The COVID-19 pandemic has been especially disruptive for high-contact industries, including the $139 billion dental industry. While many projections have been made, it has been challenging to quantify COVID-19's true economic impact and analyze it in detail.
Proprietary data from Dental Intelligence, a leading dental software provider that serves over 8,000 dental practices in the United States, was analyzed to better understand the economic impact of COVID-19 on the dental industry. This real performance data, along with recent surveys by the American Dental Association (ADA) confirm that COVID-19 has had a material, negative economic impact on dental practices that is still ongoing.
- Dental practice revenue declined 6% year-over-year in 2020, much less than the 38% decline predicted by the ADA in June
- The top 10% of practices performed better in 2020 than 2019 in terms of revenue, average patient value, and patient growth
- Dental hygiene appointments declined by 47% year-over-year in spring 2020, before recovering in the summer and dipping again in the fall
- Nearly 10% of all dental practices had to downsize their teams between January 15th and February 15th, 2021
- 27% of dental practices reported that they raised their fees between January 15th and February 15th, 2021
Table of Contents
- Timeline of COVID-19 and Dental Practice Closures
- Dental Practice Revenue Declined by 6% in 2020
- Dental Hygiene Appointments Declined by 47% in Spring 2020
- Dental Practices in All U.S. Regions Were Impacted by COVID-19
- The Pandemic Exacerbated the Performance Gap Among Dental Practices
- Key Performance Indicators Suggest That Recovery Is Still Underway
- COVID-19 is Still Negatively Affecting Dental Practices
Timeline of COVID-19 and Dental Practice Closures
The first COVID-19 cases in North America were reported in the United States in January 2020. The first states and cities began imposing shelter-in-place orders in March. By April, 42 states and the District of Columbia had state-wide shelter-in-place orders.
On March 16, 2020, the American Dental Association (ADA) called upon dentists to postpone elective procedures to mitigate the spread of COVID-19. This guidance was extended by the ADA on April 1. At that time, the ADA recommended that dental practices stay closed for everything but urgent and emergency procedures until at least April 30.
In late April 2020, some states began to relax their shelter-in-place orders. As a result, 27 states were open for elective care by May 4, 2020 (ADA).
By June, only California and Oregon still maintained shelter-in-place orders. By June 1, all but two states had opened for dental elective care (ADA).
Dental Practice Revenue Declined by 6% in 2020
As a result of the pandemic, most dental practices were closed for nearly three months in 2020. To quantify the negative impact on their businesses, real performance data was provided by Dental Intelligence, a leading dental practice analytics provider that serves over 8,000 dental practices in the United States.
This data revealed that the average revenue collected by dental practices declined by 6.0% in 2020 compared to 2019. Extrapolated to the full industry, dental practices brought in $8.3 billion less in 2020 than 2019.
Average production for practices was down 3.1% in 2020 compared to 2019. This means that, on average, practices collected a lower percentage of their produced revenue in 2020 compared to 2019.
Dental practices saw an average 10% decrease in completed hygiene appointments in 2020 compared to 2019. The average dental practice had 385 monthly hygiene appointments in 2020, compared to 428 monthly hygiene appointments in 2019. In addition, average annual patient value declined by 5% in 2020 from $677 to $644.
–Dr. Kaori Ema of Printers Row Dental Studio
Dental Hygiene Appointments Declined by 47% in Spring 2020
Based on the key dates outlined above, it was expected that dental practices experienced the biggest disruption due to COVID-19 in the spring of 2020. Dental Intelligence's data demonstrates this trend.
As you can see below, dental practices experienced the largest dip in hygiene appointments scheduled and completed in April. In 2020, there was a 42% year-over-year decrease in appointments scheduled, and a 47% year-over-year decrease in appointments completed.
While dental practices fared relatively well during the summer, they experienced another drop in production in October and November of 2020. This is due to the typical six-month interval between hygiene appointments, as well as the start of the winter spike in COVID-19 cases in the United States.
This data is consistent with the ADA Health Policy Institute's Economic Impact Survey results. As you can see below, the greatest percentage of dental practices were closed in March and April of 2020. In addition, the percentage of practices that responded that they were "open but lower patient volume than usual" slightly spiked in November, consistent with the second dip in hygiene appointments identified above.
Dental Practices in All U.S. Regions Were Impacted by COVID-19
Dental Intelligence's data was analyzed by region to determine if COVID-19 had a significantly different impact on dental practices in different parts of the United States. While there were some regional variations, it appears that the impact of COVID-19 on dental appointments was relatively uniform across regions.
There are a few notable regional differences in hygiene appointments completed:
- In the Northeast, the initial decline in appointments extended into May and June, and the fall decline was not as severe.
- The Midwest experienced the greatest decline in appointments in both the spring and the fall.
- The South had the most individual months of 5%+ year-over-year growth
The Pandemic Exacerbated the Performance Gap Among Dental Practices
Data was analyzed to determine if the pandemic had an even impact across all dental practices, regardless of business performance. In addition to the average practice, the table below shows performance for the top 10% and bottom 10% of practices.
It would be reasonable to expect that all practices would perform worse in 2020. However, the top 10% of practices actually performed better in 2020 in terms of average patient value, and patient growth. In contrast, the bottom 10% of practices performed worse in 2020 for both metrics.
Unfortunately, this indicates that the pandemic did not impact all practices equally. Instead, these data points suggest that the pandemic may have exacerbated the gap in performance among dental practices.
Key Performance Indicators Suggest That Recovery Is Still Underway
Two other dental key performance indicators (KPIs), hygiene pre-appointment percentage and re-appointment percentage, dropped for all dental practices regardless of performance. This is an ominous leading indicator that suggests that economic recovery for dental practices is still underway.
Hygiene pre-appointment percentage is the percentage of active hygiene patients (patients that were seen within the last 18 months for a hygiene appointment) that currently have a scheduled hygiene appointment. On average, dental practices had a 13% lower hygiene pre-appointment percentage in 2020 compared to 2019.
Re-appointment percentage is the percentage of hygiene visits that schedule a subsequent hygiene appointment before leaving the dental office. The average re-appointment percentage fell from 56% in 2019 to 49% in 2020. This 12.5% decline in re-appointment percentage indicates that dental practices might have less full appointment calendars in the months ahead.
–Dr. Hardik Chodavadia of Enamel Dentistry
COVID-19 is Still Negatively Affecting Dental Practices
Since the beginning of the pandemic, the ADA Health Policy Institute has regularly surveyed dentists to understand the economic impact of COVID-19 on dental practices. The most recent survey was conducted on February 15th, collecting about 2,300 responses. In that survey, they asked:
In the last month, have you taken any of the following measures to maintain the financial sustainability of your dental practice?
|Response||All Respondents||Solo Practices||Top 20 Cities|
|Downsized dental team||8.0%||9.0%||10.2%|
|Reduced dental team hours||16.5%||18.5%||20.4%|
|Reduced employee wages or benefits||2.9%||3.2%||4.8%|
|Disenrolled from dental benefits plans||7.7%||7.4%||9.6%|
|Changed dental materials supplier or lab||16.4%||16.2%||15.6%|
|Borrowed money from a bank||23.3%||22.9%||29.9%|
|Sold my practice||1.3%||1.4%||1.2%|
|Joined a DSO or large group practice||0.5%||0.4%||0%|
As you can see above, nearly 10% of all dental practices had to downsize their teams between January 15th and February 15th, 2021. In addition, 16.5% have had to reduce their teams work hours, and 3% have had to reduce wages or benefits.
The negative economic impact of COVID-19 is being felt even more among solo practitioners and practices in the top 20 cities. 9% and 10.2% of respondents in these groups indicated that they have had to downsize their teams in the past month. In addition, over 20% of dental practices in the 20 largest cities in the United States had to reduce dental team hours between January 15th and February 15th.
Dental Practices Are Raising Fees to Compensate for Lost Revenue
To mitigate COVID-19's negative impact on their businesses, dental practices are raising fees. 27.3% of dental practices reported that they raised their fees between January 15th and February 15th. As a result, consumers can expect to pay more for their next dental visit.
Performance data from 8,000 dental practices in the United States suggests that dental practice revenue declined by 6% in 2020. Dental hygiene appointments declined by 47% year-over-year in spring 2020, before recovering in the summer.
While COVID-19 appears to have impacted practices in all regions of the United States similarly, it has exacerbated the performance gap that exists in the market. The best performing dental practices actually generated more revenue in 2020 than 2019.
Key performance indicators and survey data suggest that recovery from the pandemic is still underway. The pandemic's economic impact on the dental industry will last well into 2021.
In order to understand the economic impact of the pandemic on dental practices, actual performance data from 3,677 dental practices in all 50 states was analyzed in a quantitative study. Dental practice was defined as a dental practice that was a customer of Dental Intelligence in the United States. Dental Intelligence is an analytics provider for these practices, and therefore had access to actual data for each practice. The data studied was from January 1, 2019 to December 31, 2020. States were grouped into regions based upon the United States Census Bureau definition. Regional distribution was as follows:
- Northeast: 11%
- Midwest: 19%
- South: 41%
- West: 29%