And that's not that's not, say, DSO ownership. That's to say these are now multi-unit, multi partner types of practices. But, you know, I think the we don't it's never going to completely flood the market because they're you know just as different doctors will choose different practice modalities patients will also choose different types of practices. Some some patients are very comfortable going into a practice where they might see a different dentist than the one they saw last time. And that's okay. Some patients may prefer the opposite in which is I want to see the same person I've been seeing for the past 15 years. That's the only person I trust. So many types of patients, many types of practices. And by the way, what goes hand in hand with that a lot of times is what people are willing to pay for care. So if they're if they are cost conscious, they may be more likely to go with a, you know, the type of practice where they're going to see who who is ever available that day versus somebody who might be making a little bit more of an investment in their personal care and or thinking that that's a higher priority for them to see the same person not seen that that has to be more expensive. But, you know, you do see some cost sensitivity playing in there.

Art Wiederman: Well, the great thing that I love, Anders about this profession that I have spent my entire career having the honor and privilege of serving is that you have the ability as a dentist to set your life, your practice, your goals, your vision up the way you want to. And you now with with large good practices and DSOs, you have the ability, if you want to not be a practice owner and you want to work in a in a great organization, you can do that too. So it gives you the ability to be a dentist and doctors. At the end of the day, you have choices. And it's about making choices not only being a dentist but being an accountant, being an analyst, being anything that you're going to be. So let's wrap this up with what are dentists most and least satisfied about when it comes to their careers?

Anders Bjork: Yeah, that's good. I'm going and just want to make sure I quote the right information for you here. So I'm going.

Art Wiederman: I would appreciate if you would quote that information.

Anders Bjork: And I'm looking for it here. So. Give me just a sec.

Art Wiederman: Okay. I mean, wait while you're looking for it. We had talked I know we were talking about dental students aspiration of practice ownership. And I think when you gave the lecture, it was over. It was either over 80% or over 90% of dentists wanted to own a dental practice. At some point, I think. Was it over 80 or over 90?

Anders Bjork: Yeah, it's it's about nine in ten dental students and it's about eight in ten of DSO employed dentists. And we took that cut just because it's so easy to say those are associates, you know, who, who, who might want to be looking at that. So what are dentists most satisfied with and least satisfied with? They are most satisfied. This is our this is K zone primary research. They are most satisfied with their ability to provide patient quality care, quality patients care. Excuse me. And that's great. I mean, I love that because that is, as you said, that's why dentists became dentists to serve patients. So they're most satisfied with that. They are least satisfied, probably won't be surprised with managing the business side of dentistry. So that is where dentists struggle. But, you know, again, if you're listening to this podcast and you're struggling with it, know that you aren't alone. This is a very this is a very common common thing for dentists.

Art Wiederman: And there's help. You can get help.

Anders Bjork: Yeah. In fact, this is, as I always say, this is happily one of the places where organized dentistry I can speak for Cder and many other states. This is somewhere where your relationship with organized dentistry can help you either directly or point you towards resources that can help you. So if you are struggling with the business side of dentistry, don't be afraid to reach out, get some help and focus on what you love, which is treating patients.

Art Wiederman: Absolutely. And then we talked about the dental school, Jasper Dental students aspirations. And again, it's, you know, most of them want to own a private practice. It's available. But, you know, the whole point about this is that Anders has his finger on the pulse of what's going on in the profession. And we know it's hard to find members and we know that, you know, things are going on and the landscape is changing. But at the end of the day, Andrew's and this will put a bow on this and then please stay with me as I take the podcast out. You know, dentistry is still a place that dentists can have a great career. I started my talk by saying it's never been a better time to be a dentist. The technology is amazing. Patients need us more than ever. Need dental. I consider myself one of them. I get called Dr. Wiederman more often than I can tell you. Right. And dentists, you know, they they they help people not just with their teeth, but with their total health. I mean, the the links between periodontal disease and Alzheimer's disease. I was saying in the lecture I gave. With you guys that I interviewed on my podcast. If you want to listen to it, just go on to the your podcast app and find it. Dr. Ed Zuckerberg. Mark Zuckerberg, the founder of Facebook, his dad was a dentist practicing in just outside New York City, and he is working very closely with companies that are there that are providing products to to help the link between periodontal disease and Alzheimer's and heart disease and liver disease. So dentists have such an important role, the systemic relationships between the mouth and the rest of the body. That's why I say it's never been a better time to help people. And your legacy doctors is to help people. When you leave, you will leave your profession. Whether you're with your listeners, podcasting, you're 20, 25 years old in the middle of dental school, or you're 65, 70 years old. You're going to leave the profession that you can leave the profession. The vast majority of you can leave this profession by saying, I helped make people's lives better. And that's, I think, where we'll ended up, too. Any any final closing comments, Anders, that you want to make about any stuff we've talked about today?

Anders Bjork: Just echoing that last point, there are that as the population ages more gracefully and lives longer, it's going to be more important than ever to have properly functioning dentition to allow them to have quality of life. And with a growing population, as you say, it is a great time to be a dentist because the next couple of decades only point to growth in the profession.

Art Wiederman: Well, folks, Anders, again, stay with us. Thank you. Anders Bjork, vice president of Strategic Intelligence and Analytics at the California Dental Association. The work you do is really important to keep people like me up to speed as to what's going on. I mean, I see I see trends all the time, but not like you do. So like I say, hang out for a little bit. Again, I want to thank our wonderful partner Decisions in Dentistry magazine. www.decisionsindentistry.com 140 continuing education classes, clinical education that is second to none for a very reasonable price. Go to www.decisionsindentistry.com make sure that you sign up for our business course for trying to help you to figure out what do you want to be when you grow up and what are your options June 10th if you're in Northern California, June 10th in the San Francisco Bay area, East Bay area, that information will be on the CDS website and then June 22nd in Sacramento, I will be there, Anders will be there, Katie Fanelli will be there, the great folks from Bank of America to talk about what kind of financing is available and will be there to help mentor you go to WWw.CDA.org if you want more information. And again, folks, I want to thank you for the honor and privilege of your time and listening to my podcast and the thousands of you that do every single month I am. I couldn't be more appreciative. If you need anything from me, my office number is 6572793243 and my email address is aWiederman@eidebailey.com. And with that folks, we will call it a podcast. Thank you for listening. And this is Art Weidman on behalf of the Art of Dental Finance and Management with Art Wiederman, CPA. And we'll see you next time. Bye bye.