Practice Ownership or Employment?

A recent survey of dental school seniors shows that issues such as controlling their own work schedule and opportunities for self-employment are very important reasons why they pursued dentistry. So it is not surprising that about half of surveyed seniors planned to enter private practice immediately after graduation. According to analysis by the American Dental Association Health Policy Institute, 80 percent of dentists in private practice were practice owners in 2015. Physicians started out on the same path a few decades ago. However, the percent of practice owners among physicians has declined steadily from 76 percent in 1983 to 61 percent in 2001 to 47 percent in 2016. More physicians – especially younger physicians, are choosing employment for a variety of reasons including to avoid administrative hassles, focus on being a doctor, and lack of money to invest in a practice.

Anecdotally, a lot of dentists view physicians with pity as physicians are more and more employed and have to work for hospitals instead of working for themselves. But do these physicians pity themselves? Studies suggest that employed physicians are happier and have higher satisfaction levels compared to owner physicians. Employed physicians view lack of administrative hassles, guaranteed income/less financial risk, good benefits packages, and work-life balance as some of the perks of employment. Considering that dental school graduates feel they are not adequately prepared for practice management, experience increasing levels of student debt, and face large costs to buy a practice, would employment really be such a bad option?

Beyond initial monetary concerns, let’s consider potential altruistic motive. Dental school seniors also mentioned service to others as a very important factor in pursuing dentistry. However, only 37.5 percent of dentists currently participate in Medicaid compared to about 69 percent of physicians. Further, employed physicians see more Medicaid patients than owner physicians. Sure, Medicaid reimbursement for dentists is low – only 62 percent of private payer reimbursement; but it is even lower for physicians – only 60 percent of private payer reimbursement. It is plausible that private dental practice owners cannot afford to see more Medicaid patients due to low reimbursement, but being employed would eliminate or at the very least reduce this financial insecurity. It would offer more opportunities to serve the public without assuming financial risk.

U.S. physicians have been subjected to many policy changes over the past 50 years that largely changed the way medicine is practiced, and dentists have mostly been sheltered from these changes. However, implementation of electronic health records, changes in payment models, medical-dental integration, and heightened focus on quality and value could impact dentistry greatly in the years to come. Will such changes make it more financially difficult to own a dental practice? Would it be easier and safer to be employed in such a scenario? Hospitals or dental service organizations would assume the risks while dentists enjoy the perks of employment. It depends on each individual’s personality type – some dentists surely avoid risk while others are risk takers; some enjoy and have a great aptitude for running a business while others want to focus solely on delivering care. Further, in an era of smartphones, apps and changing needs of today’s patients, dentists will need to adapt and evolve. Whether that is by undertaking employment or through adopting a newer model of practice ownership is up to the dentists.


Niodita Gupta, MD, MPH, PhD

Health Services Researcher, American Dental Association Health Policy Institute


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