Dentistry’s Boon or Bust?
We’ve all heard the projections that increased demand for oral care from the aging Baby Boomer population will have a positive impact on dentistry’s financial future. And, although there is debate as to whether or not many in this burgeoning group will have, or will commit, the financial resources to pay for the complex services needed, a recent report issued by the American Dental Association in April 2013, “Baby Boomers May Boost Dental Economy,”1 paints an optimistic but cautious projection. According to the data cited in the report, it would appear that from the year 2000 to 2010, the 65+ patient demographic has spent more dollars per capita on oral care than other age brackets. This is, in large part, due to the fact that the Baby Boomer age group, in comparison to past generations, has retained more of their natural teeth and as those teeth break down, they require more complex treatment to restore. In general, according to the report: “… retired boomers will require more dental services than previous senior cohorts and purchase more intensive services than younger patients,” which will have a positive impact on the dental economy for the next 20 years.
However, the report goes on to point out that while dental spending by older patients has been increasing since 2000, nationwide dental spending has, on average, remained flat in comparison to other healthcare segments, a slowing trend that began in 2002 and flattened from 2008 to present. The ADA Health Policy Resource Center (HPRC) attributes the slowdown and flat-lining to fewer adults visiting the dental practice overall, a trend impacted by many factors but exacerbated by the 2008 recession. However, the HPRC does not project a return to pre-recessionary dental expenditures in the future, but rather predicts this trend foretells a major shift in consumer utilization of dentistry and one that will impact the dental practice and its present structure.
This consumer shift will require dentistry’s practice structure to undergo a major transformation. This process has already begun. Evidence of the shift can already be seen in the meteoric rise of corporate dental practices, which is making the small town independent dentist as rare as the neighborhood grocery or bookstore. Group practices are also on the increase to share in overhead expenses and leverage the power of group purchasing. And pricing structures continue to be pushed with these new business models to a level that makes dentistry more affordable for the masses.
What we all need to keep in mind is that the tens of millions of Baby Boomers to whom the industry is depending to keep dentistry buoyed for the next two decades will retire out of employer-sponsored dental plans some day very soon and must either purchase private dental coverage or pay out-of-pocket for the dental services that have preserved their natural teeth over the past seven decades. The “boon” could be a “bust” …or a great opportunity.
1. Soderlund K. Baby boomers may boost dental economy. ADA News. Updated April 9, 2012. Accessed April 10, 2013. Available at: http:// www.ada.org/news/8483.aspx.