HHS Secretary Robert F. Kennedy Jr.’s “Make America Healthy Again” plan could lead to certain advantages and disadvantages for DSOs, according to one executive.
Barry Lyon, DDS, is the dental director for Main Street Children’s Dentistry and Orthodontics and the chief clinical auditor for Dental Care Alliance. He recently connected with Becker’s to discuss how the initiative could affect DSOs.
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. The views expressed are those of Dr. Lyon and do not necessarily reflect those of Main Street Children’s Dentistry and Orthodontics or Dental Care Alliance.
This response was lightly edited for clarity and length.
Dr. Barry Lyon:
The plan by RFK Jr. to “make America healthy again” could be a double-edged sword for DSOs.
The elimination of fluoride from community water supplies would lead to an increase in healthcare costs of approximately $9.8 billion over 5 years and $19.4 billion over 10 years. As healthcare costs rise, patients will face increased out-of-pocket expenses for dental care, potentially leading to deferred treatment, which would impact DSO patient volume. On the other hand, private practices facing shrinking demand and rising costs may be more inclined to affiliate with DSOs for administrative support and economies of scale, leading to further industry consolidation.
“Make America Healthy Again” policy aims to simplify regulations and inspire market-driven solutions. As a result, DSOs could have less administrative incumbrance, which could enhance expansion. The promised tax cuts and lowered interest rates could free up capital and lead to more private practice affiliations.
Mr. Kennedy has publicly criticized what he considers “predatory” private equity behavior, particularly regarding consumers. The “Make America Healthy Again” report, casting light on private equity’s influence on healthcare, may lead to increased examination of DSOs. Private equity firms could be held liable for non-compliance of the healthcare companies in their portfolios, potentially leading to increased risk and requiring more thorough due diligence.
