Discussions about DSOs have been dominated by the idea that they are here to stay, and dentistry can learn a lot from the DSO trends in 2023 and beyond. Dental practice consolidation is gaining more ground in the industry, and the COVID-19 pandemic has further increased its momentum. This article outlines the reasons why we can expect to see continued growth for dso dental groups.
According to the American Dental Association’s Health Policy Institute, the percentage of solo owner/practitioners has been declining since 1999, dropping from 65% to 50.3% in 2019.
Additionally, there has been a 40% increase in the number of practicing dentists affiliated with a DSO since 2017, and a recent survey of dental professionals found that 7% of dentists are considering affiliating with a DSO or merging their practices due to the pandemic.
What’s Continuing to Drive Dental Practice Consolidation?
Here are some of the reasons why we’ll see continued growth for DSO in 2023:
Relief from the Burden of Practice Debt and Ownership
One of the primary drivers for consolidation is the increasing burden of debt and ownership on new and early career dentists. With rising fee structures, insurance challenges, and external threats like the pandemic, many dentists are feeling overwhelmed by the accumulated debt and related career pressures.
In fact, the number of dentists under 35 who own a practice has dropped from just under half in 2005 to 30.7% in 2019. DSOs provide a compelling solution to these challenges by relieving dentists of the burdensome business tasks of dentistry and providing access to cutting-edge technology that may be financially out of reach for new or early career dentists.
In summary, DSOs offer several advantages for dentists seeking consolidation:
- DSOs assume a significant portion of the business tasks associated with running a dental practice.
- DSOs grant access to advanced technology and specialized services
Investment, Acquisition, and Consolidation: The Growing Trend in Dentistry
Private equity firms have recognized the value of investing in the dental industry and growth of DSOs, leading to an acceleration in merger and acquisition trends across the industry. According to Brian Colao, Director of Dykema’s DSO Industry Group, dentistry has evolved from single, solo dentist-owned practices to DSOs, and private equity groups are buying up and acquiring offices, resulting in consolidation.
Founder of DSO Strategy, Roshan Parikh, DDS, MBA, agrees with the industry forecast that there are many opportunities in the acquisitions space, and this trend will continue. The investment appeal for DSOs remains strong, and due to the relatively quick reopening and recovery of dentistry along with changes in the tax law, Colao predicts that DSO market penetration, currently at 30-32%, will continue its march to 75-80% over the next decade.
Dental practices are also facing staffing shortages, particularly for dental hygienists, which may further drive consolidation and dental staffing solutions as patients return with pent-up demand for hygiene appointments.
Closing the Gap on Care Access with DSOs
A key motivation for many dentists is the desire to help people. DSOs offer a unique position to help dentists focus on patient care rather than dividing their attention among various business tasks. This patient-centric approach has a natural domino effect on the quality of care provided by a DSO:
- A more patient-centric treatment environment
- The ability to innovate around new dental technology without the burden of investment debt
- Less time spent on administrative and operational tasks, allowing clinicians to focus on patient care
DSOs also open new care access paths for under-resourced or underserved populations, thanks to their available capital. The benefits of DSOs include:
- Opportunity to provide dental care for Medicaid patients
- Close the access gap for millions of Americans living in rural areas that lack access to dental care
- Develop and utilize mobile dentistry teams in regions where dental care access is limited or non-existent
As the trends in dentistry shift toward DSOs, they remain well-positioned to continue to provide quality care access for patients while freeing dentists from the administrative burden of running a private practice.
Be On the Cutting-Edge for Your DSO in 2023
Looking to stay ahead of the curve and ride the anticipated growth of DSOs and dso technology in the dental industry? Look no further than Planet DDS. As the leader in providing solutions for DSOs, Planet DDS offers a range of proven cloud-based dental practice management and imaging solutions, including Denticon and Apteryx XVWeb Imaging, trusted by emerging, midsize, and large DSOs in today’s market.
The following resources will help you keep your finger-on-the-pulse of DSO trends and growth: