The Australian dental profession has been rated "low risk with a moderate to high growth profile" according to a new health industry report, recently released by NAB Health.
NAB Health incorporates Nab Health financial services and financial planning as well as NAB's specialist healthcare brands Medfin and HICAPS. Its Australian Industry Risk Intelligence report assesses and rates risk and growth potential across the Healthcare profession.
"Overall the health profession segment is in a positive position. Business confidence in the health segment is high and the dental profession echoes this trend for a number of reasons," said Medfin's CEO, Callum Davidson.
With approximately 85% of dentists in private practice, Australia predominately works to a private practice - fee for service - dental system. While there has been some consolidation, the dental profession remains fragmented with no single operator accounting for more than 1% of industry income.
"While the industry is expected to remain fragmented, more practitioners are expected to move into shared clinic-arrangements with other dentists or allied medical practitioners, in an effort to share costs such as advertising, administration staff and radiology equipment costs," Mr Davidson said.
It's not surprising that the 2009 NAB Health Profession report confirms that present and future demand for dental services will outweigh supply.
"The number of dental visits is projected to trend upward by approximately 38% from 28.2 million visits in 2005 to 38.8 million visits in 2020."
The Australian Institute of Health and Welfare (AHIW), projects that the number of practising dentists in Australia will increase by approximately 15% during the five year period 2005 to 2010. And, the number of dental graduates is forecast to double to approximately 500 graduates by 2014.
Despite this positive trend, the AIHW predict a workforce shortfall of 800 to 900 dental providers by 2020. Fuelling this demand is our aging population's continued need for dental services.
The risk of dental disease has increased due to an increase in retention of teeth and the rising numbers of older adults in the Australian population. These indicators suggest that dentists will increasingly move towards complex treatments to assist older adults to maintain their teeth and avoid tooth loss.
"The shift towards diagnostic and preventive services, as well as cosmetic procedures, is expected to continue," Mr Davidson said.
Private health insurers have extended the 'no gap' approach to dental care for preventative procedures. This fact will tend to promote growth in the number of dental services, however may reduce unit fee for service because preventative procedures reduce the need for more costly correction services.
"Despite the current economic downturn, the outlook for the dental profession remains positive. While some practices are seeing the growth in their practices slowing, most are maintaining profit levels. The levels of investment in dental equipment and practices remains robust. This is being underpinned by a desire to provide the best clinical outcomes for patients, solid operating profits and is receiving a boost from the Government's 30% investment allowance."
The healthcare profession is a major driver of the Australian economy, and
the second largest employer. With an annual budget of over $80 billion, approximately 595,000 Australians work in health occupations.
Mr Davidson's summary of NAB Health's economic report presents a reason for optimism. "Australia's healthcare profession is expected to withstand the economic downturn as the most resilient sector," he concludes.
For more information or to speak to a Medfin dental finance specialist or see medfin.com.au.