Written by Rebecca Lipman
The New York Times recently reported on the significant rise of surgical dental work in toddlers. In fact, the article begins with a story of a 2 1/2 year old boy with cavities in 11 of his 20 baby teeth. "His pediatric dentist extracted two incisors, performed a root canal on a molar and gave the rest fillings and crowns."
Let's all hope his parents had dental insurance.
But this little boy is not alone in his situation. Not by a long shot. To readers this may come as a surprise, but it shouldn't.
The same triggers that are furthering America's childhood obesity problems, sugary food and drinks, certainly play a role in this trend. There are also plenty of parents unwilling to put their darling child through the relative torture of a nightly teeth cleaning ritual. Lack of awareness also plays its role: Parents choosing bottled water over tap are depriving their toddlers of an excellent source of fluoride.
Scale of the Trend
Here are some segments from the article to help readers understand the scale of this trend:
The Centers for Disease Control and Prevention noted an increase, the first in 40 years, in the number of preschoolers with cavities, in a study conducted five years ago. However, dentists nationwide say they are seeing more preschoolers at all income levels with six to 10 cavities or more.
The Center for Pediatric Dentistry, a joint venture since 2010 between the University of Washington and Seattle Children's Hospital, built a surgical wing because of the demand for oral surgery for preschoolers.
The dental surgery center at Nationwide Children's Hospital in Columbus, Ohio, has three operating rooms, which staff members and local dentists used to treat roughly 2,525 children in 2011, 6% more than in 2010. The average age of patients is four, and most have decay in six to eight teeth.
Dr. Megann Smiley, a dentist-anesthesiologist at Nationwide says "the most severe cases have 12 or 16 [cavities], which is seen several times a week."
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Several dentists interviewed said the cost to parents for dental restoration under general anesthesia for a child ranges from $2,000 to $5,000 or more, depending on insurance coverage and the amount of work.
With the trend on the rise, (and, let's face it, unlikely to disappear anytime soon), the best we can do is brush twice a day and look for ways to trade the trend.
For ideas on how this trend in expensive childhood dental surgery might make an appearance in a portfolio, we create a list of ten companies heavily exposed to the dental industry (market caps over $50 million).
Do you think these companies will benefit from this horrible trend? (Click here to access free, interactive tools to analyze these ideas.)
1. Align Technology Inc. (Nasdaq: ALGN): Designs, manufactures, and markets the invisalign system for treating malocclusion or the misalignment of teeth. Market cap of $2.01B.
2. Biolase Technology, Inc. (Nasdaq: BLTI): Develops, manufactures, and markets lasers and related products focused on technologies for improved applications and procedures in dentistry and medicine. Market cap of $76.83M.
3. Danaher Corp. (NYSE: DHR): Designs, manufactures, and markets professional, medical, industrial, and commercial products and services primarily in North America, Europe, and Asia/Australia. Market cap of $35.98B.
4. Henry Schein, Inc. (Nasdaq: HSIC): Distributes healthcare products and services primarily to office-based healthcare practitioners. Market cap of $6.47B.
5. 3M Co. (NYSE: MMM): Operates as a diversified technology company worldwide. Its Health Care segment provides medical and surgical supplies, skin health and infection prevention products, inhalation and transdermal drug delivery systems, dental and orthodontic products, health information systems, and food safety products. Market cap of $59.0B.
6. Patterson Companies Inc. (Nasdaq: PDCO): Operates as a distributor serving the dental, companion-pet veterinarian, and rehabilitation supply markets in North America. Market cap of $3.39B.
7. Sirona Dental Systems Inc. (Nasdaq: SIRO): Develops, manufactures, and markets dental equipment for dentists worldwide. Market cap of $2.67B.
8. DENTSPLY International Inc. (Nasdaq: XRAY): Designs, develops, manufactures, and markets dental consumable products, dental laboratory products, and dental specialty products worldwide. Market cap of $5.41B.
9. Young Innovations Inc. (Nasdaq: YDNT): Engages in the development, manufacture, and marketing of supplies and equipment used by dentists, dental hygienists, dental assistants, and consumers primarily in the United States, as well as in Canada, Europe, South America, Central America and the Pacific Rim. Market cap of $226.75M.
Disclosure: Kapitall's Rebecca Lipman does not own any of the shares mentioned above.