Despite a strong demand for dental services and improving inflation, the looming possibility of a recession leads one DSO exec to have a mixed outlook on economic recovery in the dental industry.
An April poll of more than 1,000 dentists by the American Dental Association's Health Policy Institute found that 29.3 percent of dentists indicated they were "very confident" in the economic recovery of their dental practice and 15.7 percent said they were "very confident" in the economic recovery of the dental care sector.
Dr. Lyon is a chief dental officer for the division of orthodontics and pediatric dentistry at Sarasota, Fla.-based DSO Dental Care Alliance. He recently spoke with Becker's about dentists' outlook on economic recovery.
Editor's note: This Q&A is part of a weekly series featuring Dr. Lyon focused on topics in the dental industry and DSO field. Responses were lightly edited for clarity and length.
Question: What is your reaction to the results of the ADA's most recent poll regarding confidence in economic recovery?
Dr. Barry Lyon: I think the results are not surprising. Traditionally, dentists are conservative, most do not have a sophisticated business sense and those in private practice realize they have a questionable safety net. Putting all of those together, one would expect the poll results to skew toward the negative.
Q: What do you think are the factors contributing to dentists' confidence in economic recovery? Why might a dentist be skeptical or confident?
BL: I feel there are a number of factors coming into play that affect dentists' outlook on the economy and their ability to grow their practices. First, although inflation appears to be easing, it may not be doing so evenly. Costs for dental supplies and equipment may not be lowering as fast as purchases being made in the private sector. Second, there are still supply chain issues. Dentists who feel expanding and adding additional operatories would be beneficial may not be able to based on the ability to procure the needed equipment. However, I think the biggest factor affecting dentists' confidence in recovery is the difficulty in hiring suitable employees to meet patient demand. It continues to be quite challenging trying to hire dental hygienists and dental assistants. When they are hired, I think many dentists are stunned by the unexpected sticker shock of escalating salaries. Add into this mix the fear of a recession, and one can understand why confidence in economic recovery is low.
Q: How would you describe your confidence in economic recovery for the dental sector?
BL: My confidence is mixed. On one hand, working for a DSO and not in private practice, I see the continued very strong demand for dental services. I expect doctor schedules to remain robust with elective services like cosmetic dentistry and orthodontics continuing strongly. In addition, it appears inflation is beginning to wane and COVID-19 is in the rearview mirror. On the other hand, news reports about the possibility of a recession later this year may be frightening the public who may respond with cautious spending.