Orthodontist and entrepreneur with nearly 30 years of experience provides insight on the rapidly changing dental landscape.
Dr. Greg White, President and CEO of PepperPointe Partnerships and orthodontist with nearly 30 years of experience, recently released an article sharing his insight on the state of the dental industry. In this article, Dr. White discusses what led to the growth of dental service organizations (DSOs), private equity's influence on dentistry, and his predictions for the future.
Within the past five years, practicing dentists affiliated with DSOs increased by nearly 50%, while the top DSOs grew an average of 145%.
“Some of the cash flow that the doctor owner previously took in profits is used by the DSO to support the administrative work of the DSO platform, but most of the profits are reaped by the owners of the DSO, which is predominantly owned by its founders and the PE investors; the doctors are only small stakeholders,” said Dr. White. “The DSO at this point is taking the lion’s share of the profits that the doctor once received. But, make no mistake, the doctors are still doing all the work and generating all of the production.”
The article states what Dr. White sees as the real concern with private equity’s entrance into the dental space: its impact on the continuity of patient care. As DSO employees (and without true ownership in the practice and its assets), doctors are not committed to the practice and communities leading to a high turnover rate and inconsistent patient care.
“If a doctor does not own the non-clinical assets of the practice — accounts receivable, leases, and the furniture fixtures, and equipment (FFE) — and control the profitability of the practice, the likelihood of that doctor having the authority and ability to invest into the community diminishes significantly,” said Dr. White. “Without true ownership, the ability to allocate resources, and commit to the community in any meaningful way is curtailed, or even derailed.”
The article sheds light on the ever-changing dental landscape and provides practicing doctor owners with a unique perspective for a better future.
Access the full article here.
