It seems that at least some dental practices in the United States are doing OK, business-wise, in spite of the down economy. We’d like to hear if you agree with this market assessment.
In the numbers-filled environment of research publisher IBIS World, the Dentists Industry—in the collective perspective—“performed well during the economic recession and is expected to continue benefiting from favorable demographic trends, improvements in technology and mounting awareness of the importance of oral hygiene.”
Further, IBIS declares, “The Dentists industry is resilient and expected to benefit from improving dental care insurance coverage.”
We’ll take this useful insight for dentists and dental marketing professionals, although we might add at least a small grain of salt. The IBIS folks are good at what they do, but in our experience, a lot of dental and medical professionals are still waiting to feel the much discussed, but little seen, economic recovery. (See our earlier post: Is This What a Unicorn Economic Recovery Looks Like?)
First, there’s the up side…
As IBIS World organizes things, the “Dentists” category is a $110-billion industry that is expected to grow 0.3 percent in the current year, and increase 1.0 percent per year on average in the near term. What’s more, “Revenue growth is expected to pick up in 2013 as healthcare reform legislation increases the number of insured Americans.” [For purposes of this analysis, general dentists represent about 84 percent, and dental specialists (including pediatric dentistry, oral surgery, endodontics, orthodontics, prosthodontics, etc.) account for the other 16 percent.]
In the battle to contain or reduce business costs (and achieve their reported resiliency), dentist have increasingly been outsourcing functions such as marketing, accounting, staffing and other operating functions. (For more on this, read: When & Why Outsourcing Saves Money.)
…and then there’s the down side.
But there are also negative economic forces at work. IBIS World observes that future dentists have additional financial challenges to overcome just to get into the business. They list the soaring cost of dental school, the burden of the resulting educational debt, the cost of the latest technology to outfit a new dental office, and other capital expenses, as serious barriers to starting a practice.
The industry forecast expects that, over the next five years, the number of dental offices and clinics in the US will shrink. Continued consolidation will result in larger (but fewer in number), group practices with both general and specialty care available under the same roof.
For more about this, IBIS World has posted a summary description online here.
We’d like to hear what you think. Has this been your experience?