Private equity ownership affects dental practices

Private equity (PE) investment in dentistry has accelerated, targeting small, fragmented, solo-owned practices and acquiring DSOs that handle nonclinical functions. Between 2015 and 2021 the PE share of dental practices nearly doubled, and dentistry attracted roughly $4.4 billion in PE investments from 2004-2021 as dentist ownership fell from 85% in 2005 to 73% in 2023 while multisite groups now employ about 25% of dentists. Researchers analyzed how PE acquisitions change office demographics, finances, service mix, care intensity, staffing, and payer participation to determine effects on practice operations and patient costs.

Findings show PE-owned offices employ younger dentists, are less rural, and had higher baseline shares of nonpreventive procedures and Medicaid participation. PE acquisition raised submitted charges about 3.3% initially and more than 5% by year three, while negotiated insurer payments stayed roughly constant. Treatment patterns shifted toward higher-cost restorative care: implant procedures per visit rose 14% after acquisition and 46% by four years, root canal rates were unchanged, and multispecialty services increased markedly. Researchers conclude PE boosts practice revenue by substituting higher-cost procedures without higher reimbursements, shifting costs onto self‑paying patients (over 40% of dental spending) and producing gains for investors that do not necessarily benefit providers or patients, warranting policy attention.