BUSINESS STRATEGY

The specialty land grab

In dentistry’s new frontier, the gold isn’t underground. Instead, it’s under specialty referral codes. Like the settlers of yore eyeing untapped land, DSOs are moving fast to stake their claims in the dental specialties.

Across the U.S., DSOs are making bold moves into the specialty space. Whether through new specialty-only platforms or expanding existing networks, the race to integrate high-margin, high-demand procedures is picking up speed. Let’s explore what’s behind the trend and what you can do to stay ahead.

What’s happening: A growing number of DSOs are pivoting toward specialty care. Some, like Smile Doctors and Beacon Oral Specialists, are building platforms exclusively around orthodontics or oral surgery. Others, like PDS, are embedding specialists into general practice footprints or launching co-branded specialty divisions. Integration models range from in-office rotations to dedicated hubs and joint ventures.

Why it’s happening: For some DSO leaders, referrals look a lot like revenue walking out the door. Specialty procedures like implants, endo, and ortho carry higher margins and stronger insurance coverage. By keeping these in-house in a hybrid specialty-general DSO model, DSOs boost same-store growth and raise patient lifetime value.

Investors and purchasers have noticed. Specialty practices are commanding purchase prices that represent significant multiples of EBITDA, compared to general dentistry. More importantly, they’re hypothesized to be even more recession-resistant than general dentistry.

The rise of specialty-only DSOs is also being driven by these same economics. Focused platforms can streamline operations, concentrate branding, and dominate a single vertical with deep clinical expertise. These groups often appeal to younger specialists burdened by debt, looking for strong income, lifestyle balance, and clinical focus without the burdens of solo ownership. For investors, specialty DSOs offer simplicity: a clean, high-margin business model in a fragmented market with room to roll up and scale.

The investor angle: Private equity groups are always hunting for margin and durability. That’s why they got into dentistry, and now why they are getting deeper into specialities. Specialty DSOs offer both margin and sustainability, with repeatable procedures, tech-enabled delivery models, and fragmented landscapes ripe for roll-up. Hybrid general-specialty DSOs, meanwhile, can be valued for revenue diversity, internal referral control, and future-proofing.

Sticky business: Multi-specialty platforms are built to retain. When a DSO delivers hygiene, ortho, implants, and pediatric care within one system, the patient experience becomes simpler to navigate and harder to leave. Referrals stay internal. Families grow up inside the platform. The patient relationship deepens with each visit, creating habits that are difficult to disrupt.

The pitfalls: Specialty expansion looks good on paper. In practice, it can drag down even well-run platforms if execution falters.

• Culture clash: Specialists often value autonomy and clinical control. Without alignment, integration can feel like a downgrade to a specialist.

• System sprawl: Merging different EHRs, imaging tools, and workflows creates friction. Disconnected systems slow teams down.

• Scheduling strain: Traveling specialists and shared chair time require precision. Poor coordination leads to empty slots and lost revenue.

• Recruiting risk: Talent is limited. Specialists are selective. A weak brand or misaligned model makes hiring harder and more expensive.

• Financial drag: Overpaying for acquisitions, underestimating integration costs, or losing key producers can hit EBITDA and erode value.

Looking ahead: Whether this becomes a permanent reshaping of the DSO model or simply a major growth phase remains to be seen. But for now, specialty integration is one of the most active strategic plays in the market. The trend is big, the investor appetite is real, and the competitive stakes are rising. But will it work for your DSO? Let’s refer you to a specialist for that one.