URBAN DENTAL PRACTICE – FINANCIAL SECURITY OR FINANCIAL UNCERTAINTY?

 The cost, reality and challenges a dental graduate should expect to face while setting up an urban practice today  

Disclaimer: The views expressed in this blog are the authors own and are derived from observations and personal experiences. They are in no way disrespectful to dentistry or to the dental community. This blog is the intellectual property of the blog owner and unauthorized reproduction of the blog material is prohibited.

“Implants, aesthetics, laser dentistry”. Bold white letters on a blue background, M.D.S credentials, premium interiors, glass doors, embossed logo...just about every ingredient needed to indicate a “would be” successful dental practice. Except one...patients!

A sense of uncertainty took over me as I realised that this was the 6^th dental clinic to open shop on a street within a distance of about 300 meters. That’s one dental clinic every 50 meters!

“Did this guy not notice the 5 clinics already present?” I thought. There were more dental clinics in the neighbourhood than there were businesses offering services for daily, weekly or monthly needs! Why the comparison you ask? Because, any given day, the demand for these services far outweighs that for root canals, implants and basic oral hygiene. Yet, somehow, it was the dental clinic that seemed more abundant even though the demand was mediocre to say the least!

Unable to control my curiosity about his decision-making ability, I went in and had a chat up front and found out that even though he was a “fresh” out-of-college M.D.S, he did belong to a strong financial background. So may be, paying the rent and establishing a patient base quickly were not the issues needing his immediate attention. Here I was, thinking that his decision to make a fresh start in an already overcrowded market was unwise.

Irrespective of the field he or she chooses, financial and job security are concepts that are engraved in the mindset of the average, urban, working Indian, growing up. No wonder then, in the absence of a proper financial support system, the first thoughts even a dentist has before setting up an urban practice are;

“Will I be able to afford the rent?”

“Will I earn a decent living?”

That’s because for a dentist, especially at the start of his/her's career, living and practicing in an urban area requires a decent monthly income. One that covers the cost of urban living and also leaves some scope for profit or savings;

P.S – The total in the figure does not include the initial Rs 5,00,000-7,00,000 investment that one needs to make in order to set up the clinic and the security deposit of Rs 50,000-2,00,000 for the place that one rents. However, it does include the cost of EMI’s assuming that one takes a loan for the above. All figures mentioned are monthly averages and may differ from location to location. All expenses are vulnerable to the inevitable inflation, so expect a price rise with every passing year.

From the figure estimates, it becomes clear that in an urban setting, the practicing dentist needs to target an income in the range of Rs 1,00,000 – 1,50,000 per month on an average in order to meet the cost of living.

Coming to some more number crunching, consider the fact that most patients will undergo at least a root canal procedure (approx. Rs 1800) compared to the few that will undergo an implant (approx. Rs 25,000) or a similar but high valued procedure. Hence, the average income per patient can be estimated to lie in the range of Rs 5000-7500 depending on various factors such as frequency of OPD, patient conversion rate (PCR) etc.

Do the math. In order to achieve the target income, the dentist needs a PCR (i.e. the number of patients agreeing for the treatment out of the total number of patients visiting the OPD) of at least 18-30 patients a month. That’s a PCR of about 1-2 per day! (Figuring in Sundays, holidays and the occasional off day).

But that seems like an achievable target right?! 

Well, we still haven’t figured in two important factors yet!

SATURATION and PATIENT FLOW

The WHO puts the figure at 1:10,000 i.e. 1 dentist per 10,000 people in the urban areas. Let us take a look at that figure from a realistic perspective.

The average population density in urban areas is 5000-10,000 people per sq km. The average number of dental clinics (includes private practice, trusts and chains) in the same area can be estimated to be around 5-7 (this figure is purely observational and numbers can vary between +/- 3).

In reality, this leaves us with 700-2000 people serving as the OPD set for every clinic in metro cities.

In the ideal scenario, that is a lot of patients per dentist! 

In reality, the chances of all 2000 people needing dental treatment and choosing one particular clinic for all present and future treatments are highly variable. Quite unlike the businesses that offer essential services where weekly or monthly visits are guaranteed, oral hygiene awareness is still a far cry away from being recognized as an essential part of the lifestyle of the Indian population!

The whole point of this number crunching is that in reality, there are a lot of extrinsic factors that limit the earning potential of an urban dental set up as summarised below;

As a result of these factors, the urban dental practice eventually ends up focusing on meeting monthly targets in order to keep up with the cost of living. 

Dentistry as a profession was always meant to be a service and not a business. The moment it became a business, cutthroat competition ensured that ethics went down the drain and the urban, practising dentist became the sacrificial lamb if he or she did not have a strong financial cushion to cover up for the losses.

To conclude, there is no doubt that dentistry remains a great field to build a career in...but there is an IF... IF one does have a financial cushion to fall back on during the days or years of struggle. 

IF NOT, it might turn out to be a bumpy ride for those who dig the well in the hope of finding the water that keeps flowing.

Not that one won't eventually find a ground after months or years of struggle...but after investing 5 or more years studying and another 5 or more years trying to establish one's practice, the question remains, "Does it really have to be this hard?"

THE SOLUTION

What? There is one?

Absolutely!

But unlike the general advice such as; shutting down colleges to combat saturation and demanding more jobs for dentists in government hospitals which just serve to stir up debates than achieve real outcomes, change needs to be encouraged at the individual level.

A change in mindset.

If you are dentist looking to set up an urban practice and thrive, here’s the mindset you need to develop;

DON’T PUT ALL YOUR EGGS IN ONE BASKET!

How?

Well, the answer to that needs a separate 1000 word blog and shall be covered in future blog posts.

Till then, follow www.gangaspeaks.blogspot.in to find out!

NEXT BLOG : #4
"I'm done with internship...should I pursue PG given the current odds of scoring a rank in the entrance exam?"
"Is it worth the effort?"
We take a look at both the sides of the PG ENTRANCE coin!
Blog goes live on 27/09/2017
Stay tuned!

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