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Dental Market Trends

Panel Intelligence, LLC

May 2008

Quantitative Research

Qualitative Research Intelligence Reports

Panel Intelligence, LLC, 150 Cambridgepark Drive, 7th Floor, Cambridge, MA 02140 617 532 5700 www.panelintelligence.com

2


QUANTITATIVE RESEARCH

Project Objectives

Understand trends in case starts since January of 2007.Quantify impact of the downturn of the national economy on case starts.Estimate future volume of patient visits.

Primary Objective: To understand patient trends in the past year and to estimate future trends.

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Recruitment & Study Methodology


Quotas and Recruitment Criteria for Survey: 101 dental professionals Mix of solo and multi-dentist practice Geographical mix Practices with annual revenues greater than $200,000

Quotas and Recruitment Criteria for Survey: 101 dental professionals Mix of solo and multi-dentist practice Geographical mix Practices with annual revenues greater than $200,000

Survey Detail: Self-administered survey Approximately 30 minutes’ duration 101 total respondents Fielded online from April 23, 2008

to April 25, 2008

Survey Detail: Self-administered survey Approximately 30 minutes’ duration 101 total respondents Fielded online from April 23, 2008

to April 25, 2008

Summarize resultsand key findings for final report

Deliver finalanalysis and

results

STEP 3: Wrap-Up

Clean andanalyze finaldata set

Participants respond to surveywhile Panel Intelligence monitors data for integrity

STEP 2: Fielding

Respondentquota(s) reached;

Survey closed

Inviteparticipants

Kickoff: clarifyclinical orbusiness-relatedissues

Panel Intelligence draftsinitial survey &recruitment criteria

Program andtest online

survey

STEP 1: Setup

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Solo practitioners: 58.4% n = 101

Multi-dentist practice: 41.6% [Mean: 18.3 Range: 2 - 200]

Respondent Background Information

Annual Revenues % of Physicians (n=101)

$1,000,000 or more 39.6%

$500,000 - $999,999 39.6%

$200,000 - $499,999 20.8%

Primary Specialty % of Physicians (n=101)

General Dentistry 71.2%

Oral/Maxillofacial Surgery 11.9%

Periodontics 6.9%

Orthodontics 5.9%

Prosthodontics 3.0%

Dental Implantology 1.0%

Questions S1 - S5

Region % of Physicians (n=101)

Northeast 31.7%

Midwest 29.7%

West 19.8%

South 18.8%

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Key Findings: Trends in Dental Cases & US Economy Impact

Dentists expect volume of routine and non-routine visits to increase in 2008

compared to the same quarter in 2007.

For dentists expecting a decrease in visits in 2008, 90% indicate the state of the economy is a factor.

Dentists predicting an increase in visits in 2008 cite practice growth as a factor.

Nearly 80% of respondents currently have a negative to strongly negative perception of the general US economy.

67% of dentists indicate the economy is currently having a negative impact on their practice.

Nearly 60% indicate that the US economy will have a negative on their practice impact 12 months from now.

Currently 15% of dentists feel the US economy is having a positive impact on their practice, yet over 30% indicate the economy will have a positive effect 12 months from now.

While respondents were split on awareness of new tax incentives, almost 32% will make an equipment technology purchase in 2008 because of the tax incentives.

The tax incentive will influence respondents to purchase new equipment, digital x-rays, large ticket items, and replace failures instead of fixing them.

Close to 63% of those making new equipment or technology purchases will spend $50,000 or more, which for 60% of respondents represents an increase in spending from 2007 by an average of 70%.

6



Key Findings: Consumables, Basic Equipment, and High Tech Equipment

72% of consumables purchased are from primary distributors; Henry Schein is most

commonly used.

Over 80% of dentists will not change the percent of total purchases supplied by their primary consumables distributor.

68% of dentists purchase 16% of their consumables directly from manufacturers.

Choice of distributor is primarily driven by price (mean rank 1.8) followed by most consumable SKUs (breadth of

products) (mean rank 3.1).

Over 65% of total basic equipment purchases are made from primary consumables

distributors.

80% of high-tech equipment is purchased through either primary consumables

distributors (53%) or direct from the manufacturer (27%).

Digital x-ray (mean rank 1.5) is considered the most important high-tech equipment to dental practices, followed by the

intra-oral camera (mean rank 2.3).

Outside of digital x-ray and CAD/CAM, respondents indicate laser dentistry, cone beam/CT, electronic records, and

digital impressions as being the most promising new technologies in the next 5 years.

7



Key Findings: Digital X-Ray

76% of dentists are performing intra-oral imaging, 65% are doing panoramic, 11% are

doing neither.

Both intra-oral and panoramic users indicate digital is more beneficial than film, panoramic users slightly more so, 63%

to 61% respectively.

Respondents estimate nearly a third of US dentists are currently using digital x-ray.

A 26% CAGR expected in digital x-ray use over the next 3 years.

Of the 42% of respondents without digital x-ray, 19% anticipate purchasing a system

in 2008.

Over 68% of respondents are aware of 3-D x-ray systems, 60% of them see a need within their practice for one and

34% of those who see a need plan to purchase a system within the next 3 years.

8



Key Findings: Trends in Dental Implant Cases

Respondents perform an average of 7.8 implant cases per month, 60% of which are non-

elective.

For the 15% of respondents that switched implant brands, most are leaving Nobel Biocare, going to either Straumann, or Astra, for

various reasons.

77% of dentists said price was not the most significant factor in choosing an implant manufacturer, ease of use and reliability are

indicated as factors influencing selection.

Respondents report a consistent increase in the number of dental implant case starts over

2007, (16.5 in Q2 07) and they project the number to continually increase reaching 20.1 case

starts per month by Q1 in 09.

The economy and energy prices are indicated as factors for those anticipating a decrease in case starts in Q2 2008 compared to Q2

2007.

Advertising/marketing and increased awareness are factors given for seeing an increase in case starts from Q2 2007 to Q2 2008.

70% of dentists have not seen a change in outward referrals for dental implants in the past 12

months.

26% have seen an increase by 26%. Reasons indicated for the increase include better patient education and awareness.

5% have seen a decrease in outward referrals by 33%. Primarily because they are capable of doing implants themselves instead of

referring out.

9



Key Findings: CAD/CAM

65% of respondents feel the average 29 crown restorations they perform a month will

not change over the next 12 months. 32% believe they will see an increase by 12%.

Respondents recognize a mean difference of $785.67 between the amount charged

per crown and the amount paid in lab fees per crown. More dentists are paid cash by

patients than through managed care.

While all respondents are aware of CAD/CAM 60% are not using it.

60% of respondents indicate cost as the primary reason they have not purchased an in-office CAD/CAM system,

followed by lack of necessity for 27%.

Of the 16% considering purchasing CAD/CAM, it would be in an average of 3.3 years.

25% of those are considering the E4D from D4D.

A 15% CAGR is expected for in-office CAD/CAM system use over the next 5 years.

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DETAILED FINDINGS

SECTION ONE: TRENDS IN DENTAL CASES

11



Surveyed Practices Currently Manage an Average of 5,854 Patients

Q1. In total, how many patients is your practice currently managing/treating?

The median number of patients respondents are managing is 2000.

n=101

Mean Median Range

Number of Patients Practice Currently Managing/Treating 5,853.7 2000.0 100 – 50,000

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Volume of Visits to Increase in 2008 Compared to the

Same Quarter in 2007

Q2. Please estimate the number of dental visits your practice experienced in the following time periods:

Q3. In the table below, please estimate the number of visits you expect your practice to have in the following time periods.

Patient visits in 2008 for routine and non-routine care are expected to increase from the same quarter in 2007.

n=101

Mean Number of Visits

Q2 2007(April – June 2007)

Q3 2007 (July – September

2007)

Q4 2007(October –

December 2007)

Q1 2008(January – March

2008)

All patient visits 1490.9 1484.4 1497.5 1509.9

Non-routine care visits only 206.3 205.5 209.7 218.3

Mean Number of Visits Expect to Have

Q2 2008(April – June 2008)


2008)

Q4 2008(October –

December 2008)


2009)

All patient visits 1548.5 1613.1 1547.8 1600.1

Non-routine care visits only 212.7 216 215.2 230.7

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Q4. You indicated that you expect a decrease in the number of visits in second quarter 2008 compared to second quarter 2007. Which of the following factors, if any, do you feel may contribute to the decrease in patient visits?

n=22

For over 90% of 22 respondents who predict a decrease in visits from Q2 2007 to Q2 2008, the state of the economy is a factor.

The State of the Economy Greatest Reason for a Decrease in Visits

Factor Percent Responding

State of the economy 90.9%

Energy prices 63.6%

Real estate prices 54.5%

Job loss 50.0%

Decline of the stock market and/or lower interest rates 45.5%

Consumer confidence 40.9%

Scaling back practice 13.6%

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Q5. What other factors not mentioned above, if any, may contribute to the decrease in patient visits?

Respondents indicate a number of other reasons for an anticipated decrease in patient visits from Q2 2007 to Q2 2008.

Other FactorsDifficulty finding good employees

People losing insurance to do job loss, saving money

General dentists trying to perform all procedures in their office rather than referring to specialists

Work fewer days

Economy

Tighter credit

Ins benefits are not enough to help pt decrease out of pocket costs and more patients are moving to DMO/network plans in

which we do not participate

Patient no shows/cancellations

We are focusing on cosmetic and implant treatments, and less hygiene and general dentistry

Scale back of insurance, nervousness on the economy

Gas

Many more offices in town

Uncertainty about war in Iraq and presidential election

Election year

Less hiring at Microsoft

n=22

Other Factors Contributing to Decreasing Patient Visits

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Q6. You indicated that you expect an increase in the number of visits in second quarter 2008 compared to second quarter 2007. What factors do you feel are contributing to the expected increase in patient visits?

Almost 29% of respondents indicate practice growth as the reason they will see an increase in the number of visits in Q2 2008 from Q2 2007.

n=35

Increases in Visits Due to Practice Growth


Practice growth 28.6%

Marketing 17.1%

Added staff 14.3%

Patient referrals 11.4%

Better internal processes 11.4%

Increase in population 8.6%

Less vacation 5.7%

Economy is getting better 5.7%

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Q7. You indicated that you expect a decrease in the number of non-routine care visits in second quarter 2008 compared to second quarter 2007. Which of the following factors, if any, do you feel may contribute to the decrease in non-routine care visits?

n=22

For respondents anticipating a drop in non-routine care visits in Q2 2008 from Q2 2007, the state of the economy (86%) and job loss (64%) are factors seen as having the greatest impact.

State of the Economy and Job Loss Drive Drop in Non-routine Care Visits

FactorPercent

Responding


Job loss 63.6%

Energy prices 59.1%




None of above 13.6%


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Q8. What other factors not mentioned above, if any, may contribute to the decrease in non-routine care visits?

Respondents indicate changing budgets for patients and the election as other factors contributing to an anticipated decrease in non-routine care visits.

n=22

Patient Budgets and the Election Also Factors for Declining Non-routine Care Visits

Other Factors

I still think the continuing war in Iraq and presidential elections are negatively affecting the numbers

Many more offices in town

Gas

Normal fluctuation and HSA spending accounts

Work fewer days

Doing better work

People being cash strapped and no dental insurance

Patients doesn’t want to do expensive procedures

Summer cycle, people on vacation

Priorities changing concerning spending on elective procedures

I think the main reason is the economy, it will change after the election

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DETAILED FINDINGS

SECTION TWO: US ECONOMY IMPACT

19



Negative Perception of the General US Economy

Q10.On a scale of 1 to 7, with 1 being a “Strongly Negative” and 7 being a “Strongly Positive”, what is your current perception of the general US economy?

Nearly 80% of respondents currently have a negative to strongly negative perception of the general US economy.

3.0% 76.2% 10.9% 9.9%

Strongly Negative (1) Negative (2-3) Neutral (3) Postive (5-6) Strongly Positive (7)

Perception of the General US Economy

n=101

% of Respondents Selecting Answer

Mean

2.9

20



US Economy Currently Having Negative Impact on 67% of Practices

Q11.On a scale of 1 to 7, with 1 being a “Strongly Negative” and 7 being a “Strongly Positive”, how much of an impact, if any, do you think the general US economy is currently having on your business?

4.0% 63.4% 17.8% 12.9% 2.0%


Impact General US Economy is Currently Having on Your Business

n=101


While the majority of respondents indicate the economy is negatively impacting their practice, 15% say it is having a positive impact on their business.

Mean

3.3

21



Anticipate Economy Will Have Less Impact 12 Months From Now

Q12.How much of an impact, if any at all, do you think the general US economy will have on your business 12 months from now?

Nearly 60% of respondents indicate that the US economy will have a negative on their practice impact 12 months from now, but over 30% indicate it will have a positive effect, twice as high as current impact.

3.0% 55.4% 10.9% 30.7%


Impact General US Economy Will Have on Your Business 12 Months From Now

n=101


Mean

3.6

22



While Not Well Known, Tax Breaks In New Stimulus Bill Will Make An Impact On Purchases

Q 13. Are you aware of the new provisions in the recently-passed stimulus bill that increased the write-off a maximum of $250,000 on equipment and technology purchases installed and operational by the end of the 2008 calendar year?

Q 14. Will this tax incentive for small businesses influence you to make an equipment technology purchase in 2008?

While respondents were split on awareness of the new tax incentives, almost 32% will make an equipment technology purchase in 2008 because of the tax incentives.


48.5%

51.5%

0%

20%

40%

60%

80%

100%

Awareness of New Provisions in Stimulus Bill

n=101

Aware of New Provisions in Stimulus Bill

Not Aware of New Provisions in Stimulus Bill


68.3%

31.7%

0%

20%

40%

60%

80%

100%

New Provisions Influence on Making An Equipment Technology Purchase in 2008

Will Make an Equipment Technology

Purchase in 2008

Will Not Make an Equipment Technology Purchase in

2008

23



Q14.a Will this tax incentive for small businesses influence you to make an equipment technology purchase in 2008?

If Yes, how so?

The tax incentive will influence respondents to purchase new equipment, digital x-rays, large ticket items, and replace failures instead of fixing them.

n=32

Purchases Will Include New Equipment and Digital X-Ray

FactorNumber of Mentions

Will purchase new equipment 13

Digital x-rays 4

Large ticket items 2

Will replace equipment failures instead of fixing 2

New office 1

Keep my taxes in check 1

Save money 1

Will spend $ now I may have waited to spend 1

We are currently looking into a costly ct scanner and this will help to make the decision easier 1

May purchase icat 1

24



More Than 60% Will Spend Over $50,000

Q 15. How much do you anticipate you will spend on new equipment or technology in 2008?

44% of respondents who anticipate making a new equipment or technology purchase in 2008 will spend between $50,001 - $100,000.

% of Respondents Selecting Amount

37.5%

43.8%

12.5%

3.1%3.1%

0%

20%

40%

60%

80%

100%

Anticipated Amount Spending in 2008

n=32

$50,001 - $100,000

< $50,000

$100,001 - $200,000

$200,001 - $250,000

> $250,001

25



Compared to 2007, 60% Will Increase Spending by 70%

Q 16. a Does this reflect a change in spending on new equipment or technology from the previous year?

In 2008 60% of 32 respondents will increase their spending on new equipment or technology from 2007 by an average of 70%.


15.6%

25.0%

59.4%

0%

20%

40%

60%

80%

100%

Change From Spending In Previous Year

Increase By: 70.3%n = 18 (with 1 outlier excluded)

Decrease By: 35.6%n = 5

No Changen = 8

n=32

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Q16.b Please highlight some of the technologies you will be investing in (CAD/CAM, digital imaging, etc.):

n=32

Dentists Plan to Invest In Digital Technologies

Technologies Dentists Will Invest In

X-ray imaging and processing. Digital intraoral camera; computer in the office; upgraded operatory equipment

Would like to do digital radiography but not at this time Digital imaging, PT education software

Win oms 3D digital panorex Digital imaging, networking computers to rooms, cameras, so far

Software, electric hand pieces Digital imaging, CT scan or tomogram

Paperless charting, icat Digital imaging, and radiographs, also paperless office.

New operatory. Digital imaging. digital imaging chairs laser

Just installed digital imaging and digital iintraoral photography; need more monitors and patient education programs

Digital imaging

Intraoral camera, Digital camera, intra oral camera. Ceph

Digital imaging, Digital camera, New delivery systems Digital

Digital xray, laptop computer Dental chairs

Digital xray, crt at ops CT scanner with mobile dental unit; additional computers, maybe another cerec machine

Digital X-Ray, CAD/CAM Cone Beam CT scanner

Digital radiographs(newer),computers in each operatory, Computer upgrade,implant engine

Digital radiograph Computer systems

Digital photography, practice management software Chairs, Delivery systems, new intraoral x-rays

Digital pano, remodel, Xray unit, electric hp? CAD/CAM prosthetic technology, practice software, perhaps a digital pan

Several dentists indicate digital x-ray, and digital imaging as areas of investment in 2008.

27



DETAILED FINDINGS

SECTION THREE: CONSUMABLES

28



Q17. How many distributors do you currently use for purchasing consumable products?

Q18. Who is your primary consumables distributor, and what percent of your total consumable purchases are from that distributor?

Dentists use an average of 4 distributors for purchasing consumables.

n=101

Henry Schein Most Commonly Used Primary Distributor; 72% Of Purchases Are From Primary Distributors

Primary Consumables Distributor

Percent Using Distributor

Henry Schein 45.5%

Patterson Dental 14.9%

Darby dental 10.9%

Benco Dental 8.9%

Pearson 2.0%

Atlanta dental 2.0%

Mean Median Range

Number of Distributors Currently Used For Purchasing Consumables 4.2 3.0 1 – 20

Percent of Total Consumables

Purchased from Primary Distributor:

72.1%

29



Over 80% Will Not Change Percent of Total Purchases Supplied By Primary Distributor

Q 19.a Do you anticipate this percentage to increase, decrease, or stay the same in the future?

Less than 20% of respondents will change the percent of total purchases bought from their primary distributor.

% of Respondents

9.9%

81.2%

8.9%

0%

20%

40%

60%

80%

100%

Anticipated Percent Change in Total Consumable Purchases from Primary Distributor

IncreaseN = 9

DecreaseN = 10

Remain the Same

N = 82

n=101

30



Increasing patient loads supports more purchases, while decreases in patients and increasing prices are reasons for decreases in purchases.

n= 9 increasen = 10 decrease

Patient Load Drives Changes In Purchasing Behavior

Reason for Increase (n = 9) Reason for Decrease (n=10)

Companies are being bought out by this company and merging Prices

More production Too expensive

Hope to see increase in practiceI probably would purchase equipment from Patterson

Starting/opening more offices in the group Patterson giving more incentives

Satisfaction Fewer pt visits

Due to more patients Less patients

More patients New products from a competing company

Increase in patient care Their prices are high

More patient visits Seeing fewer patients

Price increases

Q 19.b If you anticipate this percentage to increase or decrease, what is the primary reason for the change?

31



68% of Dentists Purchase 16% of Consumables Directly From Manufacturers

Q 20. Do you purchase any consumables product directly from the manufacturer? If so, what percentage of total consumables purchases does this represent?

While 32% of dentists make no purchases from manufacturers, nearly 16% of total consumable purchases made are direct from the manufacturer.

% of Respondents

31.7%

68.3%

0%

20%

40%

60%

80%

100%

Percent Purchasing ConsumablesDirectly From the Manufacturer

Average of 15.6% of Total Consumables Purchased Direct from Manufacturer

n=101

Do not

32



Although having a breadth of products is important (3.1 mean rank), price (1.8 mean rank) is still the most important factor in deciding on a consumables distributor.

n=101

Price Drives Distributor Choice

Q 21. Please rank the following factors by order of importance when selecting a distributor for consumable products. (1=Most Important, 2=Second Most Important, etc.)

FactorMean

Rank

Lowest price (unit cost) 1.8

Most consumable SKUs (breadth of products) 3.1

Value-added services (consultative approach) 4.1

Ability to sell and/or service basic and high-tech equipment 4.8

Size of distributor 5.5

Electronic ordering capabilities 5.5

Contract terms/payment options 6.1

Ability to sell and/or service dental practice management software systems 6.6

Proximity to office (location) 7.4

33



DETAILED FINDINGS

SECTION FOUR: BASIC EQUIPMENT

34



Most Basic Equipment Is Purchased From Primary Consumables

Distributors

Q 22. When purchasing high tech equipment, what percentage of purchases are made from the following vendors:

Over 65% of total basic equipment purchases are made from primary consumables distributors.

% of Respondents

4.4%

10.2%

19.8%

65.5%

0%

20%

40%

60%

80%

100%

Percent of Basic Equipment Purchases Made by Vendor Type

Direct from Manufacturer

Other*

Secondary Consumables Distributor

n=101


Others Specified: pens, paper products; local full service dealer; Equipment Supplier; equipment service contractor; Dental repair technician; dart; appropriate

distributor; already present when purchased this practice

.

35



DETAILED FINDINGS

SECTION FIVE: HIGH TECH EQUIPMENT

36



More Than Half of High-Tech Equipment Purchases Are Made

From Primary Consumables Distributors

Q 23. When purchasing high tech equipment, what percentage of purchases are made from the following vendors:

Over 80% of high-tech equipment is purchased through either primary consumables distributors or direct from the manufacturer.

% of Respondents

2.7%

16.8%

27.2%

53.3%

0%

20%

40%

60%

80%

100%

Percent of High-Tech Equipment Purchases Made by Vendor Type

Direct from Manufacturer

Other*

Secondary Consumables Distributor

n=101


Others Specified: On line or retail stores; local full service dealer; Equipment Supplier; distributor of particular item; dart; copiers, printers, computer.

37



With a mean rank of 1.5 digital x-ray is considered the most important high-tech equipment to dental practices.

n=101

Digital X-Ray and Intra-Oral Camera Are Ranked As the Most Important High-Tech Equipment

Q 24. Please rank the importance of the following types of high tech equipment to your practice (i.e., enhancing the customer’s experience, improving productivity, minimizing employee turnover, etc.) (1=Most Important, 2=Second Most Important, etc.)

High Tech Equipment Mean Rank

Digital x-ray 1.5

Intra-oral camera 2.3

Dental lasers 3.5

Chairside CAD/CAM (CEREC) 3.9

3D Cone Beam CT 3.9

38



Over the next five years, respondents indicate laser dentistry, cone beam/CT, electronic records, and digital impressions as being the most promising new technologies.

n=101

Laser Dentistry and Cone Beam/CT Seen As the Most

Promising New Technologies

Q 25. Outside of digital x-ray and CAD/CAM, what do you view as the most promising new technology expected to impact the dental market over the next five years?

Promising Technologies in Dental Market Number of Mentions

Laser dentistry 31

Cone beam / CT 21

Electronic dental records /paperless/ hand pieces 17

Digital impressions 15

Immediate load implants 8

3-D Imaging / scanners / radiography 7

Bone grafting 6

Don’t Know 7

39



DETAILED FINDINGS

SECTION SIX: DIGITAL X-RAY

40



Awareness of Digital X-Ray Is Over 90%

Q 26. Are you aware of digital x-ray systems for oral imaging (as compared to the traditional film based imagers)?

Less than 9% of dentists were unaware of digital x-ray systems for oral imaging.

% of Respondents

8.9%

91.1%

0%

20%

40%

60%

80%

100%

Percent Aware of Digital X-Ray SystemsFor Oral Imaging

Yes

n=101

No

41



More Dentists Practicing Intra-Oral Imaging Than

Panoramic Imaging

Q 27. Which of the following types of imaging, if either, do you currently perform?

76% of dentists are performing intra-oral imaging, 65% are doing panoramic, 11% are doing neither.

n=101

Imaging Percent Currently Performing

Intra-oral imaging 76.2%

Panoramic imaging 65.3%

None of the above 10.9%

42



Both Intra-Oral and Panoramic Users Indicate Digital Is More Beneficial Than Film Based

Imaging Type Relative Value of Imaging Systems

Digital Is More Beneficial Than Film Based

Both Are Equally Beneficial

Film Based Is More Beneficial Than

Digital

Intra-oral imaging 61.1% 32.2% 6.7%

Panoramic imaging 63.3% 33.3% 3.3%

Q 28. For the following types of imaging, please indicate the relative value of digital as compared to film based imaging.

One-third of respondents indicate equal benefits among digital and film based imaging.

n=90

43



Q29. Approximately what percentage of U.S. dentists do you think currently use digital x-ray for patients?

n=101

Estimated 33% Dentists Using Digital X-Ray

Percent Median Range

Percentage of US Dentists Currently Using Digital X-Ray 32.7% 30.0 5% - 75%

44



Digital X-Ray Use Expected To Increase To Over 65% Three Years From Now

Q30.What percentage of U.S. dentists do you predict will use digital x-ray:

Respondents expect steady increase in digital x-ray use from 33% now to 65% 3 years from now (26% CAGR).

39.1%

50.7%

65.4%

0.0%

25.0%

50.0%

75.0%

100.0%

Percent of US Dentists Who Will Use Digital X-Ray

Pe

rce

nta

ge

of

Ph

ys

icia

ns

One Year From Now Two Years From Now Three Years From Now

n=101

Percent of US Dentists Anticipate Will Use Digital X-Ray in Next 3 Years

45



58% of Respondents Have Digital X-Ray Systems

Q31. Do you currently have a digital x-ray system?

Q32. Do you anticipate purchasing a digital x-ray system in 2008?

Of the 42% without digital x-ray, 19% anticipate purchasing a system in 2008.

% of Respondents

41.6%

58.4%

0%

20%

40%

60%

80%

100%

Percent That Currently Have a Digital X-Ray System

Yes

n=101

No

19.0% (n=8) without digital x-ray systems anticipate purchasing one in 2008.

Brands mentioned: Kodak (2), Gendex (1), Dexis (1)

46



3-Dimensional X-Ray System Demand Is Increasing

Q 33. Are you aware of the next generation 3-dimensional (3D) x-ray systems?

Q 34. Do you see a need for 3D x-rays in your practice?

Q 35. Do you expect to purchase a 3D x-ray system within the next 3 years?

Over 68% of respondents are aware of 3-D x-ray systems, 60% of them see a need within their practice for one and 34% of those who see a need plan to purchase a system within the next 3 years.

% of Respondents

31.7%

68.3%

0%

20%

40%

60%

80%

100%

Percent Aware of Next Generation 3-Dimensional X-Ray Systems

Yes

n=101

No

59.4% of those aware see a need for 3D x-rays in their practice

34.1% of those who see a need plan to purchase a 3D x-ray system within the next 3 years*

* Planmeca (4 mentions), I-Cat (3 mentions), Sirona (2 mentions), Kodak 9000 (1 mention)

47



DETAILED FINDINGS

SECTION SEVEN: TRENDS IN DENTAL IMPLANT CASES

48



Q36. How many dental implants cases do you currently start/perform per month?

Q37. What percentage of your dental implant cases are:

n=100

More dental implant cases are done on a non-elective basis than elective.

Of the 7.8 Mean Implant Cases Per Month, 60% Are Non-Elective

40.3%

59.7%

0%

20%

40%

60%

80%

100%

Non-elective (i.e. patientswould otherwise seek analternative solution suchas a crown or bridge)

Elective (i.e. patientswould otherwise gountreated)

Types of Dental Implant Cases

7.8

0

1

2

3

4

5

6

7

8

9

10Mean # of

Dental Implant Cases

Per Month

Perc

en

tag

e o

f D

en

tal Im

pla

nt

Cases

n=94n=7 have 0 implant cases

49



Q38. Has your practice changed the brand of dental implant used in the past 12 months?

Q39. Please indicate the former and new manufacturer:

For the 15% of respondents switching implant brands, most are leaving Nobel Biocare, going to either Straumann, or Astra, for various reasons.

85% of Respondents Have Implant Brand Loyalty

85%

15%

0%

20%

40%

60%

80%

100%

Changed Brand

Did Not ChangeBrand

Changes in Dental Implant Brands Used in Practice

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Changes in Implant Brand Carriers

From: To: Because:

Zimmer Nobel Biocare More versatile

Strauman Nobel Specialist's preference

Nobel replace select Astra Tech Internal connection

Nobel Biocare Biohorizons Decline to answer

Nobel biocare Implant direct Cost

Nobel BioCare Astra Easier technique

Nobel Biocare 3i Poor service

Nobel biocare AstraToo many changes from nobel

Nobel biocare Straumann Better support

NB Astra Surgeon

Biocare n Stramun OS choice

Bicon 3i Referal patterns

Bicon StraumenChanged surgeon, better system

3I Strauman Failure rate increase

n=14


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Q40. Is price the most significant factor influencing your choice of implant manufacturer?

Ease of use and reliability are indicated as significant factors influencing implant manufacturer selection.

Price Not the Most Significant Factor Influencing Implant Selection

77%

23%

0%

20%

40%

60%

80%

100%

Yes

No

Price Significance in Vendor Selection

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Most Significant FactorFactor Mentions

Ease of use 10

Reliability 10

Oral surgeons preference 8

Quality of product 6

Successful track record 6

Support 6

Service 5

Research/ evidence based literature 4


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Number Implant Case Starts Increased Over 2007 and Expected to Continue Through 2008Respondents report a steady increase in the number of dental implant case starts over 2007 and they project the number to increase throughout 2008.

Mean Number of Dental Implant Cases Started

Q2 2007(April – June 2007)


2007)

Q4 2007(October –

December 2007)


2008)

Your practice 16.5 16.7 16.8 17.6

Mean Number of Dental Implant Cases Expect to Start

Q2 2008(April – June 2008)


2008)

Q4 2008(October –

December 2008)


2009)

Your practice 18.3 18.9 19.5 20.2

Q41. Please estimate the number of dental implant cases your practice started/performed in the following time periods:

Q42. Thinking ahead for the next year, what change, if any, do you expect to see in the volume of dental implant cases your practice will start/perform?

n=94n=7 have 0 implant

cases

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For the 18 respondents who project a decrease in case starts in Q2 2008 compared to Q2 2007, the two greatest factors indicated as contributing to the decrease are the economy and energy prices.

State of the Economy Primary Reason for Decrease In Case Starts From Q2 2007 to Q2 2008

Factors Contributing to Decrease in Number of Cases2nd Quarter ‘07 Vs. 2nd Quarter ‘08

Factor Percent Responding State of the economy 72.2%

Energy prices 50.0%

Job loss 44.4%






Q43.You indicated that you expect a decrease in the number of case starts in second quarter 2008 compared to second quarter 2007. Which of the following factors, if any, do you feel may have contributed to the decrease in case starts? n=18

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Various Other Factors Are Noted as Contributing to a Decrease In Case Starts

Other Factors Less hiring at Microsoft

More offices in town

Gas

Patients not ready in tx plan

Expendable income eaten up by increasing prices, bleak economics

Decline in economy

Concentrating on fewer procedures

Availability of cases

Treatment planning

Q44. What other factors not mentioned above, if any, may contribute to the decrease in case starts? n=18

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Q45.You indicated that you expect an increase in the number of visits in second quarter 2008 compared to second quarter 2007. What factors do you feel are contributing to the expected increase in patient visits? n= 40

Advertising/marketing, increased awareness, becoming a more acceptable treatment, and increased referrals are factors given for seeing an increase in case starts from Q2 2007 to Q2 2008.

Increases In Case Starts Due To Advertising and Increased Awareness

Factors Contributing to the Expected Increase in Patient Visits

Number of Mentions

Advertising/Marketing 7

Increased awareness 6

Becoming more accepted 5

More referrals 5

Practice operating better 4

Patient education 4

More demand 3

Post Presidential stability effect on business usually stabilize insurance problems1

I indicated an increase in implant cases, not an increase in patient visits. I believe patient visits will be down for 2008 relative to 2007.

1

Patients saving money for implants. 1

patients feeling economy is bad with prospect of loss of job, many patients want to have implants placed before loss of employment

1

Pricing 1

Economic improvements 1

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Q46. Has your practice experienced a change in volume in the number of implant restorations performed in the past 12 months? n= 39

Respondents indicate implant restoration frequency has either remained the same, 50%, or increased, 37% by and average of 18%.

Only 4% Of Respondents Have Seen a Decrease In Implant Restorations In the Past 12 Months

4%

9%

37%

50%

0%

20%

40%

60%

80%

100%

No, remain the same

Yes, increase by

Do not perform implantrestorations

Yes, decrease by

Change in Volume of Implant Restorations in Past 12 Months

18.4%

15.0%

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Q47. Has your practice experienced a change in the volume of referrals outward for dental implants in the past 12 months? n= 101

While 70% of dentists have not seen a change in referrals for implants in the past 12 months, 26% have seen an increase in referrals by 26%. For the 5% seeing a decrease in referrals, it is by 33%

70% of Dentists Have Not Seen A Change In Referrals For Implants

5%

26%

69%

0%

20%

40%

60%

80%

100%

No, remain the same

Yes, increase by

Yes, decrease by

25.5%

33.0%

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Change in Volume of Referrals for Dental Implants in Past 12 Months

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Q48.You indicated that your practice has experienced a decrease in the volume of dental implant referrals in the past 12 months. Which of the following factors, if any, do you feel may have contributed to the decrease in referrals?

Q49. What other factors not mentioned above, if any, may contribute to the decrease in dental implant referrals?

n=5

For the dentists who indicate a decrease in implant referrals, capability of doing implants themselves instead of referring out is commonly mentioned.

Decrease In Implant Referrals Due to Changing Practice Abilities




Energy prices 20.0%





Factors Contributing to Decrease in Volume of Dental Implant Referrals for Past 12 Months

Factors Contributing to Decrease in Dental Implant ReferralsSame as above

I am a general dentist. I answered that I have decreased the referral outward because our practice continues to place more implants ourselves.

Decline in economy

The general dds is doing bridgework instead

I am doing implants in my office, thus fewer referrals out.

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Q50.You indicated that your practice has experienced an increase in the number of dental implant referrals in the past 12 months. What factors do you feel are contributing to the increase in referrals? n= 26

Greater patient education and awareness contribute to dentists getting more dental implant referrals in the past 12 months.

Better Patient Education and Awareness Increasing Dental Implant Referrals

Factors Contributing to Increase in Dental Implant Referrals

Number of Mentions

Patient education/awareness 13

Better technology/increased skill 6

Cost 4

Promotion 3

Patient acceptance 3

Satisfaction with technology 2

Study group that I am part of that is sponsored by implant company I use 1

More implants to be performed 1

Different mix of patients. I have the same surgeons as before and the same confidence in treatment 1

Increased diagnosis and treatment planning 1

Factors Contributing to Increase in Volume of Dental Implant Referrals for Past 12 Months

59



DETAILED FINDINGS

SECTION EIGHT: CAD/CAM

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While 65% of respondents do not feel the mean number of crown restorations they perform a month (29) will change over the next 12 months, 32% believe they will see an increase by 12%.

Dentists Average 29 Crown Restorations Per Month; Expected to Increase Over Next 12 Months

4%

32%

65%

0%

20%

40%

60%

80%

100%

No, remain the same

Yes, increase by

Yes, decrease by

Anticipated Change in Volume of Crown Restorations in 12 Months

11.5%

13.3%

28.5

0

10

20

30

40

50

Mean # of Crown

Installations Per Month

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Q51. How many crown restorations do you currently perform per month?

Q52. Do you expect the number of crown restorations you perform per month to change over the next year?

n=79n=22 perform 0 crowns/month

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Q53. On average, how much do you charge for a crown?

Q54. On average, what are your lab fees for the crown?

Q55. What percentage of your business is cash pay versus managed care (PPO, DMO, Medicare, Other)?

Respondents recognize a mean difference of $785.67 between the amount charged and the amount paid in lab fees per crown. More patients pay cash than through managed care.

Difference Between Mean Charge Per Crown and Mean Lab Fees Per Crown is $785.67

62.3%

37.7%

0%

25%

50%

75%

100%

Cash Pay Managed Care

Payment Types

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$961.92

$176.25

$0.0

$200.0

$400.0

$600.0

$800.0

$1,000.0

Mean Charge Per Crown Mean Lab Fees Per Crown

Price Per Crown Charged to Patient Vs.Price Per Crown Paid to Lab


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Q56. Are you aware of CAD/CAM technology for dental restorations?

All Respondents Are Aware of CAD/CAM Technology

100%

0%

20%

40%

60%

80%

100%

Aware

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CAD/CAM Technology Awareness


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Q57. Describe your current use of CAD/CAM technology?

Only 5% use CAD/CAM in their office.

While All Respondents Are Aware of CAD/CAM, 60% Are

Not Using It

1%5%

34%

60%

0%

20%

40%

60%

80%

100%

Do not use in either setting

Use via a dental laboratory

Use in my office

Use both via a dental laboratory and in my office

CAD/CAM Current Use

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Q58. What has been the main reason you have not purchased an in-office CAD/CAM system?

60% of respondents indicate cost as the primary reason they have not purchased an in-office CAD/CAM system.

Cost and Lack of Necessity Keep Dentists From Purchasing CAD/CAM Systems

4%

9%

27%

60%

0%

20%

40%

60%

80%

100%

Cost

Unnecessary based oncurrent process forperformingrestorations

Other

Limited number ofrestorations performedin my practice

Reasons for Not Purchasing CAD/CAM System

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Other Specified (n = 7)Tooth reduction

Scheduling would have to change and we have not made that decision yet but it is in the planning stages

Not as good as my lab

Have own on-site lab

Fit, finish an sturdiness of final restoration

Cost, but also technology not good enough yet

Cost, aesthetics, maintenance of system, stocking blanks


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Q59. Do you anticipate purchasing an in-office CAD/CAM system?

Q60. Are you considering the E4D from D4D Technologies? If Yes, How does E4D compare with CEREC (from Sirona)?

n=12

Of the 16% considering purchasing CAD/CAM, purchase time averages 3.3 years; 25% of them are considering the E4D from D4D.

A Majority of Dentists Do Not Plan To Purchase CAD/CAM In the Future

Yes (3 Comments): am researching this new

product now No powder necessary.

Software probably immature.

no powder

75.0%

25.0%

0%

20%

40%

60%

80%

100%

Yes

No

Considering E4D from D4D Technologies?

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83.8%

16.2%

0%

20%

40%

60%

80%

100%

Yes

No

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In 3.3 years

Planning to Buy CAD/CAM in the Future?

n=74n=5 already use in office or in office

& lab

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Q61. What percentage of U.S. dentists who perform crown restorations do you think currently use an in-office CAD/CAM system for crown restorations?

Q62. What percentage of U.S. dentists who perform crown restorations do you expect will have an in-office CAD/CAM system within the next 1, 3, 5 years?

A 15% CAGR is expected for in-office CAD/CAM system use over the next 5 years.

Respondents Estimate 12% of Dentists Currently Use In-Office CAD/CAM Systems and Predict This Number to Double in 5 Years

13.9%

18.2%

24.3%

0%

10%

20%

30%

40%

50%

1 Year 3 Years 5 years

12.1%

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

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Dentists Who Use CAD/CAMSystem for Crown Restorations

Dentists Who You Think Will Have CAD/CAM in the Future

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