Just like any industry, the landscape of dentistry has always been changing and that’s not going to stop any time soon. Nevertheless, change is often scary. The uncertainty is stressful, even if most change ends up working out well.
One of the best things we can do to navigate a changing industry is to be involved and active in industry communities like Nifty Thrifty Dentists, Trapped in an OP, and Dental Hub 360. In those groups and others, we connect tens of thousands of dentists, dental professionals, dental consultants, and others.
A recent conversation focused on how dental practices are changing in the future. Specifically, Dr. Glenn Vo asked the Nifty Thrifty Dentists community what they thought the most common dental practice structure would be in twenty years. Over 130 people responded. Here are the three most common predictions from your peers.
A Sea of Dental Service Organizations, or DSOs
DSOs are popular buyers of practices today and it’s likely only going to get more popular over the next several years. This was the most popular response to the poll, with almost 80 responses predicting DSOs would be the most common dental practice in twenty years.
If you’re unfamiliar with DSOs, they are essentially corporations that allow non-dentists to own a practice. They can be very big“corporations too—some of the biggest DSOs own thousands of practices across the country. Generally, DSOs buy a practice from dentists who keep working for the practice with a contract of two to five years.
DSOs are popular buyers because they tend to pay high prices for practices. They don’t have student debt to service. They have large company budgets. And they have the ability to run large-scale marketing campaigns, buy supplies for cheaper costs, and enjoy additional economies of scale. DSOs are hard to compete with if you’re a solo practitioner or individual dentist looking to buy or run a practice.
A Big Percentage of Group Practices
Because solo practices will have a tough time competing, many predict solo practitioners will join forces to form larger group practices. This model is currently quite popular and they can better compete against DSOs because they have more volume than solo practices. Because group practices are owned by multiple dentists, it can be easier for newer dentists to join. Additionally, because all owners are dentists, there are fewer complexities needed in structuring the ownership. A group practice can be much more flexible than a DSO.
This prediction came in second, with 48 dental professionals believing this would be the most common dental practice in twenty years.
A Smaller Percentage of Solo Practices
Solo practices have been very common but many people reduct they will become less common. Only seven dental professionals predicted they will be the most common dental practice in twenty years.
For the reasons discussed with DSOs and group practices, solo practices will have a hard time staying competitive in many markets. And they will be hard to purchase by individual dentists. Startup practices might be easier for newer dentists, although they might have an even harder time competing with DSOs or larger group practices.
The changing landscape is not a bad thing.
Industries change over time and dentistry is no different. But that doesn’t mean the change needs to be a bad thing. Connect in the Facebook groups and consider all your options. Maybe you will end up selling to a DSO or forming a group practice. Or, maybe you will find another model that better fits your goals.
The businesses that adapt are the ones that end up sticking around and prospering, even after the industry change. Some practice owners would love to sell to a DSO. Doing so would give them two to five years of contract work to plan their next move.