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NEW YORK, U.S.: COVID-19 is causing historically significant contractions in patient volumes and demand for dental equipment. Baird Equity Research is tracking the situation by surveying U.S. dentists and says that it is too early to predict when demand might bottom out and what might happen afterward. Trends witnessed in the dental market after the global financial crisis of 2007–2008 suggest that patients will defer appointments for restorative and orthodontic procedures but not for general dental care.
Baird normally conducts its dental surveys on a quarterly basis, but senior research analyst Dr. Jeffrey D. Johnson confirmed to Dental Tribune International that the investment bank has stepped up the frequency of its surveys, as the spread of the SARS-CoV-2 virus has begun to significantly disrupt the operations of dental practices and the businesses of dental manufacturers and distributors.
After more than 15 years of conducting the surveys, Baird has added questions on topics that its analysts had previously never needed to consider, such as potential office closures and supply constraints for essential materials.
Baird surveyed 137 U.S. dentists (mainly general practitioners) on March 12 and 13 and found that patient volumes had declined by 0.4% across the U.S. in the weeks prior to the survey. On the West Coast, where SARS-CoV-2 infection rates were higher, a 3.5% decline in patient volumes was recorded over the same period. Respondents indicated that there was some likelihood that office hours would be reduced and that some offices might close, but respondents largely indicated that they did not expect to close their dental practices or reduce staff hours as a result of the outbreak.
The situation had already changed dramatically by the time the data from the first survey was published, and Baird conducted a second survey just a week later, on March 19. Baird surveyed 91 of the 137 dentists who had responded to the first survey and found that plans to reduce office hours and close dental offices outright had significantly increased.
The March 19 survey showed that 76% of respondents expected to reduce office hours (up from 5% one week earlier) and that 60% expected to close their dental offices for at least one week (up from 4% one week earlier). Close to 15% of respondents had seen patient volumes contract by at least 20% (up from 2% one week earlier). On the West Coast, almost 30% of respondents said that patient numbers had dropped by at least 20%.
Based on the results, Baird estimated that expected equipment purchases by the 200,000 dentists in the U.S. will fall by around $14,000 in 2020 and that this would translate to an approximate loss of $1.4 billion (€1.27 billion) in spending this year. “That would effectively wipe out close to half of what we estimate is just over $2.5 billion in spending on dental equipment in North America each year,” Johnson clarified.
What goes down must come up? Lessons from the global financial crisis
Baird is specifically surveying U.S. dentists, but its findings are likely indicative of currently flagging demand for equipment and patient visits across a score of dental markets. The American Dental Association has recommended that all nonemergency dental care be postponed, and similar measures are in place in many other affected countries, such as India, Pakistan, Italy and Canada. While there is no way to predict when dental professionals might be able to return to normal business activities, data from the period after the global financial crisis of 2007–2008 could help us to understand what might happen after such a significant drop in demand for dental services.
“We’ve seen in past cycles, including in 2008–2009, that there does seem to be a deferral and eventual catch-up of some dental procedures” - Baird Senior Research Analyst Dr. Jeffrey D. Johnson
Johnson told Dental Tribune International that data from the most recent economic downturn shows that appointments for certain elective treatments are likely to be deferred: “We’ve seen in past cycles, including in 2008–2009, that there does seem to be a deferral and eventual catch-up of some dental procedures, including orthodontics and certain restorative procedures. General dental care is a bit different, though, as it seems that some visits are simply lost, as a patient perhaps forgoes a six-month check-up and simply returns to the queue for his or her 12-month visit later down the road.”
He continued: “We’ve also historically seen trade downs, from implants down to crowns, to cavity filling or even to extractions instead of more costly restorations, so while some of these higher-end restorative procedures might be deferred and eventually return to the office, value might also come out of the market in the near to intermediate term if patients are instead trading down to less costly procedures.”
The outbreak of the SARS-CoV-2 virus has left dental teams in an unprecedented situation, and Johnson said that the shape and speed of a recovery in the dental market will depend on wider economic trends. “We know that in 2008–2009 industry growth fell to flattish or slightly negative levels for a period of roughly five quarters before beginning to recover, and we’ll need to see where employment and global macroeconomic trends settle out over coming months before we can understand whether dental-related pressures in 2020 might be shorter, but deeper, and have an associated ‘V-shaped’ recovery, or whether we are instead heading into a multiquarter period of declining procedural demand.”
“We don’t have an answer to those questions yet, but we hope through our ongoing analysis and survey work to have a more informed view over coming weeks.”
Editorial note: Dental Tribune International will publish the results of Baird’s next survey of U.S. dentists on April 6.