Maintaining Growth: Pediatric Trends – Ep. 285

Welcome to the Accumulating Wealth podcast. I’m Hunter Satterfield. And I’m Judson Crawford. We’re CPAs, wealth advisors, and partners at Cain Watters and Associates, a financial services firm here to help business owners navigate the decisions they face every day. 

 A few weeks ago, we got a chance to talk about CWA’s orthodontic practice benchmarking report, and today we are back for more as we review our newly launched pediatric practice comparison report. Yep. We’ll be digging into overhead, insurance mix, profitability, and performance trends for a set of our pediatric practices. 

And on top of that, we’ve got a guest joining us who really loves kids. Let’s go. 

 Well, Judson, we are back with our eighth annual pediatric dental comparison report. So it’s basically turning the age that is appropriate for dentistry. That is correct. Yeah. And today, as we said in the intro, you probably already know who it is but we have our planner who loves kids the most, Keith Klein. 

Thank you for having me. And to be clear, the kids I love the most are Lindy and Hudson. Oh, yes. My kids. Oh, okay. Yeah. Got it. But, but they’re not even kids anymore. They’re like- solidly teenagers, 17, we got prom on Saturday. It’s like, yeah, they’re barely even qualifies as a kid. That’s right.  

But you have been involved in the pediatric report since its inception. 

I have. And have a quite a bit of pediatric dental practices as your clients. That’s right. I have, probably about 30 different 30 different pediatric practices that all across the country. So definitely see a lot of this and a lot of the, a lot of the information that goes into this report is, from a lot of my clients. 

So, definitely in tune to what’s going on in pediatrics. Yeah, I think, and we’ve all been here near almost 20 years. Some of us have been here longer, Judson. I have. But I mean, for those listeners that are like, “I don’t have a pediatric dental practice, I don’t need to listen to this,” the answer is you still should. 

And the reason is like we’ve seen all these periods of time, guys, over the years where times have been tough, right? I mean, COVID, GFC. In our career here, we’ve seen all of these. Pediatric practices sort of make… They just thrive right through it. I mean thrive or they just, they navigate those choppy waters. 

I mean, I think it’s for a couple reasons. One, people always prioritize their kids, right? I mean, always. Hundred percent. We all have kids. I mean, goodness gracious, what do we have eight between us? We’re always going to prioritize our kids. I mean, that’s a, that’s a number one reason why. So even as things do maybe get a little tougher in the economy I oftentimes look at a pediatric practice and say like, “Man, that’s a really good snapshot of what’s going on in the real economy right there.” 

Yeah. Couldn’t agree with you more. I mean, pediatrics is not like the rocket ship that you see in some other practices where they can double and things like that, but it is definitely just like that steady investment return. You’re going to grow 3% to 5% per year and, there’s very little like when the economy gets bad that you don’t really see it in a pediatric practice like you do some other practices that are more elective, ’cause people are going to take care of their kids. 

 Yeah, and we’ll talk some of the the payer mix stuff, but a lot of that’s because of things like Medicaid and insurance. I think the second reason, Judson, is like a super important reason to sort of tune in is that like pediatrics really is like the foundation of dentistry, right? It’s really, it’s getting these families used to what does, what is dentistry in my life? 

Getting kids used to going to the dentist, getting them comfortable with different types of procedures and I think because of that, it’s an incredibly important business for the economy, but then also for dentistry as well. Yeah, I agree, and the last thing I’d say on why to continue to listen is because when we talk about these practices and why they may have thrived in 2025- I think there’s clear ways that you can take that into other businesses, especially other dental businesses and use those same things to help your own practice. 

 That’s right. Okay. Keith, as one of the leaders on the team here, you want to give everybody sort of just a high-level overview of kind of what the data told us from 2025? Yeah. Yeah, so the data for 2025 compared to 2024, we saw, a slight increase in, in production. It was up about 5.5% compared to last year. 

However, the collections were up 11%. So, something to think about there is definitely also saw, and we’ll get to this later in the report, but the Medicaid percentage was down, so less Medicaid being in that payer mix, I think led to higher collection increase than we even saw on the production side. 

Yeah. But even with Medicaid being down, production’s still up overall. Yeah. So I mean, it did say, it did show that our patients were still coming in. It just was a different type of patient- Right … which probably led to better collections. Yeah. And, and you can see that, too, because the per patient amount went from, like, $300 last year, close to $300 per patient visit to, like, $337, I think $336 this year. 

So you’re definitely seeing, pediatric dentists getting more per patient in the door compared to what it’s been historically.  

So, and then what about on the broad strokes on the overhead side of things as far as expense goes?  

Yeah, so overhead, the direct costs were all pretty steady and pretty in line with last year, but we did see fixed costs jump up about a percent or two. 

So really, even with the growth, the overhead percentage was about 51% for 2025 compared to about 50% the year before. So saw 1%. So income stayed about the same.  

So one thing you may want to do is go ahead and download this report if you haven’t already. Hunter, where would they go to download that report? That would be cainwaters.com/pcr. What does that stand for? Pediatric comparison report. Got it. So we might– You know what we’re going to do? We’re going to pause for just a second, and Judson’s going to give us a commercial, and when we return from the commercial break, we’ll, we’ll go back over to Keith. Judson? 

Well, if you’re listening to this one thing that you may want to do is hop on and download this report. You will get that in your inbox, and we would love for you to utilize this as we go through it because we are going to be referencing- kind of going through it sequentially and referencing the report. 

So if you want to pause it now and go download it, that would be a great thing to do. 

Okay. So now that you have this downloaded, folks Judson, where do you want to start? You want to start on this front page? I think we start with the main page.  

We talked a little bit, or Keith talked a little bit about where we fell for production and collections and, in general overhead too. One of the things that’s interesting in this is salaries went down as a percentage of collections. 

So we went from 23%, a little over 23% to a little over 22%. My suspicion is that we’re not actually paying less than the prior year, and we’ll talk a little bit about wages later, but that’s a function of collections. Would you agree? I totally agree. I think wages stayed, normal COLA type adjustments on the wage side, but for sure the 11% increase in collections has more to do with that than anything. 

Yeah, and it’s probably– We can see that too because marketing dollars as a percentage went up, right? So, I mean, again, I think that’s a, that’s a great example of, we’re probably spending more there and we’re getting more collections, and yet  the percentage is going higher as well. So that’ll be an interesting topic that we can talk through about maybe what the implications were of that. 

But largely, like you said, everything else stayed pretty similar other than, the fixed costs rising. But I mean, again, I think that’s an inflationary thing that we’ve seen, Judson, across all of our practices. Yeah, and I think that it’s a good point though that, when you look at the fixed cost of your pro- Well, I guess the point is, is that you can ignore, even though we lump a lot of expenses into that on your fixed costs, it’s another reminder just as we do with our clients every year, to go through and compare your fixed cost year to year. 

Because if we saw that, like in our pediatric practices, that our fixed costs went up by 2%. So again, let’s think about this. Our average pediatric practice collected $3 million. Fixed costs went up 2%, so that’s a $60,000 swing. If you’re experiencing increased fixed cost, if nothing else, you should know where that increase is. 

Absolutely. Yeah, and you’re seeing that increase, across the board. There’s been- there wasn’t any consistency in like what fixed costs we saw go up, so you’re seeing it some in marketing that Hunter alluded to earlier. Technology and computer expenses are always rising. 

 So there, there have been a few different categories that are lead contributing to that increase. 

Credit card fees too as well, if you’re seeing more fee for service, and it’s something that, you need to check out every few years because those things can creep on you significantly. 

Absolutely. Hate those pediatric creeping. Totally. Yeah. 

Okay, let’s go to production, y’all, because this is the first big page and, and Keith’s already kind of mentioned this that production did go up 5%, 5.5%, man, almost 6%. So that’s production by provider and overall production. 

And I think, guys, we need to just double-click on this very quickly because you said, Keith, like pediatric practices tend not to be like high flyers where you have these huge 10%, 12% years. To see production up that much, that’s almost double what we would normally see production. That’s a big number. Yeah. Yeah, the production by provider, I mean, it jumped, almost $100,000 year over year, and that’s, that’s a lot of kids you’re going to have to see and treat to do $100,000 more in a, in a single year. 

So to see that go to almost $1.8 million is was a big jump. Yeah, and I think again we’ve already referenced this but we wanted to double-click on this as well, is that production per patient visit. So it went from about $305 to about $336, which is an 11% increase, and I think that’s where a lot of that collection increase is coming as well. 

Keith, like what, what is that? I mean, because it’s basically it’s like we’re still seeing the same number of patients, we’re just getting a whole lot more out of those patient. Like what are you hearing from your clients, seeing from your clients on why? 

Yeah, I mean, I think it’s those add-on procedures that you’re asking for from the patient, and sealants and fluorides and the things that maybe aren’t always covered under insurance that historically, the front desk maybe or the dental assistant or the doctor hasn’t done a good job of asking for it. 

It does seem like more and more of that is being done because, that’s going to just increase the amount of production that you’re going to do in that visit, and while that kid’s in the chair, might as well get it done.  

One of the numbers I like on here is the production per chair, right? We do production by provider and it’s in here as well. We do production by provider in both this and the ortho report and, and what I mentioned on the ortho report is this is a great number to kind of track because it can give you an indication of maybe when you need to start thinking about, adding another provider. 

I love the production per chair number because, this can give you a real indication on when you may really be running out of space instead of just being more efficient per chair, right? 

Correct. Yeah. And you can see in the data, like between the bigger practices, the bigger practices being the ones over $1.65 million compared to like the smaller practices under $1.65 million, there’s a huge discrepancy in the production per chair. 

And that’s likely because some of the practices are in the smaller category are still just maturing, maybe don’t have full utilization of their chairs, but the bigger practices do seem to be fully utilizing their chair space. So if you’re a smaller practice, kind of give you a goal to kind of set for your practice, like, “Hey, we can almost double our production per chair by getting more patients in and, and, doing things a little bit more efficiently.” 

So, production we saw was up 5.5%. Production per patient visit was up almost 11%, and collections were up almost 11% as well. And so I think it’s not just that we’re getting more out of that individual patient that’s sitting there, but we’re also collecting more, and that’s probably also a payer mix thing, right? 

So we talk about how much is being generated and in a lot of dental practices it’s just going to be insurance and then fee for service, but then in pediatrics you also bring in this Medicaid piece as well. And we saw that Medicaid piece decrease slightly, which means that if we saw the same number of patients, we had more profitable patients sitting in the chair. 

Correct? Correct. Yeah. And in every consult I have with pediatric dentists that have the more mature practice, we’re definitely talking about, what it would take to, to move out of network. Now, some are doing it, some aren’t, and we didn’t really see a whole lot of movement in, on the insurance side on payer mix. 

We did see the Medicaid percentage go down and that’s definitely leading to that increased collection on the same level of production. And I think we’re going to continue inside pediatrics to kind of trend in that direction where you’re going to see more and more of these busier practices start to go out of network. 

Yeah, and if reimbursement rates continue to tick up, I mean, there have been some step-ups from various states, both in Medicaid and then of course insurance as well, which ought to help on the collection side, even though production might not jump, right? Yeah, absolutely. Yeah. The, some states have actually increased their Medicaid reimbursements in the last year. 

Not all states unfortunately, but, but some states are, have been trending in the right direction on that. 

And hopefully those other states, follow a little bit and so you can pick up a couple more as providers. 

The next page we’ll turn to talks about demographics, and we’ve talked quite a bit about this, about how we saw a slight decrease in Medicaid and an increase in fee-for-service and other insurance. I think that that’s a great thing to compare your practice to help understand your demographics compared to what our averages are. 

But the one thing I did want to talk a little bit about that we did see a really large increase on was the hospital affiliation. And Keith, when you see that type of increase in hospital affiliation, what does it mean to you, and how could that affected the broader numbers? 

Yeah. So a hospital piece, those are– those GA cases are a really big piece of pediatrics, right? 

‘Cause these are kids that have, a lot of work that are needed, and they’re going to have to go to a hospital or surgery center to have it done. And those are generally speaking mostly, not always, but a high percentage of those are Medicaid patients. So you’re really seeing, like when you’re doing those cases, you’re going to have a very productive day as a pediatric dentist when you go to the hospital and see three to five kids. 

Those are going to be high, high productive, high collection days for your office. 

Okay, so let’s move on to payroll, Keith. What are some of the takeaways you saw on the payroll category? 

 Yeah, so for your front desk assistants, hygienists, there wasn’t really a whole lot of movement here. Pretty consistent year over year, which again feeds back to, like, what we were saying on that first page where we see 11% collections increase and the percentage of overall payroll go down. Essentially the collections is driving , that percentage down, not lower pay. 

 Yeah, the one big movement you saw on this report this year was quite a big increase in the associate doctor daily. So, what could have led to that big of a jump? We have a 10% increase, so, $140 basically. Yeah, $150. Yeah, and we were just talking about how production by provider, the pediatric were just busier. 

They’re up almost 1.8% production by provider. So you’re just looking at them being busier and, they’re earning more. So typically if unless I’m wrong, most pediatric associates are probably going to have some sort of daily minimum, but then they’re going to get a – they’re going to be working off of production, right? 

Yeah, adjusted production or collections, yeah. So what do you say, what would, like, an average pediatric associate start for as a daily base?  

What they would start at as a daily base would probably be between $1,000 maybe up to $1,200 depending upon the market per day. 

Okay, so then clearly what we saw from last year to this year is our associates may have just been more productive. Yeah. And so they’re getting a higher pay. 

Yeah, absolutely. I think they, you can see that in the numbers. They have been more productive and, and I think it’s just – definitely leading to higher compensation for them. 

Good job, associates. Okay, so talking about some other elements of overhead. Really there’s not a, there weren’t huge shifts necessarily in things like supplies or, net profit other than fixed costs and things like that. I think the one we wanted to spend a little bit of time on, Judson, is marketing, right? 

Because that one did move quite a bit higher, which typically in a pediatric practice there’s not a ton of marketing per se, especially because of insurance and Medicaid. It’s like the core, like- Brand type marketing, maybe, connecting with various schools, but not near what we would see maybe in some other, types of practices. 

But this is a big move, over 20% increase year over year on just the marketing spend. Now, what I think is interesting is that the number of patients seen didn’t necessarily rise that much, right? But I think we would still say there was some success in these marketing numbers, right, Judson? 

Yeah, absolutely. I mean, and the thing I look at, and, again, this is something that we look at for our orthodontists as well, is the new patient acquisition cost, right? In 2025 our pediatric practices spent about $32.50 per new patient, right? And that’s an increase from about $30 last year. 

But then if we go back to, one of the things we very first talked about, the production per patient visit went up from, $303 to what was it? $336, right? So you paid to acquire that patient, couple dollars more, but then you produced $30 more in the chair. That’s a pretty good ROI. 

Oh, absolutely. Yeah. Because, your marketing dollars, I think there’s a perception out there that it’s only going to lead to new patients, but you’re also marketing to existing patients, wallet share, all of those concepts factor into what your marketing spend is really bringing into your practice. 

And if you’re continuing to market and, maybe mom is seeing, it’s definitely never dad, mom’s seeing some new procedure or something else you’re adding to your practice or like, “Hey, be sure to talk to us about sealants,” or, “Be sure to talk to us about, fluoride treatments for the kids,” or, “Talk to us about a frenectomy.” 

Whatever it is, like, then maybe there’s just more wallet share coming from mom. Again, never dad.  

Yeah, and I think that those are the things I think that when you think about marketing should be included, right? I mean, that’s the unique thing is I think marketing can actually set you apart somewhat as a pediatric practice because so many don’t do it. 

So if you have those procedures that are maybe a little bit more unique to your practice and/or if you want to encourage some of those other things that I think are important for kiddos, as do many dentists obviously, but are maybe not covered by insurance, that’s a great way to accomplish it is marketing. 

And I mean, Judson, we talk about all the time, like the marketing spend that’s might, might be required by other types of dental practices, $30 a patient just isn’t that much. No, it’s not. And it’s an opportunity for pediatric dentists to really grab more of that market share, I think. 

Yeah, and I think it’s important whether, you know- Again, I think that, whether you’re trying to get specifically more non-Medicaid patients or whether you’re just trying to grow any type of patient overall, you can’t ignore marketing, okay? It, it’s not like it was 20 years ago where you’re probably going to get all of your patients from that. 

And Keith made a great point that you are marketing… When you spend marketing dollars, if you’re doing it effectively, you’re marketing to, people that don’t know your name, people that have heard your name, people that are already inside your practice, everybody out there, you’re marketing to. 

And honestly, in today’s digital age, you can’t not be doing some of the marketing that’s out there. So we don’t want to discourage marketing at all. In fact, we want all of our clients to be effectively marketing. 

Yeah. I mean, if you’re not marketing, if you’re not doing anything, I mean, you’re slowly you’re slowly dying, right? 

Like, you have to be doing some level of marketing to keep yourself on track. Just, I mean, again, look at the fixed costs, all these other things. Like, if you’re not marketing, you’re going to be, you’re going to be hurting eventually. So it, it is an important part of the practice. Yeah. 

Tons of really great data for geeks like us inside this report, so make sure to go download it again at cainwatters.com/pcr. Just to kind of wrap up maybe before we close, I mean, there’s some really good stuff at the end of the report maybe some more of the soft skill things. And it was great to see, guys, that in 2024 only 46% of our respondents reported growth, and 21% experienced a decline. 

That jumped to 59% saying there was growth which is fantastic. And very few were reporting any decline. So it was really a good year overall for our pediatric practices, and we’ve seen that also heading into 2026. So far for the first four months or so has been very positive overall. 

Yeah. I mean, I think the responses show us that the dentists that filled out the survey, thank you by the way they’re optimistic about what’s happening in their practices by and large. There was very few that were, kind of more negative. So I think there’s a lot of good things happening out there in, in pediatric dentistry right now. 

 All right, Keith, one last question that our pediatric doctors definitely want to hear. Do you believe that children are the future? Yes. Great. 

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