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 123,100 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 6-7 workers and generates about $1 million in annual revenue.

    • There are about 123,100 dental practices in the US that employ 1,014,900 workers and generate annual revenue of $152 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
                              Source: Vertical IQ and Inforum

                              Recent Developments

                              May 1, 2023 - President Biden Ends Covid-19 National Emergency Early
                              • President Biden signed in April a congressional resolution to bring the US national emergency to respond to the COVID-19 pandemic to a close after three years — weeks before it was set to expire alongside a separate public health emergency. The US Congress used The Consolidated Appropriations Act, 2023, to extend many telehealth flexibilities through December 31, 2024, however. More Medicare enrollees got care via telehealth during the public health emergency. The service is now no longer limited to those living in rural areas. Telehealth visits can be conducted at home, rather than a health care facility. Beneficiaries can also use smartphones and receive a wider array of services via telehealth. Dental conditions treated via telehealth visits include easing the pain of a toothache, evaluating gums to treat possible gum disease, and starting the process to repair a broken tooth.
                              • The US Department of Health and Human Services warned of two growing ransomware threats that could impact the dental community. Royal Ransomware and BlackCat Ransomware are two of the more recent sophisticated ransomware threats targeting the health care sector, according to the department's Health Sector Cybersecurity Coordination Center (HSCCC). Royal appears to be a private group without any affiliates, maintaining financial motivation as their goal, according to the HSCCC. Ransom demands range from $250,000 to over $2 million. BlackCat is focused on the US and includes healthcare. “We do not attack state medical institutions, ambulances, hospitals," the BlackCat group has said. "This rule does not apply to pharmaceutical companies, private clinics.” BlackCat ransom demands have been as high as $1.5 million. Many cybercriminal groups have broken promises not to attack healthcare targets in the past, according to the HSCCC.
                              • High inflation could increase private equity interest in dentistry and have a downward impact on the values of dental practices, according to Kyle Francis, president and founder of Professional Transition Strategies. Some of the first items on which inflation has an impact are clinical supplies and laboratory costs. These are typically followed by an increase in staff costs. It is easier for dentists who are primarily fee-for-service providers to increase patient fees as they undergo these changes. It is challenging, however, for in-network providers to do the same thing because they are beholden to how much an insurance contract is willing to pay for a procedure. Practices relying heavily on reimbursement from insurers may attract the attention of private equity organizations seeking to capitalize on a drop in practice value due to lagging reimbursement increases by insurers.
                              • More than 500 dental practices are adopting patient financing tools each month, according PYMNTS. There’s a need for such an offering because millions of Americans are forced to choose between paying out-of-pocket or declining essential care when facing dental expenses that are often unexpected, according to the payment analytics firm. Even patients with private dental insurance face coverage caps, which all but guarantee that any significant treatment will require a hefty out-of-pocket payment.
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