Health Reform Expected To Polish The Dental Industry

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Through 2016, the Dentists industry will benefit from positive demographic trends, an improving economic environment and greater access to dental insurance according to the latest research findings from IBISWorld, the nation’s largest publisher of industry research. Over the five-year period, revenue is forecast to increase at an average annualized rate of 3.5% to $130.0 billion. Although growth from 2011 to 2012 will remain relatively low at 2.1%, sales are projected to pick up in 2013 as healthcare reform boosts the number of insured Americans. To meet demand, the number of dentist offices is projected to grow at an average rate of 0.7% annually to 175,789 practices through 2016. The dominance of dental practice management companies (DPMC), however, will continue to hamper the expansion of new offices as more dentists recognize the benefits of consolidating in order to spread costs across several practices.

IBISWorld Market Research

IBISWorld Market Research

Over the five-year period, revenue is forecast to increase at an average annualized rate of 3.5% to $130.0 billion.

Through 2016, the Dentists industry will benefit from positive demographic trends, an improving economic environment and greater access to dental insurance according to the latest research findings from IBISWorld, the nation’s largest publisher of industry research. Over the five-year period, revenue is forecast to increase at an average annualized rate of 3.5% to $130.0 billion. Although growth from 2011 to 2012 will remain relatively low at 2.1%, sales are projected to pick up in 2013 as healthcare reform boosts the number of insured Americans. To meet demand, the number of dentist offices is projected to grow at an average rate of 0.7% annually to 175,789 practices through 2016. The dominance of dental practice management companies (DPMC), however, will continue to hamper the expansion of new offices as more dentists recognize the benefits of consolidating in order to spread costs across several practices.

The federal healthcare reform approved in 2010 includes several provisions related to dental and oral health that will likely increase the number of patients who can receive treatment, thereby boosting industry revenue. Some of the provisions of reform were implemented in 2010 and 2011; however funding is yet to be secured and many significant changes are not scheduled to take effect until 2012 through 2018. The Patient Protection and Affordable Care Act (PPACA) states that pediatric dental care must be included as part of the minimum essential coverage for individuals through the state-run health exchanges. Pediatric Medicaid expansion plans also provide growth opportunities for the Dentists industry because this market segment has an unmet need. Increased government funding from the PPACA will likely lead to profit-margin expansion opportunities given the anticipated higher demand in pediatric practices for surgical and anesthesia-related procedures and lower demand for lower-margin dental lab work.

According to IBISWorld senior analyst Sophia Snyder, the $109.5 billion Dentists industry has been resilient and performed well during the economic recession, benefiting from favorable demographic trends, improvements in technology and mounting awareness of the importance of oral hygiene. “Revenue increased about 2.2% per year on average during the five years to 2011,” says Snyder. “Revenue is expected to rise 1.8% from 2010 to 2011.” This steady growth illustrates the resilience of the industry, which is partly attributable to growing public appreciation for dental care.

In contrast, the cost of dental education has soared, weighing down dental graduates with debt that has hindered them from starting practices. Rapid advancements in technology are also making it overly expensive to outfit a dental office. These factors have led to the growth of dental practice management companies (DPMCs), which are large companies that provide services for multiple dentist offices. Since these companies also buy independent practices, their growing dominance is leading to industry consolidation. During the five years to 2011, the number of companies is expected to decline 0.8% per year on average to 154,032 operators. Consolidation is forecast to persist through 2016; this will be one of several factors that boosts operating profit margin to 17.7% during the next five years, up from 17.3% in 2011.

The five-year outlook for dentists is positive, with favorable demographic trends, an improving economic environment and growing access to dental insurance, which has boosted revenue over the period. IBISWorld forecasts that revenue will increase at an average annualized rate of 3.5% to $130.0 billion by 2016. Revenue growth is expected to pick up in 2013 as healthcare reform boosts the number of insured Americans. DPMCs will continue to penetrate the industry and grow in size as more dentists recognize the benefits of spreading costs across practices.

For more information, download the full report from IBISWorld on the Dental Industry

Dental Industry Report Table of Contents

About this Industry
Industry Definition
Main Activities
Similar Industries
Additional Resources

Industry at a Glance

Industry Performance
Executive Summary
Key External Drivers
Current Performance
Industry Outlook
Industry Life Cycle

Products & Markets
Supply Chain
Products & Services
Major Markets

Globalisation & Trade
Business Locations
Competitive Landscape
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry

Major Companies

Operating Conditions
Capital Intensity

Key Statistics
Industry Data
Annual Change
Key Ratios

Jargon & Glossary

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About IBISWorld Inc.
Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.

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