DSOs have begun to prioritize measures that ensure sustainable growth as rapid acquisitions lead to financial challenges for some, according to LADD Dental Group.
LADD Dental Group, which has 10 locations in Indiana, posted a blog March 10 discussing the future of DSO growth and sustainability amid reports of several organizations facing restructuring challenges.
Four notes:
1. Sarasota, Fla.-based Dental Care Alliance and Morrisville, N.C.-based Affordable Care have reportedly been taken over by lenders after undergoing restructuring challenges in recent months.
2. Acquisitions have been the primary growth strategy for many DSOs over the last decade, with low interest rates and investor interest fueling this activity. However, higher rates and operating costs have led to financial challenges for several groups in recent years.
3. LADD Dental Group said organizations that grow rapidly without appropriate support systems in place, such as operational infrastructure and clinical alignment, experience additional challenges.
4. The company added that future success for DSOs will likely rely on operational enhancements, including regional density, doctor support, clinical leadership and sustainable financial structures.
