December 2012

Objective: To use industrial organisation and organisational ecology research methods to survey industry structures and performance in the markets for private dental services and the effect of competition. Design: Data on practice characteristics, performance, and perceived competition were collected from full-time private dentists (n=1,121) using a questionnaire. The response rate was 59.6%. Cluster analysis was used to identify practice type based on service differentiation and process integration variables formulated from the questionnaire. Results: Four strategic groups were identified in the Finnish markets: Solo practices formed one distinct group and group practices were classified into three clusters Integrated practices, Small practices, and Loosely integrated practices. Statistically significant differences were found in performance and perceived competitiveness between the groups. Integrated practices with the highest level of process integration and service differentiation performed better than solo and small practices. Moreover, loosely integrated and small practices outperformed solo practises. Competitive intensity was highest among small practices which had a low level of service differentiation and was above average among solo practises. Conclusions: Private dental care providers that had differentiated their services from public services and that had a high number of integrated service production processes enjoyed higher performance and less competitive pressures than those who had not. Key words: dental health services, private sector, economic competition, group practice, private practice, industry structures