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Volume3 Issue2
I
ssues and
P
eople
onvarious items for 3differentperiods: prerecession (1995-
2007), during the recession (2007-2009), andpostrecession
(2009-2011). Thesedata
5
are from themostup-to-date, reliable
source forhousehold spendingover timeon specific items
(spendingon tattoos, unfortunately, isnot available).When
thedataarepresented thisway, several important conclu-
sions emerge. First, household spendingondental care
decreasedduring the recession, asdidhousehold spending
onmany items. This finding is consistentwithfindings from
other research
1
showing thatUSdental careexpenditurewas
flat during thedownturnandactuallyhad started to slow in
theearly2000s. Second, among items forwhichhousehold
spendingdidnot decreaseduring the recession, therewas
still amarked reduction in thegrowth rateof spending. Third,
postrecessionhousehold spending is contracting for just 3
items—legal services, coffeeand tea, anddental care—while
the remaining items areall seeing spendinggrowth.
Someof the increases inpostrecessionhousehold spending
aredramatic. For example, spendingoncell phones and
package tours isgrowingbyapproximately10%per year.
Spendingonalcohol isgrowingat 5%per year, after takinga
hit during the recession. Household spendingondental care,
on theother hand, continues todecrease. Other data show
that despitebeing5years removed from theendof the
Great Recession, thedental economy isnot recovering, and
dental spendingcontinues tobeflat.
1
Thebasicconclusion
from thefigure
5
is that household spendingonmany items is
recovering. But not lawyers, lattes, anddentists.
Twoquestions come tomindwhen thinkingabout how to
interpret thesedata. First, is thereanythingon thehorizon
thatmight kick-start thedental economy, or arewe inanew
–10%
–5%
0%
5%
10%
15%
20%
25%
Legal Services
Co eeandTea
Dental Care
HealthCare
Educational Services
CableandSatelliteTV
SoftDrinks
AlcoholicBeverages
HotelsandMotels
CellularPhoneServices
PackageTours
Prerecession (1995-2007)
DuringRecession (2007-2009)
Postrecession (2009-2011)
Items forwhich
spending
ISNOT
recovering
Items forwhich
spending
IS
recovering
ANNUALPERCENTCHANGE
Figure1:
Annual growth rateof inflation-adjustedhousehold
spending for various items.
Source: Bureauof EconomicAnalysis.
5
normal of flat or decreasing spending?Dentistry
is enteringaperiodofmajor transition, and it
isdifficult toanswer thisquestion. On theone
hand, recent analysis suggests that dental spend-
ingwill not recover tohistoricallyhighgrowth
rates
6
if current trends continue. On theother
hand, theAffordableCareAct is expandingdental
coverage inmany states,which is likely to spur
demand for dental care. Given that thecoverage
gains aremainly throughMedicaid,
7
however, it
isdifficult topredict thenet spendingeffect and
net effect ondemand for dental care. Dental care
useamongmiddle- andhigh-incomeadults—
themaindriversof dental care spending—has
beendecreasing steadily since theearly2000s
and showsno signsof reversing.
2
The second, andperhapsmoreprofound, ques-
tion iswhyarehouseholds spendingmoreoncell
phonesandvacationsand spending lessondental
careas theeconomy recovers?Thereareobvious-
lyamultitudeofplausible reasons.Dental care
needscouldbedecreasingbecauseof oral health
improvements. Perceived lackofneed is the top
reasonhigh-incomeadultsdonot intend tovisit
thedentistwithin thenext12months.
4
Different approaches
couldbeemergingwith respect to routinepreventivecare
strategies,withamoveaway from twice-yearlyvisits.
8
The subjectivevalueof dental carealsocouldbechanging
among theadult population, butmuchmore research is
needed to “get inside theheads” of consumers. Bothquan-
titativeandqualitative researchdemonstrates that young
adults, for example, valuedental insurance,
9
but theyare
cost-conscious shoppers and, for example, aremuch lesswill-
ing topayhigher premiums formore robust plans andmore
provider choice thanareolder agegroups.
10
Ingeneral, there
is increasingcost consciousness anddrive for valueamong
consumers throughout thehealthcare system, particularly
amongyoungand low-incomeadults.
C. Everett Koop, formerUS surgeongeneral, famously said,
“Youcan’t behealthywithout goodoral health.”
11
Emerg-
ingevidence suggestsdental careusecan reducemedical
carecosts, improve jobprospects, and improvequalityof
life. Inmyview, however, there is alsoemergingevidence
thatweareenteringanera inwhich the subjectivevalueof
dental care in theeyesof theadult population—especially
youngadults—couldbechanging.More in-depth research
isneeded tounderstand, andpotentially influence, thevalue
propositionassociatedwithadental visit. TheHealthPolicy
Institute is exploringcollaborationswithvarious stakeholders
togenerate this evidence.
a
Theauthor thanksTomWall of theADAHealthPolicy Institute forhis assistancewith the
dataanalysis.
References
Complete list of references available in
