Private equity has played a major role in the dental industry over the past few years, with more private equity-backed DSOs and other dental organizations popping up across the U.S.
Here is what five dentists recently told Becker's about how they anticipate private equity and DSOs affecting the dental sector in the future as well as considerations dentists should make when deciding if joining a DSO is for them.
Note: Responses were lightly edited for clarity and length.
Deric Ikuta, DDS. Dentist of Ikuta Dental Health Center (Reedley, Calif.): DSOs have had a huge impact in the dental field. One of their biggest impacts is driving consolidation of the dental industry. Cost of ownership has been increasing because of labor costs, buying new technology, equipment/supply costs and insurance reimbursements not keeping up with inflation. Combine that with the debt load of new graduates, the percentage of dentists that own a practice is declining every year. It is becoming harder to sustain a solo practice, and when they go to sell, oftentimes a DSO will give the most compelling offer and consolidate their practice into their portfolio.
Robert Trager, DDS. Dentist at JFK Airport (New York City): My outlook on how DSOs affect dentistry now and in the future is that of a perspective of a solo practitioner, which I am. The DSOs will survive and proliferate as long as there is available private equity funding and anticipated decrease in the interest rates. The outlook for the young providers is that if they ever want to open up their own practice or to associate, they will have no or little skills in practice management, financing, marketing and devising their own treatment plans. They will not possibly know where to open their own office or to associate with another office. There will be a generation of skilled practitioners who have relied on AI and treatment plans that have been provided for them without their input. They will need to learn all of this in order to survive.
Emily Letran, DDS. CEO of Sea Breeze Dental (Huntington Beach, Calif.): For me, DSOs are a business model that has been around for a long time, the model of group practice. The main difference, and one of the reasons this model has risen up, is centralized management and a very practical approach that is metrics driven. The DSO model has grown significantly because it is a working model. Going forward, I expect more group practices to form to cater to the patients' needs of efficiency and availability, such as group practices offering longer hours of operation.
Owen Waldman, DMD. Waldman Dental Group (Scottsdale, Ariz.): If the number of solo dentists continues to decline, dentistry will continue to look more and more like medicine, kind of how it's already started to — big groups, less personal, more corporate structure — but solo private practices will still continue to exist and thrive. Dentistry is a personal business and in the way that there are "concierge" medical offices that patients seek out, this is what solo dental offices will continue to be. For those dentists who always strive to go the extra mile for their patients and give that outstanding individualized quality care, there will always be patients seeking out that type of care in a more personal setting.
Alan Wasserman, DDS (Boulder, Colo.): Frankly, I think [the future] will be gray. DSOs and private equity firms will gain more influence without improving dental health at all. All that will be improved is their bottom line. Secondly, the rise of the dental therapist will also affect dentistry's future. It is said that they will give access to low income people who can't afford to see a real dentist, but dental therapists will only increase substandard care. DSOs will attempt to hire them so they can increase their output and profits. Allegedly, they will acquire the skills to place fillings and extract teeth in a quarter of the time it takes to train a dentist. Seriously? Years ago it became fashionable to educate a dentist in three years. These dentists would receive a break on their expenses if they practiced in a needy area. We know how that went. They left as soon as they could. There isn't enough respect for what we do unless you have a bad toothache.