Shifting DSO acquisition strategy, evolving supplier strategy and employees leaving the industry are three trends that one CEO has seen in 2023 and expects to spill over into next year.
Greg White, DMD, president and CEO of Lexington, Ky.-based PepperPointe Partnerships, connected with Becker's to discuss the biggest challenges and trends in the dental industry he foresees heading into 2024.
Editor's note: Responses have been lightly edited for clarity and length.
Question: How do you think economic challenges will impact growth overall in the DSO industry?
Dr. Greg White: 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.
Q: What are the top trends in dentistry that you are following now?
GW: There are three different things. One is that there's a definite shift in the supplier strategy from sales to service. I was talking to one of the largest supply companies recently and they said that they are focusing on the larger groups with hundreds of locations and won’t need an entire sales team anymore. The independent practitioner is going to have to make a determination about who they're going to team up with because this idea of being the lone survivor is not going to go well for them. Two is a shift in dental personnel not leaving for another dental office but leaving the industry altogether, which is something we've not encountered before. That decreases the number of personnel that we have available to us and it will also drive inflation on labor, which will have a direct impact on the profitability of the company. Third is that there is less discretionary spending now among the consumer and that is going to lead to a slowdown in same-store growth opportunities, so the DSOs are going to have to get much more creative in a lot of ways in order to capture those patients.