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Economy forum

Course examines whether the recession is the only factor in declining dental earnings

November 05, 2012

By Kelly Soderlund, ADA News staff

San Francisco—It wasn’t the economic downturn in 2008 that caused dental earnings to decline and adult utilization to go down. These trends have been in play since the early 2000s, expert dental economists said at the ADA Annual Session.

Economics of dentistry: Marko Vujicic, Ph.D., managing vice president of the ADA Health Policy Resources Center, gives his presentation, Recent Trends in the Market for Dental Care. Photos by EZ Event Photography

Marko Vujicic, Ph.D., managing vice president of the ADA Health Policy Resources Center, joined Drs. L. Jackson Brown and Howard L. Bailit, also Ph.D.s, to present Has the Economic Downturn Changed Dentistry Forever? to a standing room only crowd Oct. 18.

“Right now, we’re really in a crossroads in dentistry,” said Dr. Jeffrey Cole, who moderated the course and is a member of the Council on Dental Practice.

Dr. Vujicic presented data showing the growth rate in the dental economy slowing significantly in the early 2000s and flattening after 2008. Specifically, total dental spending per capita began to slow in 2002 before flattening in 2008.

A lot of this appears to be driven by significant changes in utilization of care, he said. Among adults, particularly poor adults, dental utilization began to drop starting in 2003.

For children, it’s the exact opposite, Dr. Vujicic said. Utilization of dental care has increased since the early 2000s, especially among poor children.

“All of this data suggests that something was happening well before the economic downturn,” Dr. Vujicic said.

What was it? Dr. Vujicic said he’s not completely sure but early analysis by his team at HPRC points toward a decrease in the share of adults with private dental insurance. That could be because more employers are cutting their benefits, specifically dental, forcing many people to utilize public insurance or be uninsured, he said. Many employers are also passing higher insurance costs on to their employees, Dr. Bailit said.

“People having private dental insurance is absolutely critical for the economic well-being of the dental profession,” Dr. Bailit said.

In private dental insurance, enrollment has declined; employee contributions to premiums has increased; there are larger deductibles; and there’s been no change in maxima, Dr. Bailit said.

“We know with those declines, there is going to be less demand for dental care,” Dr. Bailit said.

Dr. Bailit
Household incomes are also declining. Dr. Bailit said the broad middle class’s income hasn’t changed much in the past 30 years, leaving a large chunk of people without money to purchase insurance or spend on oral health care. The median household income peaked in 2000 at $52,300 and has declined ever since, Dr. Bailit said.

There’s also been a population boom, specifically among Hispanics and the elderly—groups that typically have a lower utilization rate, Dr. Bailit said.

The supply of dentists in the United States or a specific region can also affect earnings, the experts said. According to recent data collected by the HPRC, when asked about their workloads, one-third of dentists reported they were not busy enough, Dr. Vujicic said.

It was a fact that resonated with the audience, many of whom agreed there may be a shortage of dentists in rural areas but that in higher populated areas, they felt less busy than in previous years.

“We have felt the same trends that your graphs show nicely,” said Dr. Carey Penrod, of Rancho Santa Margarita, Calif.

After each of the panelists presented their findings, they took questions submitted from CDP and later interacted with the audience, many of whom could relate to the decline in income and utilization.

Dr. Kim Keller, of Idaho, said there are so many dentists willing to take Medicaid patients in Idaho that it shows the insurance companies the industry can live on a lower income.

“We have seen a decade of substantial progress in the percent of Medicaid kids who see a dentist—in 48 out of 50 states actually,” Dr. Vujicic said. “Dentist earnings are down but policymakers’ goals are to get care to the public at the lowest cost. In terms of access to care, the needle has been moving in the right direction for low-income children but for low-income adults, we are likely to see major problems in the coming years.”

Dr. Kevin Sessa of Colorado, who’s also a member of CDP, described a conversation he had with a patient, who was willing to purchase a $6,000 bicycle but not pay half of a $1,000 oral surgery he needed. The patient’s insurance company was going to pay for half of the surgery costs but he would be responsible for $500, Dr. Sessa said.

“I asked if he had bicycle insurance,” Dr. Sessa said. “This is not an entitlement, this is a need. This is your health.”