A look at statistics showing how the insurance industry fared in consumer class action settlements.
Los Angeles, CA (PRWEB) August 28, 2012
The Dentists industry was steadfast and performed well during the recession, benefiting from favorable demographic trends, technological advances and mounting awareness of the importance of oral hygiene. Although profitability has somewhat declined in the past five years, private dental clinics were the nation's most profitable industries during the economic downturn. According to IBISWorld analyst Anna Son, "this profitability is partially attributed to industry operators being less dependent on reimbursement from healthcare insurers, compared with other medical services, because many patients pay for dental treatment out-of-pocket." However, better preventative care at home has somewhat suppressed revenue growth. Improved toothbrushes and formulas for toothpastes that lead to healthier teeth slightly lowered demand for traditional dental services. During the five years to 2012, revenue is expected to grow an average 0.3% per year, reaching $109.6 billion. This growth includes a 1.0% increase in 2012.
In contrast, the cost of dental education has soared. Weighed down with debt, dental graduates are hindered from starting practices, which require significant capital investments. Rapid advancements in technology are also making it expensive to outfit a dental office. These factors have led to the growth of dental practice management companies (DPMCs), which are large firms that provide services for multiple dental offices. Because DPMCs also buy independent practices, their growing dominance has led to industry consolidation. 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. In addition, referrals from a general dentist to a specialist no longer take patient revenue away from the practice, as both belong to the DPMC. As a result of the growing DPMC's prevalence in the Dentists industry, concentration has increased marginally during the past five years. “Continued consolidation is expected to help expand profit margins over the next five years,” says Son. Nonetheless, the industry remains highly fragmented, with no one industry accounting for a significant market share.
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. IBISWorld forecasts revenue to continue increasing in the five years to 2017 at a faster rate than in the the past five years. Revenue growth is expected to pick up in 2013 as healthcare reform legislation increases the number of insured Americans. As the job market improves, increased dental coverage from employers and rising disposable income will result in more patient visits. DMPCs 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
About IBISWorld Inc.
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.
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