Dental Care Spending Levels Off in United States

Laird Harrison

April 25, 2013

Spending on dental care has flattened in recent years, despite unmet need, according to a report by the American Dental Association (ADA).

Adjusting for inflation, dental spending increased by 3.9% per year from 1990 to 2002, but the increase slowed to 1.8% between 2002 and 2008 and declined at a rate of 0.3% from 2008 to 2011, the ADA researchers found.

The researchers presented their results in 2 briefs published in March on the ADA Web site.

They drew on data from the Medical Expenditure Panel Survey, maintained by the US Agency for Healthcare Research and Quality.

Using 2011 dollars, the researchers found that annual dental expenditures per capita increased from $200 in 1990 to a peak of $351 in 2008 before dipping back down to $348 in 2010 and staying at that figure in 2011.

Because the decline started before the recession began in 2008, and as overall health spending continued to increase slightly after 2008, the researchers conclude that factors other than the recession were at work in the dental spending decline.

''A lot of this expenditure reduction is driven by a decline in utilization," Marko Vujicic, PhD, managing partner of the ADA's Health Policy Research Center told Medscape Medical News.

A variety of factors contribute to this decline, he explained. According to the reports, oral health is improving throughout the US population, and at the same time, Medicaid and other subsidized dental care programs for children have expanded: Only 17.8% of children younger than 21 years have no dental coverage, and more children are going to the dentist than in the past. The share of dental expenditure financed by public sources rose from 4% in 2000 to 8% in 2011. However, spending per visit in this group has remained flat, perhaps because children tend to need more preventive care than restorative care.

Two Thirds of Adults Have No Coverage

In contrast, two thirds of adults have no dental coverage. Some states have cut Medicaid dental programs for adults, and because healthcare costs are increasing in general, many employers have cut back on dental benefits or required employees to contribute more. In addition, patients have always paid a higher proportion of their dental costs out of pocket compared with their medical costs. Therefore, adults may be cutting back on their healthcare costs in one of the only ways they can, by visiting their dentists less often.

Finally, Baby Boomers and seniors have more teeth than in the past, and therefore need more restorative treatments. So they are spending more money per visit. However, the increase in spending per visit does not compensate for the decrease in the frequency of visits. As this population gets even older and has even greater needs, their high spending per visit could boost the dental economy of the future, according to the reports.

''Some of the research we have done shows that the percentage of adults with benefits has gone down in recent decades," said Dr. Vujicic. "Not surprisingly, the financial barriers have gone up. So it's certainly not all about improved oral health and reduced need."

Although many states have cut back on their Medicaid programs for adults, Dr. Vujicic said, a few, including Massachusetts, Maryland, and Virginia, have moved in the opposite direction with exemplary new programs that could point the way for the rest of the country.

Bassim Michael, a certified public accountant in Fresno, California, who was not involved in the study, said he is seeing these trends play out among the many dentists he advises.

The demand for care for children is only likely to increase as the Affordable Care Act is implemented because it mandates dental care for children, but not for adults, he told Medscape Medical News.

Dentists increasingly must choose between treating children, particularly those with subsidized coverage, or working harder to attract the shrinking number of adults who can afford dental care.

Children are more likely to need preventive care than restorations, and preventive procedures get lower reimbursements. So to make money in this market, dentists must see 35 or 40 children a day compared with 8 adults, Michael says.

Efficiency Needed

That means becoming very efficient: Dentists going after the pediatric market should consider whether they have space in their offices for multiple operatories they can staff with hygienists and assistants, he added.

"That's why the rise in care for disadvantaged children coincides with the rise of dental service organizations," he said. "There are opportunities for the solo dentist, but they have to study very carefully whether they can accommodate the volume.''

Dentists who want to stay focused on adults with significant restorative needs must also change their games, Michael said.

"If you continue to do things the way you did 10 years ago, you're going to see a decline in income," he said. "But if you're investing in technology and diagnostic equipment, and investing in training for yourself and your staff and in marketing, you're going to do all right."

Michael has disclosed no relevant financial relationships. Dr. Vujicic is employed by the American Dental Association.

"Per-patient Dental Expenditure Rising, Driven by Baby Boomers." Health Policy Research Center, the American Dental Association. Published online March 2013. Full text

"National Dental Expenditure Flat Since 2008, Began to Slow in 2002." Health Policy Research Center, the American Dental Association. Published online March 2013. Full text