Latest / The Demographics Podcast with Fexingo: Aging Populations, Birth Rates, and Economic Impact / How Falling Birth Rates Reshape the Dental Industry
Transcript
- Lucas: Luna, I want to talk about something that most people don't think about when they hear 'falling birth rates' — your teeth. Luna: Okay, you have my attention. How do birth rates connect to dentistry? Lucas: Well, think about the entire business model of a typical dental practice. For decades, a huge chunk of revenue for many general dentists and orthodontists came from kids — fillings, sealants, and especially braces. But when fewer children are born, that pipeline shrinks. Luna: Right, it's not like the number of kids per dentist just stays flat. So what's the data showing? Lucas: According to the American Association of Orthodontists, new patient starts for children under 12 dropped by about 20 percent between 2020 and 2025. Meanwhile, adult orthodontic starts grew by 15 percent year-over-year through last year. So the industry is pivoting, but it's not a one-to-one swap — adults are a different patient with different economics. Luna: Different how? I imagine adults are more likely to pay out of pocket, since many insurance plans cap orthodontic coverage for adults. Lucas: Exactly. And that's actually a positive for practice revenue — higher margins. But the volume is lower. An orthodontist who used to see thirty new kids a month might now see eighteen kids and twelve adults. The total is smaller, and the treatment mix is more complex. Clear aligners like Invisalign have made adult treatment more popular, but the average adult case takes longer and requires more monitoring. Luna: So the per-patient revenue might be higher, but the throughput is lower. That changes staffing needs, chair time, everything. Lucas: And it's not just orthodontics. Pediatric dentistry as a specialty is seeing a slowdown. The American Academy of Pediatric Dentistry reported that the average number of patient visits per child has declined slightly — partly because there are fewer children per family, so parents are more cautious about elective procedures. Meanwhile, the demand for periodontal care and dental implants among older adults is booming. The baby boom generation is now in their seventies, and they're keeping their natural teeth longer than any previous generation — but they need maintenance. Luna: So the same demographic trend that hurts pediatric orthodontics helps restorative dentistry. That's a classic shift. Lucas: It is. And it's why the big dental service organizations — the DSOs — are aggressively buying practices that have a strong adult patient base. Heartland Dental, which is one of the largest DSOs in the US, now controls over 500 practices. They've been acquiring more general dentistry and implant-focused practices, and they're less interested in heavy pediatric volumes. The valuation multiples for pediatric-heavy practices have actually compressed a bit — maybe one to two turns lower than for adult-focused general dentistry. Luna: So if you're a dentist in your fifties planning to sell your practice, the mix of your patient base matters a lot more than it did ten years ago. Lucas: It's probably the single biggest factor in valuation right now. And that ties back to demography. A practice in a region with a rapidly aging population and fewer young families — say, parts of the Northeast or Midwest — is going to be valued differently than one in a Sun Belt suburb where there are still some young families moving in. But even in growing areas, the long-term trend is fewer kids overall. Luna: You know, this is one of those episodes where you really see how a demographic shift ripples through a specific industry. I think a lot of listeners probably never connected birth rates to their dental bills. Lucas: And if today actually helped make that connection, the way we keep this show ad-free is listener support. If you found it useful, you can buy me a coffee at buy me a coffee dot com slash fexingo. It's what lets us keep digging into these niche angles without any sponsor pressure. Luna: Yeah, it really does. And we appreciate everyone who chips in — it makes episodes like this possible. Lucas: So back to the dental industry — one other shift I want to highlight is in dental education. Dental school applications have actually been increasing, but the type of student is changing. More graduates are going straight into DSOs rather than opening their own practices, because the capital required is huge and the patient base is uncertain. Schools are also adjusting their curricula to put more emphasis on geriatric dentistry and implants, and less on pediatric procedures. Luna: That's a pretty significant signal when even the training institutions are adapting. Are we seeing any pushback from older practitioners who trained in a different era? Lucas: Some, but the economics are persuasive. The average net income for a pediatric dentist has grown slower than for general dentists over the past five years — about three percent annually versus five percent. And that gap is expected to widen. Meanwhile, implant dentistry — which is largely driven by older adults — is one of the fastest-growing segments, with some specialists reporting double-digit revenue growth. Luna: So if you're a dentist in your thirties deciding on a specialty, you'd be crazy not to think about demographics. Lucas: Absolutely. And the data backs that up. The number of implant procedures in the US is projected to grow at a compound annual growth rate of about seven percent through 2030. Compare that to pediatric crowns and pulpotomies, which are essentially flat. The demographic tailwinds are very clear. Luna: What about the consumer side? Are patients noticing any changes in availability or pricing? Lucas: In some suburban areas, it's actually getting harder to find a pediatric dentist who accepts new patients, because some have cut back hours or limited their pediatric load. Meanwhile, adult cosmetic dentistry — veneers, bonding, teeth whitening — is being marketed more aggressively. You see more ads for smile makeovers aimed at people in their forties and fifties, which is a direct response to the demographic shift. Luna: So the same birth rate decline that reduces demand for children's braces is fueling a boom in adult aesthetic dentistry. That's fascinating. Lucas: And it's not just cosmetic. The need for periodontal maintenance — deep cleanings and gum treatments — grows with age. A study in the Journal of Dental Research found that the prevalence of severe periodontitis among adults over sixty-five in the US is around twenty percent. As that population grows, so does the need for specialized care. Some DSOs are actually building periodontal-focused clinics within their networks. Luna: That makes me wonder about insurance. Medicare doesn't cover routine dental, and many seniors have limited coverage. How does that affect the economics? Lucas: It's a real constraint. About half of Medicare beneficiaries have no dental coverage at all. That means a lot of periodontal and implant care is paid out of pocket or through discount plans. It creates a two-tier market — those who can afford care and those who delay it. But for practices that can attract the higher-income senior demographic, the margins are excellent. Some implant-focused practices report gross margins above sixty percent. Luna: So the demographic lens really helps explain why some dental practices are thriving while others struggle. It's not just about clinical skill — it's about location and patient mix. Lucas: Exactly. And we're still in the early stages of this shift. The US birth rate has been below replacement level since 2007, and it's not bouncing back. That means the number of children will keep declining in absolute terms for the foreseeable future. Dental practices that don't adapt — that stay reliant on pediatric volume — are going to face increasing pressure. Luna: What about corporate dentistry? Are chains like Aspen Dental or Gentle Dental adapting faster than independents? Lucas: They are, because they have centralized data and can reallocate resources. Aspen Dental, for example, has been rolling out more implant and denture services. They also have a clear aligner brand. They can shift marketing spend from children's services to adult services quickly. An independent practitioner might not have that flexibility. Luna: So the demographic trend is also accelerating consolidation in the dental industry. That's a big story. Lucas: It is. The largest DSOs now control about twelve to fifteen percent of the U.S. dental market, up from maybe five percent a decade ago. And that share is growing. Private equity has been very active in dental roll-ups, and a big part of their thesis is that demographic trends favor adult-focused, dso managed practices over traditional solo pediatric-heavy ones. Luna: Wow. So the next time I sit in a dentist's chair, I might be seeing the effects of a birth rate statistic from years ago playing out in real time. Lucas: That's exactly right. Demographics is destiny, as they say — even for your teeth.