DSOPro: Tell us about NDX.
NDX is the leading and largest full-service dental lab network in the country. We support DSOs, Group Purchasing Organizations (GPOs), and the university, government, and institution segments.
DSOPro: What differentiates NDX from other labs when partnering with DSOs?
It starts with our network of labs. NDX is the largest network of dental labs in North America. We have approximately 55 domestic labs comprised of local labs in many markets and national mail order labs. We also have high-end aesthetic labs, specialty labs, and a wholly owned and operated global lab. With our extensive network, we’re not just a single location servicing a DSO partner. That allows us to scale more effectively and to align with growing dental groups. The other significant differences are the talented individuals NDX employs across various functions to support our DSO customers, including marketing, our selling organization, and our operations/labs teams.
DSOPro: How do you obtain new partner labs?
The lab world is similar to the dental practice world from the standpoint of consolidation, which was happening pre-pandemic, but has accelerated post-pandemic. Most of our acquisition opportunity comes proactively from lab owners reaching out to us, asking if we are interested in acquiring their lab.
DSOPro: What improvements are NDX implementing to ensure proper support of current/new DSO partners now and into the future?
Technology is driving industry conversations. Significant improvements at the lab level include technology implementation, training, and support. We’re investing in resources that support individual practices. We have a large team of territory sales managers, as well as a robust corporate accounts team, to better support the leadership at DSOs and group practices. Internally, we focus on the continued growth, training, and support of the NDX teams that go into practices to support the providers. We’ve developed digital training teams to improve high-level technology use within the practices and labs.
DSOPro: What types of new technologies are NDX implementing?
We started introducing digital technology into our labs years ago. Two primary technologies are 3D printing and impression digitizing. When discussing digitization, the initial thought that comes to mind is using a digital scanner in the practice to replace the analog impression-taking process. However, on the lab side, we’re able to digitize our processes to include standard impressions as well. Using scanners, digital design software, 3D printing, and milling machines has resulted in more efficient workflows, more accurate restorations, fewer remakes, and lower per-unit costs.
DSOPro: What are the top trends you see happening within the DSO space?
Capital funding is pushing consolidation at a fast pace. From a macro perspective, large amounts of capital funding continue to flow into the space, primarily through private equity. We saw it pre-pandemic, but it’s intensified post-pandemic on several fronts. While the larger groups have continued to expand, we’re seeing small and emerging groups, those with 5 to 50 offices, aggressively looking to grow because of the funding opportunities.
On the practitioner level, recently published data highlighted that in 2021, only 46% of dentists were practicing in solo practices in the United States. Factors contributing to that are the number of young adults graduating from dental school continues to increase and that dental education is more expensive than it’s ever been. Young dentists are graduating from dental school with significant debt, therefore reducing the likelihood that they can buy or open a private practice. The highest percentage of doctors affiliated with DSOs is younger, up to about 34 years old. They represent 20% of the DSO practitioner space.
From the lab perspective, we’re seeing more small and emerging dental groups begin to look for partnerships. NDX continues to grow our incredibly strong partnerships with the large DSOs, but many small emerging groups are now engaging us to discuss a potential lab partnership. They’re looking for other ways we can support them and their scaling efforts.
Whether it is a 5-office DSO or a 1,500-office DSO, if the goal is to continue to scale and grow, identifying a lab partner who can scale with you and can support that scale is becoming incredibly important.
DSOPro: Are you seeing any parallels on the lab side? Are lab groups forming with private equity funding and increasing in number at the same rate as dentists?
Is private equity very present in the dental lab space? Absolutely, yes. The biggest difference between the lab and the practice space is that while DSOs are expanding, it’s not reducing the number of practicing dentists out there. In the lab world, it’s quite the opposite.
A small lab with five to ten employees that doesn’t have an exit strategy or suitable buyer may end up closing. When viewing the trends in the lab world as compared to 10 years ago, the number of registered dental labs today is 50% less, and it continues to decrease every year.
DSOPro: What are the biggest challenges you see within the DSO space and/or dentistry in general?
If you look at healthcare in general, one of the primary challenges is staffing. The American Dental Association has indicated that 80% of every dental practice location, DSO or private practice, indicated they were having challenges with staffing. The number of dental assistants and hygienists who have left the industry altogether post-pandemic is in the thousands. The staffing shortage has a trickle-down down effect. Not having appropriate staff impacts your ability to schedule and treat patients.
Another article was published recently about pre-pandemic/post-pandemic patient volume. Among the DSOs that responded, the average number of patient appointments filled was only 81% in October. Broken down to the primary contributing factors, 40% of it was due to staffing challenges. Another 40% was because patients still haven’t come back to dentists.
The insurance space continues to be challenging for all of dentistry. Reimbursement rates are decreasing, which creates other financial issues within the practice. DSOs often have the benefit of size when negotiating with insurance companies—the more offices/providers, the higher the opportunity to negotiate. When you have scale, you naturally have better negotiating power.
I’d say the final thing has to do with balance and the pace of consolidation. The pace of office level consolidation is happening at a historical rate, which creates a balancing act for those organizations that may not have a strong support structure. It’s great to partner with more groups, but it must be balanced with your ability to serve and support them properly. Fortunately at NDX, we have strong support structures in place to keep up with the pace.
DSOPro: With the advancement of AI and technology, how is NDX addressing the needs of the technology-driven practice?
We are being proactive in how we invest in our labs. We talked about 3D printing and the bench-side scanner for digitizing models. In addition, we are fortunate to have very close industry partnerships with some of the larger dental manufacturers. That allows us, at both the lab and field levels, to give our teams more in-depth training in some of these technologies. We also partner with some of these companies to beta test new technology and equipment to assist them in getting products ready to go to market. This gives us a big advantage at the lab level.
At the field level, our territory sales reps, corporate accounts teams, and digital training team receive training on all the technologies, especially the digital scanners that many of the DSOs are now implementing. Most groups we partner with have a digital technology strategy, so we are consistently training our frontline people, sales reps, and tech support team to ensure they can go into practices and assist them with that initiative.
DSOPro: What other types of support does NDX offer to DSO providers and leadership teams?
We support leadership teams in their efforts to best support their providers. Examples are our continuing education, detailed reporting analytics, and multi-level support. We have a dedicated education team, as well as a dedicated DSO marketing support person who can help develop educational opportunities for our partnerships.
We have a robust field team that can support at the office level and help educate clinicians and staff on the best ways our network can support them. We want our network to feel personal to the practice, and we’ve structured NDX to aid in creating this experience. Our field teams listen to the doctor and staff, and then align them with the lab(s) that would best fit them and their patients’ needs, whether it’s a local lab or mail-order, global, or high-end solution.
Cory Eyink is the Vice President of Corporate Accounts at National Dentex Labs. He leads the corporate accounts team, which primarily supports DSOs, GPOs, and the university, government, and institution segments. Cory has been with NDX for almost six years and previously worked in the medical device arena for seven years.
National Dentex Labs (NDX)is a leading provider of dental prosthetics and products using the most advanced restorative techniques and technologies. NDX offers dentures, crowns & bridges, implant restorations, surgical guides, and appliances, including orthodontics, migraine therapy, and sleep apnea products. Since 2015, NDX has aggressively expanded its national footprint to meet the demands of a rapidly changing marketplace and deliver best-in-class restorative solutions to dentists, specialists, and DSOs throughout North America. With a network of 55 full-service labs across the United States, NDX is committed to providing top-quality products and highly personalized service.