More dental practice consolidation, dentist seeking autonomy in DSO partnerships, and the integration of medical and dental providers: These are the trends dental professionals expect to see this year.
These six dental industry leaders recently connected with Becker's to share their big predictions for 2024 in the dental space.
Note: Responses were lightly edited for clarity and length.
Question: What is your big prediction(s) for dentistry/the dental industry in 2024?
Richard Celko, DMD. Chief Dental Officer of University of Pittsburgh Medical Center Health Plan: My prediction for dentistry would be for more integration of various licensed healthcare and oral health providers working together, either in co-locations such as pediatric dentists and pediatricians (in the same offices or clinic) or in close proximity to each other. I think there will be an expansion of practice scopes that permit public health dental hygiene practitioners to provide services not only in shortage areas but also in areas of need that are not being done by practitioners who do not participate in certain plans such as Medicaid. I see consolidation of solo and group practices either through merger and acquisition by DSOs continuing, as well as extensions into underserved areas by dental schools and federally qualified health centers or rural health clinics.
Kristen Cusack. CEO of Phase 1 Equity (Southlake, Texas): First is accelerated consolidation. After the almost 50% decline in deal volume in 2023, there is a lot of dry powder, and we expect investment money to start flowing again in 2024. This is particularly apparent in orthodontics and pediatric dentistry, which are very attractive to investors due to their operating margins and resiliency. At the same time, doctors at solo and group practices are looking for alternatives to the traditional DSO model. We expect smaller, specialty-focused platforms to be increasingly attractive to doctors and investors in 2024. Additionally, we consistently hear doctors express concern about giving up autonomy and decision-making if they decide to join a PE-backed DSO or MSO. We expect these conversations to dominate the consolidation landscape in 2024, as doctors seek platforms that enable ongoing autonomy. Doctors will continue to make autonomy a focal point of their decisions in 2024.
Richard Huot, DDS. CEO of Beachside Dental Consultants (Vero Beach, Fla.): For large DSOs that are adequately funded through private equity or other sources of cash, there will be significant opportunities to continue buying existing practices or start de novo practices. There may be opportunities for mergers and/or acquisitions of small- to medium-size DSOs to add to their portfolio of dental practices, especially in geographic areas that are thriving and more resistant to recession. For smaller DSOs, the cost of money will be a significant factor in continuing to expand their portfolio of dental practices, and there may be a move to internal financing on an installment basis, if practice owners get favorable interest rates of lending.
Mick Janness. CEO of Oakpoint (Raleigh, N.C.): Platform groups located in fast-growing metropolitan areas who have shown entry-price discipline will garner the most attention as the consolidation wave continues.
Jennifer Pearce. CEO and Lead Executive Coach of Prosperity Dental Solutions (Dallas): Dentists need to decide, for themselves, their business models, or it will be decided for them. Understanding this is pivotal in 2024.
Holli Perez. Chief Marketing Officer of DirectDental (San Diego): One of my big predictions is that DSOs are going to continue to have massive growth, especially since 33% of dentists plan to retire in the next six years.