United States / Analyst Insights
Tech Disruption (Part 2): Orthodontics & Teledentistry
by Nick Masters, Lead Industry Research Analyst
Jan 24 2020

This article is part of a newly introduced series discussing how industries may adapt to disruptive technological innovations. In this article, we’ll focus on the disruption of the corrective orthodontics market by teledentistry services.

 

Teledentistry is expected to expand its importance in both the fields of dental and telehealth services due to its significant competitive advantages and ability to reach an underserved marketThe American Teledentistry Association (ATDA) defines teledentistry as “the use of electronic information, imaging and communication technologies, including interactive audio, video, data communications… to provide and support dental care delivery, diagnosis, consultation [and] treatment.” 

As a result of this accessibility, teledentistry has emerged as a growing subset of the larger $2.6 billion Telehealth Services industry (IBISWorld report OD5775). Teledentistry’s rapid rise is also attributable to the entrance of several direct-to-consumer (DTC) providers of clear aligners and braces. The vertically integrated DTC business model has significantly lowered the cost of corrective orthodontics, thus disrupting the traditional orthodontics market.  

Vertical integration 

Teledentistry has thrived due in part to its vertical integration. For example, industry player SmileDirectClub provides teledentistry services through its at-home starter kit, while also serving as the manufacturer of its clear aligners. This effectively also places SmileDirectClub in the $41.6 billion Medical Device Manufacturing industry (33451b). With an integrated supply chain, SmileDirectClub generates significant cost savings that are passed on to consumers.  

 

From an industry perspective, vertically-integrated teledentistry operators receive greater tailwinds from the rapidly growing Telehealth Services industry than the Medical Device Manufacturing industry. IBISWorld forecasts the Telehealth Services industry to expand 9.2% in 2020, significantly outpacing an anticipated 2.3% growth in Medical Device Manufacturing.

Accessibility 

In addition to vertical integration, teledentistry’s DTC channel provides additional cost savings by eliminating clinical overhead and markup. This improves the overall accessibility of corrective orthodontics; DTC clear aligners both cost approximately 50.0% less than doctor-directed aligners and are conveniently delivered. According to the ATDA, about 20.0% of Americans live in rural areas that do not have suitable access to dentists and orthodontistsexemplifying the industry’s underserved market.   

Despite the advantages of DTC clear aligners, doctor-directed braces currently remain the norm. The $11.8 billion Orthodontists industry (OD6039) boasts a wider range of capabilities and market exposure in the clear-aligner spaceThis is primarily due to the long-standing, dominant position of Invisalig(a brand of manufacturer Align Technologyand its doctor-directed business model. In contrast to DTC teledentistry providers, patients must receive these corrective orthodontic treatments under the continued supervision of an orthodontist.  

 

 

 

Outlook 

Moving forward, however, market dynamics will likely favor teledentistry operators. From a top-down perspective, healthy consumer spending levels and low unemployment will continue to support baseline consumer discretionary expenditures, which includes cosmetic orthodontics. Furthermore, faster and more-accessible internet connections will likely continue to facilitate growth in the telemedicine realm. IBISWorld forecasts the Telehealth Services industry to maintain its expansion over the coming years, growing 9.6% and 9.4% in 2021 and 2022, respectively. Finally, the sizable cost-savings afforded by teledentistry will increase the accessibility of clear aligners to underserved markets.  

 

Looking for more research related to healthcare trends? Check out IBISWorld's analysis on pharmaceutical and medical device patent cliffs.  

 

 

Edited by Sean Egan, Copy Editor
Infographic Design by Taf Rahman, Copy Editor