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Dentists’ fees and inflation
REPORTS OF COUNCILS AND BUREAUS
Dentists’ fees and inflation Joint report of the Bureau of Economic Research and Statistics and the Bureau of Public Information
T h is re p o rt p laces in p e rsp e c tiv e th e tre n d of den ta l fees in re c e n t y ears by using th e C o n su m er P ric e In d ex an d sim ilar ind ex es a s sta tisti cal m ea su re s o f th e g en eral tre n d in p rices. D e n tis ts ’ fe e s, as m easu red by th e C o n su m e r P ric e In d e x (C P I), h av e b een rem ark ab ly stab le in re la tio n to th e re s t o f th e eco n o m y d uring th e p a st d ecad e. T h e 1975 a v erag e index o f d e n tis ts ’ fees w as 161.9, m easu red by th e C P I ’s 1967 b ase o f 100. T h e 1975 a v erag e fo r all item s in th e C P I w as 161.2. T h u s , from 1967 to 1975, d e n tis ts ’ fees in c re a se d 61.9% , co m p ared w ith a 61.2% in cre a se in a v erag e p rices o f goods an d serv ices. T o d e te rm in e w h at relatio n sh ip ex ists b e tw e e n fees ch arg ed b y d e n tists an d d e n tists ’ e x p e n se s, an index o f d e n tis ts ’ p ro fessio n al e x p e n se s, by item , w as c o n s tru c te d . T h is index is b a se d on d a ta fro m b ian n u al su rv e y s o f d en tal p ra c tic e c o n d u c te d by th e A D A B ureau o f E co n o m ic R e se a rc h an d S ta tistic s. T h e s e d a ta a re , in tu rn , co m p a re d w ith th e d en tal fee p o rtio n o f th e C P I.
D e s c rip tio n o f C o n s u m e r P rice In d e x T h e C P I is issu ed m o n th ly by the B u reau o f L a
b o r S ta tistic s, U S D e p a rtm e n t o f L a b o r. I t is th e o nly index com piled by th e U S g o v ern m e n t th a t is d esig n ed to m ea su re chan g es in th e p u rc h asin g p o w e r o f th e u rb an c o n su m e r’s dollar. P o ssibly h alf th e p eo p le in A m e ric a find th e ir incom es affe cted by it. A m ong th e se are m ore th a n 5 m il lion w o rk ers co v e red by w age c o n tra c ts an d p e n sions w ith e sc a la to r clau ses tied to rise s in the C P I. A b o u t 44 m illion o th e r p e rso n s n o w find th e ir in co m es affected by th e in d ex , largely as a re su lt o f sta tu to ry actio n . T h e se in clu d e social sec u rity b en eficiaries, re tire d m ilitary an d fe d eral civil serv ice em ployees and th e ir su rv iv o rs, p o stal em p lo y ees, an d food stam p rec ip ien ts. T h e official nam e o f th e index is C o n su m e r P ric e In d e x fo r U rb a n W age E a rn e rs an d C le ri cal W o rk ers. I t is a statistica l m e a su re o f chan g es in p rices o f goods (com m odities) and serv ices bo u g h t by u rb an w age e a rn e rs and clerical w o rk e rs, including fam ilies and single p e rso n s. P rice in fo rm atio n is g a th ered on a b o u t 400 ite m s from ap p ro x im a te ly 18,000 sto re s and estab lish m en ts in 56 cities. P rice s a re c o llected m o n th ly in N e w Y o rk , C h icag o , L o s A n g eles, D e tro it, a n d P hil ad elp h ia, and q u arte rly on a stag g e re d b asis in 51 o th e r cities. T h e list o f co m m o d ities and se rv ic e s p ric e d is called th e “ m a rk e t b a s k e t.” T h e c o n te n t o f th e JADA, Vol. 93, July 1976 ■ 129
Table 1 ■ Relative importance of selected items in Consumer Price Index, December 1Ò74. Item_____________________________ Relative importance All items Commodities Food Apparel commodities Services Housing Transportation ■ Health and recreation Medical care Personal care Reading and recreation Other goods and services
100.000 63.762 24.785 8.273 36.238 33.766 12.715 18.723 6.241 2.519 5.222 4.742
“Housing’’ consists of items that are partly under services and partly under commodities.
Table 2 ■ Relative importance of selected items under medical care in Consumer Price Index, December 1973. Item Drugs and prescriptions Professional services Dentists’ fees General physician— office visit General physician— house visit Other physician services Health insurance Hospital services
Relative importance 0.806 2.787 0.896 0.900 0.137 0.572 2.026 1.057
list is kept essentially unchanged between major revisions of the CPI to make sure that any index change is caused by prices alone. The CPI represents price changes for every thing people buy for living—food, clothing, auto mobiles, homes, furnishings, household sup plies, fuel, drugs, and recreational goods; den tists’, physicians’, and lawyers’ fees; the cost of haircuts, rent, repairs, transportation fares, pub lic utility rates, and so forth. Prices include all taxes directly associated with the purchase of an item, including sales and excise taxes. The CPI also includes real estate taxes on owned homes as part of the price of home ownership. It does not include income and other taxes not asso ciated with prices of specific goods and services.
■ Dental fee component: The items priced in the CPI are the fees charged for three represent ative dental services, obtained from a sample of dentists: one-surface amalgam restoration, in adults; simple extractions in adults, including local anesthetic and radiographs; and complete maxillary denture. As shown in Table 2, den tists’ fees had a relative importance of 0.896 in December 1973. In December 1972, the weight was 0.939, distributed among the three compon ent services: restoration, adult—0.478; extrac tion, adult—0.236; and denture, complete maxil lary, adult—0.225. According to the Bureau of Labor Statistics these services were selected as probable repre sentation of the universe of dental services. In other words, fee increases for these services would very likely indicate the extent to which fees are increased for other dental services. The Bureau of Labor Statistics samples 434 dentists for the CPI. In accordance with samp ling procedures, fee data are collected from the same group of representative dentists as much as possible. The Bureau of Labor Statistics indi cates that the turnover among dentists reporting fee data is low, averaging less than one replace ment each month. The percentage distribution by census region of dentists reporting fee infor mation is: Northeast, 21%; North Central, 35%; South, 23%; and West, 21%. ■ Dentists’ fees and prices in 1975: Table 3 shows the 1975 average annual indexes for the medical care component of the CPI. The medical care index contains two major subgroups: drugs and prescriptions (not shown in detail in Table 3) Table 3 ■ Average annual indexes for medical care and selected components, Consumer Price Index, United States, 1975. Item
■ Weighting structure: The “market basket” concept means that the CPI is a weighted aggre gative index with fixed or constant annual weights. Each item is weighted according to its relative importance in the family budget of urban wage earners. The relative importance (weights) for items in the current CPI was established in 1960-1961, on the basis of extensive studies of family expenditure patterns. The relative im portance of selected items in December 1974 is shown in Table 1. Relative importance of selected items under medical care in December 1973 is shown in Table 2. 130 ■ REPORTS OF COUNCILS AND BUREAUS / JADA, Vol. 93, July 1976
Medical care Drugs and prescriptions Professional services Dentists’ fees Restorations, adult, amalgam, one-surface Extractions, adult Dentures, complete maxillary Physicians' fees General physician, office visit General physician, house visit Obstetrical cases Pediatric care, office visit Psychiatric care, office visit Herniorrhaphy, adult Tonsillectomy and adenoidectomy Other professional services Eyeglasses, including examination Routine lab tests Hospital service charges Semiprivate room rates Operating room charges X-ray diagnostic tests, upper Gl Source: US Bureau of Labor Statistics.
Index (1967=100) 168.6 118.8 161.9 166.7 160.9 153.0 169.4 173.9 170.5 167.2 172.5 153.0 152.3 163.3 149.6 151.4 236.1 239.4 156.2
Table4 ■ Averageannual index for selected items, Consumer Price Index, United States, 1975. Index (1967-100)
Item
and professional services. Table 3 shows the 1975 average indexes for all subgroups under dentists’ fees, physicians’ fees, and other professional services. For hospital service charges, only three of ten subgroups are shown in Table 3. (These are the only hospi tal items for which data were published for the entire eight-year period. The hospital index was expanded from three to ten items in 1972, using that year as the base year.) The 1975 average index of dentists’ fees, 161.9, is a weighted average of indexes of the three den tal subgroups. In 1975, the index for a one-sur face amalgam restoration averaged 166.7, extrac tion, 160.9; and maxillary denture, 153.0. The index for dentists’ fees was lower than the general index for medical care, which aver aged 168.6, and for physicians’ fees, which aver aged 169.4. Of the items composing the general index for medical care, drugs and prescriptions were lowest with 118.8. Among professional services comparable to dentistry, only psychia trist office visits and eye care services had in dexes of commodities and services, the two ma jor components of the CPI. Approximately 64% of urban working families’ after-tax-income is spent on commodities and 36% on services. In ponents in the cost of hospital care had more than doubled in eight years. Table 4 shows a comparison of dentists’ fees with CPI indexes for items other than medical care. The most important of these are the in dexes of commodities and services, the two ma jor components of the CPI. Approximately 64% of urban working families’ after-tax-income is spent on commodities and 36% on services. In 1975, the price index for commodities averaged 158.4, which was 3.5 index points below the den tists’ fee index. This means that the total in crease in dentists’ fees since 1967 was about 2% above the increase in retail commodity prices. Food is the largest subgroup under commodi ties, accounting for about a fourth of urban work-
Dentists’ fees All items
161.9 161.2
Medical care Physicians’ fees Hospital semiprivate room rates
168.6 169,4 236.1
Commodities Services
158.4 166.6
Food Clothing Housing Home ownership costs Maintenance and repair services Transportation Auto repairs and maintenance Gasoline Fuel oil and coal Household appliances Insurance and finance
175.4 141.2 166.8 181.7 187.6 150.6 176.6 170.8 235.3 128.1 180.4
Legal services, short will form Daily newspapers Postal charges
187.8 174.5 175.4
Source: US Bureau of Labor Statistics.
ing families’ expenditures. The 1975 index for food prices at the supermarket was 175.4, about 8% higher than the dentists’ fee index. Among commodities with increases higher than den tists’ fees were fuel oil and coal (index of 235.3 in 1975) and gasoline (170.8). Commodities with smaller increases than dental fees included cloth ing (141.2) and household appliances (128.1). The cost of services in 1975 was 166.6 on the CPI, indicating total increases of about 3% above dental fee increases since 1967. Among services with higher price increases than dentists’ fees were home ownership costs (index of 181.7 in 1975), home maintenance and repair services (187.6), auto repairs and maintenance (176.6), insurance and finance (180.4), daily newspapers (174.5), postal charges (175.4), and fees for rou tine legal services (187.8).
Dentists’ fees and price trends, 1967-1975 Table 5 shows the CPI annual averages for the past eight years for dentists’ fees, physicians’
Table 5 ■ US averages for selected items, 1967-1975, Consumer Price Index. (Average annual index, 1967=100.)
Yr 1967 1968 1969 1970 1971 1972 1973 1974 1975
Dentists’ fees
Physicians' fees
Medical care
Hospital semiprivate room rates
Services
All items
100.0 105.5 112.9 119.4 127.0 132.3 136.4 146.8 161.9
100.0 105.6 112.9 121.4 129.8 133.8 138.2 150.9 169.4
100.0 106.1 113.4 120.6 128.4 132.5 137.7 150.5 168.6
100.0 113.6 128.8 145.4 163.1 173.9 182.1 201.5 236.1
100.0 105.2 112.5 121.6 128.4 133.3 139.1 152.0 166.6
100.0 104.2 109.8 116.3 121.3 125.3 133.1 147.7 161.2
Source: US Bureau of Labor Statistics. REPORTS OF COUNCILS AND BUREAUS /JADA, Vol. 93, July 1976 ■ 131
Year
Year
Fig 1 ■ Annual US averages fo r de ntists’ fees and all items,
Fig 2 ■ Annual US averages fo r de ntists’ fees and services, 1967-
1967-1975, C onsum er Price Index.
1975, C onsum er Price Index.
fe e s, m ed ical c a re , h o sp ital se m ip riv a te room ra te s , se rv ic e s, an d all item s. F ro m th e la te 1960s to 1972, d e n tis ts ’ fees w ere rising a t a ra te slight ly h ig h e r th a n th a t fo r a v erag e p rices in th e e co n om y as a w h o le. T h e c o st o f d e n ta l c a re , h o w e v e r, w as risin g at a slightly lo w er ra te th a n th e c o s t o f o th e r h ealth c a re se rv ic e s, an d se rv ice s in g e n e ra l. B y 1972, th e in c re a se in d e n tis ts ’ fees w as n e a rly th e sam e as in m edical c a re , w h e re as h o sp ita l ro o m ra te s w e re a b o u t 30% hig h er. S ince 1972, d u rin g th e P h a se I I I c o n tro ls, d e n ta l fees ro se a t a lo w e r ra te th a n th e a v e ra g e o f o th e r p ric e s in th e eco n o m y an d also a t a lo w e r rate th a n o th e r h e a lth c are serv ices. T h e s e tre n d s fo r th e y e a rs 1967 to 1975 a re sh o w n in F ig u res 1 th ro u g h 3. Fig 3 ■ Annual US averages fo r de n tists’ fees, physicians’ fees, hospital sem iprivate room rates, and medical care, 1967-1975, C onsum er Price Index.
C o s t o f c o n d u c tin g a d e n ta l p ra c tic e In th e y e a rs sin ce 1967, d e n tis ts ’ e x p e n se s fo r m a te ria ls an d serv ices n e e d e d to o p e ra te a p ra c tic e in c re a s e d m ore th a n tw ice as fa s t a s th e in c re a s e in d e n ta l fees. A v e ra g e e x p e n se s fo r op eratin g a d e n ta l p ra c tic e m o re th a n d o u b le d be tw e e n 1967 an d 1975, w h e re a s fe e s w e re ra ise d an a v e ra g e o f 62% . T h e su b sta n tia l c o st in c re ases w e re p a rtly th e re su lt o f p ric e rise s o f c o n su m ab le su p p lies a n d se rv ic e s. S om e o f th e se in c re a se s w ere in flatio n ary , an d so m e re flec ted th e c o s t o f q u ality im p ro v em en ts o f n ew d e n tal p ro d u c ts in tro d u c e d in th e m a rk e t e v e ry y ear. S u ch e x p e n se s in clu d ed n ew e q u ip m e n t p u r c h a s e s , n ew o p e ra to rie s c o n s tru c te d , a n d g reatly in c re a se d u tilizatio n o f au x iliary p e rso n n el. 132 ■ REPORTS OF COUNCILS AND BUREAUS / JADA, Vol. 93, July 1976
A m ong item s o f sm aller c o st, th e p rice o f alloy in 1975 w as a b o u t do u b le th e 1970 price. In th e five y ea rs fro m 1970 to 1975, p rices o f d e n tis ts ’ han d in stru m e n ts su ch as am algam c a rv e rs in cre a se d a b o u t 100%, th e price o f e n d o d o n tic files in c rea se d m o re th a n 60% , and fo rcep s a b o u t 55% . T h e p rice o f a p ro p h y la x is angle in cre ased m o re th a n 50% in th e p a st five y e a rs, m odel p las te r in c re ase d m ore th a n 60% in p rice, radiog rap h ic film a b o u t 30% , and p a p e r and c o tto n p ro d u c ts a b o u t 30%. D a ta from A D A su rv e y s o f dental p rac tice a re show n in T a b le s 6 an d 7 and F ig u re 4. T ab le 6 sh o w s th e index o f d e n tal fees fro m th e C P I co m p ared w ith in d ex e s o f d e n tists’ pro fessio n al
Table 7 ■ Estimated index of dentists' professional ex Table 6 ■ Index of dentists’ fees, pro fessional expenses and salary expenses, 1 9 6 7 -1 9 7 5 . (A v e ra g e a n n u a l in d e x , 1967=100.)
Yr 1967 1968 1969 1970 1971 1972 1973 1974 1975
D entists’ fees* 100.0 105.5 112.9 119.4 127.0 132.3 136.4 146.8 161.9
Dentists' professional expensest 100.0 110.3 121.1 131.9 149.3 166.8 186.3 208.1 232.5
D entists' salary expensest 100.0 112.5 126.6 143.4 159.9 179.2 199.8 222.7 248.3
* Source, Consumer Price Index, US Bureau of Labor Statistics. t Source, ADA Survey of Dental Practice. Data com piled for years 1967,1970, and 1972; estimated fo r other years.
ex p e n se s an d salary ex p e n se s. In 1975, th e in d ex o f d e n tis ts ’ to tal ex p en ses (w ith 1967 = 100) w as e stim ated at 232.5. S alaries p aid to em p lo y e es w as th e larg est e x p e n se item fo r d e n tists, am o u n tin g to alm o st a th ird o f to ta l ex p e n se s. S ala ry e x p e n se s sto o d at 248.3 on th e in d ex in 1975. T h e c o st o f fringe b en efits fo r em p lo y ees (health a c c id e n t, disab ility and life in su ra n c e , an d re tire m e n t p lan s, paid v a c a tio n s, h o lid ay s, an d sick leave) although only a sm all p o rtio n o f to ta l e x p e n se s, in c re a se d m ore th a n th reefo ld sin ce 1967. O v e rh e a d fo r such item s as la u n d ry , office su p p lies, and office m a in te n a n c e m ore th an do u b led during th e eight y e a rs an d in c re a se d to o v e r 12% o f to tal e x p en ses. T a b le 7 show s the 1975 index o f d e n tis ts ’ p ro fessio n al e x p en ses an d p e rc e n t o f to tal ex p en ses fo r v ario u s item s. F ig u re 4 sh o w s th e tre n d in d e n tis ts ’ fe e s, salary e x p e n se s , an d to tal p ro fessio n al e x p e n se s from 1967 to 1975.
S u m m a ry D e n tis ts ’ fe e s, as m easu red b y th e C o n su m e r P ric e In d e x , in c re a se d a t a b o u t th e sam e ra te in th e p ast eight y ears a s av erag e p ric e s in th e e c o n om y. B etw een 1967 an d 1975, d e n tis ts ’ fees in c re a se d 61.9% c o m p a re d w ith a 61.2% in crease in av erag e p rices o f all goo d s an d se rv ic e s m e a s u re d in th e index. In the y ears since 1967, th e c o s t o f co n d u ctin g a den tal p ra c tic e has stead ily in c re a se d . D e n tis ts ’ e x p en ses fo r m aterials and se rv ic e s in c re a se d ap p ro x im ately tw ice as fa s t as th e in-
penses, by item, 1975, and items as percentage of total expenses.
Item O ffice rent and utilities Salaries (including com missions) Fringe benefits (not included in salaries) Dental supplies and equipm ent (excluding office supplies) Com m ercial dental laboratory charges Insurance, depreciation, travel, subscriptions, professional fees, and so forth All other overhead (laundry, office supplies, postage, collection expenses, office management, and so forth) Total expenses
Estimated 1975 index (1967=100)
% of total expenses
204.8 248.3
12.3 32.4
357.7
1.8
195.7
17.6
187.4
19.9
177.8
3.4
253.9 232.5
12.6 100.0
Source: ADA surveys of dental practice.
Fig 4 ■ Index of dentists' fees, dentists’ professional expenses and salary expenses, annual US averages, 1967-1975.
c re a se in d en tal fees. O n the basis o f A D A su r vey d a ta ,1-3 d e n tis ts ’ professio n al ex p e n se s in c re a se d 133% and d e n tis ts ’ salary e x p en se s fo r au xiliaries in c re a se d 148% b etw e e n 1967 and 1975, w h ereas d e n tis ts ’ fees in c re a se d only 62% .
This article was prepared by Sheldon Loewy, MA, and Karen Schaid, BS, ADA Bureau o f E conom ic Research and S tatistics.
1. 1968 Survey of dental practice. Chicago, Am erican Dental Association, 1969. 2. 1971 survey o f dental practice. C hicago, Am erican Dental Association 1972. 3. 1973 Survey of dental practice. Chicago, A m erican Dental Association, 1974.
REPORTS OF COUNCILS AND BUREAUS / JADA, Vol. 93, July 1976 ■ 133
Dentists’ fees and inflation Joint report of the Bureau of Economic Research and Statistics and the Bureau of Public Information
T h is re p o rt p laces in p e rsp e c tiv e th e tre n d of den ta l fees in re c e n t y ears by using th e C o n su m er P ric e In d ex an d sim ilar ind ex es a s sta tisti cal m ea su re s o f th e g en eral tre n d in p rices. D e n tis ts ’ fe e s, as m easu red by th e C o n su m e r P ric e In d e x (C P I), h av e b een rem ark ab ly stab le in re la tio n to th e re s t o f th e eco n o m y d uring th e p a st d ecad e. T h e 1975 a v erag e index o f d e n tis ts ’ fees w as 161.9, m easu red by th e C P I ’s 1967 b ase o f 100. T h e 1975 a v erag e fo r all item s in th e C P I w as 161.2. T h u s , from 1967 to 1975, d e n tis ts ’ fees in c re a se d 61.9% , co m p ared w ith a 61.2% in cre a se in a v erag e p rices o f goods an d serv ices. T o d e te rm in e w h at relatio n sh ip ex ists b e tw e e n fees ch arg ed b y d e n tists an d d e n tists ’ e x p e n se s, an index o f d e n tis ts ’ p ro fessio n al e x p e n se s, by item , w as c o n s tru c te d . T h is index is b a se d on d a ta fro m b ian n u al su rv e y s o f d en tal p ra c tic e c o n d u c te d by th e A D A B ureau o f E co n o m ic R e se a rc h an d S ta tistic s. T h e s e d a ta a re , in tu rn , co m p a re d w ith th e d en tal fee p o rtio n o f th e C P I.
D e s c rip tio n o f C o n s u m e r P rice In d e x T h e C P I is issu ed m o n th ly by the B u reau o f L a
b o r S ta tistic s, U S D e p a rtm e n t o f L a b o r. I t is th e o nly index com piled by th e U S g o v ern m e n t th a t is d esig n ed to m ea su re chan g es in th e p u rc h asin g p o w e r o f th e u rb an c o n su m e r’s dollar. P o ssibly h alf th e p eo p le in A m e ric a find th e ir incom es affe cted by it. A m ong th e se are m ore th a n 5 m il lion w o rk ers co v e red by w age c o n tra c ts an d p e n sions w ith e sc a la to r clau ses tied to rise s in the C P I. A b o u t 44 m illion o th e r p e rso n s n o w find th e ir in co m es affected by th e in d ex , largely as a re su lt o f sta tu to ry actio n . T h e se in clu d e social sec u rity b en eficiaries, re tire d m ilitary an d fe d eral civil serv ice em ployees and th e ir su rv iv o rs, p o stal em p lo y ees, an d food stam p rec ip ien ts. T h e official nam e o f th e index is C o n su m e r P ric e In d e x fo r U rb a n W age E a rn e rs an d C le ri cal W o rk ers. I t is a statistica l m e a su re o f chan g es in p rices o f goods (com m odities) and serv ices bo u g h t by u rb an w age e a rn e rs and clerical w o rk e rs, including fam ilies and single p e rso n s. P rice in fo rm atio n is g a th ered on a b o u t 400 ite m s from ap p ro x im a te ly 18,000 sto re s and estab lish m en ts in 56 cities. P rice s a re c o llected m o n th ly in N e w Y o rk , C h icag o , L o s A n g eles, D e tro it, a n d P hil ad elp h ia, and q u arte rly on a stag g e re d b asis in 51 o th e r cities. T h e list o f co m m o d ities and se rv ic e s p ric e d is called th e “ m a rk e t b a s k e t.” T h e c o n te n t o f th e JADA, Vol. 93, July 1976 ■ 129
Table 1 ■ Relative importance of selected items in Consumer Price Index, December 1Ò74. Item_____________________________ Relative importance All items Commodities Food Apparel commodities Services Housing Transportation ■ Health and recreation Medical care Personal care Reading and recreation Other goods and services
100.000 63.762 24.785 8.273 36.238 33.766 12.715 18.723 6.241 2.519 5.222 4.742
“Housing’’ consists of items that are partly under services and partly under commodities.
Table 2 ■ Relative importance of selected items under medical care in Consumer Price Index, December 1973. Item Drugs and prescriptions Professional services Dentists’ fees General physician— office visit General physician— house visit Other physician services Health insurance Hospital services
Relative importance 0.806 2.787 0.896 0.900 0.137 0.572 2.026 1.057
list is kept essentially unchanged between major revisions of the CPI to make sure that any index change is caused by prices alone. The CPI represents price changes for every thing people buy for living—food, clothing, auto mobiles, homes, furnishings, household sup plies, fuel, drugs, and recreational goods; den tists’, physicians’, and lawyers’ fees; the cost of haircuts, rent, repairs, transportation fares, pub lic utility rates, and so forth. Prices include all taxes directly associated with the purchase of an item, including sales and excise taxes. The CPI also includes real estate taxes on owned homes as part of the price of home ownership. It does not include income and other taxes not asso ciated with prices of specific goods and services.
■ Dental fee component: The items priced in the CPI are the fees charged for three represent ative dental services, obtained from a sample of dentists: one-surface amalgam restoration, in adults; simple extractions in adults, including local anesthetic and radiographs; and complete maxillary denture. As shown in Table 2, den tists’ fees had a relative importance of 0.896 in December 1973. In December 1972, the weight was 0.939, distributed among the three compon ent services: restoration, adult—0.478; extrac tion, adult—0.236; and denture, complete maxil lary, adult—0.225. According to the Bureau of Labor Statistics these services were selected as probable repre sentation of the universe of dental services. In other words, fee increases for these services would very likely indicate the extent to which fees are increased for other dental services. The Bureau of Labor Statistics samples 434 dentists for the CPI. In accordance with samp ling procedures, fee data are collected from the same group of representative dentists as much as possible. The Bureau of Labor Statistics indi cates that the turnover among dentists reporting fee data is low, averaging less than one replace ment each month. The percentage distribution by census region of dentists reporting fee infor mation is: Northeast, 21%; North Central, 35%; South, 23%; and West, 21%. ■ Dentists’ fees and prices in 1975: Table 3 shows the 1975 average annual indexes for the medical care component of the CPI. The medical care index contains two major subgroups: drugs and prescriptions (not shown in detail in Table 3) Table 3 ■ Average annual indexes for medical care and selected components, Consumer Price Index, United States, 1975. Item
■ Weighting structure: The “market basket” concept means that the CPI is a weighted aggre gative index with fixed or constant annual weights. Each item is weighted according to its relative importance in the family budget of urban wage earners. The relative importance (weights) for items in the current CPI was established in 1960-1961, on the basis of extensive studies of family expenditure patterns. The relative im portance of selected items in December 1974 is shown in Table 1. Relative importance of selected items under medical care in December 1973 is shown in Table 2. 130 ■ REPORTS OF COUNCILS AND BUREAUS / JADA, Vol. 93, July 1976
Medical care Drugs and prescriptions Professional services Dentists’ fees Restorations, adult, amalgam, one-surface Extractions, adult Dentures, complete maxillary Physicians' fees General physician, office visit General physician, house visit Obstetrical cases Pediatric care, office visit Psychiatric care, office visit Herniorrhaphy, adult Tonsillectomy and adenoidectomy Other professional services Eyeglasses, including examination Routine lab tests Hospital service charges Semiprivate room rates Operating room charges X-ray diagnostic tests, upper Gl Source: US Bureau of Labor Statistics.
Index (1967=100) 168.6 118.8 161.9 166.7 160.9 153.0 169.4 173.9 170.5 167.2 172.5 153.0 152.3 163.3 149.6 151.4 236.1 239.4 156.2
Table4 ■ Averageannual index for selected items, Consumer Price Index, United States, 1975. Index (1967-100)
Item
and professional services. Table 3 shows the 1975 average indexes for all subgroups under dentists’ fees, physicians’ fees, and other professional services. For hospital service charges, only three of ten subgroups are shown in Table 3. (These are the only hospi tal items for which data were published for the entire eight-year period. The hospital index was expanded from three to ten items in 1972, using that year as the base year.) The 1975 average index of dentists’ fees, 161.9, is a weighted average of indexes of the three den tal subgroups. In 1975, the index for a one-sur face amalgam restoration averaged 166.7, extrac tion, 160.9; and maxillary denture, 153.0. The index for dentists’ fees was lower than the general index for medical care, which aver aged 168.6, and for physicians’ fees, which aver aged 169.4. Of the items composing the general index for medical care, drugs and prescriptions were lowest with 118.8. Among professional services comparable to dentistry, only psychia trist office visits and eye care services had in dexes of commodities and services, the two ma jor components of the CPI. Approximately 64% of urban working families’ after-tax-income is spent on commodities and 36% on services. In ponents in the cost of hospital care had more than doubled in eight years. Table 4 shows a comparison of dentists’ fees with CPI indexes for items other than medical care. The most important of these are the in dexes of commodities and services, the two ma jor components of the CPI. Approximately 64% of urban working families’ after-tax-income is spent on commodities and 36% on services. In 1975, the price index for commodities averaged 158.4, which was 3.5 index points below the den tists’ fee index. This means that the total in crease in dentists’ fees since 1967 was about 2% above the increase in retail commodity prices. Food is the largest subgroup under commodi ties, accounting for about a fourth of urban work-
Dentists’ fees All items
161.9 161.2
Medical care Physicians’ fees Hospital semiprivate room rates
168.6 169,4 236.1
Commodities Services
158.4 166.6
Food Clothing Housing Home ownership costs Maintenance and repair services Transportation Auto repairs and maintenance Gasoline Fuel oil and coal Household appliances Insurance and finance
175.4 141.2 166.8 181.7 187.6 150.6 176.6 170.8 235.3 128.1 180.4
Legal services, short will form Daily newspapers Postal charges
187.8 174.5 175.4
Source: US Bureau of Labor Statistics.
ing families’ expenditures. The 1975 index for food prices at the supermarket was 175.4, about 8% higher than the dentists’ fee index. Among commodities with increases higher than den tists’ fees were fuel oil and coal (index of 235.3 in 1975) and gasoline (170.8). Commodities with smaller increases than dental fees included cloth ing (141.2) and household appliances (128.1). The cost of services in 1975 was 166.6 on the CPI, indicating total increases of about 3% above dental fee increases since 1967. Among services with higher price increases than dentists’ fees were home ownership costs (index of 181.7 in 1975), home maintenance and repair services (187.6), auto repairs and maintenance (176.6), insurance and finance (180.4), daily newspapers (174.5), postal charges (175.4), and fees for rou tine legal services (187.8).
Dentists’ fees and price trends, 1967-1975 Table 5 shows the CPI annual averages for the past eight years for dentists’ fees, physicians’
Table 5 ■ US averages for selected items, 1967-1975, Consumer Price Index. (Average annual index, 1967=100.)
Yr 1967 1968 1969 1970 1971 1972 1973 1974 1975
Dentists’ fees
Physicians' fees
Medical care
Hospital semiprivate room rates
Services
All items
100.0 105.5 112.9 119.4 127.0 132.3 136.4 146.8 161.9
100.0 105.6 112.9 121.4 129.8 133.8 138.2 150.9 169.4
100.0 106.1 113.4 120.6 128.4 132.5 137.7 150.5 168.6
100.0 113.6 128.8 145.4 163.1 173.9 182.1 201.5 236.1
100.0 105.2 112.5 121.6 128.4 133.3 139.1 152.0 166.6
100.0 104.2 109.8 116.3 121.3 125.3 133.1 147.7 161.2
Source: US Bureau of Labor Statistics. REPORTS OF COUNCILS AND BUREAUS /JADA, Vol. 93, July 1976 ■ 131
Year
Year
Fig 1 ■ Annual US averages fo r de ntists’ fees and all items,
Fig 2 ■ Annual US averages fo r de ntists’ fees and services, 1967-
1967-1975, C onsum er Price Index.
1975, C onsum er Price Index.
fe e s, m ed ical c a re , h o sp ital se m ip riv a te room ra te s , se rv ic e s, an d all item s. F ro m th e la te 1960s to 1972, d e n tis ts ’ fees w ere rising a t a ra te slight ly h ig h e r th a n th a t fo r a v erag e p rices in th e e co n om y as a w h o le. T h e c o st o f d e n ta l c a re , h o w e v e r, w as risin g at a slightly lo w er ra te th a n th e c o s t o f o th e r h ealth c a re se rv ic e s, an d se rv ice s in g e n e ra l. B y 1972, th e in c re a se in d e n tis ts ’ fees w as n e a rly th e sam e as in m edical c a re , w h e re as h o sp ita l ro o m ra te s w e re a b o u t 30% hig h er. S ince 1972, d u rin g th e P h a se I I I c o n tro ls, d e n ta l fees ro se a t a lo w e r ra te th a n th e a v e ra g e o f o th e r p ric e s in th e eco n o m y an d also a t a lo w e r rate th a n o th e r h e a lth c are serv ices. T h e s e tre n d s fo r th e y e a rs 1967 to 1975 a re sh o w n in F ig u res 1 th ro u g h 3. Fig 3 ■ Annual US averages fo r de n tists’ fees, physicians’ fees, hospital sem iprivate room rates, and medical care, 1967-1975, C onsum er Price Index.
C o s t o f c o n d u c tin g a d e n ta l p ra c tic e In th e y e a rs sin ce 1967, d e n tis ts ’ e x p e n se s fo r m a te ria ls an d serv ices n e e d e d to o p e ra te a p ra c tic e in c re a s e d m ore th a n tw ice as fa s t a s th e in c re a s e in d e n ta l fees. A v e ra g e e x p e n se s fo r op eratin g a d e n ta l p ra c tic e m o re th a n d o u b le d be tw e e n 1967 an d 1975, w h e re a s fe e s w e re ra ise d an a v e ra g e o f 62% . T h e su b sta n tia l c o st in c re ases w e re p a rtly th e re su lt o f p ric e rise s o f c o n su m ab le su p p lies a n d se rv ic e s. S om e o f th e se in c re a se s w ere in flatio n ary , an d so m e re flec ted th e c o s t o f q u ality im p ro v em en ts o f n ew d e n tal p ro d u c ts in tro d u c e d in th e m a rk e t e v e ry y ear. S u ch e x p e n se s in clu d ed n ew e q u ip m e n t p u r c h a s e s , n ew o p e ra to rie s c o n s tru c te d , a n d g reatly in c re a se d u tilizatio n o f au x iliary p e rso n n el. 132 ■ REPORTS OF COUNCILS AND BUREAUS / JADA, Vol. 93, July 1976
A m ong item s o f sm aller c o st, th e p rice o f alloy in 1975 w as a b o u t do u b le th e 1970 price. In th e five y ea rs fro m 1970 to 1975, p rices o f d e n tis ts ’ han d in stru m e n ts su ch as am algam c a rv e rs in cre a se d a b o u t 100%, th e price o f e n d o d o n tic files in c rea se d m o re th a n 60% , and fo rcep s a b o u t 55% . T h e p rice o f a p ro p h y la x is angle in cre ased m o re th a n 50% in th e p a st five y e a rs, m odel p las te r in c re ase d m ore th a n 60% in p rice, radiog rap h ic film a b o u t 30% , and p a p e r and c o tto n p ro d u c ts a b o u t 30%. D a ta from A D A su rv e y s o f dental p rac tice a re show n in T a b le s 6 an d 7 and F ig u re 4. T ab le 6 sh o w s th e index o f d e n tal fees fro m th e C P I co m p ared w ith in d ex e s o f d e n tists’ pro fessio n al
Table 7 ■ Estimated index of dentists' professional ex Table 6 ■ Index of dentists’ fees, pro fessional expenses and salary expenses, 1 9 6 7 -1 9 7 5 . (A v e ra g e a n n u a l in d e x , 1967=100.)
Yr 1967 1968 1969 1970 1971 1972 1973 1974 1975
D entists’ fees* 100.0 105.5 112.9 119.4 127.0 132.3 136.4 146.8 161.9
Dentists' professional expensest 100.0 110.3 121.1 131.9 149.3 166.8 186.3 208.1 232.5
D entists' salary expensest 100.0 112.5 126.6 143.4 159.9 179.2 199.8 222.7 248.3
* Source, Consumer Price Index, US Bureau of Labor Statistics. t Source, ADA Survey of Dental Practice. Data com piled for years 1967,1970, and 1972; estimated fo r other years.
ex p e n se s an d salary ex p e n se s. In 1975, th e in d ex o f d e n tis ts ’ to tal ex p en ses (w ith 1967 = 100) w as e stim ated at 232.5. S alaries p aid to em p lo y e es w as th e larg est e x p e n se item fo r d e n tists, am o u n tin g to alm o st a th ird o f to ta l ex p e n se s. S ala ry e x p e n se s sto o d at 248.3 on th e in d ex in 1975. T h e c o st o f fringe b en efits fo r em p lo y ees (health a c c id e n t, disab ility and life in su ra n c e , an d re tire m e n t p lan s, paid v a c a tio n s, h o lid ay s, an d sick leave) although only a sm all p o rtio n o f to ta l e x p e n se s, in c re a se d m ore th a n th reefo ld sin ce 1967. O v e rh e a d fo r such item s as la u n d ry , office su p p lies, and office m a in te n a n c e m ore th an do u b led during th e eight y e a rs an d in c re a se d to o v e r 12% o f to tal e x p en ses. T a b le 7 show s the 1975 index o f d e n tis ts ’ p ro fessio n al e x p en ses an d p e rc e n t o f to tal ex p en ses fo r v ario u s item s. F ig u re 4 sh o w s th e tre n d in d e n tis ts ’ fe e s, salary e x p e n se s , an d to tal p ro fessio n al e x p e n se s from 1967 to 1975.
S u m m a ry D e n tis ts ’ fe e s, as m easu red b y th e C o n su m e r P ric e In d e x , in c re a se d a t a b o u t th e sam e ra te in th e p ast eight y ears a s av erag e p ric e s in th e e c o n om y. B etw een 1967 an d 1975, d e n tis ts ’ fees in c re a se d 61.9% c o m p a re d w ith a 61.2% in crease in av erag e p rices o f all goo d s an d se rv ic e s m e a s u re d in th e index. In the y ears since 1967, th e c o s t o f co n d u ctin g a den tal p ra c tic e has stead ily in c re a se d . D e n tis ts ’ e x p en ses fo r m aterials and se rv ic e s in c re a se d ap p ro x im ately tw ice as fa s t as th e in-
penses, by item, 1975, and items as percentage of total expenses.
Item O ffice rent and utilities Salaries (including com missions) Fringe benefits (not included in salaries) Dental supplies and equipm ent (excluding office supplies) Com m ercial dental laboratory charges Insurance, depreciation, travel, subscriptions, professional fees, and so forth All other overhead (laundry, office supplies, postage, collection expenses, office management, and so forth) Total expenses
Estimated 1975 index (1967=100)
% of total expenses
204.8 248.3
12.3 32.4
357.7
1.8
195.7
17.6
187.4
19.9
177.8
3.4
253.9 232.5
12.6 100.0
Source: ADA surveys of dental practice.
Fig 4 ■ Index of dentists' fees, dentists’ professional expenses and salary expenses, annual US averages, 1967-1975.
c re a se in d en tal fees. O n the basis o f A D A su r vey d a ta ,1-3 d e n tis ts ’ professio n al ex p e n se s in c re a se d 133% and d e n tis ts ’ salary e x p en se s fo r au xiliaries in c re a se d 148% b etw e e n 1967 and 1975, w h ereas d e n tis ts ’ fees in c re a se d only 62% .
This article was prepared by Sheldon Loewy, MA, and Karen Schaid, BS, ADA Bureau o f E conom ic Research and S tatistics.
1. 1968 Survey of dental practice. Chicago, Am erican Dental Association, 1969. 2. 1971 survey o f dental practice. C hicago, Am erican Dental Association 1972. 3. 1973 Survey of dental practice. Chicago, A m erican Dental Association, 1974.
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