Dental Practices
Industry Profile Report
Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters
Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.
Call Preparation Call Prep Questions, Industry Terms, and Weblinks.
Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.
Industry Profile Excerpts
Industry Overview
The 122,700 dental practices in the US are in the business of providing “oral health,” including hygiene or preventative care, restorative treatments, and oral surgery. 78% of dentists are in general dentistry, while orthodontists represent 5% and oral surgeons and pediatric dentists each represent 4%. The rest are specialty practices, such endodontists or periodontists. About half of dentists are in solo practices.
Weak Economy Lowers Demand
Demand for dental services had been thought to be “recession-proof,” but the past recession and recent pandemic saw a drop in dental appointments and billings.
New Treatment Technologies
Technological advances continue to increase quality, enhance patient comfort, and speed the delivery of dental treatments.
Industry size & Structure
The average dental practice employs about 8-9 workers and generates about $1 million in annual revenue.
- There are about 122,700 dental practices in the US that employ 1,027,000 workers and generate annual revenue of $158 billion.
- Dentists must be licensed by their State to practice. This requires a bachelor's degree, 4 years of dental school, and passing written and practical exams. Specialty licenses typically require another 2-4 years of postgraduate education and up to 2 years of a residency program. These licensing requirements create a significant barrier to entry for the industry.
- 78% of dentists are in general dentistry. Orthodontists represent 5% and oral surgeons and pediatric dentists each represent 4%, with the rest in other specialties (endodontists, periodontists, etc.).
- The average practice has 1-2 dentists and about 2 dental hygienists and 3 dental assistants for each dentist.
Industry Forecast
Dental Practices Industry Growth
Recent Developments
Nov 3, 2024 - Most Dentists Work In Single-Location Dental Practices
- Three-quarters of all dentists in the US work in a dental practice that only has one location, according to the American Dental Association. About 40% of dentists work in a practice that is one location with multiple dentists and 35% of dentists work in a single location, solo dentist. Working in a practice that is between 50 and 99 locations is the least common practice size, with 2% of dentists.
- Approximately one-third of dental assistants (33.7%) and dental hygienists (31.4%) expect to retire in five years or less, according to a 2024 report from the Association of Dental Support Organizations. Vacant positions in dental assisting and dental hygiene are already reducing dental practice capacity by an estimated 10% nationally. “Enrollment in dental assisting programs has been trending downward since 2015, and the pandemic had a negative impact on dental hygiene program enrollment,” according to the report. “While there has been some recovery of enrollment in dental hygiene programs, data suggest that dental assisting program enrollment will not rebound in the near future. As a result, workforce shortages are likely to remain an issue for years to come.”
- Earnings before interest, taxes, depreciation, and amortization (EBITDA) is the primary factor that influences practice value from the perspective of dental support organizations (DSO) and private equity buyers, according to Dental Economics. Practices with EBITDA of $1 to $5 million are acquisition targets for both financials and strategic buyers, and therefore tend to trade for the highest multiples. Demand and valuation are typically adversely impacted when Medicaid exposure reaches over 20% (pediatric dental practices are the exception to this rule).
- Dental practice employment and average wages for nonsupervisory employees increased slightly during the first nine months of 2024, according to the US Bureau of Labor Statistics (BLS). Dental Practices slightly raised their prices during the first nine months of 2024, according to the BLS. Dental practice sales are projected to grow at a compound annual growth rate of 4.4% from 2021 to 2031, faster than the growth of the overall economy, according to the Centers for Medicare and Medicaid Services.
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