The Controlled Economy of Dentistry

DentistryOver at Wonk Blog, Max Ehrenfreund wrote an article that is close to my heart, Why Dentists Are So Darn Rich. This is following from the lion hunting dentist. But I’ve long been aware of just how much money dentists make. I used to manage a dental office. And actually, I really liked it. I find dentistry fascinating — and it is really important. But it is also a scam.

A big reason that dentists make a lot of money is because they are small business owners. When I was working, a half hour cleaning cost $80, and the hygienists who did all the work got paid $45 per hour or $22.50 per patient — so that’s about one quarter of the cost. Let’s assume an overhead of 100%, which is high. The dentist/owner make $70 for each hour that the hygienist is working. Imagine if the dentist had three hygienists working — as some do.

But it is also true that dentists simply don’t compete with each other. Consider a crown. We charged $850 for a molar crown. The lab charged us $100 for it. The dentist normally had an assistant who made $25 per hour. The dentist needed to do about a half hour of work to prepare for the crown and take the impression. Putting it in could take as long as 15 minutes, but usually took less than five. But let’s make the math easy and say the whole thing took an hour. So the total cost was $125, which we will double with our 100% overhead. So the total cost was $250 for the crown, with a $600 profit. For one hour of work.

Ehrenfreund discussed the effect of insurance on dental costs. But I don’t think this actually has anything to do with it. Insurers pay as much as dentists charge. And dentists charge as much as they do because they are used to a certain standard of living. And that standard is very high. The truth of the matter is that I’ve known a lot of dentists. Some were really good at their jobs. Some I would never let work on me. But none of them was particularly brilliant. I think anyone could be taught to be a decent dentist.

The problem with dentistry is the problem with capitalism. I get so tired of hearing conservatives (libertarians especially) glibly talk about the efficiency of markets. There certainly are such things. I have little doubt that the corn futures market is as close to a Platonic ideal as we are ever going to get. But when we are talking about classes and the people who make them up, it is a very different matter. People often show surprise that billionaires continue to collect money. I’m surprised that they are surprised. Just like most poor people think they deserve to at least not starve to death, the billionaires believe they deserve ever greater wealth. It’s human nature.

So why do dentists make so much money? Because that’s how much money dentists make. The dentist I worked for had a brother who was a dentist. And they both had a father who was a dentist. The father built the practice, and the sons split it between them when he retired. You know: meritocracy! But the point is that no one goes off to dental school without knowing the kind of money that they are going to make. So sure: in an actual competitive market, cleanings could be $40 and crowns could be $300.[1] But they aren’t going to be because all the dentists — not the patients — have decided that they won’t work for that. And they have all kinds of laws and a great big lobbying group to make sure that they don’t have to.

[1] In fact, if you go to Mexico, where you will get US trained dentists, you will pay less than this. They have a far more free market in dental care than we have here in the US.

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About Frank Moraes

Frank Moraes is a freelance writer and editor online and in print. He is educated as a scientist with a PhD in Atmospheric Physics. He has worked in climate science, remote sensing, throughout the computer industry, and as a college physics instructor. Find out more at About Frank Moraes.

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