Every year there’s an updated list of “Best Places to Retire” in various publications, both regional and national. For transitioning doctors, these lists should perhaps garner more interest than they do. Why? Generally, older individuals, including retirees, are the real lifeblood of the crown and bridge practice. Pediatric and orthodontic practices will also benefit from the general growth as families move into the region and the recovery stabilizes.
Disposable income? Retirees have it.
These new retiree patients are more likely to be interested in higher-cost restorative and cosmetic procedures, and also more likely to pay to get what they want. It is no secret to dentists that insurance plans rarely contribute much for extensive reconstruction and cosmetic procedures, which has historically prompted the patient to hesitate to undergo treatment. Conversely, as this generation steps into retirement, many do it in style. Much of this generation has been financially conservative for their entire life, which helped them endure the economic downturn, and now they want the lifestyle they have delayed. They want relaxation, fun, and want to enjoy it with the perfect smile they’ve always wanted.
In the short term, these patients will have been insulated from any declining market — mostly out of high-risk investments and are more heavily invested in diversified funds that will provide a continued source of income. Those who are a bit further away from retirement have time to let some of their higher risk investments come back while sticking with their diversification. Bottom line, these retirees have disposable income, and are willing to use it to better their smiles.
Ideal location? You don’t have to live where you work.
While many dentists purchasing a dental practice are focused on growth areas; searching for neighborhoods that have residents similar to their own age and demographic, the reality is that these areas may be some of the hardest areas to be successful and profitable in dentistry. Why? The areas comprised of young professionals and new families generally don’t have major dental needs nor do they have a great deal of disposable income. Without much leftover cash, providing oral health to patients who can pay the fees for service at the most profitable rates is extremely difficult. While this is not the final determinant of a ‘successful’ practice, it’s certainly a favorable position.
That is not to say that just because a purchaser may want to live in a specific area that they are not able to benefit from the inherent value of the broader area’s demographics. While this may require a commute to the office, it’s worth careful consideration of the trade-offs and potential long-term benefits of living in your desired area, while working in another.
So, if you are in your own practice now, plan for and enjoy what the future has to offer. If you are not, and you are looking to purchase, consider areas that may not be demographically similar to you, but will provide the most profitable outlook for your future.
Retirement communities: Built-in business
Remember, there are also whole communities and towns that have been built for retirees. These smaller, often more rural communities offer many advantages over big cities. The facility costs are usually much less and the staff is often very stable (jobs as a dental assistant or front desk clerk are more often viewed as a career in these communities, rather than a stepping stone). Generally, overhead can be anywhere from 10% to 20% lower in rural areas. Another advantage of these areas is the generally less reduced-fee insurance, because there are fewer large corporations or manufacturing employers providing desirable benefits.
The greatest advantage of practicing in these communities is the “older” patients themselves. They typically have a greater respect for your time; arrive for appointments early and have a significantly lower cancellation rate. Additionally, they are available for appointments during weekday business hours. Retired patients place a higher value on relationships, and will seek one with you and your staff. If you invest some personal time with them, they will not only accept the treatment that you recommend, they will often request treatment.
These patients also tend to pay their bills promptly and regularly. Even more importantly, if you provide a personalized environment, they will become advocates for your practice. Although the importance of modern marketing (i.e. web presence) cannot be overstated, this “internal marketing” can provide an abundance of practice growth, ensuring the success of your practice.
The advantages of practicing in a more rural community are many fold and should seriously be considered. If you not only “think outside the box”, but consider practicing outside the box, you can achieve the practice (and all rewards it brings) that you imagined when you applied to dental school.