Washington, D.C. — Following news that dental insurer Delta Dental of Wisconsin (DDWI) has acquired a chain of dental practices known as Cherry Tree Dental—the first time in Wisconsin state history that an insurer owns dental providers—the American Economic Liberties Project and the Alliance of Independent Dentists sent a letter to the Federal Trade Commission, the Department of Justice Antitrust Division, and Wisconsin Attorney General Josh Kaul calling for an investigation.

“DDWI’s acquisition of Cherry Tree Dental brings one of the most harmful trends in American health care to Wisconsin’s dentistry market,” said Emma Freer, Sr. Policy Analyst for Healthcare at the American Economic Liberties Project. “Vertical integration between insurers and care providers poses serious conflicts of interest, endangers public health, unfairly drives independent care providers out of business, and drives up costs. These dangers are evidently present with respect to DDWI, Wisconsin’s dominant dental insurer, acquiring a leading regional dentistry provider, and antitrust enforcers should investigate without delay.”

“The ownership of medical and dental practices by insurance companies poses a serious conflict of interest and endangers public health,” said Jill Tanzi, DDS, President of the Alliance of Independent Dentists. “Dental care should be guided by licensed professionals, not by insurers whose profits increase when patients receive fewer services. Allowing insurance companies or private equity firms to control healthcare delivery undermines clinical judgment and erodes trust. To protect patients, all states should prohibit such ownership arrangements and eliminate these conflicts of interest that are detrimental to public health.”

DDWI is Wisconsin’s dominant dental insurer; its dental health plans cover more than 2.6 million Wisconsinites, and its provider network includes more than 90% of Wisconsin dentists. (Its parent company, Delta Dental, is the dominant, and often only, dental insurer in a number of states, with an average market share of 59% to 65% between 2013 and 2017.) Cherry Tree Dental is a private equity-backed general dentistry provider and dental services organization (DSO) with more than 40 practices, mostly in Wisconsin but also in Illinois, Michigan, and Minnesota.

This merger comes against the backdrop of accelerating consolidation and corporatization in regional markets for dentistry and dental insurance across the country. But it marks the first time in Wisconsin state history that an insurer owns dental providers. The letter spells out the problematic incentives this introduces—incentives that are already wreaking havoc on the non-dental healthcare industry, as Economic Liberties has documented extensively and is advocating against through the Break Up Big Medicine Initiative. These incentives include:

• Earning double margins, from “premiums on the front end and service profits on the back.”
• Steering members to its affiliated dental practices, to earn those double margins, and away from unaffiliated practices, foreclosing competition and limiting patient choice.
• Threatening independent practices with removal from DDWI’s provider network, which could be financially ruinous, to force them to sell to Cherry Tree Dental and, by extension, DDWI.
• Overriding dentists’ clinical decision making at its affiliated practices to cut costs and maximize profits.
• Locking dentists at its affiliated practices into unfair employment arrangements in which their job security is tied to accepting untenably low reimbursement rates.
• Gaming state laws that establish dental loss ratios, or requirements that dental insurers spend a certain portion of premium dollars on benefits in an effort to cap administrative costs.

The letter concludes with a legal analysis showing that DDWI’s acquisition of Cherry Tree Dental practices may violate Section 7 of the Clayton Act and should be flagged under the 2023 Merger Guidelines issued by the DOJ and FTC.

Read “America’s Health Care Consolidation Crisis: A Ledger of Harms and Framework for Advancing Economic Liberty for All,” here.

Learn more about Economic Liberties here.

Learn more about the Alliance of Independent Dentists here.

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The American Economic Liberties Project works to ensure America’s system of commerce is structured to advance, rather than undermine, economic liberty, fair commerce, and a secure, inclusive democracy. Economic Liberties believes true economic liberty means entrepreneurs and businesses large and small succeed on the merits of their ideas and hard work; commerce empowers consumers, workers, farmers, and engineers instead of subjecting them to discrimination and abuse from financiers and monopolists; foreign trade arrangements support domestic security and democracy; and wealth is broadly distributed to support equitable political power.

The Alliance of Independent Dentists (AID) is a national nonprofit organization dedicated exclusively to supporting independent, privately owned dental practices, not dental service organizations (DSOs) or corporate-owned chains. Its mission centers around empowering dentists to preserve professional autonomy, uphold patient‑centered care, and challenge corporate and insurance influences in the dental industry