The view from the United States
Industry experts currently estimate that 10 to 20% of U.S. restorative work is fabricated by an offshore laboratory. In a survey conducted by Dental Economics®, nearly 87% of the respondents were not surprised by that number. In fact, one respondent answered, "I’m not surprised by the number. I am surprised that it wasn’t higher."
"Although offshore outsourcing is discussed more openly now than it was just several years ago, the laboratory community is still divided over the issue," said Kelly Fessel Carr, Associate Publisher/Editor, LMT magazine.
"Some laboratory owners embrace the concept because it provides access to additional capacity and the means for growth. Others don’t outsource offshore but accept that it’s part of economic globalization. In a third camp are owners who feel it’s un-American and unfair to employees and are concerned about quality and material controls in foreign countries."
In recent years, "offshore labs" have made a splash, offering lower prices to dentists. Those "lower prices" have been very appealing to doctors with few major problems. However, one of the problems gathered nationwide media attention in 2008 when a 73-year-old Ohio woman being sickened by lead-tainted dental work that was outsourced to China. Though one incident, it’s still a fact that is brought up today in the lab business.
"For us, the FDA concerns about materials coming in from overseas are very real," said Bob Savage, vice president and chief financial officer of Drake Precision Dental Laboratory in Charlotte, N.C. "You have to remember that we’re fabricating body parts. Dentists should be concerned about where their crowns are coming from, and I think they have to know the origin of the product they’re being sold."
Savage not only knows about running a lab in the United States, but is also quick to point out that Drake has an offshore arm operated as Drake Worldwide.
"It’s a separate unit and our customers know up-front what we can do in terms of working at a lower cost with our offshore arm," Savage said.
"We tells our customers the scenario and they know what can be done for what cost. We’re not trying to hide anything, but rather give the customer a choice on pricing."
George Tishakadjian, owner of Divine Dental Studios in North Hollywood, Calif., is adamant on the fact that an inexpensive price tag can result in problems down the road for dentists.
"I don’t do cheap crowns," Tishakadjian said. "I only want to compete with another lab on quality, not price. Cheap labs can’t produce the quality that we can produce. It’s that simple."
He’s also doesn’t hide his feelings that quality includes the materials being used.
"Whatever I’m doing, I know my materials are approved by the FDA," he said.
Savage agrees.
"Ultimately, the dentist is responsible for the work he or she does," Savage said. "Dentists are asked to provide the best possible care for their patients, and that includes having confidence in the materials they use."
So do lab owners believe dentists should be required to tell their patients the origin of their crowns?
"I think that’s an individual decision," Savage said.
"It’s an individual decision that could affect business. If they’re asked by the patient, they should have the confidence to tell that patient exactly where the crown came from. But, on the other hand, if you’re getting an artificial knee, are you going to ask the surgeon where the knee parts came from? That surgeon is a professional just like a dentist. If you don’t trust that person and the decision he or she makes on where to get their materials, why are you going there?"
As part of a survey conducted by Dental Economics®, 78.6% of dentists who responded said that the dentist has an ethical responsibility to tell patients if their work was produced overseas.
"Absolutely every patient should know where his or her crown came from," Tishakadjian said.
And what does the future hold for offshore labs in the mind of the American lab?
"I think we’ll see 20 to 30% of the market fabricated offshore evenutally," Savage said.
"I don’t see it going away or shrinking any time soon. I think the only thing that would slow down its growth would be a large healthcare concern. However, as long as lab owners adhere to guidelines and understand the products that are being brought in, that’s not going to happen."
The view from overseas
Godfrey S.K. Ngai knows the question is coming. Sitting beside the director and chief executive officer of Modern Dental Laboratory (MDL) as we have dinner in Shenzhen, China, I ask him what’s the biggest hurdle his company has to overcome in the mind of American dentists.
"People don’t believe dental labs can be operated in such a fashion as ours," he said after thinking for a moment.
"People try to find every tool they can to attack outsourcing lab cases – poor quality, the lead scare, saying that our people work in sweat shops – it’s simply not true."
Walking the halls of MDL, I saw firsthand that the whispers of second-class conditions are unfounded. Granted, MDL and its 3,000-plus employees may not represent every dental lab in China, but it sets an example of precision and organization.
With a six-building complex in Shenzhen, including four buildings devoted to housing more than 2,000 of its employees, MDL has grown greatly since establishing itself in 1976 with just 45 people. More than 100 people currently comprise the lab’s customer service staff and more than 3,000 units of restorations are produced every day.
"This is a big lab, and that’s what attracted me here at first," said Kenny Tsoi, a technical consultant who has worked 23 years in the lab business, including three at MDL.
"Once I began working here, I learned how important quality is here, in every step of our process. Quality is rechecked at every step, so we know if there is a problem and we can fix it."
