Recently, after three weeks of public consultation, the National Health Insurance Bureau officially issued the Notice on Special Treatment of Medical Service Charges and Consumables Prices for Dental Implantation (hereinafter referred to as the "Notice"). The notice clearly states that the oral implants will be collected in a centralized manner, and the crowns will be put on the net through competitive bidding; The price of dental implant medical services is regulated. For example, the full-process regulation target of the medical service price in the tertiary public hospital is 4500 yuan per tooth.

Source: official website of the National Health Insurance Bureau

Influenced by this news, many oral concept stocks rose sharply. On the same day, Tongce Medical, Rongyu Group and Yuexin Health rose by about 36.8%, while Rier Group rose by more than 7%.

You should know that in the past, it has been difficult to significantly reduce the price of dental implants with tens of thousands of yuan and hundreds of thousands of yuan. The reason is that the price composition of dental implants is relatively complex, including both the consumables such as implants and the medical service costs of dentists, which is difficult to coordinate and price separately.

This notice requires that the price of consumables and medical services should be reduced to a reasonable position through the "separation of technology and consumption". This means that the collection of dental implants has entered a critical stage.

However, it is reasonable to say that the lower price will lead to the thinner profits of enterprises, and why will it lead to the high sentiment of the industry?

"Previously, the industry was particularly concerned about the excessive decline in medical service fees, which is better than the market expected at present. Therefore, the notification boosted the confidence of the secondary market in the dental industry." The head of a securities firm told Arterial Network that the lower price of dental implants will help to increase the number of dental clinics, especially the number of basic treatment visits. In addition, this document mainly points to public hospitals, and the private sector continues to be independent, which has a positive impact on the industry as a whole.

It should be noted that after the announcement, there are also some concerns in the industry. For example, the centralized purchase of dental implants will directly affect the lower threshold of dental implant consumption. How to ensure the quality of medical services under the overall cost reduction has become an important proposition in the industry; For example, after the centralized purchase, will the dentists of the more affected public hospitals turn to private institutions in large numbers, which will promote major changes in the industry.

How will the dental industry evolve and what are the new challenges and opportunities? In response to these questions, Artery Network interviewed many industry people in order to see the answers to the questions.

Why are dental implants so "profiteering"?

For a long time, because of the high price of dental implants, they have been labeled as "one dental implant for one suite in the county", which has led to a heavy burden on many people.

According to the statistics of the National Office for Aging, 50% of the elderly aged 65 to 74 in China are missing more than 10 teeth due to various reasons; 26% of people over 74 years old have lost all their teeth and are still on the rise. This means that at the moment of accelerated aging, the demand of dental implant market is gradually increasing and has become a livelihood issue.

However, why is a small tooth so expensive?

This is because the price of an implant tooth includes not only the price of consumables, but also the labor expenses of doctors.

First look at the price of consumables. Implant teeth are mainly composed of three parts: implant, abutment and crown. Implant is the core consumables in the process of dental implantation, which accounts for about 10% of the total cost paid. Currently, it is mainly imported brands, with low localization rate. Among them, European and Korean brands are the mainstream.

In terms of price, the price of implants of European and American brands is generally 3000 yuan and above, and that of domestic and Korean brands is about 1000 yuan to 2000 yuan.

In the circulation of consumables from the manufacturer to the service organization, the equipment dealer also accounts for a certain cost. According to the previous survey of Artery Network, there are tens of thousands of private dental clinics in the downstream, and the market presents a "single small scattered" pattern. In addition, there are many clinical SKUs in the upstream, and the important significance of the midstream is to link and earn profits through scale effect. The overall cost of dental implantation in this process accounts for about 10%.

The last is the labor expenditure of doctors. At the downstream end, the operation cost is the largest part of the cost of dental implant treatment. From the perspective of the industry, the study and time cost of a dentist is very high. It takes at least 10 to 13 years from medical undergraduate to postgraduate. In addition, planting doctors also need to invest a lot of time for patients to complete diagnosis, complete the design scheme and implement follow-up treatment. Of course, the operation level of dentists with different qualifications varies greatly, and the fees vary greatly.

According to the preliminary results of the recent nationwide registration survey, taking the conventional planting of a single seed in public medical institutions in various provinces as an example, the average cost of medical services exceeded 6000 yuan, and the cost of some provinces and cities exceeded 9000 yuan.

It is not difficult to find that the overall cost of dental implant treatment is mostly focused on the labor expenditure of doctors, accounting for more than 50% of the cost, which has become one of the important reasons for the high cost of dental implant.

How to squeeze the water in the implant teeth when the harvest is coming?

In order to solve the problem that planting teeth is too expensive, various regions have been brewing to gather planting teeth for a long time. Until the end of last year, the process of collecting dental implants began to accelerate.

● In November 2021, Sichuan Provincial Medical Equipment Tendering and Procurement Service Center took the lead in carrying out the declaration of information on dental high-value medical consumables such as implants and repair bases;

● On January 11, Ningbo Medical Insurance Bureau of Zhejiang Province took the lead in launching the limited price payment policy of dental implant insurance in the country, and hundreds of medical institutions in the city actively responded and implemented the dental implant project with medical insurance;

● On August 18, the National Health Insurance Bureau issued the Notice on Carrying out Special Treatment of Medical Service Charges and Consumable Prices for Dental Implantation (Draft for Comments), which focused on "the arrow at the end of the line".

From the perspective of preparation period, centralized purchase is difficult. The reason is that dental implants are different from consumables such as coronary stents and artificial joints. The overall price of dental implants is more closely related to the price of medical services. The excessive price reduction will inevitably affect the enthusiasm of dentists. This has also made the collection of dental implants wear the title of "the most difficult collection in history".

To this end, after many investigations, the notice clearly stated that the centralized collection of dental implants should be promoted by adopting the separate pricing method of "service items+special consumables".

In the medical service part, the notice mentioned the comprehensive opinions of the masses, medical institutions, professionals and other parties, and finally set the price control target of the dental implant medical service part of the tertiary public hospitals at 4500 yuan. For regions or medical institutions that meet specific conditions, the conditions that are allowed to be appropriately relaxed are also specified. Compared with the medical service fee of more than 6000 yuan, there is a certain decline.

It should be noted that 4500 yuan is not a fixed price. According to the previous pricing principles of medical service prices in various regions, secondary and primary hospitals can float down 10% - 20% from the tertiary standard.

At the same time, in view of the fact that the regions and cities with high economic development level do have high costs in resources, manpower and other aspects, the notice allows the relaxation of the overall control objectives of medical services. That is to say, the service price of doctors can be increased to 6300 yuan.

It is worth mentioning that the current price reduction of dental implant medical services is mainly aimed at the tertiary public hospitals, and the price of dental implant in private medical institutions is mainly to strengthen supervision and guidance.

"Private dental hospitals/clinics still have the right to set prices freely," said the head of the above-mentioned securities firm

In the part of consumables, the notice said that the relevant departments would successively issue the bidding announcement of centralized procurement of implants with volume, implement the competitive bidding of dental implants and crowns, and all regions would also formulate and publish the project and price policy of dental implant medical services in a timely manner; By March next year, the prices of implants, dental crowns, medical services and other items will be implemented in all provinces.

It can be seen that the decline of medical services, which account for the largest part of the price of dental implants, is relatively small. In addition, private dental service institutions still have the right of free pricing, which has a moderate impact on the overall price of dental implants.

"When the news of centralized procurement first came out, the whole industry thought it was a storm, and it was a relief to see the official notice." The co-founder of a dental chain in Chongqing sighed.

Where are the new opportunities for the industry to accelerate the reshuffle?

With the advent of dental implant collection, the dental industry is also accelerating the reshuffle, and some new opportunities are emerging.

At the upstream consumable end, domestic substitution will accelerate. As we all know, domestic implants in China started late and the market share is low. By the end of 2021, there were 117 registered approvals for implants and implant systems listed in China, including 99 imported products and 18 domestic products, accounting for only 15% of the domestic market.

Behind this, there are not only the lack of technology and experience accumulation of domestic dental implants, but also the weakness of clinical data support.

In terms of technology, China's implant technology is generally still in the technology follow stage. Taking surface treatment technology as an example, the two leading implant enterprises, NobelBiocare and Straumann, have adopted the fourth generation technology of TiUnite and SLActive (active hydrophilic SLA) anodizing treatment and hydrophilic sandblasting acid etching treatment respectively, which have better biocompatibility, corrosion resistance and bone tuberculosis strength. However, most domestic dental implant brands are still at the second and third generation level of simple coating and sandblasting and etching treatment, which is relatively backward.

In addition, due to the lack of scientific research data supporting the five-year success rate and 10-year success rate of domestic implants, dentists still have some doubts about the selection of domestic implant brands, which also leads to the use of domestic implants is not widespread enough.

In contrast, the market share of foreign brands in Europe, America and South Korea has reached 35% and 58% respectively. Among them, the price of Korean products is low, the market share is the highest among C-end consumers, and the price of domestic implants is close to that of Korean products, but it starts late and is suppressed by the cost-performance ratio of Korean products; The European and American implants have the best performance and currently occupy the main share of the high-end market.

After the dental implants are included in the centralized collection, it will promote the development of domestic implants. "Centralized purchase gives a very good window period for domestic growers. I personally think there will be two or three black horse enterprises in this opportunity." Lv Sang, the strategic consultant of Gaofeng Medical, told Arterial Network.

Because the implant industry is scaled up, and once the volume is increased, the profit of enterprises can keep up with it. Therefore, the market share of domestic dental implants will gradually increase through provincial and national centralized procurement.

But at the same time, Lv Sang believes that the challenges are also formidable. "Once the centralized purchase is won, it will be a big test for the production capacity demand of domestic planting brands, supply chain distribution demand, and personalized clinical guidance demand. In addition, personalized basements and bridges are also a challenge for implant brand manufacturers to support national centralized purchase."

At the downstream service end, the service level of dentists will become the focus of market competition. After centralized purchase and online connection, the cost of consumables will become transparent. For medical institutions, the follow-up core is to compete for services, technology and talent.

It can be seen from the notice that the policy side encourages premium for high-quality medical services. For example, in the three cases where the price control is allowed to be relaxed, there are areas where the oral implant technology is leading, and the relaxation range can be as high as 20%.

For example, the national stomatological center/medical institutions with dental implant specialty listed as the national key clinical specialty and the medical institutions with high success rate of dental implant, public service quality information, and commitment to accept supervision and inspection will be relaxed by 10%.

"At present, I think the pricing of national centralized purchase is very fair. A reasonable price is the guarantee of quality." Zhu Liya, the founding partner and CEO of Maxwell Oral Medicine, told Artery Network.

In addition, the Matthew effect on the downstream server is intensified. For enterprises with weak brands, they may "increase revenue without increasing profits", or even decline in business profits; For the leading enterprises in the industry, with better service resources and capabilities, siphon off most of the patients in the region, and improve the viscosity through the overall oral solution (in addition to dental implantation, oral care and other services for patients' families) to achieve a higher premium.

"Next, we will increase the recruitment of high-quality doctors, especially the recently launched equity incentive, which plays a great role in internal talents, and has more confidence in the rapid development of the company in the future." Ding Ning of Rongyu Group said, "The policy still fully affirms the value of dental implant medical services, and we will give full play to the complementary advantages of marketization of private institutions and provide multi-level dental implant services on the basis of actively embracing the new policy."

"Maxwell will continue to attach importance to medical quality and information construction." said Zhu Liya, founding partner and CEO of Maxwell Oral Medicine, "Medical treatment is very rigorous, and time is a barrier."

Many industry insiders agreed that the higher the popularity of dental implants in the market, the better the market will be educated, and the more consumers will be able to pay attention to the importance of oral prevention and periodontal maintenance. This can drive the development of the oral industry.

Not only that, but also from the perspective of social significance, the lower price of dental implants will improve the happiness of hundreds of millions of Chinese people in the future.

In this process, oral medical enterprises should be good at insight into the evolution of demand and pay attention to the quality of medical services before taking off.