Alberta Dental Fee Guide

In December 2016, the Alberta Government announced that it was working with the Alberta Dental Association and College (ADA&C) on a fee guide. The purpose of this initiative was to reduce the fees in Alberta, Reportedly, the fees in Alberta are higher by 30% than the other provinces in the country. The media such as the CBC reported complaints by members of the public about the high fees in the province. CBC also reported complaints by the insurance companies as well. According to a Blue Cross survey, a typical annual checkup for an adult costs $357.43 in Alberta. The same visit costs on average $164.90 in B.C. and $192 in Saskatchewan.Most provinces have a fee guide in place.

A guide is a list of procedure and fees that are available to the public. However, a guide is not mandatory. In other words, it’s up to the dentists to adjust their fees accordingly. Alberta had a fee guide in the past until 1997, when the competition bureau deemed it was creating price fixing as all dentists were charging the fee guide rates.

After months of negotiations, the ADA&C presented a fee guide to the minister of health Sarah Hoffman in August 2017. The minister of health rejected the fee guide saying the price drop was in adequate and both parties are back at the negotiation table.

 

Most dentists are disgruntled with the minister’s approach. They believe that it disregards the fact that the cost of running a practice in Alberta is much higher than elsewhere in Canada. For example, staff are paid 50% more in Alberta than in Ontario. A more specific example would be an assistant average hourly rate is about $26 in Alberta versus $19 in Ontario according to data from pay scale.com.

In my opinion, the ADA&C will have no choice but to present a fee guide that offers at least a 15% reduction in fees for the minister and the public to accept it. Just like in the past, most practices fees will hover around the fee guide. This will drive down revenues and profit margins for most practices particularly those with higher than average fees.

Some dentists argue that they might be able to drive down the expenses to maintain the profit margins. I think that this is just not true. Overhead expensed are dictated by economic forces that are not controlled by dentists. For instance, there is only a couple of supply companies and limited training programs for staff. Besides there has been a substantial increase in competition due to the equivalency examination program that started in 2011.

Others are told by their sales reps that their loyal patients won’t leave them to see some one else across the street who offers lower fees. The reality though that they are not aware of is that the insurance companies will drop their payouts in accordance with the fee guide. This means a much higher copayment by the client. For example, say a dentist charges $110 for a complete exam. The client’s insurance Alberta Blue Cross fee is $100 for a complete exam and with 100% coverage, the patient pays $10 out of pocket. Let’s assume that according to the final fee guide, the fee for a complete exam is only $90. Alberta Blue Cross will update their fees and decrease their complete exam fee to $85. Now, if the dentist keeps their fees the same, that new patient will cough up $25 out of pocket instead of just $10. $15 is not little money in today’s economy and it adds up.

In the end, the fee guide and the liberal tax reforms are only the latest troubles for dentists in the province, adding insult to injury from the provincial recession and increased competition due to the skyrocketing number of new dentists entering the market. For more information on the new equivalency process, please refer to my blog titled: Oversupply of Dentists in Canada.

Dentistry and Porter Five Forces Competition Analysis

 

According to Professor Porter there are five forces or powers that determine the degree of competition in a business environment:

1. Supplier power: the fewer the supplier the less power a business would have.
2. Buyer power: the fewer the buyers the less power you would have.
3. Competitive rivalry: how many other businesses provide similar products or services.
4. Threat of substitution: how easy is it for customers to find another way or product to achieve the same result.
5. Threat of new entry: how easy is it for new businesses to enter the market and compete against you.

I would argue that in dentistry in general and particularly in Canada, all the forces work against the dentists especially the newbies. Here is how:

1. Supplier power: there is only a handful of major dental supply companies that dentists deal with. In Canada, these are Henry Schein, Patterson, and Sinclair. Their prices are very comparable. It’s a situation similar to the case of phone and data providers: Telus, Bell, and Rogers. Consequently, dentists have very little bargaining power when they purchase equipment and materials
2. Buyer power: the end customer of dental services is the patient. Unfortunately, the population to dentist ratio is falling across Canada. This gives the patients more bargaining power over dentists. Moreover, there is only a few insurance companies that provide dental plans and they have tremendous bargaining power over dentists as patients rarely go to the dentist unless the service is covered by their plan.
3. Competitive Rivalry: dentistry is a homogenous health service and it’s very difficult to differentiate yourself from other dentists without stepping on the toes of the licensing jurisdictions. In the eyes of the patients, all dentists are the same. Moreover, a lot of dentists are willing to throw their colleagues under the bus in the hope of winning over some patients.
4. Threat of substitution: this might be the only power that keeps dental clinics open. People will always have teeth that need to be checked and maintained. However, it might not take long before patients can bypass the dentist to achieve their goals. Just look at the increasing number of over the counter dental products such as whitening products and night guards.
5. Threat of new entry: although it’s still quite challenging to get into a dental program in Canada, it’s not really the case for foreign-trained dentists. Canada has relaxed its criteria for immigration and foreign dental credentials. For more information, please refer to my blog on the oversupply of dentists.

The Equivalency Process & The Standard of Care

In 2011, the Canadian National Dental Examination Board (NDEB) launched the equivalency process for foreign or internationally trained dentists (FTDs). A foreign-trained dentist is a dentist who graduated from an un-accredited dental program. As of 2012, dental schools in Canada, the US, Australia, New Zealand and Ireland are considered accredited.

The equivalency process consists of four steps and three exams:

Part A: Application and document verification. According to the requirements, any dentist with a bona fide dental degree from any country in the planet and any GPA can apply be approved to proceed to part B. Although, there are a lot of great schools in Europe, there are a lot of private schools in developing countries where the admission and passing requirements are so low that it’s almost like buying a dental degree. Not to mention that work ethics is not as high.

Part B: Assessment of Clinical Skills. This is a multiple choice question exam on the theory of Dentistry.

Part C: Assessment of Clinical Judgement. This is also a multiple choice questions exam on possible clinical scenarios.

Part D: Assessment of Clinical Skills. This exam consists of a few excersises on plastic teeth and a manikin (simulation). This exam does NOT involve a real patient and doesn’t cover a lot of clinical procedures required of a dentist.

The Assessment of Clinical Skills excersises are:

Class II amalgam preparation.
Class III composite resin preparation.
Full metal crown preparation.
Metal-ceramic (porcelain fused to metal) crown preparation.
Endodontic access preparation on a molar tooth.
Direct Class II composite resin restoration on a pre-prepared* tooth
Direct Class IV composite resin restoration on a pre-prepared* tooth
Class II amalgam restoration on a pre-prepared* tooth.
Provisional crown restoration for a pre-prepared* metal-ceramic (porcelain fused to metal) crown preparation on Day 2 of the Assessment. The original unprepared tooth will be in the typodont used on Day 1 of the Assessment.
Rubber dam application
Those excersises are done by a Canadian or US dental student in the second year of the four year dental program!

The Clinical Skills Assessment does NOT test many necessary disciplines such as:

Endodontics (Root canal treatment)
Dentures (complete and removable)
Periodontics (gum treatment and cleanings)
Oral surgery such as extractions
Orthodontics (braces)
The equivalency process will lead to a drop in the standard of health care as more and more dentists with inferior training and work ethics are allowed to treat Canadian patients. Unfortunately the public are unaware of the equivalency price and its possible negative consequences.

According to the National Dental Examination Board (NDEB), about 250 foreign trained dentists have been licensed every year in the last 3 years. Those are dentists who were not trained in any of the 4 countries that hold bilateral accreditation arrangement with Canada. Moreover, the number of annual licensed dentists by accreditation has spiked by about 30% due to dentists coming from those 4 countries. To put things in perspective, only half the new dentists getting their licenses every year are trained in Canada.

 

Corporate Dentistry

Corporate dentistry is a steadily growing trend in Canada. The largest dental corporation in Canada is Dental Corp Canada. It started buying up dental practices in 2011 and currently owns over 140 dental offices nationwide. Dental Corp Canada was founded by Graham Rosenberg (CEO) and Dr Andrew Miele (CDO). Dental Corp Australia also one of the leading dental corporations in Australia.

Another significant dental corporation is Altima Dental, which was founded in 1993 by Dr Sven Grail and Dr George Christodoulou. It owns over 30 dental offices nationwide. There are also various smaller dental corporations such as Dental Choice in Alberta. There is a growing trend of the investing dentists who collaborate to own and run multiple practices.

 

Oversupply of Dentists in Canada

It used to be that a dentist right after graduating would hang out their shingle and not before long there would be lots of patients coming through the door. Dentists did no or very little marketing. In fact, most dental offices were on high floors in professional buildings. Yet dentists were quite busy and most of them were booked 3-9 months in advance.

Today, the picture has changed considerably. Dentists nowadays strive to be in very high exposure retail locations that come at a premium. They spend a lot of time and money on marketing and advertising campaigns. However, most of them are only booked a couple of weeks in advance.

You might be wondering why you’re seeing a dental office sign at every street corner in all cities across Canada. The answer is simple: there are too many of them!

According to the Canadian Dental Association, the population to dentist ratio has been dropping in all the provinces. In Ontario, the ratio dropped from about 1800:1 in 1997 to about 1500: 1 in 2013. In Newfoundland, it fell from about 3700:1 to about 2700:1 over the same period. Those ratios are even lower in urban centres like the GTA, Montreal, and Vancouver.

Courtesy of the Canadian Dental Association.

Back in the late 90s and early 2000s, it was thought that there will be shortage of dentists in Canada as baby boomer dentists start to retire. However, this has proven not to be the case as the number of dentists entering the market has been far more than the ones exiting especially in the last few years due to the launch of the equivalency process and reciprocal accreditation of Australian, New Zealand, and Irish dental schools.

According to the National Dental Examination Board of Canada (NDEB), 1101 dentists were certified in Canada in 2017. Only 483 dentists graduated from Canadian Dental Schools with a DDS or DMD. 235 dentists earned their dental degrees in the US, Australia, or New Zealand. A staggering 307 dentists were certified through the 3-exam equivalency process up from only 44 in 2011.

By comparison, the number of dentists in the US (population of 323 million) went up from 195,722 in 2015 to 198, 517 in 2017. That’s an increase of about 1400 dentists per year for a nation that’s about 10 times bigger in population than Canada.

Are Dental Fees Too High in Canada?

 

When people find out that I’m a dentist, they often ask me: why is dental work so expensive? Why is it so much cheaper to get a dental implant in Mexico?

As a person without dental benefits, I totally agree that dental treatment might be too expensive for some people that don’t have a dental benefits plan of some sort.

Let’s look at the cost of some dental treatments in Alberta as an example. Typically, if you’re taking good care of your teeth and have no issues, you would need to go the dentist’s at least twice a year:

1. First Visit: a recall exam, X-rays  and a cleaning (cost is about C$ 300-350)
2. Second visit (6 months later): a cleaning only (cost is about C$ 200-250)

The total is about C$ 500-600 for two hours time.If you happen to have a couple of cavities, that would typically take an hour and cost about C$ 400. This means that the clinic hourly rate is about C$ 300. This is actually how much you would pay ANY professional such as a lawyer, accountant, etc. per hour. In fact, a plumber or electrician would charge you that much for a job that takes under 30 minutes. Not to mention that cleaning your teeth or filling cavities is much more demanding physically and mentally for the dentist than punching in numbers into a computer.

It is true that there are some procedures that cost over a thousand dollars such as:

1. Molar root canal: C$ 1000-15000
2. Crown: C$ 1200-1500
3. Implant with crown: C$ 4000-5000

However, those procedures take more time and skill.

To answer the Mexico questions, the cost of running a dental office in Alberta is definitely a lot higher than running a practice in Mexico due to:

1. Much tougher regulations from Alberta Health and the provincial regulatory body.
2. Higher cost of human resources: a dental assistant for example averages C$25 per hour in Alberta.
3. Higher rent especially in high exposure retail locations: at least C$40 per sqft.
4. Higher cost of equipment and materials.
5. Higher cost of construction to begin with. In Alberta, leasehold improvements average C$ 150-250 per sqft.

There are a few entrepreneurial and investing dentists that are rich. However, the vast majority of dentists are in the middle class of society.

Foreign-trained Dentists in Canada

 

Up until 2010, a dentist would have to graduate from a Canadian or US dental school to be eligible for licensure in Canada.

Graduates of dental schools outside North America had to go through an advanced standing or qualifying program at an accredited North American dental school. This literally involved re-doing the last 2-3 years of dental school with regular dental students and graduating with a DMD or DDS degree.

Getting accepted at those qualifying or advanced standing programs was very competitive as there were only 70-80 spots across Canada. In order to get in, successful candidate would have to perform better than other candidates in all these competencies:
1. GPA earned in dental school in their home country
2. ACFD exam: a written exam on fundamental knowledge of dentistry
3. Interview by dental school teaching staff
4. Assessment of clinical skills: various clinical excersises on typodonts and manikins.

Successful foreign trained dentists who were accepted had to apply for loans and bank lines of credit in order to pay tuition and other expenses which were comparable to what a regular dental student would pay. A dentist in North America typically graduates with about 100-300 thousand dollars of debt.

In 2011, the government started:

• Reciprocal accreditation of dental schools in Australia, New Zealand, and Ireland (2012).
• Launched the Foreign trained dentists FTDs equivalency process.

The Equivalency process for FTDs consist of a set of three exams:
Part 1: Fundamental knowledge written exam
Part 2: Clinical judgement written exam
Part 3: A clinical assessment exam: excersises on typodonts and manikins

The exams cost less than ten thousand dollars, don’t involve a real patient, don’t test all clinical skills, and can be passed within one or two years. Applicants don’t have to be a Canadian citizen or permanent resident to write them. In fact, dentistry is on the express entry for immigration to Canada.

The number of successful FTDs has skyrocketed in the last few years. When the program first launched in 2011 only 44 candidates passed. In 2014, the number was over 260, which is equivalent to the graduates of 6 typical Canadian dental schools.