Dental professionals and executives can expect to see continued growth in affiliations and acquisitions by DSOs in the next decade, according to Barry Lyon, DDS.
Dr. Lyon is the chief dental officer for the division of orthodontics and pediatric dentistry at Sarasota, Fla.-based DSO Dental Care Alliance. He recently spoke with Becker's about what changes dental professionals can expect to see in the DSO field in 10 years.
Editor's note: This Q&A is part of a weekly series featuring Dr. Lyon focused on topics in the dental industry and DSO field. Responses were lightly edited for clarity and length.
Question: What are some of the key trends you've seen from DSOs since you entered the field?
Dr. Barry Lyon: In the late 90s when DSOs began affiliating with practices, private equity did not have the presence it has now. DSOs were growing by affiliating with individual practices. Once private equity began investing in DSOs, they were able to affiliate with larger practices and small groups with one or multiple owner-doctors. I think that trend will continue. We're also now seeing smaller DSOs being acquired by larger ones.
The number of doctors working for DSOs has increased significantly. In 2015, 7.4 percent of dentists worked for DSOs. In 2019, that figure was a little over 10 percent. That corresponds to a decline in solo practitioners. In 1999, 65 percent of dentists were solo practitioners. In 2019, it decreased to a little over 50 percent.
The use of technology has significantly increased since I entered the market. 3D imaging, scanners, clear aligner therapy, cloud-based practice management software, enhanced social media presence and improved SEO are now commonplace among DSOs.
Q: What do you think the DSO field will look like in 10 years?
BL: We're going to see strong DSO growth continue. Private equity sees DSOs as a fairly low-risk and highly profitable investment. Further, as long as student debt is in the $250,000-$300,000 range and graduating dentists are unwilling to increase their debt by opening up their own practices, they'll be seeking employment with DSOs. Those two factors alone will continue to support DSO growth. The American Dental Association predicts DSOs will experience a growth rate of nearly 100 percent between 2018 and 2025 and more than triple their current market share by 2035.
The global dental market was valued at $36 billion in 2021 and it's projected to grow from $39 billion in 2022 to $64 billion by 2029 with a compound annual growth rate of 7.4 percent. The forecast for DSO growth is extremely strong.
Q: Will there ever come a time when private practices do not exist?
BL: I think there will always be private practices in underserved or rural areas that are just not suitable for affiliation with a DSO, either because of their size, the capability to adequately recruit providers, or the ability to effectively manage the practice.
Q: What technology do you see DSOs using more of in the future?
BL: I think we're going to see continued use of 3D imaging, cloud-based practice management software, and scanners. Artificial intelligence will evolve into a useful tool for dentistry.
Q: Is it possible U.S.-based DSOs will expand into international markets?
BL: I think what might prevent DSOs from entering international markets would be regulatory requirements and the ability to manage offices in remote locations.
Q: Do you think there will be less apprehension among dental professionals about joining DSOs?
BL: I think we're already seeing less apprehension among dental professionals. DSOs' standards for patient care and business practices are high. The dentists I'm interviewing for positions appear to have no concerns about being employed by a DSO.