Dental spending

The U.S. is emerging – albeit slowly – from the worst economic downturn since the Great Depression. At the same time, the health care system is on the verge of unprecedented reform.

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by Marko Vujicic, Ph.D.

The U.S. is emerging – albeit slowly – from the worst economic downturn since the Great Depression. At the same time, the health care system is on the verge of unprecedented reform. The Affordable Care Act, with its triple aim of improving the health of the population, enhancing the patient experience, and reducing cost will usher in a sea change in how health care is financed and delivered. The U.S. far outspends any other country when it comes to health care, with no real demonstrated gains in health outcomes.

The ADA's Health Policy Resources Center recently completed a comprehensive analysis of dental spending in the United States. Total dental spending makes up about 4% of overall health spending and in 2011 it reached $108 billion. After adjusting for inflation and population growth, however, dental spending in the U.S. has been flat since 2008. Although our analysis goes through 2011 and covers only two full years of the post-recession period, it is clear that the dental economy is not rebounding – at least yet. Another very important conclusion we came to was that the growth rate of dental expenditure per capita changed significantly in the early 2000s. This is very important. The slowdown in the dental economy is not solely due to the economic downturn. Something happened in the early 2000s to fundamentally change the trajectory of dental spending. Figure 1, in fact, shows that there are three distinct periods of spending growth for dental care: 1990-2002, 2002-08, and 2008-11. It also shows that dentistry is different than health care. While dental spending and overall health spending grew at a similar rate prior to 2002, this has not been the case since.

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Based on these results, it appears the dental economy is in a transition. Subsequent analysis my team has been working on shows that average dentist earnings have been declining since the mid-2000s and have not recovered since the end of the economic downturn. And a lot of this, according to our research, is being driven by a decline in utilization of dental care among adults. Other factors include improvements in oral health which could be causing a shift in procedure mix away from (more costly) restorative procedures toward (less costly) preventive procedures. As dentistry finds itself at a crossroads, the ADA's Health Policy Resources Center will closely monitor spending trends in the coming years to determine if spending continues to stagnate, starts declining, or begins to recover.

To access the full analysis please visit http://www.ada.org/1442.aspx .

Marko Vujicic, Ph.D. is Managing Vice President, Health Policy Resources Center at the American Dental Association where he is responsible for overseeing all of the Association's policy research activities. Prior to joining the American Dental Association, he was Senior Economist with The World Bank in Washington D.C. where he directed the global health workforce policy program. You may reach him at email: vujicicm@ada.org

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