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 itsimportance inboththe fields ofdentaland telehealthservicesdueto its significant competitive advantages andability to reach anunderserved market.TheAmerican Teledentistry Association()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 in the United States.Teledentistry’srapid rise isalsoattributable to theentrance of several direct-to-consumer (DTC)providers ofclear alignersand braces. The verticallyintegrated DTC business model has significantly lowered the cost of corrective orthodontics, thusdisrupting the traditional orthodontics market.
Vertical integration
Teledentistry has thrived due in part to its vertical integration. For example,industry player provides teledentistry services through its at-home starter kit,while also serving as the manufacturer ofitsclear aligners.This effectively also placesSmileDirectClubin the $41.6 billion Medical Device Manufacturing industry in the United States. With an integrated supply chain,SmileDirectClubgenerates significant costsavings that are passed on to consumers.
From an industry perspective, vertically-integrated teledentistry operatorsreceive greater tailwinds from the rapidly growing Telehealth Services industry than the Medical Device Manufacturing industry. 91forecaststhe Telehealth Services industry to expand 9.2% in 2020, significantly outpacingan anticipated2.3% growth inMedical Device Manufacturing.
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In addition to vertical integration,teledentistry’sDTC channelprovides additional costsavings by eliminating clinical overhead and markup.This improves the overall accessibility of corrective orthodontics;DTC clear alignersbothcost approximately50.0% lessthan doctor-directed alignersandare conveniently delivered. According to the, about 20.0% of Americans live in rural areas that do not have suitable access to dentists and orthodontists,exemplifying the industry’s underserved market.
Despite the advantages of DTC clear aligners, doctor-directed braces currently remain the norm. The $11.8 billionOrthodontists industryboasts a wider range of capabilities and market exposurein the clear-aligner space.This is primarily due to the long-standing, dominant position of Invisalign(a brand ofmanufacturer)and its doctor-directed business model. In contrast to DTC teledentistry providers, patients must receivethesecorrective orthodontic treatmentsunder the continued supervision of an orthodontist.
Outlook
Moving forward,however,market dynamics willlikelyfavor 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 connectionswill likely continue tofacilitategrowth 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.
