An interesting article appears in the November 2014 issue of The Journal of the American Dental Society by Marco Vujicic titled “The invisible hand and the market for dental care.” In the article the author opens by discussing Adam Smith’s invisible hand and that it is better than central planning and regulated prices. The author then discusses the supply and demand of dental services from 1993 to 2012.
In the article, 3 distinct periods of dental care from 1993 to 2012 are described. The first period was from 1993 to 2002 when dental care was growing steadily at about 4% per year in real terms while the supply of dentists remained constant. In this period dental incomes increased. From 2002 to 2008, dental spending grew at about 2% per year while the supply of dentists remained roughly the same. In this period dental incomes stagnated. From 2008 to 2012 the supply of dentists increased while dental care spending was flat. This caused dental incomes to decline.
The author then touches on points with an eye to the future to help the reader better determine what will happen to the supply and demand of dentists in the future and the growth of dental care. The author states there is an expected decrease in dental care utilization amongst working adults but an expected increase in dental care utilization in children and older adults. Even so the growth amongst older adults and children will not compensate for the decrease amongst working adults. The author states that Medicaid has been expanded as a result of the Affordable Care Act. Hence, there will be an expected growth in dental care utilization in those receiving Medicaid.
The author then discusses that the supply of dentists is expected to grow. The author states
“…at the most aggregate level, if dental spending remains sluggish and the supply of dentists continues to increase, history suggests that the ‘invisible hand’ could produce a situation of stagnant dentist earnings in coming years.”
Even so the author acknowledges, that there is uncertainty of the supply and demand of dentists in the future.