As startup costs have increased, many dental graduates have been less willing to start their own practice
New York, NY (PRWEB) February 24, 2015
Once viewed as cosmetic procedures, orthodontic treatments have become routine in dentistry. Over the past five years, the Orthodontists industry has benefited from favorable demographic trends and technological advances. According to data from Dental Economics magazine, about 60.0% to 70.0% of adult Americans receive routine dental care. Overall, as more patients visited their dentist, they were more aware of needing orthodontic treatments, bolstering the number of patient referrals to orthodontists. According to IBISWorld Industry Analyst Sarah Turk, “Patients who have crooked or crowded teeth, overbites or underbites, issues with jaw positioning or jaw joint disorders may require industry services.” If left untreated, these ailments may result in tooth decay, gum disease, headaches, earaches or speaking, biting or chewing issues.
Private dental clinics were highly profitable over the five-year period because many patients pay for orthodontic services out of pocket, which lowers administrative costs related to securing reimbursements. However, the industry's landscape has changed considerably. As the cost of dental education has increased over the period, many dental graduates have been less willing to start their own practice, due to high startup costs. Rapid technological advancements have added to the capital outlay required; as a result, dental practice management companies (DPMCs), large companies that provide services for multiple dental offices, have become more prevalent. The industry has consolidated as DPMCs have acquired small, independent practices. During the five years to 2015, industry revenue is expected to grow marginally. Profit is expected to rise slightly, bolstered by cost efficiencies related to operating within a DPMC network.
The Orthodontists industry exhibits a low level of market share concentration. In 2015, no orthodontic practice is expected to comprise more than 2.0% of total industry revenue. The industry predominately consists of small, sole-practitioners; however, this is expected to change over the next five years. For example, the emergence of more large-scale dental practice management companies (DPMCs) will likely characterize the industry's landscape in the coming years. As DPMCs acquire small orthodontic practices, orthodontists will be able to share fixed overhead costs across a larger revenue base. “Additionally, DPMCs will be able to keep patient referrals in-house by providing more services in their network,” says Turk. As a result, market share concentration is expected to increase over the next five years.
However, according to Dental Economics, about 35.0% to 40.0% of practices are operating below capacity, indicating growth potential for orthodontic practices over the next five years. During the five years to 2020, industry revenue is forecast to grow slowly. Nevertheless, the industry will contend with rising external competition, namely from companies that make do-it-yourself teeth aligning equipment.
For more information, visit IBISWorld’s Orthodontists in the US industry report page.
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IBISWorld industry Report Key Topics
This industry is made up of health practitioners who specialize in treating misaligned teeth and facial development with braces, headgear, retainers and other methods. Industry operators are doctors of dental surgery (DDS) or doctors of dental medicine (DDM) and have several years of specialty training in orthodontics. Industry operators may work in family, group or large practices.
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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