Dental Industry in Transition
Dentistry is undergoing a transformation—the days of the solo dentist in a small office with a single assistant and maybe an office manager are on the decline.
More and more, dentists are coming together into group practices, larger practices of 20 or more and even into giant entities of 500 or more.
Changing Practitioner Demographics
For the most part, dentists have always been solo acts. Often, a dentist could open up shop in a small town somewhere and have loads of clients right off the bat. But this model is changing.
From 2002 to 2012, the number of dental firms, dental establishments (individual locations) and dental employees grew faster than the U.S. population. According to a recent HPI research brief, the per capita supply of dentists in the United States increased from 2003 to 2013, and will continue to increase through 2033. At the aggregate level, the United States could be entering a period of expanding supply of dentists…
More dentists means more empty chair time. This is especially true for solo practitioners, who find it difficult to create a high-volume practice.
Also, recent dental school graduates aren’t looking to start their own practices.
The number of dentists who are employees versus owners is increasing rapidly….The debt load of graduating dentists is staggering, making the purchase of an existing practice out of reach.
Research shows that younger dentists are much more likely to work at larger practices than older dentists.
According to the Journal of Dental Education, dentists under the age of 35 represent the largest demographic working in group practices. The numbers diminish with age—there are 50 percent fewer dentists aged 35 to 45 working in group practices, another 25 percent fewer aged 45 to 55 and yet another 25 percent fewer aged 55 to 65.
Changing Practice Demographics
Practices with a single or possibly two dentists still dominate the landscape, according to the prevailing research—accounting for as much as 80 percent of the market. But that’s changing.
According to the Journal of Dental Education, the trend is toward larger, multi-unit practices operating under a single umbrella.
The number of dental establishments (single locations) and the average size of these establishments grew from 1992 to 2007. Large multi-unit dental firms grew in terms of number of establishments and the percentage of total receipts.
Studies show that practices with 5 or fewer employees are getting a smaller share of patients, while firms with 20 or more employees are getting a larger share. Giant firms with 500 or more employees are also on the rise, although their share of the pie is still small.
From American Dental Association research:
One study reported that, although relatively small in number, large multi-establishment dental enterprises grew in terms of the number of establishments and the percentage of annual receipts from 1992 to 2007.
A second study reported that over a two-year period, the number of large group dental practices grew by 25 percent. However, very large dental practices with 20 or more dentists accounted for just three percent of all dental practices in 2008.
The trend toward larger, multi-establishment dental practices is expected to continue, driven by changes in the practice patterns of new dentists, a drive for efficiency and increased competition for patients.
A Shifting Landscape
The dental industry is in transition. Dental practices are changing while dentists, themselves, are practicing differently.
Sooner rather than later we may see the last of the “town” dentists working by themselves in an office attached to their home. More and more, dentists are coming together and practices are getting bigger.