The 2022 Orthodontic Practice Performance Survey: A Deep Dive

Hello and welcome to the Orthodontic Products Podcast on the MEDQOR Podcast Network. I’m Alison Werner, chief editor of Orthodontic Products. In this episode, we’re taking a deep dive into our second annual orthodontic practice performance survey. We at Orthodontic Products teamed up with practice management consulting from Levin Group to survey orthodontists like you to learn about the successes and challenges you faced to 2022. Joining me to talk about the survey results is Dr. Roger Levin, CEO and founder of Levin Group. He analyzed what orthodontists like you had to say, and has written a great article which you will find in our April May issue and online. Dr. Levin, thanks for joining me.

Alison, it’s a pleasure and I’m really excited to chat with you about this year’s findings because it’s really interesting. I’ll wait for your questions, but I can’t wait to talk about it.

All right. Well, let’s get started. Just let’s set the scene. Can you give me a breakdown of the respondents? Who took the survey this year?

Yeah, the majority of the respondents, 90% were private practice owners. There was a smattering of a few DSO, OSO, orthodontists, and a smattering of associates, but we have an excellent representation here of the practice owner and their responses based on their individual practices.

Okay. Well, great. So what I appreciated in your writeup of this year’s survey was that you took time to set the findings against the larger economic picture facing the country and provided some historical context. So for our listeners, can you set the scene, so to speak, and give us some context to understand what orthodontic practices were up against in 2022?

Sure. I’m delighted to do that. I’m going to start with a little historical context, which is orthodontics has been a fantastic specialty, and for the top 50% and I know we’ll get into that, it will continue to be an outstanding specialty. But back in 2008 and 2009, things began to change. Now that was when we had what was called the Great Recession, the longest deepest recession in United States history and orthodontic practice reduction dropped during those years by about 10%. By 2012, the United States economy was on fire up until 2019 and still some segments in 2020, and then it surged again in 2021, which is for different reasons. So we had a huge long upper trajectory of orthodontic practice production and revenue and profit and Americans had money and they had credit, and things were really good.

So the economy today has changed. As we all know, 2022 was an inflection point. We have high inflation, we have higher interest rates. Americans are still spending. I don’t know for how much longer, but they’re still spending. But we also had a shortage of labor, certainly had a shortage of staff in orthodontic practices. Staff compensation went up. And we’ll get into the inflation and staff compensation effects and how it’s impacting orthodontic products. But in summary, it’s a little bit harder today to be as profitable as it was in 2021. And real quickly, 2021 was a great year, record year for many orthodontic practices because many of the American public were not spending money in four traditional areas, luxury, entertainment, travel, and restaurants. But they’re back to that so the challenges and competition for the dollar have accelerated.

Great. Well, so let’s take a deeper dive into production a little bit there. How was 2022 for practice and how did it compare to what we found out in 2021?

Well, it’s really interesting what happened, and it actually took me a little bit by surprise. The average production of a responding practice, $1,611,000. So not bad, and we’ll get to overhead later. So incomes were not bad, but not as good as bid. What took me by surprise is that about half let’s say, 40 some percent of practices actually had stable or higher production, but then over 50% had lower production. Of those practice lower production, the average drop was over 10%. So what we saw was a fragmentation of orthodontic practices where in the past you saw a much more similar picture across the board, we’re seeing much more fragmentation production amongst practices today. And this is something that’s going to continue and we can talk about that later.

Okay. Well, you also write in the article that production is an important indicator of future strengths or weaknesses, but profitability is the bottom line. So what was the bottom line for 2022?

Yeah, this was so interesting, and this is the part that didn’t surprise me. I was surprised again that production wasn’t down for a higher percentage of orthodontic practices. And I’m thrilled that I was surprised by that. That’s good. The problem was staff compensation rose by about 10%. Inflation rose by about 6.8%. Many practices had higher inflationary costs of 8%, including staff compensation and supplies and materials and equipment and lab, et cetera.

So what happened was even in practices where production rose, profit decline because the increase in overhead ended up causing a decline in profit. And for those listening, I’ll explain this in a very fun, simple way. For every 1% overhead rises, that’s 1% that profit decreases. So if overhead rises by 8% in an $800,000 practice let’s say, of revenue, then the negative effect on profit is $64,000 in lost profitability. So it’s important to understand the effect of overhead on practices even if production remains stable. Ideally, you want production going up and overhead staying stable or declining, and then profit will rise at the traditional rate. But I think our tradition’s may be over at this point.

Okay. So as you just said, overhead is a killer here. You talked a little bit about staffing. What was contributing to higher overhead in 2022?

Well, the first was staffing because the average practice has a staff compensation increase of 10%. I was talking to an orthodontist recently who said to me, “Oh, I’m not paying that.” And my polite answer was, “Well, you will be” because a staff member today can get another job in about three minutes. It’s not very hard. So staff compensation is rising. It will not be coming down. You don’t see these type of increases reversing. Now, some of the inflation could decrease, but usually when supply costs go up and technology costs, the services and subscriptions, they stay at that level. So I would encourage, major takeaway point, every practice to find a way to increase their production by at least 8.2%, which is the average drop in overhead that we saw in order to at least remain stable. Obviously we want to do better than that over time, but that would be a major takeaway from our conversation.

So you mentioned there a little bit about how practices can compensate for overhead and you talked about increasing production. Are there any other strategies that can undertake?

Well, there are lots of strategies, but orthodontics is actually a simple financial model. Not a simple business, but a simple financial model. And I want to strenuously make this point to every orthodontist. There are four things that are the four biggest factors in controlling practice production.

Number one, referrals. You get enough referrals, you will be fine because even if you have high referrals and low case acceptance or conversions, then you’re still going to be okay. So number one is referrals. Number two is starts. How many of those referrals accept treatment? And you want that to be around 86 to 87% minimum. Number three is efficiency. How efficient are you in terms of moving patients through the practice and the orthodontic treatment process? And number four is bonding on time, because something most practices don’t pay attention to is once you hit, once you’re overdue for debonding or debond, then at that point everything else is pure overhead and it’s wasted time and money.

So there are things we can talk about later like teledentistry and teleorthodontics, things like that, but in reality, those four things are the four categories that every practice needs to pay attention to more than ever before because we’re not in the same economic era and there are new levels of competition emerging very, very quickly.

Okay. So as we enter Q2 of 2023, what economic forces should orthodontists keep in mind as they set their expectations for production in 2023?

Right. Well, remember, this survey was based on 2022. The data is excellent, it’s solidified. But I can project forward. Now, I hope I’m wrong.

Right. We all do.

But so far we’re almost in April, things are pretty steady on the economic graphs, I think 2023 is going to be a equal or slightly more difficult year than 2022 economically. Now that’s not gloom and doom, I don’t think we’re going to fall off the face of the earth. There are a lot of economists saying we’re going to have a recession. We’ll see. I’m not an economist, I just follow them carefully. But I would suggest that practices start to pay exquisite attention to raising their production and they need to study their referral marketing pattern and where referrals are coming from. We had some interesting data on that that I’m sure you’ll ask me about later. We need to study the treatment coordinator and we need to change what, typically it’s a she, he or she is doing to help people make positive buying decision. We need to change the efficiency pattern in the practice. It can’t just be fill up seven chairs and then fill them again and again. How do we become more efficient? How infrequently do we need to see patients? How do we build value through teledentistry and virtual experiences?

And finally, most practice do not know what percentage of patients are overdue for debond, as I mentioned before, and it’s typically higher than they think. So the key is increase the number of referrals, increase the start percentage, move patients through with as few visits as possible while providing quality, and finish them on time. Those would be an accelerated version of what I said earlier and a great formula.

Yeah. Okay. So let’s shift gears a little bit and talk about patient volume. You write in the article that the survey results showed that in 2022 it was a year that marked a returned normal. What did you mean by that?

Well, it’s interesting. About 64% of practice stated that their volume was similar or higher. And that’s great, but in 2021 it was 80% of practices stating that. So it’s not bad news, but it’s slowing down. I think we’re going to see another drop, I’ll let you know next year. I think we’re going to see another drop in 2023.

So while we’re not falling off a cliff quickly, we are slowly seeing a decrease in the positive numbers. So patient volume in 2020 was almost unmeasured. I mean, you could measure it, but nothing made any sense. After shutdown, orthodontic practices were still stable because patients were in braces or aligners and needed their orthodontist. Then there was pent-up demand. There was a lot of money that nobody had been spending because nobody was going out. So we throw out 2020 as a year to measure anything against. It’s not a benchmark kind of year.

Right. Yeah.

2021 was equally difficult to work with because things were so good. The world just exploded. It was like the 1920s. Everybody was out economically partying, buying whatever they wanted. The problem was a lot of practice in 2021 thought, “Oh, look how good we’ve we are. Look how well we’ve done.” They didn’t realize it wasn’t anything the practice did. It was the economic factors taking place.

I was delighted that we held stable on volume for so many practices in 2022, but it did drop in the number of practices that had the same or better volume, and we’re going to see it again this year. In fact, anecdotally, just in talking clients, we’re already starting to see it happening in 2023. So again, I could be wrong, but my expectations, we’ll see a fewer number of practices with the same or better volume in 2023. So everything they’re doing to reach out to acquire new patients referrals becomes a critical element and starting point to work on right away.

Okay. Well, and as you said earlier, production was relatively flat for 2022, but when coupled with flat patient volume, this could be a sign of slowing growth, which you touched on a little bit there. Can you kind of explain why orthodontists really need to be paying attention to this as we go into the year?

Yeah, I’ve had a graph for many, many years. It’s the only graph I still show in a lot of my seminars because it’s so good. The graph basically shows four stages of an orthodontic practice. Startup, which we’re not seeing as many of anymore, growth phase, plateau, and decline. And I spend about 20 minutes explaining that graph in a seminar and help the audience of orthodontists identify where they are on that graph. I then came to realize maybe 10 years after I created that graph that decline doesn’t start when your production drops. I show three stages of decline, early decline, middle decline, and late decline. And it was right. I had it right, but it needed to be evolved even further because the first stage of decline is not the production drop, it’s when your growth slows down.

So if we see patient volume drop by 10%, it’s not the end of the world. Nobody has to sell their house. It’s not a terrible thing. But what it’s telling you is, even if your production goes up, let’s say your start rate goes up anyway and your production’s higher, it’s still telling you you’re in the first stage of decline. The way I say it is slowing growth is the first stage of decline.

So here’s another way to look at it, Alison. Let’s say for the last six years a practice has grown by 9% every… And then they hit 2022 and they only grew by 3%. Well, you’re now growing 6% slower than in the past. And I now recognize that’s the first stage of decline. That’s when you should be paying attention and realizing, “Oh, my growth is slowed. I need to get on this right away.” And again, I mentioned there are a lot of new competitive forces and factors in orthodontics and orthodontists are going to need to run more efficient, innovative business than ever before.

Okay. So you touched on that downward trend and you talked about needing to run more efficient practices. Anything else that orthodontic practice can do to counter this downward trend? Or is it the economy that’s going affected?

No, there’s a really interesting statistic that I didn’t bring out in the survey not for any particular reason, but almost every orthodontic practice before 2022 had the ability to lower their overhead by 4 to 6%. Now that’s 4,000 to $6,000 of additional income then on every $100,000 of production or 40,000 to $60,000 of additional income on a $1 million practice. Here’s the good news. In 2022 and 2023, and probably going forward, even though overhead is higher, they can still lower it 4 to 6% because 4 to 6% of overhead, it’s partly waste and partly not having good overhead control strategies and when you do and you bring that overhead down 4 to 6%. So even though it’s higher today, another production strategy so to speak, is you can raise profit by lowering overhead and you can lower overhead 4 to 6% in almost any practice in the country by properly addressing overhead control strategies.

Okay. Now, as you mentioned, tied to patient volume is referrals. What were the primary sources of referrals for orthodontists in 2022 according to the survey? And how did that stack up against 2021?

Right. Well, this is so interesting because it wasn’t a major shift, but I want our listeners to really understand where referrals are coming from. And also, if you’re not getting referrals from one of the categories I’m about to mention, it doesn’t mean that it doesn’t work. It doesn’t necessarily mean it won’t work for you. It might or it might be an excuse. So this is interesting. The top category of referrals was still from referring doctors. Now, I want to address this because I care. I want to be practical. I want to be objective. And I really hope this is useful information for our listeners, this whole podcast. You ask fantastic questions, that’s why I love working with you.

Thank you.

Many orthodontists have said to me when I’m doing orthodontic seminars, “But Roger, general dentists are doing all of their own ortho.” Patently not true. Patently probably not true in your area. And I’ll give you a quick case study and then I’ll give you more data.

I had an orthodontist call me who was interested in being a client and he said, “But the general dentists are doing all the ortho in my area. They don’t refer anything.” We did not end up working with that practice at that time, and that’s fine. Great conversation. I love talking to people. A few weeks later, we got a call from another orthodontist within a mile of that practice, and he was getting 61% of his referrals in an excellent production practice from referring doctors in the area. So what the first orthodontists didn’t realize, it wasn’t that the general dentist were doing all their own orthodontics. It was that they weren’t referring to him.

Now, anybody listening to this gets their competitive juices up. They get their hackles up. Don’t do that, just take in the story. But it’s an example of it may be that they’re just not referring to you. Now, there are general dentists doing aligners. Every year the number that participate in aligners increases. But I can tell you from GP surveys, the vast majority of them are not doing a lot of cases. So we found that 38% of the referrals in 2022 came from referring doctors. Now, we went back and using five different approaches, identified that to be $3.6 billion, billion with a B, of revenue being referred to orthodontic practices 2022 from referring doctors, mainly general dentists. So it’s not as big as it used to be, I agree with that, but it’s still a large, large opportunity.

Number two was existing patients. Now, whether it’s parents, I don’t think 13-year olds run around referring patients to their orthodontist. I think it’s heavily the parents, which is why we encourage parent marketing strategy. But that 28% of the referrals came from patients. 12% came from adult patients. Additional 12%. Now here’s what’s interesting. Social media dropped. It went from 12% in 2021 to 9% in 2022. Now that’s a 3% drop. We took note of that. I have a theory, my theory could be wrong, that because overhead went up in 2022, some orthodontic practice canceled their social media monthly contracts because it tends to be expensive and if you don’t know what you’re getting or the social media company doesn’t communicate very carefully to you what you’re getting.

I talked to an orthodontist about two months ago, he said, “I don’t know what I’m getting from my social media company.” And I said, “Well, that’s your responsibility. Pick up the phone, call them, ask them to give you the data and ask them what are they doing to get you patients with a down economy that we haven’t had in many, many years. You need to take responsibility as well.” And then what’s interesting, and if my theory is right, I’m going to go further in my theory, 13% of patients came from community activity, which is basically branding, whether it’s the sports team or the PTA or the school visits. Well, that’s up from 4% the previous year. It went from 4% to 13%.

Wow.

And if my theory’s right, and you know the joke, don’t let the facts get in the way of a good theory, my theory is that some of those social media dollars were shifted in community marketing. “I’ll do more ads. I’ll do more sponsorships. I’ll do more jerseys, I’ll do more sports teams” in the year 2022. It’s not the practices spent less on their marketing. We did not see that, but they shifted their dollars.

Let me end for everybody’s benefit that orthodontic practices can market in five focus areas. That’s our name for it, five focus areas, which is patients, parents referring doctors, social media, and the community. I encourage all five. With the new competitive factors emerging, you don’t want to be a one trick pony because you never know when that trick could run out. So we encourage all five. And I waited till now, Alison, that’s the second part of the answer to your question, how do we increase production? By expanding our marketing categories and market strategy. Critically important. And for most orthodontists, not all, do not ignore your referring doctors. So just a strong method.

Okay. Yeah, definitely, especially when you talk about billions of potential income or profit. So you write with the declining economy, orthodontic practices might want to analyze their marketing activities and the results they produce and reallocate as we just talked about. What’s your advice to them when they’re diving into such analysis? What should they be looking at?

That is such a great question, and I’m going to start with an answer that you don’t expect and then I’ll give you the answers you do expect.

Okay.

Most orthodontic practices do not track patient referrals properly. We have done this over and over again. The front desk staff is so busy, they’re forced to ask the question, “How did you hear about us?” They don’t get up in the morning with one goal, to find out how we got referrals. They’ve got to get through their day, they multitask, they front desk staff. And orthodontic practices are amazing people. They can do things that so many people can’t do. And then that call comes in and now you have to ask, “How did you hear about us?” They want to get through that as quickly as possible so they can get back to what they’re trying to do. Because remember, every phone call is an interruption. It’s not that they’re sitting there with nothing until the phone rings. So they ask the question, “How did you hear about our practice?” And the answer is often your website, which often gets called social media. Now the website is not social media in my opinion.

No. No.

But very often it gets put down as social media because most offices don’t have a category they track called website. The website’s there. But the problem is so many of these patients are referred, let’s say from a referring doctor. But in ortho, probably 85% or more check out your website before they call you, or they use the website to find the phone number or the location. And then when you ask them, “How did you hear about us?”, they say your website because that was the last thing they did.

So we’ve added a question to those front desk people. One more thing we ask them to do. If they say the website, then we say, “What got you to our website?” If you think about it, most people aren’t finding their orthodontist by searching on Yelp. We’d like to think that’s true, but it’s not. Anybody can just ask another mother or a friend, “Who’s your orthodontist?” So when you ask the question, “What got you to our website?”, that’s when we get the real answer. “Oh, my general dentist. Oh, I saw you on social media. Oh, I saw your ad at the ballpark,” whatever it may be. So a lot of times we think social media is much bigger than it really is. Remember, everybody’s on there, so you’re not alone. So if you’re getting 90% of your referrals from social media, you’re probably not to answer your question. So that’s one approach. You’ve got to really look at the data.

Then look at the data in all five focus areas. How many patients come because it’s the friend of a patient? 14 years old. How many were referred by mothers who are a very powerful, hugely powerful source? Referring doctors. We know it’s 3.6 billion a year in revenue being referred. So they’re coming from some referring doctors. Social media is still a powerful vehicle. All orthodontists [inaudible 00:26:03] on there, whether they do it themselves or not. And then the community branding is phenomenal. Every area has one practice, that’s the practice of choice. Well, how do you become the practice of choice? You’re branded that way and you’ve done work to make that happen. So that’s how I would approach tracking and analyzing data by category.

Yeah, that’s a lot of good advice. And actually I think those social media numbers probably are inflated because I think what you said is right about the analyzing the website or how that factors in. Okay. So in the article you point out that unlike other dental specialties, with the exception of pediatric dentistry, orthodontists can actually draw patients from different areas. How should this impact their marketing plan? Because a lot of the times it’s very focused on right where they are, their community.

Orthodontists are not trained in marketing. Marketing is a science. It’s not an exact science like a chemistry equation where it turns blue every single time, but it is a science. The first thing is we get calls from people, “Well, I want to work with this social media company.” And let me be clear, I’m in favor of social media. Even though it dropped in 2022 in patient acquisition, I’m a fan of social media if it’s done properly. What drives me crazy is every social media firm I’ve ever talked to has the only secret formula that nobody else knows. Well, I think Google knows this and I think everybody else knows it too.

So in reality, what you need to do is segment. There’s a term called marketing segmentation. Now, this is going to sound complicated, but it’s not. In fact, I was talking to one of our very experienced, brilliant consultants today explaining that complicated doesn’t work. It doesn’t get implemented, it doesn’t get done. I am a fanatic about simplicity, and I like simplicity. And this is pretty simple, segment your marketing. We have adults, we have teenagers, we have children. I’m now even hearing about phase one treatment with aligners. I’m not asking anybody to agree with it or disagree with it. I’m not an orthodontist. I’m just telling you I’m talking to orthodontists who are doing it. The world is going to keep changing.

So the first segmentation is age group. We’ve got phase one, phase two, teenagers, adults. The adult market is still huge. If I were an orthodontist, I’d be paying a lot of attention to the adult market because it is so underserved. In implants, they talk about all the [inaudible 00:28:30] adults, while the orthodontic adult market must be 50 times bigger than that. It’s huge. Number two, second segmentation area is by category. The five focus areas, patients, parents, referring doctor, social media and community. The third one is by strategy. Are we going to design more strategies for our referring doctors, more strategies for the local community, which we saw in the 2022 survey? Are we going to put all of our eggs into social media? What’s working for me now? But as always, I remind people, protect yourself for the future.

So there are a number of ways to segment, and then you have to track the data to get early warning signs because one rule of marketing, what works today will not work tomorrow. Whatever’s working for you today will not be the long-term permanence. Marketing never works that way.

Yeah, very true. I totally agree with that one with all these years on this magazine. Okay, so we’re going to shift gears again a little bit from marketing to staffing. So staffing was a huge challenge in 2021 and it’s still a challenge according to this year’s survey and from all the anecdotes I’ve heard in talking to orthodontists in the past year. What was the key takeaway from this year’s survey when it comes to that staffing issue? And how bad is it?

It’s bad. It’s bad. I like to see and build great practices. I like to go from bad to good, good to great, and just anybody can improve. They’re going to need to because we’re going to see four different types of orthodontic practice in the future that represents the top 25%, the next 25%, the next 25%, and the bottom 25%. I’m going to make a statement that I hope every orthodontist will embrace. You don’t want to be in the bottom 50%.

Now, as a joke, and I’m not a good joke teller, but there’s a joke I like in seminars that if you tell physicians that 50% of physicians finished in the bottom half of the class, they’ll tell you you’re out of your mind. Think about that. 50% of physicians finished in the bottom half of their class. Well, of course they did. That 50% is the bottom. I think 90% of orthodontists think they’re in the top 50%. Well, that can’t be. You want to be in the top 50%.

I’m just as fanatical about management and operations and efficiency as marketing. Management is the other half of the coin. If you want a great practice, you need a great team. We could talk about leadership and all of that at another time, which is one of my favorite topics of them all. But staffing is an inherent economic problem right now. Everyone’s aware that we have a labor problem in the United States. In fact, a colleague of mine who goes to a cardiologist even though he’s perfectly fine, but he had an atrial fib thing years ago, just got a call for a month from now to cancel his appointment because they are short of staff. I mean, in medicine, this is going to be unbelievable. Restaurants have it. Orthodontics and all of dentistry has its well.

So we found that 64% of practices are seeking a new staff member right now, whether they’re replacing. It was about 46% are replacing. And 64%, it means another 20% are adding. But whatever the case may be, this shortage is here. I am projecting, I don’t mean to be negative but I try to give real information, that this will be with us for a minimum of 10 years. Orthodontic technology is getting more complicated, so it’s harder to train people, which is why we need incredible efficiency today. It’s why we need Orthodontic Products magazine, the online version, because people need to be reading that and learning how to do things efficiently, and you do a great job with that. But bottom line is staffing costs have gone up 10% and they may go up more and they’re not coming back down. So it’s a new world. You can call it a new normal. I’m just calling it normal. We need to be prepared to handle this and work with our teams if we’re going to build great practices today.

You mentioned earlier that in the overhead discussion that increase in financial compensation for staff to deal with this staffing challenge is part of what’s contributing to that increased overhead. What are some of the other strategies that practices are employing to address the current staffing shortages? What did they say to you?

Sure. That’s such a great question. We had deep dive meetings. When I get together with the consultants for brainstorming, I call it a think tank. We had deep think tank meetings on this, and I can give some suggestions. Number one, in hiring, hiring bonuses are now becoming more normal. But you want to write an ad interesting. Most orthodontic ads are boring. Don’t write about the job. Write about the practice, the mission, the purpose, the excitement, the teamwork, a caring environment, supportive environment, friendly and growth opportunities. None of these are universals. You might want to offer a signing bonus, but you pay it over six months. I remember one orthodontist, he hired someone, gave her a $3,000 signing bonus and it was gone two days later. It’s a true story by the way. It’s like you say, “How could he do that?”

Yeah, it doesn’t surprise.

Yeah. “How could he do that?” Well, we’re all new at this. So you pay it over six months, and if they leave, they don’t get anything else. You offer your team a referral bonus and make sure it’s a lot of money. 1,500, $2,000 to get their attention. Because when team members refer other people, they’re referring people they want to work with and they’ll go out of their way to find people. Bring back past team members who may now be ready to come back into the workforce even part-time. Bring back past team members to train new team members to get them up to speed faster. A lot of times they don’t want to come back, but they’ll come in and be happy to be paid to train new team members in the job.

Little soft things like having a great culture and great leadership of course, but let’s go further. Creating a fun environment. If your team members on Sunday night are not saying, “Loved my weekend, it was great, but I’m also looking forward to going to work tomorrow,” then your practice needs to upgrade. We want people who say, “Oh, I’m going to work with my friends. Not my colleagues, not my coworkers, my friends.” You want a teamwork-based, supportive environment. You want to have value, a set of values that may not be violated. And then as a leader, you can’t tolerate anyone violating them.

Surprises, make the practice fun. Put a Post-it note under one of the chairs during a staff meeting and the winner gets $100 bill. Bring in lunches with double lunch so they have lunch for tomorrow. Fill the refrigerator with food and snacks for people to eat. Give them gift certificates to go out to dinner with their families. Movie tickets. The creative ideas are endless. Bringing in cheese sprays on Thursday afternoon with a bottle of wine to celebrate. One of my favorites because it’s so silly and fun is a basket full of miniature liquors, take three or four home, with a sign that says, “Please don’t drink these while you’re in the office.” Just make it fun.

I just talked to a client yesterday who, he takes a beach house every year. It’s got 15 rooms. The staff and their spouses are invited. You can come for one day or five days, and you might say, “Oh, that’s crazy because he’s got two office, two staffs and three doctors.” It’s phenomenal. The morale from that is incredible. But you can’t do just one thing. You have to build it throughout the entire year.

And finally, people want to grow. So bring in education, bring in sales representatives to teach them. Put them online with great courses. Let them listen to this podcast. Here’s what I’m telling dentists and orthodontists today, and I think this is really important. If you go in the hospital, you’re going to spend 97% of your time being taken care of by nurses. I don’t care if they’re RNs or LBNs. We rely on the nurses. Dentists and orthodontists should start to treat their staff like nurses, with total respect, they are mini doctors. Treat your team like nurses and treat the front desk like they’re all Harvard MBAs, and you’ll have an instant improvement in your entire office just from acting differently.

Great. Well, that’s some really good advice and I hope a lot of orthodontists take that to heart because especially if they can retain talent, it’s a lot easier than going out there and trying to find new talent and having to go through the whole training process.

Well, there’s one more, Alison. We also talk now about longevity bonus. One year, 3, 5, 10, 15, 20. They escalate to bigger and bigger amounts the longer they’re there. The 20 year amounts a lot. But who cares? It’s a lot less than replacing people three or four times in-

Absolutely. And I think that’s something people miss a lot, is they blow off how the cost of actually having to hire someone, the training, the time.

Exactly.

And it is expensive. It’s really expensive.

Oh, we estimate that every turnover costs an orthodontic practice 50,000 to $100,000 in loss production.

Oh, wow.

And that’s data by the way. The reason they don’t notice it is they don’t go write a check for it. They just don’t get it. So they don’t really notice it. If they had to write a check for 50,000, I guarantee your orthodontists will be studying human resources very closely.

I agree with that.

Yeah. We all would, right?

Yeah, we all would. Okay. So let’s take a little bit of a turn and let’s talk about treatment modalities. How did brackets and aligners stack up in the survey results for 2022?

Well, very interesting. 31% of the cases in orthodontic practice were aligners. For the orthodontists listening, it’s about 97% of the orthodontic general practice cases because general dentists… And I am a general dentist, I practice full-time for 10 years, but I never did a single orthodontic case so I always tell the orthodontists in the seminar they can like me, and that gets a big laugh. But orthodontists are still majority bracket and wire, but it’s shifting.

Here’s what I’m predicting. Again, predictions are fun because I can’t be wrong just yet. I don’t think we’re going to see a steady increase in the number of cases that are aligners. I think at some point we’re going to hit a tipping point and it’s going to be an explosion of aligners. I predict in the next five years, aligners will outpace bracket and wire significantly. One of the reasons is what I call market forces. And we’ll get to this, but we don’t see our aligner patients as often. The fewer times we see a patient to lower the overhead. And all of a sudden in 2022 overhead became the number one factor and challenge for orthodontists even more than staffing. Staffing moved to second.

Okay. So what did respondent’s report in terms of fees for aligner and bracket cases? What were the trends there?

Well, this was also fascinating. What wasn’t fascinating is the average fee for a bracket and wire case was $6,024. Okay, no surprise there. What was a surprise is a aligner fees were actually lower last year at $5,960 on average. Now, when a aligner started, orthodontists were collectively mad because the lab fee was $1,800. And if you were a VIP, premier, whatever the names would be, you got lower costs. And then some of the aligner companies are lower costs than others in the lab fees. So I was surprised to see aligner costs are coming in line almost the same as bracket and wire fees. I personally think that’s going to increase the number of orthodontic cases being done, especially as Americans. Right now, the economic data shows that we are accelerating on our credit card debt as American consumers at the fastest time in history, which means eventually they’re going to max out and not be able to pay for these cases. So if aligners are not 7,000 or $8,000, we’re going to have more people taking advantage of that orthodontic treatment opportunity.

When it comes to average office visits, and you talked a little bit about this about why you think there will be a shift of aligners overtaking ties into overhead, but when it comes to average office visits, what was the breakdown between aligners and bracket casing?

Yeah. So the data is very clear. And again, I encourage our listeners and I hope so much of this is useful information for them and they’ll take a few pearls out of this, but the data is the data. So nobody should get mad at the data because they do it differently.

For example, we have an orthodontist we work with and he still sees every patient every four weeks, which actually may be detrimental to practice. So the data is, the bracket and wire case interval averages was 7.6 weeks and aligner interval averages was 10.8 weeks. But I can tell you from the survey as well as anecdotal information, there are many practices today, bracket and wire is 10 weeks and aligners is 16 weeks. I can also tell you from our European consulting group that some orthodontists are seeing patients once and after that they don’t bring them back in the office at all. They’re working through virtual communication. We can talk about that a little bit when you’re ready. But the fewer time… a patient, the more efficient the practice will. But you still have to build value. And then every orthodontist has determine their position on what does it take to create quality. And I’m not going to try to answer that.

It’s for another day, a longer conversation.

That’s one that I’m not qualifying, so they have to make [inaudible 00:42:30].

Well, let’s talk about teledentistry or teleorthodontics, whichever word you prefer, because if you talk about office visits, there’s a lot more teleorthodontics or remote monitoring used when those patients aren’t coming in to manage those big intervals. So the technology got a big boost with COVID, the COVID shutdowns and limits in office appointments once offices started reopening. How are you seeing this technology used in 2022? What did the survey report?

Yeah, because Alison, you are so right. Teledentistry was going nowhere fast. It wasn’t growing prior to the pandemic. Pandemic comes in and companies were springing up every hour. I myself was contacted by several companies, offered equity if I would back them. I don’t do that sort of thing. But it came out of nowhere. In a lot of ways, it made sense because we were telling people, you need to be communicating with your patients. You need to be communicating with your staff. So teledentistry came in. We don’t really have great data on what happened in 2020. In 2021, under 4% of general practice were using teledentistry, but over 60% of orthodontic practice are using it. Fast-forward to 2022, very few. Almost 0% of general practice using teledentistry. But ortho is different. Not only do I personally see a great place for teledentistry in orthodontics. Here’s what we found, that 46% of practices are using it.

And I encourage more practice to use it and here’s why. If you’re going to have longer intervals, you still want to build value in the mind of your patient. So it’s very easy to go online for five minutes, eight minutes and have a check rather than having them come in the office. It’s highly efficient and a chance to build value. Make sure you’ve got your scripting and your value statement as well. What we found was that of those using teledentistry, 41% were using it for orthodontic checks, 33% used it for emergency, 21% used it for new patient consults.

I’m going to add my own opinion here, it is my opinion, be careful with the new patient consults. Shoppers are still out there, shopping’s growing. If you don’t get them in the office, it’s hard to build value. So make sure you don’t just keep them out of the office for new patient exams and then they end up in someone else’s office. 41% use them for retainer checks and 33% use them for new patient examinations, not just a consult meet and greet, but for the actual examination itself. So I think there’s a great future in ortho for teledentistry, but I think we have a lot to learn on how to build value at this time in that communication, and that’s really, really important. But orthodontics is a wonderful field for teledentistry.

Yeah, no, that’s definitely what my takeaway has been in my conversations. Do you have any advice for how orthodontic practices can get the most out of the technology? You talked about building value, but are there some other aspects where you think it can contribute to bringing down that overhead?

Yeah. Number one, delegate everything you can to a staff member. So one staff member should become the expert on teledental communication. She should make sure patients have their appointments. One concern I have, there’s no data yet, is the overdue debonds will expand because people miss their teledental and their ortho checks and therefore things aren’t getting done. Or they’re not wearing their aligners or whatever it may be. So identify one or two staff members to become your experts, typically assistants who communicate really well and don’t overwhelm the orthodontist with all of these checks. One check could be by a team member, another could be by an orthodontist.

Again, it’s the medical model. A lot of surgeons have a physician’s assistant, they’ve got other experts. After surgery, you talk to the surgeon once and then you work with the team. Now, some orthodontists would say, “Well, wait a minute, Roger, hold on. You just told me to build value. I’m the orthodontist. If I’m not talking to them, where’s the value?” And the answer is, your team treat them like nurses. They can build exceptional value if you train them and you give them scripting and you give them guidance and explain to parents and patients that “Sally, the assistant, is a highly skilled expert who will be talking to you on Zoom or whatever platform you’re using and she can answer your… That you can always call me. Call me anytime you like, but Sally will be right there to answer your questions and have meetings with you.” That’s the most efficient way to operate things.

And then schedule accordingly and give people the time they need. Schedule it for 10 minutes. If it’s six minutes, great. If it’s 11 minutes, not so bad. And note your average length of time communicating with a patient appearing. And in addition to that, Alison, I would add from our marketing side, every 30 days, an email should go to all parents and patients from the practice, just a general update email so they’re getting other commissions from the practice. It’s not about the patient. It’s a general universal email that’s interesting for parents and patients to read.

Good advice. All right. So overall, what’s your biggest takeaway from this year’s survey?

I have three. Number one, overhead is the number one concern today. We allowed the respondents to rank their biggest challenges. Overhead was number one, staffing was number two, far ahead of even new patient volume. Because in good years, new patient volume is the number one by any stretch. So I think overhead is a challenge. I don’t think it’s going to come down, I’m sorry to say. Typically, when inflation happens, prices stay up. Staffing is a 10-year issue minimum until the United States figures all this out and we have more labor available. So training is critical. So number one is overhead with lowering practice profit. Keep in mind that lower profit means adding months or years to how long you’ll work to reach financial independence. And unfortunately, the average retirement age of all dentists, including orthodontists today, is 72 years of age. So you don’t want to keep that going. I have a joke that if your goal is to die chairside, you may achieve it. Well, we don’t want that to happen, so we want bring that down.

Right.

Yeah. As I said, I’m not a good joke teller, but they do have a joke.

They do.

But number one, overhead. Scrutinize it, analyze it, look at the categories, bring it down 4 to 6%. You can’t bring staffing down if you want to have staff, but you can analyze how you’re handling it. Even bonuses for staff versus huge raises can be a fantastic overhead control recommendation. Number two, orthodontics is fragmenting. We’re not going to see the majority of practices in a similar production or revenue scenario. You want to be in the top 50%. And it didn’t matter until 2022 where profit is declining in the majority of orthodontic practices. Again, not bad, not gloom and doom. Nobody’s selling their house or car, but it is declining. I think that’s going to happen again this year for a lot of practices. So you really want to be focused on your production strategies moving forward. You don’t want to wait and then try to climb back to the top 50%. You want to be there and stay there.

And then number three is efficiency. Whether it’s marketing efficiency, whether it’s management efficiency, you now need to run the best business you can. There’s a term in the business world called sloppiness or slop. It’s not a negative term in some terrible way. It means inefficiency. We’ve got to remove the inefficiency. We see schedules that can’t fit any more patients in. And after we mathematically recalculate, we can grow 30%. So don’t let old habits hold you back because old habits worked in the old days, 2, 3, 4 years ago. But these are the new days. And you need innovative marketing and management strategies going forward, including retraining treatment coordinators to address the issues patients and parents care about, and even financial concerns that are much more severe than they used to be. Those would be my three takeaways.

Great. Well, Dr. Levin, I really appreciate you taking the time to dig into what the survey revealed about orthodontic practice in 2022 and for giving our listeners great tips to help them as they navigate the year ahead. So thank you so much.

Oh, my pleasure, Alison. Anytime. And I love working with you.

Great. Well, and are you going to be speaking at the AO, which is coming up in a few weeks?

I am. And I’m really excited about it because my title is 7 Critical Questions That You Need To Know About Orthodontics. So I tried to come up with seven most critical questions for the success of an orthodontic practice. I have an answer and then I have several key recommendations after each one. So I’m very excited because it’s a new type of presentation for me. I think it’ll help a lot of people, which is always [inaudible 00:51:44].

Great. Well, I hope our listeners go and check that out and come meet you. And to them as well, thanks for joining us. Be sure to subscribe to the MEDQOR Podcast Network to keep up with the latest Orthodontic Products podcast and check out orthodonticproductsonline.com to keep up with the latest industry news. Until next time, take care.