The introduction of private equity into dentistry has had a significant effect on the industry, driving growth while raising some concerns.
Geith Kallas, DDS, dentist and CEO of Smile Makers Dental Center, recently spoke with Becker's about the effects of private equity on the dental industry.
Editor's note: Responses have been lightly edited for clarity and length.
Question: How has private equity impacted the dental industry?
Dr. Geith Kallas: The U.S. dental industry has undergone significant transformation, largely influenced by private equity investment. This shift has been driven by various economic and market factors that have reshaped the landscape of dental care. Key growth drivers include economic prosperity, population growth and aging, increased focus on oral health and improved insurance coverage. Private equity firms have seized opportunities in the fragmented dental market through strategic mergers and acquisitions, consolidating individual and group practices.
This consolidation has led to several key outcomes:
- The creation of larger dental chains through acquisitions, improving operational efficiency and economies of scale.
- Enhanced growth by expanding access to dental care and reducing barriers for aspiring dentists.
- Increased accessibility through extended hours, additional locations and enhanced services, particularly in underserved areas.
- Standardization of procedures and the adoption of advanced technology.
- Recapitalization through capital injections, allowing for practice expansion and modernization.
Private equity investment has revolutionized the dental industry, making it more efficient, accessible and patient-centric. The focus has shifted toward delivering high-quality care with standardized procedures and modernized practices.
Q: Has private equity been a net positive or negative for dentistry?
GK: The influx of private equity investment in the dental industry has sparked significant debate, with opinions sharply divided on its effects. While some praise it as a transformative force, others express concerns about its influence. On one hand, proponents argue that private equity has brought much-needed capital, efficiency and standardization to the industry. On the other hand, critics worry about the prioritization of profits over patient care, the loss of autonomy for dentists, and potential compromises in treatment quality.
Positive impacts include increased accessibility, more efficient operations, standardized care, access to capital and professional management. Negative impacts include loss of autonomy, decreased personal interaction, overemphasis on production, higher costs and conflicts of interest. Neutral considerations include the evolving business model and regulatory challenges.
Ultimately, private equity's impact on dentistry depends on individual perspectives, experiences and values. While it has contributed to efficiency and growth, concerns about autonomy, personal interaction and potential conflicts of interest remain valid.