Rising inflation could make it hard for dental practice owners to keep up as costs increase and revenue drops, according to Rajdeep Randhawa, DDS.
Dr. Randhawa is the owner of Innovative Dentistry in Colts Neck, N.J. He recently spoke with Becker's about how inflation is affecting dentistry and what it will mean for future practice owners.
Editor's note: Responses were lightly edited for clarity and length.
Dr. Rajdeep Randhawa: Every dental practice is going to be affected differently due to inflation, staffing shortages and supply line disruptions. I have an independent out-of-network, fee-for-service dental practice where the pressure from outdated, meager fee structures and socialistic price controls by all for-profit insurance companies are irrelevant. I can raise the fees as the inflation and cost of doing business increases just like millions of other independent businesses that are not subjected to any of these severe price controls. Inflation is going to increase the cost of doing business in dentistry as there are pressures to increase the compensation for the whole dental team to help them cope with the higher cost of living.
Staff-heavy dental practices and DSOs who work with insurance price controls with 18 to 20 employees working both at the site and supporting from outside are going to start feeling the heat when patients experiencing the inflationary trends start opting only for basic loss-making procedures and are reluctant to do any procedures they deem expensive. The DSOs and dental offices who are already working with thin margins [and] high debt load may not be able to sustain the high volume, high overhead, low-profit practices as the patient volume and revenues start decreasing to unpredictable levels.
With many dentists who had already delayed their retirement five to 15 years opting to retire, newer, younger dentists who take over with no experience in the business and management of these practices will be surprised dealing with inflation shock and reduction in profits resulting in lower compensation. Unlike many other businesses, dentistry [comes with] a huge mountain of debt due to the high costs of dental education, equipment and supplies and buying [and operating] an established dental practice … it becomes difficult to run these offices due to falling revenues, staff shortages, and higher costs, with many of these dental practices and DSOs supported by private equity heading for trouble especially in the highly saturated markets.