Spit­ting mad over im­ports

U.S. den­tal labs pull for change

The Dallas Morning News - - BUSINESS - By SABRIYA RICE Staff Writer srice@dal­las­news.com

Some lo­cal den­tal lab­o­ra­to­ries are frown­ing on the fact that a large con­cen­tra­tion of the crowns, ve­neers and den­tures used to re­pair the smiles of Tex­ans are be­ing im­ported from abroad.

Den­tists across the na­tion have been by­pass­ing thou­sands of Amer­i­can den­tal labs that make these prod­ucts. They are in­stead im­port­ing them from coun­tries like China and Mex­ico, where the costs are cheaper. Do­mes­ti­cally made im­plants can cost more than dou­ble, and that ex­pense could be passed on to con­sumers.

Like other in­dus­tries, the

do­mes­tic mak­ers of den­tal im­plants are hop­ing the Trump ad­min­is­tra­tion will re­ally put teeth into ef­forts to re­vamp trade laws.

The labs have long been “fight­ing the over­seas com­peti­tor,” and they are optimistic about Trump, said Cade Tip­pett, pres­i­dent of the Den­tal Lab­o­ra­tory As­so­ci­a­tion of Texas.

Laws that curb the de­mand for cheaper goods from abroad could re­turn the fo­cus to prod­ucts made in the U.S. and help lo­cal den­tal labs stay in busi­ness.

“The work­force re­duced when over­seas started,” Tip­pett said.

‘Dis­count chop­pers’

A “vo­ra­cious mar­ket for dis­count chop­pers” has re­sulted in more than a third of the $8.5 bil­lion na­tional mar­ket for den­tal restora­tions com­ing from abroad, Bloomberg News re­cently re­ported.

Den­tal lab­o­ra­to­ries hire and train tech­ni­cians who use molds and im­pres­sions of a pa­tient’s teeth to cre­ate prod­ucts like crowns and den­tures. There were about 2,260 den­tal tech­ni­cians in Texas in 2016, ac­cord­ing to the Bu­reau of La­bor Sta­tis­tics. Texas-based labs em­ployed the third-high­est num­ber, af­ter Cal­i­for­nia and Florida.

But labs across the na­tion say they’re hav­ing to lay off tech­ni­cians more fre­quently or close al­to­gether. Of more than 2,900 labs reg­is­tered with the Texas State Board of Den­tal Ex­am­in­ers, only 641 are cur­rently in busi­ness. More than 900 are per­ma­nently closed.

Most have sim­ply let their li­censes ex­pire and would need to reap­ply.

The state board li­censes the labs, but the agency does not in­ves­ti­gate the rea­sons for clos­ings ex­cept among those that break the law.

About half of all U.S. labs have closed over the past decade.

Smaller fa­cil­i­ties have con­sol­i­dated with larger com­pa­nies. En­trepreneurs who once ran do­mes­tic labs are mov­ing on.

“Ev­ery time I had to tell some­one, ‘I can’t af­ford to have you around any longer,’ it’s dif­fi­cult,” Doug Kil­born, a den­tal lab owner in Michi­gan, told Bloomberg News. “That’s the face of Amer­i­can man­u­fac­tur­ing nowa­days.”

Ri­vals bite down

From Viet­nam to Cen­tral Amer­ica, cheap la­bor and less reg­u­lated work­ing con­di­tions help other coun­tries take a big bite out of the U.S. den­tal restora­tion mar­ket, ac­cord­ing to in­dus­try re­ports.

The stan­dard turn­around for prod­ucts like in­lays, crowns and ve­neers is about 10 busi­ness days. It may cost a den­tist more than $100 to pur­chase a crown from a lab in the U.S. but less than $40 to get one from an­other coun­try. That’s a sig­nif­i­cant sav­ings for a den­tist try­ing to cut over­head.

“But it puts us at a com­pet­i­tive dis­ad­van­tage. And there’s noth­ing we can do about it,” said David Lesh, pres­i­dent and founder of Con­cert Den­tal.

His Richard­son-based den­tal lab has about 30 peo­ple on staff, many of whom he says he hired from nearby labs that had closed.

“Trump talks about this all the time — about lay­ing peo­ple off, mak­ing goods over­seas and then bring­ing them back across the bor­der,” Lesh said.

He ap­pre­ci­ates the ad­min­is­tra­tion’s in­ten­tion to stop the prac­tice.

“Or at least af­fect the eco­nom­ics of it,” he said.

As den­tists con­sol­i­date, the larger com­pa­nies have more ne­go­ti­at­ing power. They can dic­tate which den­tal labs are used, and there is a ma­jor fo­cus on re­duc­ing costs.

Even some of the do­mes­tic den­tal labs now suc­cumb to the lure of over­seas prod­ucts. That’s leav­ing a bad taste in the mouth of den­tists, who also worry that qual­ity and cus­tomer ser­vice may be com­pro­mised.

About 15 mil­lion Amer­i­cans have crowns and bridges to re­place miss­ing teeth, the Amer­i­can Academy of Im­plant Den­tistry es­ti­mates.

There is good rea­son con­sumers may want to ask where those teeth are com­ing from, said Dr. Frank Hig­gin­bot­tom, a former board mem­ber of the Texas Den­tal As­so­ci­a­tion.

“Low cost may come at high risk. You com­pro­mise train­ing, in­fec­tion con­trol and you get cheaper ma­te­ri­als,” Hig­gin­bot­tom said.

His pri­vate prac­tice den­tistry of­fice in Dal­las has been around 46 years and spe­cial­izes in restora­tion. He uses only U.S. lab­o­ra­to­ries.

So does Dr. Sarah Te­vis Po­teet, chair of the me­dia com­mit­tee for the Dal­las County Den­tal So­ci­ety.

“I don’t think pa­tients have a clue where their crowns come from,” she said. “I would rather pay more know­ing that I’m go­ing to get good qual­ity.”

NAFTA redo

Af­ter threat­en­ing to com­pletely with­draw the U.S. from the North Amer­i­can Free Trade Agree­ment — a deal signed in 1994 by Pres­i­dent Bill Clin­ton that eased trade with Canada and Mex­ico — Trump called the lead­ers of those na­tions in April say­ing he’d like to rene­go­ti­ate the terms.

He and ad­vis­ers in­clud­ing House Speaker Paul Ryan also want the tax on im­ports to be set at the reg­u­lar rate of cor­po­rate in­come, in­stead of al­low­ing com­pa­nies to deduct im­ports from their tax­able in­come. That pro­posal has gen­er­ated sub­stan­tial op­po­si­tion from re­tail­ers.

Den­tal im­plant mak­ers say new laws could cur­tail the out­sourc­ing of false tooth man­u­fac­tur­ing that has re­duced their job sup­ply. But could the re­newed lo­cal tooth-mak­ing mar­ket make den­tal im­plants more ex­pen­sive for con­sumers? That’s the part many are still chew­ing on.

The av­er­age cost of a crown, de­pend­ing on the ma­te­rial used to make it, can range be­tween $500 and $3,000 per tooth, ac­cord­ing to the web­site Cost Helper. A den­tist charges a base amount that cov­ers all the over­head costs, in­clud­ing man­u­fac­tur­ing.

Be­cause of that, Lesh doesn’t think the changes will nec­es­sar­ily lead to price hikes.

The ad­van­tage of im­port­ing from abroad is a sav­ings of about $60 per crown.

“There was this op­por­tu­nity they saw to get it from some­one else for less. But the eco­nom­ics still work,” he said.

As with seem­ingly every­thing in health care, how­ever, oth­ers say the cost al­ways trick­les down to the pa­tient. Po­teet is in pri­vate prac­tice and pur­chases den­tal im­plants only from Texas-based lab­o­ra­to­ries.

She likes that pa­tients can go di­rectly to those labs if they want the color of their im­plantable tooth to be matched per­fectly and says she has easy ac­cess to the fa­cil­ity if there are con­cerns. But her prac­tice is not in-net­work for health in­sur­ance, and her pa­tients pay out of pocket, gen­er­ally at a higher price.

“In­sur­ance doesn’t re­im­burse well,” she said.

Den­tists may feel more pres­sure to find labs where they can get a qual­ity prod­uct at the low­est price when they are bat­tling for re­im­burse­ment, she said.

Texas’ Den­tal Prac­tice Act re­quires that tech­ni­cians who build false teeth be cer­ti­fied and tested on anatomy, phar­ma­col­ogy and hy­giene. They must un­dergo con­tin­u­ing ed­u­ca­tion train­ing and, if they work with or­tho­don­tists, spe­cialty train­ing.

And the labs must reg­is­ter and com­ply with state and fed­eral laws. They must also pay at least min­i­mum wage.

“Those things add to costs. We charge a higher price be­cause we have to, and that prob­a­bly will be trans­ferred to the pa­tients,” Tip­pett said. “But I also think we pro­duce a more pa­tient-cen­tric de­vice.”

Pho­tos by Ben Tor­res/Spe­cial Contributor

Con­cert Den­tal Labs vice pres­i­dent Felix Silva (left) and founder David Lesh have hired many of their staffers from com­peti­tors that have closed.

Silva, who is also a cer­ti­fied den­tal tech­ni­cian, works on a set of porce­lain teeth.

Ben Tor­res/Spe­cial Contributor

Des­tine Hen­der­son, a cus­tom shade and stain spe­cial­ist with Con­cert Den­tal Labs, adds glaze and shad­ing to a set of false teeth.

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