Dental manufacturing faces challenges in digitizing industry

Listen to this article

On the plus side, more people can access dental care, according to Jeff Album, vice president of public and government affairs for Delta Dental Insurance.

“The ACA has created, for pretty close to the first time, a marketplace for affordable, individual dental coverage that did not exist before,” Album said, suggesting a positive result for manufacturers tied to dentistry.

On the other hand, local manufacturers in the dental arena, such as Dentsply International Inc., saw a decrease in revenue for 2014.

It’s hard to say now how the ACA and its tax on medical devices will impact the market. Other changes, such as the introduction of digital dentistry — transitioning from mechanical to computer-controlled components — represent the main concerns of dental manufacturers in Central Pennsylvania.

 

Dental manufacturing changes

The past four or five years have brought the greatest change in dentistry with new digital units and implant technologies, according to Pamela Ament, co-owner of Lititz based Toothsmiths, which specializes in custom dental prosthetics and lab services. In business for 27 years, she and her husband, Jim Ament, have seen many changes.

“Corporate dentistry is driving prices down, but the cost of manufacturing hasn’t changed dramatically,” Pamela Ament said. There is still a need for digital- and analog-skilled technicians.

At Dentsply, industry changes led to the recently announced merger with Sirona Dental Systems Inc. of New York City, a union that is expected to create the world’s largest manufacturer of professional dental products and technologies. The combined company, Dentsply Sirona, will be worth $13.3 billion.

“The future of dentistry is about providing total solutions across the spectrum of treatments for the patient,” said Meghan Smith, spokeswoman for York-based Dentsply. “There is no better combination than the merger of Dentsply and Sirona to meet the future demands and trends in dentistry.”

Smith noted recent industry trends involve the adoption of digital dentistry and increasing demand for integrated solutions.

 

The medical device tax

The potential impact on dentistry of the medical-device tax remains to be seen, according to an article on www.dentalproductsreport.com, which cited an interview with Fred Freedman, vice president of marketing and member relations for the Dental Trade Association.

The tax of 2.3 percent took effect in 2013 and applies to medical devices that “are being manufactured, prepared, propagated, compounded, or processed … for commercial distribution.”

The levy’s impact on Dentsply is unclear. In 2014, the York-based manufacturer had annual revenue of $4.65 billion, which was a drop from $5.1 billion in 2013.

No one was available at Dentsply to comment on the specific effects of the ACA or medical-device tax on the company, as well as industry challenges the company is facing.

Toothsmiths, meanwhile, is not affected by the medical-device tax, Pamela Ament said.

 

The ACA and dental care

While more people have coverage for dental care, Album noted, insurers still struggle to hold onto enrollees after they sign up.

“Almost half a million signed up in 2015, but fewer than half paid the first month or continued to pay after the first month,” Album said.

According to Album, dental benefits are remarkably uniform, though the cost can vary based on the providers and the types of services and materials that are needed.

He sees premiums staying relatively flat in 2016. Consumers mainly use dental insurance for diagnostic and preventive care, such as cleanings, X-rays, check-ups and fluoride treatments.

“From a manufacturing standpoint, these are all benefits going to people who did not previously have dental insurance,” Album said.