ortho - the international C.E. magazine of orthodontics

ortho1_201214 I I practice matters_ staying competitive ers. Particularly of interest to orthodontists are the 4,058,000childrenbornin2000,thehighestnumber of births since 1992. These millennial babies are turning 12 this year, prime candidates for full phase adolescent treat- ment. Total U.S. population growth is predicted at 8.7 percent through 2020 and 8.3 percent from 2020–2030 with significantly high percentages of this growth concentrated in the Hispanic, Asian Pacific Islander and African American ethnic groups. _Financial lending Even with little organic orthodontic practice growth and the increasing educational debt of residents, money is available for practice purchases or start-ups for young doctors. Local banks that are primarilyassetlendersoftenhavetroubleunderwrit- ing orthodontic practice purchases. But an array of cash-flow lenders that focus on dental transaction lending for both start-ups and acquisitionshaveteamsthatareaggressivelyseeking out and lending to young orthodontists. Why? Because the performance of these loan portfolios is superior to most other types of loans these institutions underwrite. Orthodontics does and will continue to provide doctor/owners with an exceptionalreturnoninvestments,andcertainlend- ersunderstandandwanttoparticipateinthisreturn in today’s market. Money for practice purchases for young doctors typicallyrequiresnodownpayment,repaymentover seven to 10 years, with some programs being longer and often with a fixed interest rate. Larger practice loans often require the seller to carrysomeofthepurchasepriceinanotewithmany lenders agreeable to refinancing the seller portion afterayearortwooftimelypaymentsandmonitored practice performance of the new owner, thus allow- ing the seller to be fully cashed out within several years of the change of ownership. _Trends in orthodontics DecreaseinGPanddentalspecialtyreferrals Severaltrendscurrentlyinprocessdivertfromthe normsseenoverthelast30years.Chiefamongthem is a decrease in the number of referrals from general dentists or other dental specialties. According to data published by the JCO on prac- tice studies completed from 1983 to 2011, general dental referrals accounted for 50 percent or greater ofthetotalreferralsfororthodonticpracticeowners for the years 1983–1999. Since that time, this referring source has steadily declined,representing41percentoftotalreferralsin the2009practicestudyand40percentintherecently published 2011 study. Referrals from other dental specialistsalsodeclinedfrom2percentovertheyears from1983–2009to1percentoftotalreferralsinthe latest 2011 study. This is believed to primarily be a result of the increase of pediatric dentists bringing orthodontic treatment into their practices. Increaseininternalmarketingprograms As a result of a decrease in referrals form other dental professionals, practices have aggressively employed ideas and strategies to generate internal referrals. Patient referrals increased from 30 percent in the 2007 JCO Practice Study to 35 percent in both the 2009 and 2011 studies. Our observation is that generating a program to increase internal referrals is a learned skill and demandsasystemorprocessthatincludestheentire orthodontic team to be most effective. This is most easily accomplished by employing a consultanttohelpthepracticelearnhowtogenerate referrals and implement a systematic approach to seek referrals from patients. Increaseinuseofwebsiteandsocialmedia A derivative of the drive to generate patient re- ferrals is a push to increase the effectiveness of the practice website and communication with patients and prospective patients by using social media and networking tools. Not so many years ago, having a website was the goal; today, practices that have learned to leverage their websites and other social media tools tend to showhighernew-patientflowthanthosethatdonot and often higher numbers of case starts. Abbreviatedtreatmenttimes For years, the average treatment time for full- phase orthodontic treatment stayed very close to 24 months. This length coincided well with payments that fit nicely within the family budget. In recent years, adoption of certain treatment modalities has resulted in a decrease in the average number of months in treatment for patients. The 2009 JCO Practice Study reported average treatment times of 22 months, down from the tra- ditional 24 months for the first time. Many practices report treatment times in the 15–18 month aver- age range with the use of certain newer treatment modalities. Newapproachestofeesandpaymentmethods With some practices experiencing shorter treat- ment times and some treatment modalities associ- ated with per-case lab fees or higher cost of goods, treatment fees posted an increase of only three percent between 2009 and 2011, according to the