Irving, Texas-based U.S. Oral Surgery Management is preparing for a more favorable business climate in 2025 after dealing with several challenges that faced the dental industry this year.
USOSM is a management services organization supporting oral surgery practices in 28 states.
President and CEO Richard Hall and COO Alisa Ulrey recently spoke with Becker's about the company's accomplishments this year and their expectations for 2025.
Editor's note: Responses were lightly edited for length and clarity.
Question: What are your proudest accomplishments from 2024?
Alisa Ulrey: I think we take a lot of pride in several key areas at USOSM. First are always our surgeon partners and the work they do for their patients and communities. One distinction we're really proud of this year was our establishment of the oral and maxillofacial centers of excellence. This is a first-of-a-kind initiative we established in 2024. Our centers of excellence are really designed to differentiate our practices by strengthening their commitment to clinical quality, and we did that through accreditation from the Accreditation Association for Ambulatory Health Care. Achieving this accreditation was a really significant milestone that really supported the dedication of the highest levels of quality care. We had two of our partner practices that received that recognition this year, and we are really excited to continue to get more of our practices through the accreditation process in 2025.
Another area we've been really proud of is our commitment to enhancing our operational effectiveness. We've spent a lot of time this year focused on advancing our analytics, building predictive tools that help our KPIs be more directional to deliver outcomes and have more actionable insights to support our strategies. These efforts have helped to not only improve our overall growth, but also our back-end processes from a revenue cycle standpoint, as well as just building efficiencies in our practices, which has been great. We've also focused on factors such as surgeon recruitment and put a lot of investment in our teams. We know that's critical to ensuring long-term success, [having] a really strong pipeline of surgeons, and we've really built a strong infrastructure there expanding into different states and improving our quality initiatives. None of that would have been possible without the strong partnerships with our surgeons, the work of our practice support center leaders and specifically our field operations team that has really focused on improving those synergies.
Q: USOSM's CFO described the company's growth in July as a little bit behind expectations, but also added that the company had a strong pipeline of incoming partners to finish off the year. What are your thoughts on where the company's network stands now?
Rick Hall: We're very pleased with our performance this year. We're going to achieve our operating expectations from an organic growth perspective as it relates to EBITDA, and that's our most important goal for the year. When we looked at 2024 from a planning perspective in late 2023, we may have underestimated some of the downward pressure or headwinds that orthodontia and general dentistry were facing in some areas of the country, and of course, we're heavily reliant on our referral base. That pressure translated into some pressure for practices that would have been good candidates for us to partner with [and] maybe sitting on the sidelines a little bit in 2024.
We had a good, solid year — probably not as good as previous years, but we're really excited about 2025 as the macro market conditions become a little bit more favorable, both as a result of the election in November and the reduction in interest rates that we're seeing. Overall, the business environment is becoming more favorable, so we're really bullish about 2025 and returning to our normal percent of growth through mergers and acquisitions. We average typically around three practices per month that we partner with, and we're confident that we're going to get back to that level of growth in 2025.
We continue to see really good opportunities throughout the sector. The market remains active as practices seek stability and resources offered by management services organizations. The overall environment for partnerships is improving. We expect steady growth driven by strategic acquisitions. I think we will see more concentration and density focus as we look to build more density and concentration in markets that we're already in, and then strategically expand into additional new markets as well.
Q: Can you tell me more about what we can expect to see from USOSM next year in terms of growth?
RH: We're beginning to grow more up in the Northeast and in the South. We continue to grow in the Southeast and Southwest. I think the Pacific Northwest and California have been strong growth areas for us, so I think they'll continue. We're keeping a sharp eye on the regulatory environment as well. There's been a lot of regulatory activity at the state level. We're actively engaged with the [Association of Dental Support Organizations] to monitor those activities and developments very carefully, so that will shape some of our strategy on a go-forward basis, but right now, we're going to be focused and disciplined about how we partner with practices as the leader in the oral surgery space. We want to make sure we continue to set the bar as it relates to the quality of practices we partner with, as well as the performance of those practices once they become partners. So, we're selective, we're disciplined, and we're going to continue to build density and concentration in the markets that we're in today, as well as expand strategically.
Q: What trends are you currently following in the oral surgery field right now?
RH: There are a number of them. Surgeon recruitment, particularly for oral and maxillofacial surgeons, has become extremely competitive, so that's a trend that's right at the top of our list. General dentists are increasingly performing some procedures that would traditionally be handled by specialists. I think that's a response to the pressure they're feeling in the market and [them] looking for revenue diversification opportunities, but this shift underscores the need for vigilance and quality in patient care as well. You may have seen in the press recently that there were concerns raised around quality and patient care as more general dentists did implantology and full arch cases. We're obviously continuing to stay abreast of regulatory trends that are changing on a state level.
There is a lot of discussion and exploration in technology and operational efficiency tools through [artificial intelligence] and other technologies, and we're continuing to watch those carefully. Our team is continuously evaluating technology for deployment within our platform to gain efficiencies or improve patient care delivery, and we're going to continue to stay focused on that as well.
AU: The only thing I would [add] is around how we are able to attract patients into our practices. The traditional oral surgery referral management process is more boots on the ground, and the patient would go in and see a referral and be referred to our offices. As Rick talked about the use of technology and digital transformation, that patient journey is evolving a bit. I don't think you'll ever get away from that day-to-day practical referral development that's more boots on the ground [and] localized, but we have to continue to look at different ways to ensure that when there are patients who need to see an oral surgeon that they have different streams to be able to access care, and not just through the traditional ways we've seen before. So, I think as the world has changed [with] more technological advancement and solutions, we have to continue to stay abreast of those and be on the cutting edge as well.
Q: What will be the biggest challenges for DSOs in 2025, and what will DSOs need to focus on to be successful?
AU: [The challenges will] stem from these economic pressures we've all been seeing through a number of years, through inflation [and] labor shortages. While it has improved in the last year, we still have opportunities to attract high quality employees who can continue to focus on really great patient care. Some of those challenges are industry-wide, and some of those are more acute and specific. We've been really focusing on improving workforce retention. We have a very specialized workforce that comes in. Our surgical techs work side-by-side with our surgeons and are really critical to quality patient care, and [we're] really investing in their training. Our front office staff, our practice support center staff, we're always looking at ways to improve the work environment and create a culture where people feel valued and appreciated and enjoy coming to work every day.
We're looking at competitive analysis from a compensation standpoint, to make sure we are competitive in the markets in which we support our partner practices. I think the other thing is we have to embrace technology, and that is challenging sometimes because technology is different than perhaps we have led or managed in the past, so leveraging innovative solutions and understanding how we evaluate which ones are going to be the best suited to help streamline operations and continue to build efficiencies while remembering that quality patient care is truly the foundation of what we do.
Organic growth continues to be really important. So, how do you grow your same practice revenue year over year? You do that through preserving your surgeon ethos, continuing to ensure that they stay connected with what we're working on, [and making] sure these models resonate with surgeons so that they feel like they're getting that support of taking away some of those administrative burdens and focusing on patient care. We make it easier for them and almost seamless for those things to happen, but they're still side-by-side with us in our partnership. Recruitment is really competitive in this space. Surgeon recruitment will remain a major focus given increased competitiveness of the market. DSOs are going to continue to need to differentiate themselves by these opportunities, both from culture retention and ensuring that we create the best environment for people to come to work every day.