Outlook for the US Dental Industry: Drilling into the Root of the Market (L.E.K. Consulting)

Summary

• Total U.S. dental market expenditures were approximately $152 billion in 2022, and the industry rapidly bounced back from COVID-19 disruption.p.1
• The report identifies five major trends, including scaled general dentist and specialty platforms, digital dentistry, democratization of care supply and expanded dental coverage via Medicare Advantage.p.1
• Private equity interest and investment have supported strong growth in scaled dental platforms and are expected to continue.p.2
• The DSO market is relatively fragmented, with roughly 20 large DSOs of 150+ dental practices and a long tail of medium and small DSOs.p.2
• Approximately 10% of OMS surgeons were part of a specialty-focused group in 2022.p.4
• U.S. dental implant growth is expected at high single to low double digits annually through 2028F.p.9

Key insights

1. DSOs are practice management organizations that contract with dental practices to support critical business functions.p.2
2. Specialty-focused networks such as oral and maxillofacial surgery and orthodontia are in earlier stages of consolidation than general dentistry.p.2
3. The COVID-19 pandemic accelerated DSO penetration because DSOs typically have more capital to withstand closures.p.4
4. Chairside CAD/CAM has low adoption and even lower utilization despite being relatively more mature.p.6
5. 3D printing adoption is expected primarily at dental labs, given technological limitations related to strength and aesthetics.p.7
6. Implants have emerged as the standard-of-care alternative to crowns and dentures.p.9
7. Independent dental practices still make up a sizable segment of providers, so DSOs have ample runway for continued growth.p.10