As dentists, we love to build patient relationships, tinker, solve problems, focus (quite literally) on microscopic margins, and geek out on cool technology. It is in our blood; it’s what we do. Business per se is not in our blood; helping people is. We are doctors, not salesmen or businessmen. As a result, it’s easy for us to lose sight of the world outside our office walls—a world that, while abundant, promising, and beautiful—is simultaneously interconnected, at times dangerous, filled with risk, and infinitely complex.
World events, weather, politics, terrorism, currency movements, and evolving cultural norms are among an infinite number of causative drivers influencing the environment outside our office walls, all of which directly influence the problems and opportunities we face inside.
EFFECTS OF THE CURRENT FEDERAL REGULATORY ENVIRONMENT
One often underappreciated yet immense driver influencing our practices is the current regulatory environment in which American business operates (dentistry included), especially at a federal level. Our regulatory burden has reached the state of a silent cancer—a real and significant terminal threat many of us are not even aware exists.
Consider the facts. At the time of this writing (late 2016), since President Obama took office, there have been more than 600 new significant federal regulations. This pace of regulatory expansion is unprecedented in American history. “Significant” in this context is defined as those rules whose implementation cost more than $100 million each. The total cost of these 600 new rules by the federal government is conservatively estimated at more than $108 billion annually and more than $743 billion since President Obama took office. In addition to the above rules and costs, between now and the inauguration of our new president, dozens more “significant” rules are certain to be implemented. The above does not take into account rules imposed on a state and local level.1,2
Federal regulations have enormous implications for our society and affect everything from energy, housing, environmental standards, healthcare, farming, and banking to the Internet, and again, dentistry. These regulatory costs show up in higher prices for everything, and lower employment as precious resources are used to pay for compliance costs instead of business expansion. They are a tax on the American economy and each of us individually. Specifically, the aforementioned $743 billion cost represents a regulatory tax of approximately $2,300 on every man, woman, and child in America.
For dentistry, the effects are real and direct. Lower employment means fewer insured patients and less money to pay for our services, already considered an elective by much of the public.
Ironically and counterproductively, increased regulation costs the federal government tens of billions ($57 billion in 2015 alone) to administer which must further be paid for by the taxpayer. In a cost benefit analysis, there is not even a remote equivalence between the costs of compliance and the touted benefits, especially from Washington. The dollar costs above do not take into account lost opportunity costs—what could have been accomplished personally and professionally in the absence of these regulations? These regulatory costs are also not balanced by either a decreased and/or offsetting regulatory relief.
WHAT IS NEEDED?
Certainly we need common sense regulation that is transparent, enhances public safety, and enhances the environment yet allows responsible, honest, and sustainable commerce. But, the current unprecedented expansion of the regulatory state is crossing the Rubicon into an Alice in Wonderland rabbit hole—a place where it is rapidly becoming impossible for a private practice clinician or small business owner (in addition to the negative effects on large corporations) to operate independently and remain in compliance without hiring regulatory experts.
Like the frog in a slowly warming pot approaching the boiling point, layer upon layer of well-intentioned regulation has been imposed on American business at every level, making every aspect of our practice lives more complex: hiring, firing, environmental safety (waterlines, mercury disposal, materials choices, etc), building codes, tax compliance, Health Insurance Portability and Accountability Act (HIPAA), malpractice litigation, insurance requirements, and the list goes on.
How many of us now can navigate the tax codes and would do our own tax returns? Extrapolate such complexity onto running every aspect of our practices. Such compliance burdens are coming and to some degree are already here. Are we prepared? How many of us believe we are fully compliant in our offices and private lives with every federal, state, and local mandate or audit to which we are subject?
WHAT DOES THE FUTURE HOLD IF CHANGES ARE NOT MADE?
Greater and unrelenting intrusion into our lives through regulation will only grow government and perpetuate a downward cycle, regulation generating more regulation and leading to further economic malaise. For dentistry, among other challenges, this means decreased patient flow; increased costs for compliance, supplies, and services; and fewer new products. The dental industry outside our offices will also feel this squeeze as dental manufacturers must meet an ever-increasing and ever-changing threshold of compliance from the US Food and Drug Administration (FDA) among other government agencies. Their compliance costs are passed directly on to us.
Increasingly, only large companies will be able to afford such required regulatory compliance, discouraging innovation and risk taking in startup companies. Extrapolating, our current path makes starting the next Apple or Google or making a quantum leap forward in dentistry much more challenging for aspiring visionaries. As the owner of Mounce Endo, I can personally attest to the FDA being one of the single biggest challenges we face as a growing endodontic supply company.
As an aside, it is axiomatic and noteworthy that regulatory uncertainty breeds economic uncertainty. How can any company, dental or otherwise, large or small, plan strategically for the future (investment, tax, R&D, etc) when it does not know what regulations to which it will be subjected in the future?
It is valid to ask if we are safer and more prosperous as a society as a result of the regulations passed in the previous 8 years. I have not heard a single expert claim the Dodd-Frank Banking regulations have made our banking system less susceptible to catastrophic bank failures, yet these regulations have, as noted above, dramatically increased Bank compliance costs, driving up our costs as business and personal bank consumers.
Closer to home, has HIPAA in its current form, for example, truly accomplished anything? How many of us have ever read the numerous pages of HIPAA disclosures? How many of our patients actually read it standing at our front desk? How many trees are destroyed every year printing disclosures (of all types, including HIPAA) that, despite recycling efforts, head directly to a landfill? If we haven’t even read HIPAA, why do we perform this otherwise meaningless gesture? Couldn’t a much simpler set of HIPAA guidelines accomplish the same objectives, with less compliance cost and time investment?
Most baffling to me in this toxic brew is that the regulators imposing rules and dictating how our offices function are not business people, innovators, or risk takers. Regulators have no skin in the game other than to spout platitudes about keeping the public safe while not carrying any burden or having any accountability for the outcomes of their work as we do. They have no clue about who dentists are, what we do, or the immense challenges we face on a daily basis serving a generally nervous and phobic public. Said differently, if we were solving real problems through regulation, I’d be all in. Many of the regulations being passed are solutions looking for a problem.
The bad news is that without intervention, the regulatory burden will accelerate given the current trajectory. The good news is that a problem recognized is a problem half solved. Learning the facts and understanding the ramifications of this regulatory burden on American business, and dentistry in particular, is a solid first step to guide our voting, political and candidate investments, and to generate involvement in our trade associations (ADA and state associations) who are trying to hold back the tsunami. But, such trade groups can only be as effective as the interest and support of their membership. They need our help.
This Viewpoint is a call to action. We can put our heads in the sand and hope it goes away; however, this slow death by regulation is not going away unless we stand up to it and take action.
What keeps us from acting? Do we fear our government? Do we just not care? Why are we behaving collectively like the proverbial frog in slowly heating water that realizes far too late that it is being boiled alive? If we are to keep dentistry the trusted public service and blessing it is and has been for us all, now more than ever is the time to be informed, push back and chart the brightest future for the profession and people we love and cherish. It is within our power.
1. The all-time regulation record. Wall Street Journal. August 5, 2016. wsj.com/articles/the-all-time-regulation-record-1470435716. Accessed October 24, 2016.
2. Gattuso JL, Katz D. Red tape rising 2016: Obama regs top $100 billion annually. The Heritage Foundation Backgrounder. May 23, 2016. thf-reports.s3.amazonaws.com/2016/BG3127.pdf. Accessed October 24, 2016.
Disclosure: Dr. Mounce is the owner of Mounce Endo, LLC.
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