Baird data tracks flagging US dental demand

Baird Equity Research has estimated that the coronavirus outbreak could result in the loss of more than half of all spending on dental equipment in North America this year. (Image: Ascannio/Shutterstock)
TextJeremy Booth

NEW YORK, U.S.: COVID-19 is causing historically significant contractions in demand for dental equipment and patient volumes. 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.

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. Intent to purchase dental equipment was also found to have fallen, and dentists were less optimistic about the outlook for their practices in the coming three to six months. Some supply constraints were also observed from the survey results, and this mostly related to masks and, to a lesser extent, gloves and infection control products. 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 shutter 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. “We’re not surprised by any of that and frankly expect these headwinds to grow in the coming weeks,” Johnson noted in the report on the first survey results.

Taking the first results as a baseline by which investors and the industry can monitor demand as the crisis deepens, 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 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. Baird said that it believes that revenue at major manufacturers and suppliers of dental equipment could fall by 10%–50% in 2020.

“So what does this all mean for the many investors and dental industry contacts we assume are likely reading this survey today?” Johnson asked in the published results. “For our dental industry colleagues, we continue to send positive thoughts and wish you and your family good health and safety. While we’re nowhere near a point we’d feel comfortable in trying to predict when industry demand might bottom, let alone begin to normalize, we remain committed to fielding these surveys every week or two (as frequently as it makes sense) in an effort to provide at least some insight into how dentists across the U.S. are feeling about their profession and what they might be seeing from a patient demand perspective in their offices.”