Increasing DSO competition and operating costs, stagnant reimbursements and staffing shortages are among some of the greatest challenges facing dental practices today.
See how each issue is affecting dental offices and practitioners in 2023:
DSO competition
The number of dentists affiliated with DSOs has increased from 10.4 percent in 2019 to 13 percent in 2023, according to data from the American Dental Association. Dentists who have been out of dental school for less than 10 years are also more likely to be affiliated with a DSO. Challenges in the industry such as student debt are a large driving force behind this trend.
Barry Lyon, DDS, a chief dental officer for the division of orthodontics and pediatric dentistry at Sarasota, Fla.-based DSO Dental Care Alliance, told Becker's he expects DSO growth to continue because of student debt pressure and DSOs being viewed as low-risk investments by private equity firms.
Stagnant reimbursements
Dentists continue to see payer reimbursements as a major roadblock in the industry. An August 2022 poll by the ADA's Health Policy Institute found insurance reimbursement rates have remained stagnant for dentists despite rising operating costs. Nearly 60 percent of dentists indicated that rates remained stagnant, while 25 percent indicated their rates decreased and only 7 percent of dentists reported an increase in the last year.
Staffing shortages
Staffing shortages exacerbated by the COVID-19 pandemic continue to plague the industry, with dental assistants, hygienists, dentists and administrative staff shown recently to be mostly "extremely" or "very" challenging to recruit.
New ADA research found that for dental assistants and hygienists specifically, insufficient pay and negative workplace culture were the top reasons that led people in these roles to leave the industry. Furthermore, 31.4 percent of dental hygienists and 33.7 percent of dental assistants are expecting to retire within the next five years.
Dental leaders are looking for ways to attract and retain talent, investing in continuing education and training opportunities for staff and fostering a positive work culture at their companies.
Additionally, there are several pieces of federal legislation being considered to help alleviate workforce shortages, including the Action for Dental Health Act, the Restoring America's Health Care Workforce and Readiness Act and the Resident Education Deferred Interest Act.
Rising costs
Stagnant reimbursements and student debt are becoming more of a burden as operating expenses continue to rise. August data from the ADA shows that dental practice expenses rose higher than revenue in 2022, and partially led the average net income for general dentists in private practice to decline by 7 percent in 2022.
Median annual practice expenses for general practitioner owners were $540,928 between 2013 and 2017. That number hit $582,730 between 2018 and 2022, a 7.7 percent increase.
The median annual practice revenue for general practitioner owners was $741,195 between 2013 and 2017. That number rose to $757,549 between 2018 and 2022, a 2.2 percent increase.