Canada Should Nationalize Dental Corporations

Corporate dentistry is on the rise in Canada, lining investors’ pockets at the expense of patients’ oral health. Dental treatment should be fully incorporated into Canada’s universal health care system to prevent the nightmare of American-style dental care.

In Canada, dental corporations are buying up assets of dental offices, taking over control of administrative aspects to maximize profits. (LGK / Getty Images)

In the last few decades, dentistry in Canada has become increasingly commercialized and has seen an increase in corporate-owned dental clinics. According to an Edmonton-based law firm that specializes in corporate dentistry, the practice is “a growing trend where a dentist (alone, with another dentist or with a non-dentist) owns and operates several dental practices through the use of corporate vehicles.” Dental corporations have a fiduciary responsibility to maximize profits, the same as any other corporation.

In Canada, corporate dentistry is following in the footsteps of the United States and Australia. Dental corporations are buying up assets of dental offices owned by dentists and taking over control of the administrative aspects of the office, such as hiring, firing, and bookkeeping.

Currently, there is no research showing the true prevalence of corporate ownership of dental clinics in Canada, but statements from dental corporations themselves paint a picture of a growing trend. 123Dentist states that it is an owner or partial owner of 350 dental practices in Canada. The Dental Corporation of Canada (or dentalcorp) owns over five hundred dental clinics. The fact that two corporations alone own 5 percent of the dental clinics in the country makes clear the reality of corporate consolidation of dental clinics in Canada.

An Investor Feeding Frenzy

Despite limited data, experts believe corporate dentistry is growing rapidly, particularly among new dentists. Because new dentists are graduating with a lot more debt than they used to — often $250,000 or more — dental graduates are less likely to take out another loan to buy or set up a dental practice, leaving them vulnerable to the siren song of investors. This corporate funding is driving up the cost of dental clinics, creating a self-perpetuating Möbius loop of corporate influence. As a result, new dentists are often looking to work for an established clinic with a steady stream of patients so they can pay down their student debts.

Many older dentists are ready to retire and want to sell their dental practice, but fewer and fewer younger dentists are willing to buy these clinics. This is creating a window of opportunity for outside investors to buy up dental offices. Dental practices are attractive to investors because they are fabulously profitable — a corporate lawyer working in the field states that they often see a 15 percent yearly return on investment.

For dental corporations to take advantage of this opportunity, they need to receive sizable investments. For example, in 2018, the Dental Corporation of Canada received US$900 million from large investment firms. In 2019, 123Dentist raised $425 million in investments with the goal of acquiring thirty-five to forty-five dental clinics a year. Financing dental clinics this way can pressure dentists, who are sometimes personally invested in these corporations, to ensure the clinic brings in enough revenue to pay back the loans and make a profit. This in turn can have an impact on dentist’s treatment recommendations.

A survey of Canadian dentists found that those who see themselves as business people rather than health care providers — as well as those who are still paying student loans — were more likely to be aggressive in their treatment recommendations. With a more aggressive treatment approach, a dentist might diagnose more cavities than is warranted and aggressively promote luxury and cosmetic procedures that are not medically necessary. This involves counseling such treatments as veneers, implants, tooth straightening, whitening, and “replacing old mercury fillings.”

American-Style Dental Care Is a Nightmare

The growth of corporate dentistry in the United States has exposed how the profit motive can lead to overtreatment and fraud. If Canada continues increasing its corporate ownership of dental clinics in a fashion similar to the United States, it is setting the stage for disaster. A 2018 report from the American Dental Association details an incident that is symptomatic of the widespread shady conduct of corporate dental clinics in the United States:

Samson Dental Partners and ImmediaDent were alleged to have engaged in fraudulent billing and excessive and unnecessary treatment. The two companies were allegedly “prioritizing corporate profits over patient care,” with non-dentists in management positions exerting influence on dental care decisions, according to the settlement agreement.

These corporations paid $5.1 million in a settlement to the state of Indiana.

Alex Pareene, an investigative journalist who studies dental fraud in the United States, has exposed the corporate culture in dentistry, explaining how non-dentists encourage dentists to engage in more aggressive clinical decision-making. As Pareene put it in an interview with the New Republic: “The executive at the top tells the dentists working for them which procedures to push, like a chef tells their team of waiters to push the daily special.”

In another case, the New York attorney general’s office reported:

The state Attorney General’s Office has reached a settlement with Aspen Dental Management requiring the company to pay $450,000 in civil penalties and to reform its business and marketing practices after accusing the company of pressuring dentists and dental hygienists at its offices, including six in the Buffalo area, to sell unneeded services to their patients.

According to a US Senate joint staff report on corporate dentistry, Aspen Dental has made similar settlements with three other state attorneys general — in Pennsylvania, Massachusetts, and Indiana. Two more dental corporations, Kool Smiles and Small Smiles, had to return roughly $24 million each to patients after a whistleblower spoke to the US Justice Department about the companies defrauding Medicaid.

Public vs. Private Delivery of Care

Clearly, dental corporations in the United States have prioritized profits over the public good. Because of the lax oversight of dentistry in Canada, it is conceivable that dental corporations here have already been pushing the boundaries of what is acceptable. The dangers that corporate ownership of dental corporations presents is profound. To forestall the development and spread of corporate dentistry, the Canadian government ought to nationalize dental corporations and move from a private to public delivery model of dental care.

The work incentives for dentists in public delivery of dental care is very different than those for dentists in private delivery. Public dental providers are paid a salary, effectively removing the incentive for overtreatment that is present in the private fee for service model. The salaried model allows practitioners to take the time needed to treat patients with complex needs, rather than feeling rushed to get to the next patient.

Since profitability is not the goal of these clinics, they can place a greater focus on prevention rather than treatment of dental disease. Central to this aim is increasing the use of dental therapists, which are providers that can do fillings, cleanings, and simple extractions, all at a fraction of the cost of a dentist. Dental therapists are to dentists as nurse practitioners are to physicians.

Although the dental therapy-public delivery model of dental care was wildly successful in school-based dental clinics in Saskatchewan and Manitoba in the 1970s and ’80s, they are absent in Canada today. This is because the private dental industry, rightly, perceived this model as a threat. The industry effectively lobbied Conservative governments to shift Canada’s meager public dental spending from a public delivery model to the inferior dentist-centered private practice model.

The New Democratic Party (NDP) is using their leverage in the current federal minority parliament to force the Liberals to invest in dental care. While this is a step in the right direction, a shift in the delivery model is also needed to ensure this program does not shovel money into the pockets of dental corporations. By nationalizing dental corporations, the NDP can increase their base of support among the dental workforce by providing better working conditions in public rather than private clinics. Further, the greater efficiency of the dental therapy-public delivery model will increase the oral health of Canadians while saving money.

The news of the federal dental plan is promising, but it is only the first step toward fixing Canada’s dysfunctional dental care system. A proper fix will require the full integration of dental care into Canada’s universal health care system and the nationalization of dental corporations. Only these measures can ensure that public funding goes toward increasing public health instead of private profits.