Procurement/Operations Thought Leaders’ Opinions on Changes and Challenges for DSOs in 2023

Written by Heidi Arndt, Austin Hair, Karla-Marie Santiago, Kim Larson, and Bill Neumann | Feb 17, 2023 3:59:45 AM

We asked our 2022 featured industry leaders: Where is the DSO industry now? Where do you predict the industry is headed in 2023? And, any news or thoughts on emerging technologies in 2023?

AI was the topic of conversation in 2022 and seems like it will continue to be a hot technology not just for dentistry, but most if not all industries. However, there are other technologies and advancements that are important for dental groups to focus on, implement, and leverage. Keep your eyes on communication platforms, such as teledentistry and patient recall. Analytics, procurement, and revenue cycle management tools are being examined and implemented as well.

Heidi Arndt
Founder, Evolve Dental Advisors

Staffing crisis

Dentistry continues to see challenges from ongoing economic issues, and staffing continues to be the most significant frustration for dental practices across the country. Between the shortage of providers, increased compensation rates, and stagnant reimbursement rates, we continue to see eroding already-slim operating margins and the hampering of patients’ ability to access care.

These challenges will continue in 2023, with the number one hot topic being staffing. Whether due to burnout, low morale, early retirement, or for work-life balance, dentistry will continue to see providers decreasing their working schedules or leaving the profession altogether. These shortages will continue to affect access for dental patients as many offices are booked out or need to close schedules due to a lack of staff. On top of these current challenges, I anticipate we will continue to see staff churn as they seek higher wages, more attractive work schedules, or other perks.

It is important we all look at the broader picture with workforce challenges. It is essential to understand and support organizations like the ADA and ADSO as they work with states on important measures like licensure portability. There are two avenues to tackle license portability. The first is universal license recognition (ULR) laws, also known as “universal reciprocity,” “universal licensure by endorsement,” or simply “universal licensure,” which establish a state’s unilateral intent to recognize all valid occupational/professional licenses from all states. Currently, 12 states have enacted ULR laws.

Another path forward that may be easier to accomplish will be through the new Dentist and Dental Hygienist licensure compact. Endorsed by the ADA and the Council on State Governments, an interstate licensure compact is a binding agreement among states to recognize occupational/professional licenses issued by any state that has enacted the deal. The compact will go live once 10 states enact the model legislation. Supporting your state with this legislation will help open the door to improved mobility for providers and increased access to care for patients.

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Austin Hair
Managing Partner, Leaders Real Estate

Real Estate Trends

Telemedicine and remote monitoring: The growth of telemedicine and remote monitoring is changing the way healthcare is delivered, and this trend is expected to continue in 2023. This is likely to result in increased investment in the healthcare/dental real estate sector, as companies look to acquire or develop facilities that can accommodate these new delivery models.

Rise of outpatient care centers: With an aging population and an increasing focus on cost-effectiveness, outpatient care centers are becoming increasingly popular. This trend is likely to lead to more investment in the healthcare/dental real estate sector, as companies look to acquire or develop these facilities.

Increasing interest rates: As interest rates stay high or go up, the price of commercial real estate will start to slowly dwindle. If you are thinking of selling, sooner is better than later.

Kim Larson
Founder & CMO, Group Dentistry Now

Bill Neumann
CEO, Group Dentistry Now

The State of Dental Procurement in 2022 – A Global Survey of DSOs – Group Dentistry Now

For 3 years, Group Dentistry Now and Open Room have surveyed DSO DentalForum attendees and DSO and emerging dental group subscribers of Group Dentistry Now on “The State of Dental Procurement.” Bill Neumann shared the results during the Open Room Events’ DentalForum USA meeting in September 2022.

The survey was made up of 12 questions.
60 DSOs and dental group practices responded: 32 from North America, 17 from Europe, and 11 from APAC & ANZ.
At least 7,800 dental practices were represented in this survey.
The average time to complete the survey was approximately 6 minutes and 30 seconds.

Survey questions included: How many dental practice locations do you have? Who decides what products become part of your formulary? How many people are involved in the purchasing/procurement process? Rank the ways you prefer a vendor to introduce products. What new products are you evaluating in 2022?

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Karla-Marie Santiago
Director of Procurement, Oakpoint

The dental industry has come a long way in the last 10 years with new developments in clinical technology. Lately, it is in an evolution stage primarily focused on artificial intelligence (AI) technologies to help stream clinical and nonclinical workflows. In the area of procurement, e-procurement platforms like Dentira and Supply Clinic are examples of technology that aid in streamlining the dental supplies purchasing process, inventory management, and the processing of invoice payments, making it much easier for the clinical staff to do these operational tasks. Soon, I’m hoping we will see models that will help forecast purchasing needs by connecting the e-platform to the practice management software and allow the practice to be prepared for future production. Most importantly, these platforms provide a real time visibility to the organization’s supply spend, which is the most important tool for Procurement. It allows the organization to develop goals that can be measured and obtainable. It also provides the knowledge needed to do strategic sourcing.

Even though 2022 was a big year for innovative AI technologies that help to increase revenue, we still must continue to be mindful of the increases we continue to see across the board in supplies, equipment, labor, and interest rates, among others. DSOs will have to be cautious in their vendor selection process. This is where the Head of Procurement plays a key role in the DSO space. The Head of Procurement is responsible for negotiating the most favorable contracts in an already heavily inflated economy. They are also responsible for creating and maintaining long and successful relationships with industry partners while negotiating the best savings for the DSO. The leadership of the organization and the doctors rely on the Head of Procurement to provide insight into the financial advantages and disadvantages of adding a new product into the practice. Therefore, Procurement must always work collaboratively with the Operations team. The most successful Procurement roles are people who have knowledge in a practice’s operations and can suggest changes that will have a positive impact in production, collections, and EBITDA.

In 2023, we will see companies like Pearl Ai, Overjet, Patient Prism, Zentist, InsideDesk, and others continue to grow in the DSO space. We will also see other computer science companies partnering with dental experts. This advancement will penetrate the market and provide technology that will allow for an even more modern way to practice dentistry both on the clinical and the business side.

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