Economic challenges, evolving dentist expectations and technology advancements have led to shifts in how DSOs approach growth and financial stability.
Here is what six DSO executives have recently shared about their predictions for which factors will lead to DSO success or failure in the future:
Ashish Bagai. Co-CEO and Head of Business Development at Vitana Pediatric & Orthodontic Partners (Plantation, Fla.): We’ve already seen more people go into this [joint venture] concept. Traditionally, there were more 100% buyouts, and now people realize that continuity is really important, and that only happens if dentists own a portion of that practice … so that’s going to be a real trend. We hope we see a lot more slowdown in acquisitions, but [ones that] really are driving proper growth and support. I think practices deserve that support they’ve been promised. The industry is forced to now, but I still believe if the conditions open up, most practices or most groups will continue that level of organic growth focus, as they should, to be able to get the return required for their investors. Those are probably two things we’re going to see more and more of going forward.
Geith Kallas, DDS. CEO of Smile Maker’s Dental Center (Tysons Corner, Va.): The cost of capital and growth is cyclical, but on a longer cycle. From 2019 to 2021, money was free. There were 4% loans and 15x EBITDA multiples. You could buy a practice, do nothing and make money on arbitrage. From 2023 to 2026, debt is at 9.5% to 11% and multiples at 6x to 8x. De novos cost 40% more to build. Interest rates will come down to 6% to 7% eventually, and multiples will recover. There is still the structural consequence: The era of “buy any practice and grow” is over for now. Only operators who can create EBITDA, not just buy it, will survive. A number of DSOs that grew on cheap debt will go bankrupt in the next 18 months.
Hamza Asumah, MD. Director of Operations for Juniper Services (Sparks, Nev.): We have to understand exactly what the interest rates are now, and what that means for small DSOs, for medium-sized and for larger DSOs. Who is at a good place to be able to really leverage some of these things? That’s going to be very important because when interest rates were close to 0% between 2019 and 2021, people were buying practices at 12x-13x multiples. Now, interest rates are 4% to 4.5%, which is really high, so nobody’s willing to buy practices at that. So, the way those deals are structured is going to definitely change. I don’t see them slowing down, it’s just how they’re structured … The quality of what you acquire is going to be very important. How easy is it for that acquisition to be integrated? That’s where most, especially smaller DSOs have struggled. You acquire the practice, but integrating them into your infrastructure and leveraging that piece is what is going to be important.
Stef Simich. Director, People Development of Lone Peak Dental Group (Denver): One problem dentistry is still working to solve is how to consistently deliver both operational excellence and a truly human-centered patient experience. We’ve made incredible progress in technology, systems and access, but the experience can still vary more than it should. That gap isn’t about a lack of tools — it’s about alignment in how we implement, train and show up every day. The opportunity ahead is creating systems and cultures that scale consistency while still feeling personal. The organizations that get that balance right will shape the future of dentistry.
Ian McNickle. Co-founder and CEO of ICON Dental Partners (Camas, Wash.): It is both interesting and encouraging to see groups securing growth capital via different methods lately. As we all know, there has been a slowdown with exits and investments for a while, but the dam has to break at some point. There are many investor-backed groups that will want to either sell or recapitalize sooner rather than later.
This slowdown has caused most groups to really focus on improving operations with a focus on revenue cycle management and improving cash flow. These improvements should result in balance sheets showing less debt over time, which strengthens a group’s ability to secure additional capital and continue to grow.
James Jones. CEO of Cal Dental USA (Los Angeles): I think we’ll see more affiliation models, strategic partnerships and MSOs that empower independent dentists to grow while keeping their identity. We’ll see less of the traditional “buy everything” mentality. The future belongs to organizations that can offer options, create value and meet doctors where they are.
For us, the question is no longer, “Are you a DSO or an MSO?” The question is, “How much value can you create for the doctors you serve?” I believe that’s where this industry is headed.
At the Becker's 5th Annual Future of Dentistry Roundtable, taking place September 14-15 in Chicago, dental leaders and executives will gain insights into emerging technologies, practice growth strategies and the evolving landscape of dental care delivery, with a focus on innovation, patient experience and operational excellence. Apply for complimentary registration now.
