Pandemic Pivot: How Dental Spending Rebounded in 2021-2022
The pandemic had a major impact on the dental industry, with spending dropping significantly from pre-pandemic levels. The American Dental Association (ADA) has estimated that spending on dental care in the U.S. dropped by 45% in 2020.
As the country emerged from the pandemic, the spending on dental care in 2021-2022 exceeded pre-pandemic levels. Here's what we know.
According to the Centers for Medicare & Medicaid Services (CMS), healthcare spending for 2021 including dental spending was up 5.2 percent from the previous year, with a budgeted cost of $12,792 per employee, and it continues to rise in 2022.
The federal government has provided financial relief to dental providers, which has helped to partially offset the financial losses incurred due to the pandemic. This relief funding has resulted in a 25 percent increase in dental spending by government programs in 2021. Additionally, private health insurance spending was up by 11%, and out-of-pocket spending increased by 13%.
National dental spending increased by 11% from $146 billion in 2020 to $162 billion in 2021 and $165 billion in 2022, according to data from CMS and the U.S. Bureau of Economic Analysis (BEA). Funding from COVID-19 government relief programs to the dental sector totaled $7 billion in 2021, but even without these programs, it was estimated that 2021 national dental spending would have been $155 billion, still above pre-pandemic levels.
Aside from government relief programs funding, a number of factors have had a significant role in this increase. The cost of providing dental care has also increased due to factors such as inflation, higher wages, and increased costs of materials and equipment. It should be noted that procurement platforms, such as base86, can help mitigate some of these cost increases. Furthermore, an increase in dental insurance coverage has also played a role, as more people have access to dental care through their insurance plans. The Medicaid/CHIP enrollment numbers have also increased, providing more people access to dental care.
With that being said, dental spending is projected to increase further over the next several years, according to a survey from the American Dental Association (ADA). The survey further showed that 49% of dentists plan to spend more money on technology, including supplies procurement platforms, such as base86, over the next two years. Moreover, several economic forecasters predict this growing trend will continue well into 2023.
American Dental Association. (2021, December). HPI: Dental spending decreased in 2020. ADA News. https://www.ada.org/publications/ada-news/2021/december/hpi-dental-spending-decreased-in-2020
Centers for Medicare & Medicaid Services (CMS). (2021). National health expenditure fact sheet. https://www.cms.gov/research-statistics-data-and-systems/statistics-trends-and-reports/nationalhealthexpenddata/nhe-fact-sheet
Centers for Medicare & Medicaid Services (CMS). National Health Spending Grew Slightly in 2021. https://www.cms.gov/newsroom/press-releases/national-health-spending-grew-slightly-2021