Consolidation in the dental industry: a closer look at dental payers and providers
Abstract
We
examine the effect of commercial dental insurance concentration on the
size of dental practices, the decision of dentists to own a practice,
and the choice of dentists to work at a dental management service
organization—a type of corporate group practice that has become more
prevalent in the United States in recent years. Using 2013–2015
dentist-level data from the American Dental Association, county-level
data on firms and employment from the United States Census, and
commercial dental insurance market concentration data from FAIR Health®,
we find a modest effect of dental insurance market concentration on the
size of dental practices. We also find that a higher level of
commercial dental insurance market concentration is associated with a
dentist’s decision not to own a practice. There is inconclusive evidence
that higher levels of dental insurance market concentration impact a
dentist’s decision to affiliate with a dental management service
organization. Overall, our findings imply that dentists consolidate in
response to increases in concentration among commercial dental insurers.
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