By Dr. Roger P. Levin
November 15, 2012
For the last six months, I have been asked at almost every seminar I give what effects the Affordable Care Act (also known as Obamacare) would have on dentistry if President Obama was re-elected. My answer has been very simple in that no one will know that until after the election – and even then the total impact may not be realized until we actually start to experience the effects of this groundbreaking legislation because so much depends on bipartisanism. Here is what we do know:
- President Obama won the election and Congress is basically the same as it was before the election. So for all the money and time spent on the election, not much has changed in that regard.
- There are deadlines to implement the Affordable Care Act and we are already seeing some fundamental shifts to meet those directives. A full understanding of the impact of this legislation will not happen until it is further implemented.
- The role of insurance companies and government agencies is still being defined but there will be changes in coverage, plans, pricing, etc. for both medical and dental care. Dentists can be sure that any dental service that includes federal and/or state government involvement such as Medicaid coverage for children will be heavily regulated.
- Taxes will go up. It is still undetermined whether or not taxes will go up only for specific income brackets or across the board. Either way most dentists can be assured that they will be paying higher personal income tax in the future.
- Additional taxation will impact dental products and services. For example, there is a proposal for a 2% tax hike on laboratory-fabricated dentistry. The exact details are not available for every aspect of our profession but you will definitely need the assistance of a qualified CPA to determine how these changes will impact your practice.
- There is a strong chance that the depreciation schedule on new equipment investments for all businesses will be changed or eliminated. The present depreciation schedule will remain in effect on approved equipment investments through the end of 2012 and it is anybody's guess as to what will happen after that.
The real message for dentists is that we are four years into the recession and the economy has yet to see any bright light at the end of the tunnel. According to the Levin Group Data Center™, 75% of practices have experienced production declines. Dental Economics Levin Group Annual Practice Survey dental practices declined over the past 4 years and the number of new patients entering dental practice is still off by approximately 30%. Regardless of the effects of the Affordable Care Act, dentists need to act now focusing on increasing practice production and reengineering their practices to meet the expectations and demands of the changing economic environment. Practices that focus on developing business practices that address these changes will be best positioned to respond with the least impact to their bottom line. My best advice: don’t wait to see what the Affordable Care Act is going to do. Dentists should focus very heavily on operating an excellent business as the current economy has changed the profession on a permanent basis. An improvement in the U.S. economy will not simply improve dental practices automatically. Those that are developing and implementing excellent business methods and continuing to innovate on a regular basis will have no problem increasing production, profit and income. Those that don't may find themselves in a plateau or even in a production decline.
Take action now to position your practice for stable growth and increased profitability as the future unfolds. Dentistry has and will continue to be a strong and viable industry for those who meet the challenges of this new economy head-on.
RELATED: 9 ways to make sure your small business is better off four years from now, no matter who wins the election
RELATED: Preparing for "taxmageddon"
