With less than 300 orthodontic laboratories in the U.S., the specialty is a quintessential niche market and one that has experienced steady growth for years, spurred by more involvement of general practitioners, enhanced public awareness of orthodontic treatment and an increase in adult orthodontics. "When I started in this specialty 30 years ago it was rare to see an adult in orthodontic treatment; now it's very common, especially now that more cosmetic cases are being done and orthodontic appliances are sometimes used in advance to reduce aggressive preps," says Don Inman, CDT, owner, Inman Orthodontic Laboratories, Coral Springs, Florida. "Generally, there has been more demand for orthodontics and that translates into more work for orthodontic laboratories."
In fact, comparatively speaking, the orthodontic specialty has remained relatively healthy even in the face of the economic downturn. Less than half of orthodontic laboratories saw a decline in business in 2009, compared to 62% of C&B, removable and full service laboratories that say workloads were down. And, more than one-third of orthodontic labs say business was actually up in 2009. "It's exciting to be part of a business that is thriving and growing in one of the worst economies we've seen in years," says Christian Saurman, manager, New England Orthodontic Laboratory, Wilmington, Massachusetts.
In addition to the economy, orthodontic laboratories recently surveyed as part of LMT's State of the Industry 2010 coverage are watching a number of other factors influencing their businesses--as well as monitoring trends affecting other specialties to see how they'll play out in the orthodontics arena. Here's a look:
Sleep apnea devices
Sleep apnea appliances are becoming increasingly popular and continue to be heavily marketed to dentists, especially by manufacturers of proprietary appliances. Currently 44% of orthodontic laboratories offer some kind of sleep apnea device.
Demand for these appliances was bolstered after the American Academy of Sleep Medicine changed its guidelines four years ago to allow sleep physicians to refer patients with mild to moderate obstructive sleep apnea to dentists for oral appliance therapy. "The sleep device market is growing as more people become aware of how restricted airways during sleep can affect their health," says Arlen Hurt, vice president of Specialty Appliances, Cummings, Georgia. "Our focus in this market is the Sleep Disorder Herbst appliance and it's had a positive impact on our business; it allows us to cross-sell other appliances to sleep customers and, in this economical downturn, several clients are looking into sleep appliance treatment to draw patients into their offices."
Despite the laboratory's success with sleep appliances, Hurt acknowledges that having to comply with FDA guidelines for Class II medical devices can be time-consuming and expensive. In fact, those administrative costs and the fact that some sleep apnea devices are extremely labor-intensive and carry higher material costs have led several orthodontic laboratories to opt out or even discontinue the service. "We stopped offering sleep appliances this year due to lower profit margins, numerous remakes and the fact that the highly skilled technician needed to fabricate them could be more profitable in other areas of the lab," says Michael Wright, CDT, laboratory manager, Orthodent Lab, Inc., Williamsville, New York. "But the main reason was a fee imposed by the FDA for laboratories fabricating medical devices; it ate too much into the already low profit and was the final 'nail in the coffin.'"
Threats to retainer business
Sixty percent of survey participants report being negatively affected by vacuum-formed retainers that dentist-clients fabricate in their offices to often replace the final retainer in treatment; the selling points are that the technology reduces the practice's costs and utilizes assistants' downtime.
On the other hand, some laboratories are finding that clients are concerned about vacuum-formed retainers inhibiting the final settling of teeth and not lasting as long as conventional retainers. "Although we had some loss of sales initially, some of our doctors who tried vacuum-formed retainers ended up returning to conventional retainers due to breakage and repeat office visits," says Kendall Lamp, co-owner/CEO, Accutech Orthodontic Lab, Chesapeake, Virginia. Sold directly to dentists, Invisalign has also had somewhat of a detrimental effect on business for 28% of respondents, who note a decreased demand for retainers as well as RPEs and arch development appliances. But some point out a silver lining, saying that Invisalign has brought more general dentists into orthodontics and that the company's direct-to-consumer advertising builds awareness of orthodontic treatment. "Invisalign draws patients into the office. Sometimes doctors don't feel it's the best solution and instead give them more traditional options," says Saurman.
Transition to Digital Study Models
Digital study models for case analysis are made by scanning models or impressions; they are more accurate and save on storage space. Although several companies are marketing the technology to laboratories--as well as directly to orthodontists--digital study model services are far from commonplace in orthodontic labs. Although 57% of survey participants offer conventional study models, only 4% have added digital ones to their repertoire.
The obstacle is not only the investment in scanners and software--especially for smaller laboratories--but like any new technology, it's a challenge to get dentists on board. "When I first saw digital study models, I thought that was the end of plaster models. It still surprises me that it's such a hard sell, especially since orthodontists as a group are pretty tech-savvy," says Inman, who invested $32,500 for the scanner and software to produce digital study models. "We have a few accounts who use them but many still prefer to hold a physical model in their hands." Inman has had more success selling the technology to clients as an archiving service for old cases; he digitizes the models and can fit 90 sets of models on one DVD.
As the concept of digital models catches on--and most agree it will--more and more laboratories will likely get involved in computer-aided design; some are already using software for case planning and analysis. At Specialty Appliances, for example, 3Shape's Ortho Analyzer software is used to fine-tune the fabrication of Herbst appliances. "We use a digital model and measure the circumference of the teeth to help us determine the proper size of bands or crowns that are used to temporarily anchor the appliances; this saves the doctor an appointment," says Hurt.
The Advent of Digital Technology
If CAD technology is already being used in orthodontics, how far behind is the CAM part of the equation? Currently, the only CAM-generated appliance being marketed by an orthodontic laboratory is Great Lakes Orthodontics' proprietary digitally fabricated splints. After scanning upper and lower models and then scanning both models in centric relation, the laboratory uses the software it developed to create a digital splint and identify and optimize the selection of contact points. Acrylic is then manually applied to the upper arch and the model is placed in a traditional CNC machine that mills the acrylic to duplicate the splint created on screen.
Since 2007, Great Lakes has fabricated about 20,000 digital splints. "The doctors we get to try them are sold because there are next to no occlusal adjustments when seated," says Jim Kunkemoeller, president of the Tonawanda, New York lab, which charges $25 more for a digital splint than a conventional one. As for the future of CAD/ CAM in the orthodontics laboratory, our survey respondents are split on if--and how soon--it will play a major role. Kunkemoeller believes the turning point will be the fine-tuning of digital impressions for use in orthodontics. "The roadblock right now is the quality of the full-arch scan. There are too many adjustments necessary because the scan doesn't capture enough of the soft tissue; it's not like C&B where you only need the margin," he says. "Once that gets fixed--and it will--orthodontic labs will eventually be accepting scans and using a 3D printer for acrylic appliances; it will also make digital models commonplace."
Offshore outsourcing as a potential menace
Thus far, orthodontic laboratories have not had the same offshore headaches as C&B laboratories; in fact, only a few of our survey participants say their business has been negatively affected by orthodontic work going outside the country, and none of them say they send work offshore. That's because the appliances are comparatively inexpensive and the longer tunaround inherent in sending cases offshore makes it especially unsuitable for orthodontics. While some think these factors are enough to keep offshore outsourcing off their radar, others point out that the advent of technology that eliminates shipping time--intraoral scanning and digital models--could result in it having a larger impact. "If offshore labs can get their cost and turnaround times down, it may become more of a problem," says Cade Tippett, manager, Renew Dental Lab, Garland, Texas. "But good orthodontic technicians are rare; they will never lose their jobs. At the very most, they will be used in conjunction with offshore labs to increase production and provide more services."