The market for dental services in Australia grew steadily during the period FY’2012-FY’2017. Major drivers of increased patient demand included general improvement in economic conditions, rising income and job security, incline in private health insurance funding and overall dental health and treatment awareness among Australian population. Direct government funding for dental services has been limited compared to other sectors of healthcare. An increase in the number of Australian dentistry graduates over the last few years also fueled the market growth. Rise in number of dentists resulted in increased local competition, less constrained labor market and better access to dentists. An incline in dental visit by Australians driven by rise in general awareness for dental health and prevention and growing unhealthy food habits resulted in increased market revenues during the last few years.
Majority of the dentists in Australia operated through standalone clinics, with limited number of organized dental chains operating in the sector. Individual or out-of-pocket expenditure on dental services comprised for a large part of revenues for overall Australia dental services market in FY’2017. Majority of dental establishments in Australia are privately operated and private health insurance funds only partly covers for dental care treatment costs. Most dental visits by Australians, post regular check-up, were for restoration services. The need for restorative dental treatment has increased due to large number of people willing to retain their natural teeth and a breakdown of restorations in existing filling and restorations. Increased spending on aesthetic appearance also aid in market growth of restorative services.
The Australian market for dental equipment and supplies is largely import driven with over 90% of the equipments being imported. Dental equipments were largely imported from Europe, US and Asia. The United States and Europe have traditionally led the market; however, products from Asia, especially Japan have become increasingly popular over the past decade. Domestic production of dental equipments and consumables is very limited and largely limited to tooth filling materials and dental equipments such as dentists’ chairs. Small market size of dental equipments has resulted in companies finding it more cost effective to import goods rather than manufacture locally.
Victoria and New South Wales are biggest market both in terms of revenue and supply of doctors, dental clinics. The dental services market is highly fragmented with majority of providers operating from small scale single locations, although corporate activity in the sector is increasing. The market is in mid-late growth stage, recording low single digit growth year-on-year. However, organized dental clinics have grown at a health rate in the last decade by expanding their clinics network through acquisitions or organic growth. The skyrocketing cost of dental services in Australia has resulted in increased number of citizens considering options abroad. Former vacations spots in South-East Asia such as Malaysia, Thailand, Vietnam and Philippines are becoming attractive destinations for vacation coupled with dental care visits. Australians are looking for affordable options for rather expensive dental procedures including root canal therapy and cosmetic dental implants.
Australia’s ageing population, growing dental health awareness, inclining patient fee for dental services, rising out-of-pocket and private health insurance expenditure are likely to drive the market growth in the mid-long term. Growing private health insurance coverage would largely stimulate market growth going forward as patients would be willing to visit dental clinics on a more frequently and undergo expensive procedures as part of it is funded by insurance funds. Growing private health insurance coverage would largely stimulate market growth going forward as patients would be willing to visit dental clinics on a more frequently and undergo expensive procedures as part of it is funded by insurance funds. Expected rise in number of dental practitioners, dental establishments and growing per capital expenditure on dental care would positively impact the market growth.
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Ankur Gupta, Head Marketing & Communications