Group Dentistry State of the Union: Past Trends and Future Outlook

The New Year is in full swing now. As group practice owners and entrepreneurs, you are working toward your 2019 goals to take your practice or DSO to the next level.

Achieving your goals also means planning ahead in the fast-changing DSO landscape. Keeping past, current and future trends in mind will help you stay ahead of the curve and prepare for the rest of 2019.

Karan Garg of Houlihan Lokey gave a “Group Dentistry State of the Union: Past Trends and Future Outlook” at the The 2018 DEO Fall Summit. Here are a few highlights:

DSO Trends

Private Equity Still Readily Available – $1 Trillion Worth

Currently there’s more than $2 trillion of private equity capital under management with $1 trillion available for investment. There’s also still a lenient debt market. This sums up to a dearth of assets for investment.

The market is still ripe for DSOs seeking private investors.

$130 Billion DSO Market Larger Than Urgent Care, Physical Therapy, Dermatology, or Veterinary Space Combined

DSOs are more attractive for investment than the urgent care, physical therapy, dermatology, or veterinary space. Across the board from market size, historical growth, fragmentation, availability of physicians, reimbursement risk, profit margins — the DSO market stands out because of its sheer size: $130 billion.

The other spaces don’t add up to that combined.

DSO 2.0 — The DSO of the Future: Trends To Compete

Karan noted the original reasons DSOs formed, the DSO 1.0 model, are not going to keep DSOs competitive.

It’s time for DSO 2.0.

DSO 1.0 was formed for scale, centralization, to remove administrative burdens from clinicians, and it was either patient or provider focused, not both.

But, the DSO 2.0 of the future has to be:

  • Technology and data driven: empowering staff and clinicians to use the latest tools and resources to serve patients and increase performance
    Partnering with payers (insurance companies) for value-based care
  • A one-stop shop with multi-specialty offerings
  • Branding and reputation forward: have a sophisticated strategy to develop social capital
  • Patent experience focused
  • Provider focused: providing staff and clinicians with a career instead of just a job

DSO Trends 5 – 10 Years from Now

Based on Karan’s experience and current market trends, he sees even bigger changes down the road:

    • Larger DSO platforms going public with dentists’ buy-in
    • Rise in differentiation and emergence of specialist DSOs
    • Consolidation of the consolidators: even more consolidation will happen, perhaps geographically

Click here to see Karan’s complete address.

Discover even more of what the future holds for group dentistry and position yourself for success — Attend The 2019 DEO Summit: The Emerging Future of Group Dentistry, June 27-29, Phoenix, AZ.

Click here to register now for the early bird price and save!

This year, The DEO will provide you with even more tools and resources helping pave your way to success for the rest of the year — stay tuned!

Cheers to a successful 2019!

— Jake

P.S.: To learn more about the DEO, membership and to apply, click here.