Recruiting and Retaining Dental Labor in Federal Facilities: Harder than Pulling Teeth?

Dental practice in the US remains largely a private enterprise with one or few owners of a given firm. Projections of dental shortages and surpluses have waxed and waned, which has encouraged both the closing and opening of dental schools in recent years.

One setting believed to be in need of more dental labor is the US Veterans Administration (VA). The VA operates a parallel, government-run health care system specifically reserved for the country’s qualifying military veterans. It is championed as an earned benefit for this special population, but expanding and sustaining the VA health system has a checkered history. Sufficient and high-quality health care access has been a salient struggle for the VA. Dental care, specifically, has been highlighted as a service that is too often underutilized by veterans, and oral disease and inadequate access has long been documented in this population.

With these issues in mind, Congress embarked on a legislative intervention in the mid-2000s to funnel additional financial resources to the VA in order to implement more generous and flexible pay packages for VA health care providers, including dentists. The goal was to correct perceived provider shortages that risked undermining the VA’s longstanding mission. This Congressional action had clear fiscal implications as well as the potential for broader dental labor market impacts, but its ultimate effects are currently unknown. It also took place against a national backdrop of declining real earnings for general practice dentists. Deteriorating outside options juxtaposed to more attractive VA compensation could plausibly tilt the marginal dentist toward federal employment, with possible downstream ramifications for both the public and private dental care sectors. However, these remain open empirical questions.

We leverage this quasi-natural experiment to assess how responsive dentists are to more generous and less rigid wage structures in the public sector within a difference-in-differences framework that uses other, unaffected federal occupations as a control comparison group. After documenting the sharp legislated change in VA dentists’ incomes, we specifically explore the policy effects on job separation rates, recruitment, retirement, workforce characteristics, and employment characteristics (e.g., location and full-time versus part-time). We ultimately find that the policy has limited effects on the VA dental workforce overall but does drive some important changes among specific subsets of workers. Early career dentists appear more willing to accept full-time VA positions and remain VA employed. At the same time, dentists hired after the policy is in effect are more likely to have greater professional experience and practice within harder to recruit areas (e.g., rural VA facilities). Local managers seem to use their greater wage setting discretion to compensate these workers for accepting less geographically desirable jobs. New dental recruits also demonstrate improved retention; however, weak employment attachment among new hires remains an unresolved issue for federal facilities. Taken together, our findings reveal persistent dental labor market difficulties for the VA system, which calls into question the wisdom of relying on public as opposed to private provision of dental care for military veterans.