The next 12 months
Manufacturers talk about the economy, healthcare reform, and dentistry in the year ahead
With talk of the economy slowly turning around, First Impressions called some manufacturers to get their take on what the next 12 months might hold for the dental industry. The following are responses from three: David Kasza, director of dental sales, Cetylite Industries; Eric Shirley, vice president and general manager, Midmark Dental Division; and Marc Montalto, sales director, acute care, Sempermed.
First Impressions: What are the biggest question marks facing the dental industry in the next 12 months?
David Kasza: I see two question marks impacting dentistry in the next 12 months. The first is the impact of new technology, and the second is the state of the economy. Technology is changing the way dental professionals think about their business and perform procedures. When you couple this with what has been happening with the economy, we see more general dentists attempting to keep more business within their own practice. An example of this is the increasing number of general practitioners purchasing lasers and performing periodontal procedures they used to refer to a specialist. In addition, the economy is forcing dentists to take a look at their cost structure. This will result in searching out products and services that will lower their costs without affecting the quality of care they are providing to their patients.
Eric Shirley: Impact of healthcare reform, and economic recovery.
Marc Montalto: The economy is the largest factor facing the dental [industry]. With elective procedures being postponed, the industry faces a few unknowns in the next 12 months.
First Impressions: What’s the one sure thing about the year ahead?
Kasza: The economy will continue to affect the dental industry. Those manufacturers and distributors that are dedicated to providing value and reducing costs will be the heroes.
Shirley: [The one sure thing is] that it is full of question marks. But it is also full of opportunity. Patients are consumers, and all consumers make conscious and subconscious decisions each and every day regarding where, when and how to spend money. Consumers have money. Consumers have dental benefits. Dentists who understand that they are competing for a consumer’s dollar are taking the time to create better connections with patients, to listen to their needs and wants, to create compelling visions for those patients about function and esthetics, and to create office teams that make patients feel unique and special. I’m hearing about a different mind-set with successful dentists and successful dental teams, and it’s very exciting. Distributors and manufacturers are being forced as well to offer new technology, new incentives, new products and new services, and we have to do it cost-effectively and more rapidly than ever. It’s a time of great competition and change, and out of it will come innovation and new paradigms.
Montalto: Commodity items due to raw material, transportation, and exchange rates will continue to be a highly volatile category.
First Impressions: Are you seeing recovery? If so, is it by region? By specialty?
Kasza: I believe the recovery has been slow moving in the field of dentistry. This has not been regional but national. The procedures such as cosmetics and implants, which were booming, have come to a screeching halt due to the economy. This has impacted not only the general dentist, but also the specialists, such as oral surgeons and periodontists.
Shirley: Yes, we are seeing signs of life. Nothing that makes me think the industry is back on solid footing, but I’m encouraged. Specialties didn’t suffer, according to the numbers I’ve seen, to the level that the GP may have suffered. Also, I’ve talked to many dentists who said that 2009 was their best year ever. These are clinicians who offered more services, made patient interaction a priority, and/or enhanced their offices with new equipment or technology.
Montalto: Our market segment - gloves - continues to be strong. We are not experiencing significant differences based on regions.
First Impressions: If you haven’t seen recovery yet, where do you expect to see it first, either geographically or in terms of specialty?
Kasza: Recovery will be slow in dentistry due to the "fee for service" nature of the business. The general public is focused on retaining their jobs and paying their monthly bills vs. expending cash for dental procedures that can be delayed.
First Impressions: Healthcare reform is said to mean good things for the dental industry, including more coverage for kids, and more funding to educate dental professionals. On the other hand, it does not provide for expansion of dental benefits through Medicaid. What do you think the impact of healthcare reform legislation will be on the dental industry?
Kasza: Again, dentistry is a "fee for service" business. The addition of better coverage for children will improve the hygiene and basic restorative areas of the practice. But, it will not have any impact on the bigger ticket items, such as crown and bridge, cosmetics and implants. These areas will improve as the general economy improves.
Shirley: I think it will be a work in progress for many, many years to come. Someone much smarter than me said that healthcare reform would work like Social Security - it will pass and we’ll spend the next 50 years sorting it all out. I think that’s exactly the case. Too many questions at this point, and if anyone - manufacturer or clinician or distributor - waits until it’s clear, they will be waiting a very long time.
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