Signal of the Times

Jan/Feb 2024:  Favorite ortho stories, industry insights, and study clubs/events for the local area orthodontists I cover

If you felt bad about 2023… at least don’t feel alone.  

Most of the cash stimulus and gains from post-pandemic era is gone.  Spent.   And with that, a significant drop in starts comparatively.   Notably with adults.

2.

But there’s another issue coming for child starts: A dropping US birth rate.  

Outside my best efforts (..We’re expecting our 4th), there’s less kids coming down the pipeline.Less kids means less teeth to straighten, further fueling practice competition.     

 (Ohio, as of 2018, is trending worse than the US average.)

 Combine that with most OSO’s needing to hit their annual 5% growth  – it’s game on.

 …gifting us even more creative TikTok clips of orthodontist’s dancing.

 3.

 …Yet, the good news is that the orthodontic industry is still expected to grow at 3-5% rate.

 Margins and profitability should remain in the high 50-60s, with less able to do more via outsourcing & tech, and a rebound with adults.

 4.

 But here’s a huge signal of the times:  virtual, remote orthodontic assisting.

 We’re entering an era where some assistants can be fully remote and external.

 …two assistants can work for the same practice, and never know it.

 5.

 So what’s this all mean..

 Average orthodontic employee retention rate is now 2-3 years, resulting in staff shortages, with more outsourcing businesses including orthodontic remote assistants coming into the marketplace.

• Outsourcing will continue to grow (Supplies and Lab) and slowly overtake (in-house staffing and resources) for practices due to technology and A.I.

• A declining birth rate will make it more important than ever to double down on what makes your orthodontic practice different and unique in this changing environment.  I absolutely argue that efficiency with efficacy is a goal for the modern orthodontic practice to win today.

 But keep in perspective of how far the industry has come:

 When my father started in his practice in the early 1980s, the median orthodontic practice had:

• Overheard at 49%

• Collections around $190,000  (Or $700,000 in today’s dollars)

• Full Treatment cost was $1,700 (about $6500 in today’s dollars)

• The average patients per day was 38

• The average number of starts was less than 200/year

• Most, if not all, patients were kids

 To end, I’ll recap a quote by Sahil Bloom:

 “You’ve done more than you think, and reached higher heights than you appreciate today.    Many people walk this earth better because of the gifts you’ve given them.

Zoom out once in a while.... and claim perspective.”