The Present and Future of Dentistry
Patient demands, external pressures, the DSO factor, and more
The dental industry's optimistic start to 2022 has given way to justifiable skepticism as a turbulent economy has compounded the ever-volatile effects of the COVID-19 pandemic. Whereas 64% of dentists who responded to a January 2022 American Dental Association (ADA) Health Policy Institute (HPI) monthly survey indicated that they felt very or somewhat confident in the recovery of the dental care sector during the next 6 months, only 52% of respondents indicated that they felt that way when the same survey was conducted again in July 2022.1 Those shrinking numbers were inversely proportional to the respondents' increasing levels of skepticism regarding the US economy in those same surveys, with 56% reporting that they were very or somewhat skeptical in January and 65% reporting that they were very or somewhat skeptical in July.1
When compared with their confidence in dental practices at large, dentists remain more confident about their own practices, however, with 61% of the respondents to the July survey saying that they were very or somewhat confident, and only 19% expressing skepticism.1 One takeaway from these numbers is that despite challenging external pressures, dentists mostly believe that with astute management, owning a practice should still be lucrative.
"Last year was so huge for dentistry in general," says Stephenie Goddard, CEO of Glidewell, which is believed to be the largest dental laboratory in the United States. "However, if you look at all of the reports coming out this year, monthly metrics are either flat or down from the same months last year. I think that everyone is waiting to see what happens next. Has that stagnation in dental been a result of increased travel as time has gone on with the pandemic, in which case we might expect an increase in dental visits now that summer is over? Or is a recession truly approaching, leading people to postpone dental care as they did in 2008? Dental professionals are watching and waiting, trying to prepare for what could happen next."
What Patients Want
Nearly every business is driven by its customers, and dentistry is no different. Meeting the needs and demands of patients is the overarching key to operating a successful practice, and those needs and demands continue to evolve. "Patients have different expectations of their dentists today than they did in the past, following the same trends that we are seeing across other consumer-oriented industries," says Lauren McDonough, DMD, vice president of practice owner development for Aspen Dental. "They want services available at convenient hours for their schedules, and as soon as they develop a desire or need, they want efficiency and ease throughout the entire experience—from online scheduling and a quick and seamless visit to paying their bill. At the same time, understandably, they want to preserve the quality of care. Patients are also receiving marketing and education from more platforms and have more options at their fingertips than ever before. All of these external factors impact the pressures that dentists and their teams feel to meet patients where they are and deliver quality care."
The convenience factor also extends to a desire to receive more services through a single provider. "We are observing a shift in patient behavior as the demand for ‘one-stop care' increases," says Mark Greenstein, executive vice president and chief growth officer for Heartland Dental. "Many patients have become accustomed to having access to multiple disciplines within one facility in medicine, and they want the same seamless experience with fewer re-appointments for their dental care. Although specialists will continue to be critical in overall dental health, patients are benefitting from dentists with enhanced skills who can provide more convenient access to necessary treatments."
Nonetheless, the demand for convenience and efficiency is not accompanied by an acceptance of any compromise in quality. Patients expect to have access to the highest level of care. "The era of patient visits being mostly limited to prophylaxis and the occasional filling is over," says George Tysowsky, DDS, MPH, senior vice president of technology for Ivoclar. "Patients are much more knowledgeable today. They are sophisticated. They are demanding quality, an overall experience, and participation in the management of their total healthcare. Dental practitioners need to step up and provide those types of avenues."
Taking advantage of advances in technology, including the use of software to streamline the patient experience, digital imaging, CAD/CAM, and more, can help practitioners meet patients' demands. "Our lives are run by technology, and patients expect that in the dental office," Goddard says. "One of the best ways to differentiate your business is by investing in tools that will help provide the faster, better, more reliable, and more cost-effective services that customers demand."
According to Tysowsky, staying ahead of the game, rather than just keeping pace with patient demand, is critical. "Dental professionals need to continuously evolve and focus on patient-centricity," he says. "Do not ever take a patient for granted just because your patient volume is strong at the time."
Pressures on Practices
Providing patients with what they want requires resources of course, including adequate staffing. In the aforementioned HPI monthly survey, in July 2022, 34% of the responding dentists cited trouble filling vacant staff positions as a factor preventing their appointment schedules from reaching 100%.1 Staffing shortages, particularly among dental hygienists, have been well-documented during the past 2 years.2,3 The HPI survey results for July 2022 indicate that of the responding dentists 36% were currently or recently recruiting dental hygienists, 40% were recruiting dental assistants, and 29% were recruiting administrative staff.1 One way to attract and retain staff is to increase financial compensation packages. However, Greenstein affirms that Heartland Dental's leadership development opportunities also help to attract more candidates. "There is no diminishing the import of having a great environment for them to work in where their development is prioritized," he says.
Getting sufficiently reimbursed for services rendered is perhaps an even more significant challenge. HPI's 2020 Annual Dental Industry Report noted a 6% decrease in dental reimbursement rates across dental practices, procedures, and carriers between 2013 and 2017.4 "Change on the insurance reimbursement front is desperately needed," Greenstein says. "The differences between dental insurance and medical insurance confuse patients and do not serve them well from a total care perspective. Maximums of $1,500 to $2,000 per year are incongruent with the links between oral health and systemic health. Reimbursement models have not changed in more than 20 years, which is also incongruent in economic terms. One thing that we all can agree on is that dentistry has changed during the past 20 years, becoming far more digital and far more comprehensive. Insurance companies have a lot of work to do to catch up; however, many payers actually reduced fees in recent years, taking them back to pre-2010 levels. It is becoming economically untenable, especially for solo practitioners."
In recent years, offering membership plans and other alternative payment models has been a trend, and fee-for-service models remain an option, but those are often unable to meet the needs of many patients. "More and more dentists are struggling because insurance reimbursement is not keeping up with inflation," McDonough says. "As a result, more dentists are going out of network because they do not have the support to improve efficiencies to stay in network with these plans. Some dentists are turning to other options to close the gap, such as membership strategies. At the same time, many providers are offering services outside of what insurance companies currently reimburse for dentistry, such as neuromodulators, sleep medicine appliances, etc."
If insurance reimbursements ever increase in a meaningful way or the models ever evolve in a positive direction, patients are likely to be the drivers. "People are very cost-conscious, and dental insurance is considered a right or a privilege in so many different segments now, including corporate employees, government workers, schoolteachers, unions, and more," Tysowsky says. "That expectation will continue to grow."
Of course, insurance reimbursement models cannot be discussed without mentioning the current push toward healthcare integration. The ADA asserts that dental and general medical care coverage can be meaningfully integrated through better health policy to motivate health equity.5 Greenstein notes that Heartland-supported practices increasingly are connecting with nearby urgent care or primary care facilities and that a few hospital systems have approached the company about co-locating dental offices with outpatient primary care facilities. "We are engaging more and more the connection between oral health and overall health," Greenstein says, "so we are exploring more opportunities to make oral care easily accessible. We will continue to invest and march forward to support that link. Our supported dentists are working very hard to ensure that they are communicating with primary care physicians to enable comprehensive care. Oral care and primary care remain quite different. I don't know if they will ever coexist in the same space, but creating connections between dentists and primary care physicians to effectively share information is a step in the right direction to support overall health."
DSOs and Private Practices
Amid all of these other factors is a continuing movement toward consolidation as dental support organizations (DSOs) expand their market share. Many practices are garnering five to nine times their earnings before interest, taxes, depreciation, and amortization in these acquisitions.6 "Current data trends and future predictive data indicate that in the next 5 to 10 years DSOs will have more market share than private practices," Goddard says. "As a private practitioner, competing with DSOs will be difficult if only DSOs have access to special pricing. Private practices will need to differentiate themselves in other ways, such as by offering a concierge type of service or by accessing pricing options that are offered through entities such as group purchasing organizations. This situation is not unique to dentistry. Consolidation has occurred in many different industries, so there are lessons to be learned there."
Greenstein echoes that assessment. "There will always be a role for the solo practitioner, especially for certain types of procedures or specialties," he says. "However, the majority of dental practices will be in a DSO model, just like 80% to 85% of the medical practices today are associated with large corporations and hospital systems. It may take some time to reach that number, but the value proposition for doctors, teams, and their patients is even more compelling for dentists given the support, education, and economic advantages. We will probably cross the 50% mark in the next 10 years."
Heartland Dental supports practices in 38 states as well as in Washington, DC, and grew by 40% in 2021. "The DSO model of providing nonclinical support services to dentists continues to gain momentum and traction," Greenstein says. "Dentists across the country are seeking out these services. They want easier access to CE, they want improved work-life balance, and they want help recruiting staff members."
Indeed, attitudes have evolved, and increasingly, dentists are viewing the DSO route as a viable option.6,7 DSOs offer attractive advantages, particularly for newer graduates. "They provide a steady revenue base, experience, and training," Tysowsky says.
McDonough elaborates on the desires of today's graduates. "We are seeing new dental school graduates express a desire for more mentorship and career development opportunities, and DSOs are the ones with the infrastructure to provide that kind of support," she says. "In addition, this generation continues to demonstrate a desire to improve social issues through their work. A DSO can be more attractive to these dentists because it reaches the underserved and expands access to care, so they can feel like they are a part of something bigger every day. At the same time, DSOs have the infrastructure to negotiate better prices with laboratories and source technology and supplies more efficiently through larger-scale partnerships with dental product providers."
Consolidation in the dental industry is not exclusive to clinical practices. Dental laboratories are consolidating at a similarly rapid pace. The US Bureau of Labor Statistics reported that there were 34,150 employed dental technicians in 2021,8 and the two largest laboratory companies in the United States—Glidewell and National Dentex Labs (NDX)—employ nearly 10,000 people, albeit not all technicians, combined. "Mass consolidation will continue with technology driving it," Goddard says. "A smaller laboratory may struggle more to afford all the equipment necessary to meet the needs of today's dentists. There are currently between 5,000 and 6,000 laboratories in the United States, and over the next 10 years, I expect that we will see further consolidation. I doubt that we will ever reach a point of only having a few large labs to choose from because there will always a place for small laboratories. Dentists will always need services such as custom shade appointments, concierge services, etc, and larger laboratories are not positioned to offer those levels of service."
Rise to the Challenge
In a rapidly evolving industry with so many challenges yet so much promise, the importance of having a strong business acumen is magnified perhaps more than ever. Simply providing exceptional dentistry is often not enough. "With staff wages on the rise and reimbursement for services staying relatively flat, margins have been increasingly tight for dental practices," McDonough says. "Key strategies for addressing this tension include having a strong infrastructure for patient scheduling, implementing accountability protocols to maintain patient satisfaction, and making concerted efforts to retain staff and reduce turnover."
Despite the challenges, a well-run dental practice should still be extremely lucrative. "This is an exciting time," Tysowsky says. "Dentistry is on a very fast track. What is critical is for all dental professionals to avoid stagnation and focus on expanding their clinical skills, technology, services, and ability to communicate with patients."
1. ADA Health Policy Institute. Economic outlook and emerging issues in dentistry - state dashboard. ADA website. https://www.ada.org/resources/research/health-policy-institute/economic-outlook-and-emerging-issues/eoeid-tableau-dashboard. Accessed September 2, 2022.
2. Morrissey RW, Gurenlian JR, Estrich CG, et al. Employment patterns of dental hygienists in the United States during the COVID-19 pandemic: an update. J Dent Hyg. 2022;96(1):27-33.
3. Harrison B. HPI: Dental office employment declined in March. ADA News. https://www.ada.org/publications/ada-news/2022/april/hpi-dental-office-employment-declined-in-march. Published April 10, 2022. Accessed September 2, 2022.
4. Varadarajan S. Dental benefits and reimbursements. American Association of Endodontists website. https://www.aae.org/specialty/communique/dental-benefits-and-reimbursements/. Published July 6, 2021. Accessed September 2, 2022.
5. Vujicic M, Fosse C. Time for dental care to be considered essential in US health care policy. AMA J Ethics. 2022;24(1):E57-E63.
6. Fialkoff S. DSOs: selling your practice isn't a game of chance. Inside Dentistry. 2022;18(1):14-21.
7. Mazda J. Trends in dentistry: statistics and opinions as the profession embarks on a new year. Inside Dentistry. 2019;15(1):14-24.
8. Occupational employment and wages, May 2021: 51-9081 dental laboratory technicians. U.S. Bureau of Labor Statistics website. https://www.bls.gov/oes/current/oes519081.htm. Updated March 31, 2022. Accessed August 22, 2022.