Industry Changes

As the RDAC dentists considered the ADP offer, they paid attention to what was going on in the wider dentistry industry. By 1998, group practices like Reston Dental Arts had become more common; the dental industry was moving toward greater consolidation. According to the American Dental Association, by 1995 12 percent of dentists worked in group practices, up from 4 percent in 1991.[11] Although general dentistry continued to represent the bulk of dental care services at 79 percent in 1996, specialty dentistry was on the rise at 21 percent.[12]

The move toward larger group practices offered numerous benefits over solo practitioners. For example, it allowed recent graduates to enter the profession without significant debt or capital outlay. With partners to pick up the slack, those nearing retirement could enjoy greater flexibility in their schedules, as could dentists with young children or others who needed reduced working hours. The apparent preference of younger dentists for workplace flexibility, and emerging changes in the volume and type of dental services the public wanted seemed to reinforce the move toward larger practices.[13]

Corporate dentistry. At the same time, the concept of corporate dentistry was starting to take hold. Dental management professionals at companies like ADP ran corporations that operated across large geographic areas. One of the major selling points was the opportunity for dentists to focus solely on patient care and leave administration, including human resources, billing and insurance, to others who specialized in those fields. Dental practice management was becoming more complex as the industry shifted toward accepting insurance. Managing reimbursements and the multiple systems involved was a major headache for many dentists.

Companies like ADP could offer economies of scale as well, purchasing equipment and supplies in bulk. They also offered veteran dentists a way to realize, prior to retirement, the capital investment they had been building in their practice for years. As a sign of the times, ADP itself went public in April 1998, and was listed on the NASDAQ exchange.[14]

Finally, dental patients were starting to have more choices. Fee-for-service remained the standard. But increasingly, employers provided dental insurance as an option. The number of Americans with dental insurance rose from 41 percent in 1990 to 46 percent in 1995 and 55 percent in 1997.[15] The industry could anticipate that demand for dental services would rise. Then there was public funding: Medicare and Medicaid were considering adding dental coverage for children and adults already on their rolls for general health insurance. If that happened, dental services could be expected to skyrocket.


[11] American Dental Association (ADA). From ADP’s NASDAQ listing background information. See: http://www.nasdaq.com/markets/ipos/company/american-dental-partners-inc-2517-4492?

[12] National Association of Dental Plans. Ibid. [??]

[13] ADA Health Policy Resources Center, A Profession in Transition: Key Forces Reshaping the Dental Landscape, American Dental Association, 2013.
 
[14] For more information on ADP and the state of the industry at the time, see Appendix 2, ADP’s NASDAQ listing background information. See: http://www.getfilings.com/o0000927016-00-000908.html

[15] National Association of Dental Plans. From ADP’s NASDAQ listing background information. See: http://www.nasdaq.com/markets/ipos/company/american-dental-partners-inc-2517-4492