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Models for Funding Clinical Dental Education: What’s Likely and What’s Not

The Macy study team explored six strategies for dealing with the financial problems of dental schools: 1) increased public funding; 2) regionalization; 3) closer integration with medical schools; 4) reorganization of graduate dental education programs; 5) community-based dental education; and 6) dental school-run, patient-centered delivery systems. We concluded that the first four options have little potential for significantly increasing net revenues. The last two, however, are viable options and are the reason for our optimism about the future of dental education. This article summarizes the reasons for our conclusions about these strategies.

	Strategies for Dealing with Dental Schools’ Financial Problems

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Four Unlikely Options
Increased Public Funding.
It is unlikely that federal or state support for dental education will increase substantially in the next ten years. Public support for all of higher education has declined, and federal and state budgets are constrained by large and growing national debt related to demands for a larger military, growth of entitlement programs, and, of course, rapidly rising health care expenditures. Although a few dental schools have received generous increases in state funding for both operations and capital improvements over the past twenty years, we do not believe that most can look to the government for solutions to their financial problems. There may be exceptions to this generalization, which prove the rule that dental education is a local business. In other words, different schools will find different solutions to their financial challenges.

Regionalization.
Papers published in the American Dental Association-sponsored monograph, "The Economics of Dental Education,"¹ indicate large economies of scale in dental education. The unit cost of educating dental students declines as class size grows until it reaches about 300 students, at which point costs begin to increase. Because the average dental school enrolls eighty-five students in a class, substantial reductions in the cost of dental education could be achieved if there were fewer schools with larger numbers of students per class. However, we see little chance that dental schools will merge to form larger units. In our experience, each school has a strong group of supporters who will fight vigorously to keep their school open. Dental schools within a given geographic area could possibly achieve lower operating costs by sharing resources, but again, we see little evidence of collaboration among dental schools in the same region. Efforts in Kentucky, New York City, and Texas to foster collaboration between schools have not been successful.

Closer Integration with Medical Schools.
Most dental schools are located in academic health centers where there is also a medical school. We investigated possible savings from integrating more dental school functions into the medical school, even to the point of making dental schools a department in medical schools. While there may be educational or philosophical reasons for closer integration of medical and dental education, we do not see substantial savings. Like medical school clinical departments, dental schools will still be responsible for the fiscal integrity of their clinical education programs.

Reorganization of Graduate Dental Education Programs.
We raise this issue with some trepidation, knowing that the current system for educating specialists is well entrenched. However, it is known that a large percentage of dental school resources are spent on the education of relatively few specialists, and most specialty programs generate little clinical income and require large operating subsidies. Thus, this is an important issue, and we are seeking data to examine the cost of specialty education.

The bottom line is that we see little likelihood that any of these four strategies will generate significantly more net revenues for dental schools within the next ten years.

We do see the potential of two other strategies related to clinical education programs: 1) community-based dental education, in which senior dental students receive their general dentistry patient care experience in community clinics and practices; this strategy is informed by our experience with the Dental Pipeline program;³ and 2) patient-centered delivery systems run by dental schools, in which dental clinics owned and managed by the schools are transformed into patient-centered operations where faculty practice as they supervise residents and students.

We have estimated the financial impact of both these approaches, reported in full elsewhere.³ The analyses presented are based on financial models developed in consultation with nationally recognized financial experts from dental education and practice. They provide upper boundary estimates of the potential impact of the models. The actual financial impact is expected to vary, as schools design and implement the models according to their individual needs and requirements.

Community-Based Dental Education
For the purpose of this analysis, we assume that senior students spend 70 percent of their time providing general dental care to patients and that all their general dentistry training takes place in community clinics and practices. Because few community sites provide specialty services, we expect that seniors will receive specialty training in dental school-run specialty clinics. We also assume that third-year students will continue to be educated in traditional dental school clinics.

Using data from the 2002–03 ADA and ADEA financial surveys,^4,5 we calculated the reduction (or savings) in clinic operating and instructional expenses, expected loss of clinic revenues, and net savings per school when students spend 70 percent of their senior year in community sites (Table 1). For the fifty-four U.S. schools in operation at the time, the average clinic instructional expense savings ($2.2 million) are greater than operating expense savings ($1.5 million). The clinic revenue loss is about $1.0 million (an average of $12,342 per senior student). The net savings per school are $2.7 million, which is 8.1 percent of total school expenses. Further analyses indicated that public schools and schools with large student bodies generate the most net revenues from community-based dental education programs.

The net revenues generated per team are a percentage of the revenues generated by private dentists. We estimate that faculty can generate 85 percent of the net income of full-time, community practitioners who have the same training. We use overhead rates of 68 percent for generalists and 63 percent for specialists. We expect residents to be 65 percent as productive as private practitioners and that their productivity will be reduced by an additional 10 percentage points because they assist in the supervision of senior dental students (one student per resident). Thus, on average, residents will be 55 percent as productive as private practitioners. In this model, residents do not receive any Graduate Medical Education support from the federal government. Senior students working with an assistant are expected to generate an average of $40 per hour. This should come close to covering their marginal overhead expenses.

Table 2 shows the annual income generated by one generalist team of faculty, residents, and senior students, in which faculty and residents treat full-pay patients and senior student fees are 50 percent less than full pay. Each FTE generalist faculty member generates net revenues of $148,198. Residents generate $191,786. Therefore, the annual income from a generalist team totals $339,984. The calculations for specialist-led teams follow the same logic, but specialists generate 60 percent more income than generalists. As seen in Table 3, the combined annual net revenues for one generalist and one specialist team are $907,923, or a little over $9 million for all twenty teams.

	Discussion and Conclusion

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We appreciate that the financial models presented here are limited by the amount and quality of data available from the ADA and ADEA surveys. The analyses indicate that the savings from community-based dental education are significant, but that the overall financial impact is rather modest. Relative to the magnitude of the financial challenges facing most dental schools, the estimated annual increase in net revenues, $2.7 million, is not large enough to meet the growing revenue needs of the average dental school. This is especially true as the gap between private practitioner and faculty incomes continues to widen.

In contrast, the development of patient-centered clinics, owned and operated by dental schools, show considerable financial promise. The estimated increase in total net revenues averaged about $14 million per school.

While financially promising, the capacity of dental schools to convert their existing patient care operations to patient-centered clinics is a large unknown. A few schools have experience with this model (at Boston University and the University of California, Los Angeles), but most involve teams of specialty faculty and residents working together. Recently, one school, at the University of Connecticut, announced plans to integrate senior students into a general dentistry team with faculty and residents.

Clearly, it will require considerable effort on the part of the average dental school to convert to a patient-centered clinical education model for faculty, residents, and seniors. Further, the increases in net revenues presented in the financial models represent an upper boundary estimate and are what could be achieved under ideal conditions. We do not expect many schools to achieve the level of clinical efficiency reported here. The barriers that schools face in converting to a patient-centered delivery system are easy to predict. They include convincing faculty and staff of the need to change to a new educational model, dealing with the constraints of state and/or university human resource policies that provide little flexibility in hiring and managing staff, and recruiting faculty and staff who have experience running patient-centered delivery systems. There are also the issues of adequate numbers of full-pay patients, capital to convert clinics to a patient-centered system, and dealing with concerns of local stakeholders.

Another important caveat concerns how net revenues from the successful operation of patient-centered dental clinics are allocated. We assume that the additional funds would be used to strengthen dental school educational, research, and service programs. The reality is that declines in academic health center budgets are expected and, in this fiscal environment, any financial gains made by dental schools could be used to subsidize the operation of other health professions clinical and educational programs. Some dental schools may have to pass the additional funds on to their parent universities.

Finally, this article has focused on the financing of dental education. Of equal importance is the impact of these models on the quality of educational programs. Evidence indicates that well-run community-based dental education programs provide excellent clinical experiences. Little is known about the impact of dental school patient-centered care programs on the quality of resident and senior student clinical education. However, since many other health professions and oral and maxillofacial surgery use patient-centered teaching programs, there is reason to believe that dental schools will be successful—both educationally and financially—in converting to this new model of dental education. The education of students and residents may be significantly better in a patient-centered model. In contrast to the current clinical education system, they will work with a team of experienced allied dental health personnel and administrators, learn how to deliver care in a real delivery system, and, perhaps most importantly, have the opportunity to model their own clinical performance after experienced clinical faculty who provide efficient, high-quality care.

In conclusion, we are optimistic about dental education and believe that the current financial challenges are actually an opportunity to advance dental education using new clinical models. We appreciate that change is always difficult, but so is not changing. In the words of Jack Welch, former CEO of General Electric, "Change before you have to."⁶

	Footnotes

 
Dr. Bailit is Professor Emeritus, Department of Community Medicine, University of Connecticut Health Center and a Research Associate, Department of Community Dentistry, Columbia University. He received his D.M.D. degree from Tufts University and his Ph.D. degree (Anthropology) from Harvard University. Prior to his current position, he was Chair of the Department of Health Administration and Policy, School of Public Health, Columbia University; Senior Vice President for Medical Policy and Programs, Aetna Health Plans; and head of Behavioral Sciences and Community Health, University of Connecticut Health Center. Dr. Bailit has published widely on health policy and managed care, serves on numerous national committees and editorial boards, and has received many awards and honors, including Institute of Medicine, 1984, and Presidential Citation, American Dental Association, 2005. Direct correspondence to him at Department of Community Medicine, University of Connecticut Health Center, 260 Farmington Ave., Farmington, CT 06030–6325; 860–679–5487 phone; 860–679–5463 fax; bailit{at}nso1.uchc.edu.

	REFERENCES

Top Strategies for dealing with... Discussion and Conclusion References

 

1. Brown LJ, Meskin LH, eds. The economics of dental education. Chicago: American Dental Association, Health Policy Resources Center, 2004.
2. Pipeline, profession, and practice: community-based dental education. At: www.dentalpipeline.org/. Accessed: April 2007.
3. Bailit HL, Beazoglou TJ, Formicola AJ, Tedesco LA. Financing clinical dental education. J Dent Educ 2007; 71(3):322–30.[Abstract/Free Full Text]
4. American Dental Association, Survey Center. Surveys of predoctoral dental education. Chicago: American Dental Association, 1990–1 to 2002–03.
5. Weaver RG, Valachovic RW. ADEA survey of clinic fees and revenue, 2003–04 academic year. J Dent Educ 2006; 70(4):448–62.[Abstract/Free Full Text]
6. At: www.brainyquote.com/quotes/authors/s/jack_welch.html. Accessed: November 2007.

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