Will dentists overcome the threat of the looming financial collapse?
Dental health has been something of the forgotten Covid-19 cousin to A&E, and GP practices, unless of course you have been in the painful position of requiring emergency dental treatment.
It is a market under considerable pressure at this time, and yet our mid-term forecasts out to 2026 are still achievable. We ask what could go wrong and does it change the business model?
According to the World Congress on Dentistry and Oral Health, the smaller general-practice model generates roughly USD 225k to 300k (GBP 180k to 240k) in gross revenues. Mid-range operations gross between $350k and $425k (GBP 280k to 340k). The gross revenue for the larger general practice ranges from USD 475k to USD 550k (GBP 380k to 440k). https://www.imedpub.com/articles/market-analysis-2020-on-26th-world-congress-on-dentistry-and-oralhealth.pdf
According to the journal of oral medicine, “across the globe today, the most common practice model is the standard solo practice with three-plus operators and a lean clinical-support staff.”
The dental market can be ranked broadly by opportunity as follows: North America and Europe, followed by the rest of Asia, Latin America, Africa, the Middle East, and Australia.
We have segmented the market according to our research interests into consumables, cosmetic, hygiene and devices.
Dental consumables are the products used in cosmetic dentistry and oral hygiene dentistry. While dental devices are all instruments used by dentists to provide optimum dental care.
In the exhibit below we have taken four segments of the global dentistry market, which when added together equated to a market with a value of around US$ 100bn in 2018, we then applied growth rates from our analysis and asked ourselves the question, what could cause these forecasts to be missed and how could this impact the dentistry business model?
We expect:
- The global cosmetic dentistry market to reach a value of US $43bn by the end of 2026 up from US $23bn 2018, an 8-year CAGR of 8%.
- The global dental consumables market to increase to US $49bn by 2026 up from US $28bn, an 8-year CAGR of 8% in our forecast.
- The global dental hygiene market to reach US $63bn by 2026 up from US $46bn in 2018, representing a CAGR of 4%.
- The global dental devices market to exceed US $10bn YE26 up from over US $7.5bn YE18, an 8-year CAGR of 4.5%.
The risk to our forecasts lies in the danger of prolonged future Covid-19 waves that lead to country or state wide shut downs (failure of track and trace and related policies) or and the failure to find a vaccine or other drug based disease control response.
These market failures could, in turn, lead to a prolonged new set of conditions for the dental market, made up of a new higher cost base for dental practices; lower unit revenue per day; the limitation on dental services that can be delivered (revenue and margin limitation) and the overall reduction in dental practices in operation (distribution), may restrain the growth of the dental market over our forecast period.
