Although dental insurance rates have improved over the last decade — 83% of adults are now covered, compared with 58% in 2014 — Americans increasingly struggle to afford and access dental care. Research shows that individuals with private dental insurance pay more in out-of-pocket costs than those without it, deterring usage. Those with public insurance — including 38% of children — often find that dentists do not accept Medicaid’s low reimbursement rates. Meanwhile, insurance reimbursement rates are declining. If patients are paying more and dentists are being paid less, then where is the money going?

The answer is that dental insurers and other corporate entities are consolidating dental practices to reshape care delivery around financial incentives. In other words, these entities are spending less on care to maximize profits.

Such consolidation has already occurred in the medical sector, where hospital systems, private-equity firms, and insurance companies have rolled up physician practices, resulting in higher prices, worse quality, and increased clinician attrition.(A similar corporate takeover is occurring in the veterinary sector.)

State policymakers have long been concerned about the corporate ownership of physician practices, a concern that carries over to dentistry. All but five states have laws that ostensibly restrict the corporate practice of dentistry. These laws are intended to prevent non-dentists from owning or controlling dental practices and to protect clinical decision-making from commercial interference. But this legal framework is uneven and filled with loopholes, even in states with stronger bans.

One of the most common workarounds is the “dental services” or “dental support” organization (DSO) model, which closely resembles the management services organization (MSO) model in the medical sector. In a typical arrangement, either a dental practice forms a DSO to attract corporate investment or a corporate entity forms a DSO through which to invest in a dental practice. In both cases, the practice is helmed by a “friendly dentist,” who remains the legal owner of the practice while the DSO handles administrative and management functions. In effect, the DSO maintains operational control over the clinic’s finances, staffing, and strategic decisions, skirting state laws meant to prevent such corporate practice.

Indeed, the dental practice and DSO markets have consolidated in recent years as dentists shift from independent practice to employment by groups or affiliating with DSOs. For instance, 73% of U.S. dentists were practice owners in 2023, compared with 85% in 2005. Meanwhile, 13.8% of U.S. dentists were affiliated with a DSO in 2023, up from 7.4% in 2015.

Private equity is only accelerating these trends. In 2024, there were at least 161 private-equity deals in the dental sector — more than in any other area of health care. Research shows that private equity–affiliated dental practices not only charge more for care but also prioritize higher-cost restorative, specialty, or surgery care over diagnostic and preventive procedures.

This model legislation would strengthen state corporate practice of dentistry laws so that they not only prohibit non-dentists from owning dental practices but also outlaw increasingly common workarounds, including DSOs.