Although dental insurance coverage has improved over the past decade—rising from 58% of adults in 2014 to 83% today—many Americans still struggle to afford and access care.
Research indicates that individuals with private dental insurance often face higher out-of-pocket costs than those without coverage, discouraging them from seeking treatment.
Meanwhile, patients with public insurance, including 38% of children, frequently encounter dentists who do not accept Medicaid due to low reimbursement rates. At the same time, insurance reimbursement rates for dentists are declining.
Experts say the growing gap between patient payments and dentist compensation is largely benefiting corporate entities rather than providers or patients. Dental insurers and other corporate organizations are consolidating dental practices, reshaping care delivery to prioritize profits over patient care.
This pattern mirrors trends in the medical sector, where private-equity firms, hospital systems, and insurance companies have acquired physician practices, leading to higher costs, lower quality, and clinician burnout. Similar corporate consolidation is also emerging in the veterinary field.
State lawmakers have long sought to limit corporate control over dental practices. Most states have laws restricting non-dentists from owning dental clinics, designed to protect clinical decision-making. However, these laws vary in strength and often contain loopholes.
One widely used workaround is the dental service organization (DSO) model, which resembles the management services organization structure in medicine. In these arrangements, either a dental practice creates a DSO to attract investment or a corporate entity forms a DSO to invest in a practice.
A licensed dentist typically remains the official owner, while the DSO manages finances, staffing, and strategy—effectively circumventing state restrictions on corporate ownership.
The trend toward consolidation is evident. In 2023, 73% of U.S. dentists owned their practices, down from 85% in 2005. Meanwhile, 13.8% of dentists were affiliated with a DSO in 2023, up from 7.4% in 2015. Private equity is fueling this shift.
In 2024 alone, the dental sector saw at least 161 private-equity deals—more than any other area of healthcare. Studies show that private-equity-affiliated practices charge more and emphasize high-cost restorative, specialty, or surgical procedures over preventive care.
Proposed legislation aims to strengthen state corporate practice laws, closing loopholes that allow DSOs and other corporate entities to control dental practices, ensuring that clinical decisions remain in the hands of licensed dentists.