Several DSO leaders spoke with Becker's this year about topics such as economic challenges, recruitment, patient care and technology.
Here is what eight execs told us in 2023:
The trend that could accelerate DSO consolidation
Kristen Cusack. CEO of Phase 1 Equity (Southlake, Texas): Our primary goal is to level the playing field for doctors in the world of private equity. We made it our mission to provide a better option for doctors in the face of consolidation, in which they can stay in control of their practices and retain the majority of the equity in their businesses, while benefiting from the resources generally reserved for traditional DSOs. We will continue to prioritize educating doctors on how to maximize the value of their practices while recruiting a network of other, best-in-class, like-minded orthodontists and pediatric dentists to collaborate with and learn from.
Prioritizing people: How 1 dental group prepares for 2024 success
Mike Friguletto. CEO of Beacon Oral Specialists (Dallas): One of the things I look at is the housing market, and the reason I pay close attention to that is because it is a good indicator of what markets and communities are growing in population. There is optimism that a real estate developer will be able to sell those properties, which means that there are people with jobs who can afford to buy those houses. To me, that's a very good indicator of if the economy is coming back. If we're looking at expanding in that community, that is a good sign because others are investing in it as well. … I’m also watching new car sales, house sales and unemployment. Sales of durable goods, like cars, is a good way to know if the economy is coming back.
How DSO strategy might change on multiple fronts in 2024, per 1 CEO
Greg White, DMD. President and CEO of PepperPointe Partnerships (Lexington, Ky.): Access to capital being more limited, rising interest rates and increased patience from the doctor population are all impacting growth. As a result of that, I'm anticipating that there will be fewer deals, but I think private-equity-backed DSO will be more selective in their transactions in the coming year, with finances being the primary determinant of that. They're going to look for bigger deals and fewer deals. For us, we're going to be much more selective in terms of purpose. I want to enter into relationships and help unite these doctors together that care about the things we care about. I spent nearly 30 years as an orthodontist and I know what it's like to put blood, sweat and tears into building a practice.
How Smile Doctors is empowering its doctors
J. Hedrick. CEO of Smile Doctors (Dallas): We want, first and foremost, cultural alignment and doctors who are committed to providing the best patient experience. At the end of the day, we believe in the ultimate patient experience. They can be doctors who have already proven that they can build a successful practice. It de-risks it for us and them because they've already done it. Now they can do it without having to hire the contractor, find the site or negotiate the lease. All the things that are a headache, we can take off their plate. We also want to give a path for orthodontists who come out of school with a lot of debt and do not have the financial resources to go buy an existing practice. It lowers that barrier to entry for them. We do want them to work with us for 12-18 months before we do that because for us it is about that cultural alignment and building the organization with the best practitioners in the U.S.
DSO 'buying spree' could hit a wall in 2024, 1 exec says
Josh Davis. Chief Development Officer at Imagen Dental Partners (Scottsdale, Ariz.): I've got a short window of time that I've been in the dental industry, so the biggest thing I think was COVID-19. Pre-COVID, doctor sentiment was generally different around independence versus partnership. I think that swung significantly in 2020. Folks faced with potentially losing their life's work rethought the value of hedging their business and bringing in some professional management to help them take some of the chips off the table in terms of the value that they had created in their business to date. That's probably the single biggest thing. Then, you saw that significant ramp up in 2021 through 2022, the buying spree, and now folks are sort of retracting and trying to figure out, "How do we reorganize and rejigger this thing so that we can deliver our own value proposition and continue to grow?" So I think it's just been the evolution of the mindset of doctors.
Why AI in dentistry excites one DSO exec
Akeyla Brown, DDS. Clinical Director for Diversity, Equity and Inclusion and Community Engagement Max Surgical Specialty Management (Hackensack, N.J.): Artificial intelligence in dentistry is really cool and I love to see those changes. That is something I am definitely keeping my eyes on. What I'm really excited to see in terms of artificial intelligence is that we've started to get better at placing and making guides for implants. We don't really have systems for that yet, so seeing that change is going to be really exciting. I love how artificial intelligence has helped streamline patient care. Making things faster for patients and making patients happy is always a plus, so that's something I'm following and something I am really interested in.
What dental practices need to survive a recession
Barry Lyon, DDS. Chief Dental Officer for the Division of Orthodontics and Pediatric Dentistry at Dental Care Alliance (Sarasota, Fla.): While clearly a challenge, there are steps dental practices can take to help offset a downturn in the economy. The first thing practice owners should do is take a deep dive into their key performance indicators. Can your practice operate more efficiently? Are the operational costs higher than necessary? Is the revenue cycle being managed well? Can the practice operate with less staff? Are treatment plans presented with an emphasis on patient benefit instead of cost? The proactive practice is better prepared to ride out a faltering economy.
Pacific Dental Services to surpass 1,000 offices in 2023: Q&A with CEO Stephen Thorne
Stephen Thorne IV. Founder and CEO of Pacific Dental Services (Irvine, Calif.): One of the trends I'm closely following is the shift towards a more predictive and preventive approach in dentistry. There is growing awareness about the Mouth-Body Connection, where people are realizing that oral health is closely linked to overall health. CMS's inclusion of medically necessary dental services in Medicare plans and the growing pull from Medicare Advantage plans demonstrate the increasing recognition of the importance of oral health in overall healthcare. I call this the convergence era of dentistry, where the medical and dental fields are collaborating more closely to provide better, more efficient care.