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Insurance reimbursements have remained stable despite the increase in the operating costs of dental practices
According to an August survey by the American Dental Association’s Health Policy Institute, insurance reimbursements have not increased for the majority of dentists, despite rising costs. The Health Policy Institute surveyed about 1,200 dentists about their operating expenses and found that they reported increased costs for supplies, staff salaries, PPE, equipment and rent, to name but a few. name a few. Nearly a third of dentists (31%) reported that PPE prices had increased by more than 20% and about 26% reported that prices for supplies and materials had increased by at least 20% over the past the last year.
According to the survey results, the insurance industry has yet to respond to the rising operating costs of dentists. Nearly 60% of dentists said rates have remained stable, 25% say their rates have gone down, and only 7% of dentists say they’ve had insurance reimbursement increased in the past year. The ADA provides guidance to help dentists engage with third-party payers in contract negotiations, which can help curb rising costs.
Key questions (continued)
ADA supports Department of Education student loan initiative and urges more incentives to train more hygienists and assistants
The American Dental Association has released comments applauding a Department of Education proposal to eliminate interest capitalization on some federal student loans and reform the public service loan forgiveness program. According to reviews, federal student loans are sometimes subject to interest capitalization, which can add tens of thousands of dollars to a new dentist’s student loan debt. This interest is triggered by designated “capitalization events” which can cause a borrower’s accrued and unpaid interest to become part of the principal balance, often without their knowledge, and the elimination of that event and other capitalization events could be a benefit for dental and medical residents. Becker’s Dental Review compared dental school debt to medical school debt and found that the average dental student debt was $292,169 in 2019, while medical students owed about $215,900 in 2018, last year’s data was available.
In a separate letter, sent Sept. 6 to the Health Resources and Services Administration (HRSA), the ADA supported Title VII scholarships and encouraged the agency to prioritize scholarship programs. training for hygienists and assistants. The ADA is currently leading a campaign to improve oral health in America, which aims to reach the 181 million American citizens who do not visit the dentist, as well as the nearly 50% of all people over 30 year old who suffer from a form of gum disease. The plan includes providing more community dental health coordinators to remove barriers to effective oral health care in underserved areas. Improving training programs for hygienists and assistants can also be part of the solution. As noted in previous editions of the Benesch DSO report, staffing shortages in dentistry, particularly among hygienists and assistants, is one of the top issues preventing practices from meeting patient demand, and according to the ADA and the Health Policy Institute, a pandemic-related decline in enrollment did not improve in the 2021-22 enrollment year.
Sources: American Dental Association, Dental Economics, Health Policy Institute
Dental Support Organization News
Pacific Dental Partners with Epic to Install EHR in 900-Practice Network
Pacific Dental Services, one of the largest DSOs in the United States, has partnered with Epic to install electronic health records in nearly 900 dental offices in its network. Pacific Dental spent two years converting 9.7 million patient records from legacy software to Epic and trained 13,000 team members and clinicians with the new system. The first dental office in the Pacific went live with Epic in April, and now the system is live in all DSO locations. Pacific Dental also helped optimize Epic’s dental module, Wisdom, so that dental records could more easily integrate into general health records and patient treatment plans.
Source: Pacific Dental Services on August 24, 2022
Smile Generation Serve Day has record year, with $7.6 million in dental services donated by practices supported by Pacific Dental Services
In August, Pacific Dental Services (PDS) partnered with Smile Generation to participate in the 12th annual Smile Generation Serve Day, a day of service and national donation campaign that focuses on providing dental donations to underserved patients. served. The collective efforts of clinicians and team members supported by PDS indicated that a record $7.6 million was donated in dental services, while PDS team members provided more than 55 000 hours of service to their local communities. Since its inception in 2011, more than 24,000 patients have received dentistry donations on Smile Generation Serve Day, totaling more than $46.8 million in oral care donations.
Source: Pacific Dental Services, September 2, 2022
SmileDirectClub appoints Alex Dimitrief and Linda Williams to Board of Directors
SmileDirectClub has appointed Alex Dimitrief and Linda Williams as independent directors to its board of directors. Dimitrief is an experienced director and C-suite leader with experience leading global businesses through a wide range of challenges. Williams is an executive who brings business, regulatory and information security experience to the healthcare and insurance industries. Mr. Dimitrief will join the audit committee and the nominating and corporate governance committee and Ms. Williams will join the audit committee of SmileDirectClub’s board of directors. Following these appointments, SmileDirectClub’s Board of Directors will consist of nine directors, four of whom will be independent.
Mergers and Acquisitions
Sentinel leaves Altima Dental through a merger with 123Dentist
Sentinel Capital Partners, a private equity firm that invests in promising lower-middle-market companies, has completed the merger of its portfolio company, Altima Dental, with 123Dentist, a Vancouver-based DSO, to create one of largest DSOs in Canada. The transaction was funded with equity capital provided by 123Dentist’s existing private equity sponsor, Peloton Capital Management, and new investors KKR, a leading global investment firm, and Heartland Dental, a portfolio company of KKR and the leading dental support organization in the United States. Sentinel will retain a minority stake in the combined company. The terms of the contract are not disclosed.
Source: Sentinel Capital Partners on August 15, 2022
Silver Oak’s Smile Partners USA has reportedly hit the auction block
DSO Smile Partners USA, backed by Silver Oak Services Partners, is for sale through Piper Sandler. Dental is a well-used space for private equity, but it remains fragmented, and Smile Partners’ focus on physician alignment sets the company apart, according to Axios. The company is marketing over $175 million in revenue and over $40 million in EBITDA for 2022, representing its near-term M&A pipeline. The company encompasses more than 90 clinics, including 15 under LOI, and is a physician-led platform. The DSO has a relatively large medical equity model whereby a large portion of dentists who join Smile inject equity into the parent company. PE-supported medical practice management groups are moving increasingly toward higher physician compensation and equity models as specialists demand greater autonomy, both clinically and economically.
Sources: Axios on August 26, 2022
Great Lakes Dental Partners expands in Illinois with Signature Dental Group Affiliation
Great Lakes Dental Partners (GLDP) has added Signature Dental Group to its network of affiliated practices, expanding its reach in the greater Chicagoland area. GLDP, a portfolio company of Shore Capital Partners, provides practice management services to more than 40 partner locations. GLDP actively seeks partnerships with dental practices in the Midwest and is backed by Shore Capital Partners. Ideal affiliate opportunities include physician owners who want to partner with functional experts to grow their practices.
Innovation and the future of dentistry
SmileDirectClub Introduces Second Generation Retainer Manufacturing Technology
SmileDirectClub transitioned to its second-generation retainer manufacturing technology at the company’s FDA-registered Smile Labs based in Antioch, Tennessee. The company’s enhanced retainer manufacturing lines feature the laser technology and automations that produce its Comfort Sense aligners. Technology allows him to manufacture automations that will continue to increase the efficiency and productivity of the company. The technology will allow it to produce twice as many aligners and retainers with about 1/3 of the workforce, increasing productivity by 225%, according to the company.
Sources: SmileDirectClub on September 6, 2022
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