Wider insurance coverage and an improving economy will benefit the industry
Los Angeles, CA (PRWEB) May 26, 2012
The $109.6 billion Dentists industry has been steadfast and performed well during the economic recession, benefiting from favorable demographic trends, improvements in technology and mounting awareness of the importance of oral hygiene. IBISWorld expects revenue to increase 1.0% per year on average during the five years to 2012. Revenue is expected to rise 0.3% from 2011 to 2012. “This growth illustrates the resilience of the industry, which is partly attributable to growing public appreciation for dental care,” says IBISWorld industry analyst Sophia Snyder.
In contrast, the cost of dental education has soared. Weighed down with debt, dental graduates are hindered from starting practices, which require significant capital. Rapid advancements in technology are also making it very expensive to outfit a dental office. These factors have led to the growth of dental practice management companies (DPMCs), large companies that provide services for multiple dental offices. “The allocation of accounting, staffing, marketing and other administrative tasks to a centralized management company creates a model that can address high operating costs while spreading capital costs over a larger revenue base,” adds Snyder. In addition, referrals from general dentist to specialist no longer take patient revenue away from the practice as both belong to the DPMC. Since these companies also buy independent practices, their growing dominance is leading to consolidation in the Dentists industry. During the five years to 2012, the number of companies is expected to decline 0.7% per year on average to 153,763. About 169,677 dentist offices and clinics operate in the United States, and no major companies dominate this highly fragmented industry. Nearly 92.0% of dentist offices have fewer than 20 employees, based on data from the US Census Bureau. Consolidation is forecast to persist through 2017; this will be one of several factors that will lift the operating profit margin during the next five years.
The five-year outlook for dentists is positive, with favorable demographic trends, an improving economic environment and growing access to dental insurance boosting revenue over the period. Revenue growth is expected to pick up in 2013 as healthcare reform legislation increases 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, visit IBISWorld’s Dentists in the US industry report page.
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IBISWorld industry Report Key Topics
This industry includes firms of health practitioners that have a degree of Doctor of Dental Medicine (DDM), Doctor of Dental Surgery (DDS) or Doctor of Dental Science (DDSc). Industry firms are primarily engaged in the independent practice of general or specialized dentistry or dental surgery. These practitioners operate private or group practices in their own offices (e.g. centers or clinics).
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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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.