Buying or selling a practice? Read this.

Buying or selling a practice? Read this.
Pexels/Daniel Frank

The promises and perils of AI in dentistry are top-of-mind this week. Researchers are looking at ways that this technology can deliver more personalized dental care. Meanwhile, a DSO is facing a class action lawsuit regarding its use AI. We also get an inside look at the market for dental practice sales and examine trends in dental practice ownership. 

But first, a woman and her husband were arrested this week for allegedly running an illegal dental clinic out of an Oklahoma apartment.

SMALL BITES

A look at practicing ownership trends. Data from the American Dental Association (ADA) finds that many dentists still want to be practice owners, but it is taking more time to get there.   

Diet isn't everything in childhood caries. Sugary drinks and snacks equal more cavities, right? New research indicates that diet isn't the sole factor at play when it comes to childhood cavities. 

Debunking another TikTok hack. Dr. Ben Winters, aka The Bentist, takes a look at a money-saving oral hygiene TikTok hack. Unsurprisingly, he has some critiques. 

A lost file and a lawsuit. A dental practice in Missouri is facing a lawsuit from a patient who claims a dental file became lodged in his throat during a root canal. 

More details emerge in murder trial. The Colorado dentist who allegedly poisoned his wife is currently on trial. His daughter testified that he asked her to create a deepfake video of his wife asking him for the chemicals that caused her death. 

SPOTLIGHT

Planning to buy or sell a practice? Start early

Are you thinking about selling or buying a practice? Rod Johnston, founder and principal of Omni Practice Group, recommends starting the process early. 

Johnston spoke to Dental Bite about the sales activity he is seeing this year and what dentists can expect during the process of selling a practice. —Carrie Pallardy

Are you seeing any major themes for dental practice sales in the market today? 

Early in this year, it started off a bit slower than normal. I think people were waiting to see how the economy was doing. But it has picked up, and we're busier than ever. 

What does the process of selling a dental practice look like this year? 

We had this checklist that I started years ago, and I think it was about 35 items to do before closing. Now, it's 85.

For a typical transaction, we'd start out by doing the valuation on the practice. That involves gathering documents: everything from tax returns to practice management reports, profit/loss, employee information. It takes us about 10 days to do the valuation to figure out what the practice is worth.

From there, we put together the marketing materials. Then, we start marketing it. Once the marketing starts, we start getting the phone calls and talking to buyers about the practice. And sometimes we do open houses on practices just like residential open houses, except they're confidential.

After that, we'll hopefully get an offer on the practice and we negotiate the letter of intent. Then, the buyer gets to do due diligence on the practice. They schedule a Saturday or an evening when the staff's not around. They'll come in and do anywhere from two hours to two or three days. It depends on the buyer.

The buyer is also getting their bank financing done. The bank's not looking at just the buyer, they're looking at the practice as well to make sure it's going to cash flow and that it's a good investment for the buyer to purchase.

Once the legal documents are done, we use escrow typically and it's all done electronically now.

Do you have any advice for dentists considering a practice sale this year? 

Start early. Educate yourself. I just had a meeting last night with a couple of sellers who were probably a little over two years away from selling.

I suggest doing a valuation to see where you are. The rule of thumb is practices are worth 70% of collections. That might be true in 50% of the cases. If your practice is in the middle of nowhere in Washington or California or New York or wherever, it's going to take longer to sell and it's not going to be worth 70% of collections. On the other end of the spectrum, if it's in a downtown metropolitan area and the overhead is low, it might sell for 90% or 100% of collections.

Responses have been edited for brevity and clarity. 

FRONT LINES

Healthy mouth, healthy life

The evidence backing the connection between oral health and overall wellbeing continues to mount. Nearly half of people (42%) who visited a dentist within the past year report that their health is excellent or very good. Just 26% of people who haven't been to the dentist within the past year report the same, according to new data from Gallup. Gallup also found that regular dentist visits are associated with other indicators of wellbeing, including life satisfaction. 

Why it matters: Dentists and other community leaders have an opportunity to improve access to oral care to boost people's overall wellbeing. (Gallup)


Class action lawsuit highlights risk of AI use in dentistry

DSO Heartland Dental is facing a class action lawsuit regarding its use of AI and alleged violation of the Federal Wiretap Act. The plaintiff claims that a tool from RingCentral AI was used to analyze calls to a practice supported by the DSO without patient knowledge and consent. 

Why it matters: AI is becoming ubiquitous, but its application is not without risk. Dental practices need to understand this risk to avoid litigation and other potential consequences. (Becker's Dental Review)


AI could drive more personalized dental care

Researchers at UT Health San Antonio and the University of Texas at San Antonio are developing AI models to predict how well different dental composites will perform in patients' mouths. In the long term, they envision an open-source platform that would invite participation from researchers and companies. This kind of platform could be a significant resource for the quick development of custom composite materials.

Why it matters: AI tools, like this one, lay the groundwork for better understanding dental materials and their outcomes. The resulting custom composites could help dentists provide more personalized care. (UT Health San Antonio)

FINAL BITES

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