6 Big Changes in the Dental Industry

patient and dentist with x-ray

The dental industry is in the midst of a transformation that is making it more competitive than ever before.

But what’s driving this transformation? Here are six of the most significant drivers of this change.

More Dentists

Simply put, there are more dentists than there used to be. There are more schools and more newly minted dentists coming out of those schools every year.

According to the National Institutes of Health (NIH), the U.S. had 42 dental schools in 1950. That number had risen to 60 by 1978 and, after a dip in the 1970s and 80s, had risen to 64 by 1989.

Naturally, the number of dental school graduates follows suit. There was a big rise in dental school graduates between 1950 and 1975, an 89 percent increase. The numbers dipped during the late 1970s and 80s and then rose again in the 1990s and 2000s (by about 35 percent between 1994 and 2010). The trend continues to today.

Larger Practices

While practices with five or fewer employees still dominate the landscape (about 80 percent of all practices), group and DSO-supported practices are on the rise.

(One reason practices are getting larger is the increasing costs of education and the sizable debt that most dental school graduates acquire. With so much debt, many new dentists are unable to start their own practices, so they join group practices.)

Consumerism

Dental patients are getting savvier about their care every day. (It’s not just happening with dentists; it’s happening across most industries.)

With the internet, the average Joe and Jane have become more astute, savvy shoppers, and they’re applying this newfound talent to their dental and healthcare as well.

Healthcare costs continue to rise, and consumers want to get good value for their money, which means they’re now comparison-shopping physicians and dentists the same way they do with cars and televisions.

Less Insurance Coverage

Many patients have to pay out-of-pocket for their dental care, which means they’re looking for lower costs.

This is particularly true for older patients, which represent the fastest growing segment of the U.S. population. Americans are living longer, the Baby Boomers are entering retirement age and, at the same time, fewer older patients have dental coverage—which means they’re paying out-of-pocket for their care.

National data from the Medical Expenditures Panel Survey show that the percentage of adults with private dental insurance dropped from 62 percent in 2001 to 56 percent in 2010…Out-of-pocket payments are increasing for the elderly population. From 2000 to 2010, adjusted per‐patient dental expenditure increased among adults, especially among the elderly and higher income adults. The highest increase in expenditures was among the uninsured elderly.

—American Dental Association research

Increased Accountability

Commercial and public dental plans alike are pressuring dentists to be more accountable in their businesses, demanding metrics to show that they’re operating efficiently and doing their best to reduce overall costs.

Interviews with dental plans showed a trend toward cost containment through smaller provider networks and diminished reimbursement with increased accountability through metrics on utilization, provider profiling and cost controls.

—American Dental Association research

Insurers want to see performance data, which means dental practices have to dedicate resources to tracking results. Whether that means a full-time employee or a contractor, someone has to do it.

Increased Efficiency

The business side of dentistry has become more important than it used to be—dental practices have to be more efficient to thrive.

In this environment, it’s getting more and more difficult for the traditional model—a dentist, an assistant or two and a couple of office personnel—to handle the workload. As a result, many dentists are working in groups to share the administrative burden.

Best practices and efficient technologies are becoming more important every day. Practices need to operate as profitably as possible with as few employees and the least amount of overhead that they can manage.

(Some are even increasing the size of their waiting rooms and, in essence, over-booking their patients to ensure their chairs don’t go empty.)

Competition Driving Dentistry’s Transformation

A number of external factors are changing the dental industry, including an increased number of professional dentists, larger practices, consumerism, less insurance coverage for an aging population, increased accountability and the need for efficiency.

These factors, and a few others, are making the dental industry more competitive than it’s ever been before.

 

By Charlie Smith