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a blog by Chris Barrow

Lower interest rates - how will that affect dentistry? A guest post by Dr. Julian Perry

The IMF are predicting a lowering of interest rates mid to end of 2023. How will that impact the dental profession?

Lowering interest rates is typically a tool used by central banks to stimulate economic growth and increase inflation. When interest rates are low, it becomes cheaper for individuals and businesses to borrow money, which can lead to increased spending and investment. This increased spending and investment can, in turn, lead to higher economic growth and job creation.

However, there are also potential downsides to lowering interest rates. Lower interest rates can lead to inflation, as more money is in circulation and people have more purchasing power. In addition, lower interest rates can reduce the incentive for people to save, as they will receive less interest on their savings.

In 2023, the impact of lowering interest rates will depend on a variety of factors, including the current state of the economy, inflation rates, and the actions of other countries and financial institutions.

The dental landscape is changing.

Post Brexit it is more difficult to get associates and even harder to find good ones. Good associates want higher rates of pay and yet an associate will only deliver around 22% EBITDA to a Principal in the best-case scenario (and it has nothing to do with charging higher prices / private, if costs are a percentage of gross - for those who can’t work that out).

Increased wage costs, associate costs and labs and material cost increases are squeezing the current model to the point where the current associate understanding in no longer viable.

Principal dentists will know exactly what I mean.

Many DSO’s have stopped buying, the overheated M&A market is settling, and BUPA have been a recent casualty of this situation having to sell off 85 sites. It’s not BUPA that are the issue, it’s the changing landscape!

There is a bright future for dentistry and a rewarding one……but it is no longer the current model. The new model is………………..?

Dr. Julian Perry BDS MFGDP.RCS DipImpDent.RCS

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