Has the Pandemic Really Strengthened DSOs in the U.S. Dental Market?

In a recent article for Dental Tribune, Professional Transition Strategies Lead Broker Stanton Kensigner offered insight into the current state of dental service organizations (DSOs) amid the pandemic. When dental practices were forced to shut their doors back in March 2020, solo practitioners were scrambling to figure out their next move in an already-changing industry. “Never again will we have the same opportunity with this much private equity flooding the marketplace,” Kensigner said. Here’s what else we can learn.

A chance to expand

With a fluctuating patient base amid the pandemic, joining a DSO gives practices a chance to expand. DSOs are extending their reach to smaller, suburban communities with a critical shortage of general dentistry to include specialty care, such as comprehensive orthodontic services, oral surgery, dental implants, oral hygiene services and pediatric care. Patients these days are looking more toward the one-stop-shop model.

Growing alternative DSO models

“There is a different vibe out there compared with what we were dealing with two years ago,” Kensigner said. “It is about market conditions and changing models and there has been an influx of private equity.” Kensinger explained that the DSO model is diversifying, leading to the emergence of what he described as new and more dentist-focused DSOs, such as dental partnership organizations, and the pandemic has accentuated the process.

Leveling patient volumes

Unsurprisingly, DSOs have greater purchasing power and corporate structures, allowing them to pool and allocate key resources, such as staff, cash and personal protective equipment (PPE). What’s more, the pandemic gave older dentists permission to retire early due to increased health risks. As a result, DSOs have had a leg up getting back up to speed amid the pandemic due to purchasing power and more human resources.

The bottom line

“I think that COVID has just stressed so many good clinicians,” Kensigner concluded. “Many of these dentists were at a breaking point and they were burned out, and we are still talking to dentists today who are at that breaking point.” Which isn’t to say it’s all doom and gloom but rather an opportunity for independent dentists to consider if their next steps involve joining a DSO.

What’s next?

Contact the experts at Professional Transition Strategies to learn more ways to navigate your dental practice in an ever-changing industry.