Dental care utilization over time

Between 1950 and 1978, per capita real dental expenditures in the U.S. grew at an average annual rate of 3.33%. Between 1978 and 1989 there was virtually no net growth in this measure of dental care utilization. This sharp curtailment of utilization growth has promoted debate about the sources of this change. Possible explanations include, among others, a reduction in dental disease due to increased exposure to fluoridation, the substitution of noncaloric sweeteners for refined sugar, preventive dentistry, , improved oral health habits, an increase in the net price of dental services, and the cost-containment efforts of insurers and employers. Changes have occurred in all of these variables, but little has done to isolate and quantify the individual effects. This decomposition is difficult, in part, because of the lack of an established model for time-series analysis of dental care utilization. A model of dental care demand, incorporating economic factors (out-of-pocket or net dental prices, per capita income, and nondental prices) as well as dietary factors (refined sugar consumption, noncaloric sweeteners, and exposure to fluoridated water), is combined with a simple model of dental care supply within an equilibrium framework. A two-stage estimation procedure is applied, using U.S. aggregate time-series data for the period 1950-89. Results show that economic and dietary factors are significantly related to changes in utilization. Net price and income elasticities of demand exhibit the expected signs and are compatible with estimates from cross-sectional studies. Decreases in cane and beet sugar consumption, facilitated by the increase in the use of noncaloric sweeteners, are associated with reductions in utilization. Fluoridation appears to be weakly but positively related to utilization. There also appears to have been a significant structural shift in demand since 1978. Overall goodness-of-fit is strong and the model accurately tracks the 1978-89 flattening of per capita real dental expenditures. Analysis of the relative contribution of each independent variable suggests that economic, dietary, and structural shift factors have contributed to this curtailment of growth.