The importance of productivity in estimating need for dentists
TRYFON BEAZOGLOU, Ph.D.,
DENNIS HEFFLEY, Ph.D.,
L. JACKSON BROWN, D.D.S., Ph.D. and
HOWARD BAILIT, D.M.D., Ph.D.
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ABSTRACT
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Background. Although the number of dentists is an important determinant of supply, other factors also contribute. Technological advancements and well-trained and managed auxiliary personnel affect supply by allowing dentists to produce more dental services per unit of time.
Methods. This article examines trends in dental output, productivity, number of dentists and dental care utilization from 1960 through 1998. The authors estimated growth rates for the entire period and selected subperiods using regression analysis. Growth rates for dentist productivity and per capita utilization are important to estimate the number of active dentists needed in the year 2020.
Results. Based on ADA practice survey data, the annual growth rate in dentists’ productivity was 1.41 percent from 1960 through 1998. However, productivity grew at different rates during this period. It increased 3.95 percent per year from 1960 to 1974. There was a decline in productivity of 0.13 percent annually from 1974 to 1991. From 1991 to 1998, productivity grew 1.05 percent annually.
Conclusions. Accurate estimates of changes in dentist productivity are important in evaluating the adequacy of the number of dentists to meet the demand for dental services.
Practice Implications. Since productivity generally increases over time, failure to account for changes in productivity can lead to an overestimation of the number of dentists required for any given level of demand for dental services.
The supply of dental services usually is measured in terms of the number of licensed and professionally active dentists in an area. Although the number of dentists is an important determinant of supply, other factors also contribute. Dental equipment, supplies and well-trained and managed auxiliary personnel also affect supply by allowing dentists to produce more dental services per unit of time.1 In the longer term, technological innovations (such as new restorative materials) and changes in the number, mix and roles of auxiliaries in each practice may alter dentists’ productivity. Similarly, underemployment of dentists (the "busyness problem") that results from rapid growth in the number of dentists or inadequate growth in the demand for dental care may lead to a decline in productivity.2
Accurate estimates of changes in dentist productivity are important in evaluating the adequacy of the number of dentists to meet the demand for dental services.
Accurate estimates of changes in dentists’ productivity are important in evaluating the adequacy of the number of dentists to meet the demand for dental services. One reason is that training dentists is very expensive, in comparison with the costs of training people in other categories of the dental work force. In addition, the average professional life of a dentist lasts about 35 years.3 Clearly, if productivity improves, then fewer dentists can produce the same amount of dental services. In the last quarter-century, productivity has increased in numerous sectors of the U.S. economy, and it is likely that the dental sector is part of this general trend.
While productivity is critical to evaluating the adequacy of the U.S. dental work force, so are changes in the population’s demand for care. In a market economy, the demand for dental services is not constant over time. New services (such as providing dental implants), a decline in caries, greater per capita income and access to dental insurance all influence the demand for care. Likewise, changes in the age distribution of the U.S. population may affect demand by influencing the volume and pattern of services that dentists provide.
For all of these reasons, basing forecasts of the future need for dentists on the dentist-to-population ratio and ignoring productivity and utilization changes may lead to serious errors. The following formula illustrates some of the factors to consider when assessing dentists in relationship to population4:
where DENt is the number of dentists, POPt isthe population, Ut is the utilization per person and Pt is productivity per dentist at time t. The ratio Ut/Pt is equal to the dentist-to-population ratio, given that Ut is dental output per person and Pt is dental output per dentist.
As the formula shows, the appropriate number of dentists clearly is related to the size of the population. However, this relationship is modified by other factors. If per capita utilization (Ut) increases, then the number of dentists per unit of population also will need to increase to keep supply from lagging behind demand. Alternatively, if supply has grown faster than demand, there may be idle capacity in the dental delivery system because dentists are not fully busy. In that case, increasing the busyness of existing dentists is preferable to increasing the number of dentists. Finally, changes in dentists’ productivity (Pt) will reduce thenumber of dentists that is appropriate per unit of population, if the previous factors do not change commensurately.
Basing forecasts of the future need for dentists on the dentist-to-population ratio and ignoring productivity and utilization changes may lead to serious errors.
In this article, we estimate changes in the U.S. population’s utilization of dental care, as well as dentists’ productivity, as measured by output per unit of time and from 1960 through 1998. Empirical estimates of productivity published by U.S. government agencies typically use this single-factor measure of productivity. The measure is influenced by demand conditions and may decline if the capacity of the dental delivery system is not fully used owing to a decline in demand relative to supply. This is important information, because it indicates when the dental system may be operating at less than capacity.
Assessment of dentists’ productivity relative to other inputs in the production of dental services (for example, dental auxiliaries and equipment) is best accomplished by production function analysis. Conceptually, the latter measure is not influenced by market conditions and is closer to a measure of productive potential for a given combination of inputs. (For a more detailed and technical explanation of both of these types of production estimates, see Beazoglou and colleagues.5 For a review of the literature on work force and productivity, both dental and general, see Goodman and Weyant,6 Capilouto and colleagues7 and Cowing and Stevenson.8) We use these data to estimate the number of active dentists needed in the year 2020 to maintain current (for purposes of this evaluation, "current" means the year 2000, the latest year for which data are available) access levels, assuming other market conditions stay the same.
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METHODS
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Data sources.
We used two main sources of data in this review. From the American Dental Association, we obtained data on the number of professionally active dentists in the United States9,10 and gross billings from dental practices11; from the federal government, we had access to data on dental care expenditures and prices,12,13 as well as information on the U.S. population.14,15 (Dental expenditures are reported annually by the Centers for Medicare and Medicaid Services12 of the U.S. Department of Health and Human Services and are available for the period 1960 through 1998.)
Definitions and measures.
First, we measured total dental output: national dental expenditures deflated by the dental component of the Consumer Price Index, or CPI, for each year, during the period 1960 through 1998.
Second, we measured dentist productivity (output) using two different approaches:
- – total dental output divided by the total number of professionally active dentists;
- – gross billings per dentist from annual surveys of dental practice.
(Productivity estimates based on annual surveys of dental practice are not affected by the accuracy of the total number of professionally active dentists.)
Third, we measured dental care utilization per capita: total dental output divided by population for the same period.
Data analysis.
First, we examined trends in dental output, productivity, number of dentists and utilization during the period 1960 through 1998. We estimated growth rates for the entire period and selected subperiods using regression analysis. To estimate the number of active dentists needed in the year 2020, we used growth rates for dentist productivity and per capita utilization.
Second, we used regression analysis to estimate the impact of a number of variables—changes in demand for dental care (for example, disposable income per capita, dentist-to-population ratio), dental practice (for example, number of operatories), technology and dentists’ hours worked per year—on productivity. It should be noted that there are no readily available time series measures for percentage of female dentists, mean years of training, dentists’ mean age, auxiliaries’ hours of work and other inputs.
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RESULTS
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Dental output, utilization and prices.
The use of dental services (total dental output) more than tripled between 1960 and 1998 (Figure 1
), going from $7,270 million to $22,790 million (in 1982–1984 dollars). The average rate of growth was about 3 percent per year (Table 1). The growth rate was higher (5.01 percent) early in the period (1960–1980) and lower (1.80 percent) more recently (1991–1998).
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Figure 1. Dental output in the United States, 1960 through 1998, in millions of dollars. Sources: American Dental Association, Health Policy Resources Center10; American Dental Association, Survey Center11; Center for Medicare and Medicaid Services12; U.S. Bureau of Labor Statistics13; U.S. Bureau of the Census.14,15
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Growth in dental output also is expressed in terms of changes in population and per capita utilization (Figure 2). The population growth rate was stable at about 1 percent throughout the period. In contrast, per capita utilization of dental services per year increased rapidly from 1960 through 1974 (3.83 percent) and later declined by 0.82 percent from 1991 through 1998 (Table 1
).
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Figure 2. Dental care utilization per capita in the United States, 1960 through 1998, in 1982–1984 dollars. Sources: American Dental Association, Health Policy Resources Center10; American Dental Association, Survey Center11; Center for Medicare and Medicaid Services12; U.S. Bureau of Labor Statistics13; U.S. Bureau of the Census.14,15
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Dental fees (both absolute and relative to CPI) and real out-of-pocket expenses are important determinants of the demand and supply of dental services. Table 2 presents the rate of growth in dental fees and real out-of-pocket expenses. Fees grew by 6.37 percent per year throughout the period. Most of this increase can be attributed to general inflation. Adjusted for general inflation, dental fees (relative prices) rose about 1 percent per year. In contrast, real out-of-pocket expenses declined for the period.
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TABLE 2 GROWTH RATES (PERCENTAGE CHANGE) OF PRICES, RELATIVE PRICES AND REAL OUT-OF-POCKET EXPENSES, 1960 THROUGH 1998.
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Number of dentists and productivity.
From 1960 through 1998, the number of active dentists grew at a higher rate (1.64 percent) than did the population (1.02 percent). Most of thisgrowth occurred from 1974 to 1991, when the number of active dentists increased twice as quickly as did the population.
Dentists’ output per hour (Figure 3) grew at different rates: 3.95 percent per year from 1960 through 1974, –.13 percent from 1974 through 1991, 1.95 percent from 1991 through 1998 and 1.41 percent from 1960 through 1998. Using the ADA practice survey data, we calculated the annual growth rate of dentists’ productivity to be 1.05 percent from 1991 through 1998.
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Figure 3. Dentists’ productivity in the United States, 1960 through 1998, in 1982–1984 dollars. Sources: American Dental Association, Health Policy Resources Center10; American Dental Association, Survey Center11; Center for Medicare and Medicaid Services12; U.S. Bureau of Labor Statistics13; U.S. Bureau of the Census.14,15
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Factors influencing productivity.
The variation in dentists’ productivity over time is explained very well by variations in the dentist-to-population ratio, dentist hours of work, real disposable income and number of operatories. The annual growth in dentists’ productivity, holding the above factors constant, is an estimated 2.61 percent. Dentists’ and auxiliary personnel’s work hours and size of the office (measured by square feet of office space) are important determinants of dental practice productivity. Similarly, the dentist-to-population ratio and real disposable income, measures of the demand for dental care, contribute significantly to variation in dentists’ productivity.
Dentist projections, 2000 to 2020.
In the year 2000, there were 281,421,906 people and 166,049 dentists in the United States, resulting in a 1 to 1,695 dentist-to-population ratio. In the year 2020, the population is estimated to total 332,145,221. To maintain the 2000 dentist-to-population ratio in 2020, 195,978 professionally active dentists will be needed—an increase of 29,929 dentists from year 2000 levels. The annual difference between dentists entering and dentists leaving professionally active status must average 1,496 to generate the 29,929 additional dentists needed to keep the 2000 and 2020 dentist-to-population ratios equal.
If dentists’ productivity grows at the same rate as it did in the period 1991 through 1998 (1.05 percent per year—the lower estimate of productivity growth), this is equivalent to an increase in the productive equivalent of 38,578 active dentists by 2020—far more than the required 29,929. Thus, an annual productivity growth rate of 1.05 percent would result in the productive equivalent of 204,627 dentists in 2020.
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DISCUSSION
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Dentists’ productivity has increased significantly over the past 40 years. Specifically, during this period, dental output has more than tripled, and almost half of this increase is accounted for by the growth in dentists’ productivity. This means that the average dentist is able to see more patients and provide more services per unit of time now than in earlier years. Interestingly, this increase has occurred while the dental work force has aged and its sex mix shifted significantly and while, on average, practitioners are working fewer hours per year.
We estimated the annual rate of productivity increase during the 1960 through 1998 period to be 1.41 percent. However, dentists’ productivity showed very different patterns during this period. Three distinct trends in productivity occurred from 1960 through 1998. From 1960 through 1974, productivity increased rapidly as dentists moved to high-speed drills and the greater use of auxiliaries. From 1974 through 1990, productivity actually declined. In part, this was the result of a large increase in the number of dental graduates without a concomitant increase in patient demand. As a result, dentists were less busy and, in turn, less productive per unit of time. From 1991 through 1998, productivity increased as the business problem eased, the general economy improved and dentists responded by employing more auxiliaries and increasing the size of their offices.
It is of great importance that the total national output of dental services has continued to expand for 40 years, and the demand for dental care has increased during that time as well. The latter is reflected in rising dental prices that modestly exceeded growth in the CPI. Also, utilization increased at the same time the oral health of the American people was undergoing dramatic improvements. Of course, the mix of services patients receive has changed significantly, with large increases in diagnostic, preventive and cosmetic services and equally large reductions in extractions, restorative care and provision of full removable dentures.16-18
With estimates of dentist productivity now available, it is clear that basing the need for dentists on the dentist-to-population ratio alone will result in a serious miscalculation of the number of dentists needed to produce a given amount of dentistry. The difference between the two estimates for the number of dentists needed in 2020 to maintain current access levels is substantial: almost 10,000 practitioners. This represents about 5 percent of dentists in 2020 on a base of some 200,000 practitioners.
Of course, many factors affect the required number of dentists. Changes in the dental work force need to be evaluated carefully on a continuous basis. This includes dentists’ demographic characteristics (such as age and sex), the use and availability of allied personnel and new technologies.
Demand for dental services also plays an important role in work force requirements. Predicting growth in per capita dental expenditures, however, is difficult, because it depends on the growth in the overall economy, socioeconomic shifts in the population, changes in therapeutic and preventive interventions, and the impact of changing oral disease rates as well as dental fees. These factors also warrant careful tracking.
We appreciate that large segments of the population—the poor, near poor, medically disabled and geographically isolated—have relatively low utilization rates compared with those of other, more affluent groups. We sincerely hope that funding for these groups will increase. If major new funding programs become available or if major new treatment opportunities emerge, per capita utilization may increase. However, without greater public subsidy (for instance, Medicaid eligibility and fee increases), the demand for dental care by underserved populations is unlikely to increase rapidly.
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CONCLUSION
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Work force requirements are influenced by many factors other than just the number of dentists. One of these factors is dentists’ productivity, which increased markedly during the past 40 years. Thus, the simple dentist-to-population ratio, by itself, should not be used to estimate the adequacy of the future supply of dental services. Dentists’ productivity is improving, and this must be considered in work force studies. When the productivity of the dental delivery system is close to its capacity, additional increases in productivity arise from technical and scientific advances. However, the U.S. economy leads the world in these types of advances. Thus, dentists’ productivity is likely to continue to improve and will need to be evaluated as part of work force assessments.
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FOOTNOTES
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Dr. Beazoglou is an associate professor, University of Connecticut Health Center, Department of Pediatric Dentistry, Farmington.
Dr. Heffley is a professor, Economics Department, University of Connecticut, Storrs.
Dr. Brown is the associate executive director, Health Policy Resources Center, American Dental Association, 211 E. Chicago Ave., Chicago, Ill. 60611, e-mail "brownja{at}ada.org". Address reprint requests to Dr. Brown.
Dr. Bailit is a professor and the director, Health Policy and Primary Care Research Center, University of Connecticut Health Center, Farmington.
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REFERENCES
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ABSTRACT
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