Ep. 255: The Rural Strategy
Where you open or buy a practice can have a major impact on its long term success. In this episode, Jeff explains why today's buyer market presents a unique opportunity and how to identify locations with the greatest growth potential.
DSO Summit - https://www.mgeonline.com/dso-summit
HRSA - https://bhw.hrsa.gov/workforce-shortage-areas/shortage-designation
Have a question for Jeff?
Fill out the form and he will get back to you.
Questions From This Episode
How many practices are expected to come onto the market over the next decade, and will there be enough buyers?
Roughly 36,000 US practices are projected to come up for sale over the next ten years as the large cohort of dentists 55 and older retires, but with younger dentists buying practices far less often than they used to, only about 19,000 of those are expected to actually sell to a solo doctor or DSO, leaving an estimated 17,000 practices to simply close as the owner hands back the keys or sells the charts.
Why does the average dentist-to-population ratio differ so much between metro and rural areas?
The national average is about 59.5 dentists per 100,000 people, but that splits sharply by area, roughly 64.7 per 100,000 in metro markets versus about 32.7 in rural markets, nearly half. A lot of that gap comes down to where younger dentists are actually settling, since 31 percent of dentists five years or less out of school are DSO affiliated, and DSOs cluster heavily in urban areas.
How does an underserved area get officially defined, and what does the scoring mean?
The Health Resources and Services Administration designates an area as underserved if it has at least one full-time dentist per 5,000 residents, or per 4,000 if dental needs are unusually high, then scores it from zero to 26, with higher scores indicating a more severe shortage. Some officially underserved areas turn out to have solid or even high median household income, not necessarily rural poverty.
What are some concrete examples of nearby underserved or lower-competition areas relative to a major metro?
Kaufman County, Texas, about an hour from Dallas, has roughly half the dentist-to-population ratio of Dallas itself while carrying a higher median income. Kendall County, Illinois, south of Chicago, has less than half Cook County's dentist ratio with a considerably higher median income too. Officially underserved counties like Elbert County, Colorado and Camden County, North Carolina show similarly strong household incomes despite their underserved designation.
What steps does Jeff recommend before actually committing to a practice in an unfamiliar area?
Drive the actual commute during rush hour before committing if you'll be working there yourself, since a long daily drive that feels fine in theory can quietly become unbearable. Check how hard it actually is to find staff locally, using cues like inflated signing bonuses on job boards, and for a satellite office specifically, run a test job ad for an associate before ever buying, since being unable to find anyone willing to work there can sink the whole plan.
Episode Transcript
-
There's an old saying in real estate that you make your money when you buy. That same logic applies to purchasing, or even starting from scratch, a dental practice. It should be a good deal. When you do the math and fully evaluate the situation, you should be able to see yourself adding considerable value in a relatively short time. If you're looking at a practice to purchase and you can't see how it would be considerably more valuable three to five years from now, I wouldn't recommend buying it, assuming you know how to actually scale it, which is a whole separate conversation. Unlike real estate, plenty of factors affect a practice's value, the largest being overall productivity and revenue.
The other major thing to consider when you buy or start an office is location. Your location isn't the determining factor in your success, we have plenty of successful clients in fiercely competitive markets, but it can definitely help. Compare a practice in a standalone building that's genuinely hard to find, or one of thirty or forty doctors in a high-rise, against a practice in a strip mall next to a Starbucks and a supermarket. Who gets more foot traffic? I had a client tell me years back that he picked up an extra 25 new patients a month once a Starbucks moved in nearby. Location won't determine your success on its own, there are a lot of ingredients to that, but it can definitely be a helpful building block.
About two months ago I recorded my annual State of the Industry episode, covering a wide range of economic data on dentistry and where it's projected to head. One thing that really stuck with me afterward was the comparison between metro and rural markets. Here's what's interesting: nationally, the average number of dentists per 100,000 people in the US is 59.5. Break that down between metro and rural areas specifically, and the numbers get starkly different. The average metro area has 64.7 dentists per 100,000 people, while the average rural market has 32.7, roughly half. That's a substantial difference.
So when I talk about location here, I don't just mean visibility or foot traffic, I mean what city or region the practice is physically located in. And this isn't limited to truly rural areas either. There are suburban or bedroom communities not far from major cities, and I'll give you specific examples, where the dentist-to-patient ratio drops dramatically while median income stays comparable, or is actually higher. So if you're looking for a satellite office, a third or fourth practice, or you're a new practitioner or associate hunting for your first location, there are a few things worth considering to give yourself a real leg up. That's what I want to talk about in this week's episode, where to actually buy that practice, or second or third location, including resources, ideas, and metrics to help narrow down the right place for you. My name is Jeff Blumberg, and I'm your host.
Let me set the table a bit first, because there's an interesting phenomenon happening. Looking at message boards and social media, or just talking with associates and newer practitioners, I haven't seen this degree of career dissatisfaction in my career. Younger doctors today report noticeably more frustration and stress than they did 20 or 25 years ago, and a lot of them are carrying considerably more debt too. But here's the thing: whether you're looking at a second location or your very first office, there has never been a better time to buy and own a dental practice. I covered this in depth in episode 248, the State of the Industry episode, and I won't rehash all of it here, but I do want to set the stage so you understand the environment we're currently in.
As far as practice acquisition goes, we're in the early stages of a genuine buyer's market. Think of it the way you would real estate: a buyer's market means a large amount of inventory relative to buyers, so prices come down and buyers have real choice. A seller's market means very little inventory with many buyers competing for the same property. With dental practices specifically, there's a substantial demographic shift underway in the US that will continue over roughly the next ten years, which I broke down heavily in episode 248, but here's a general idea if you haven't heard it.
As of 2024, the latest figures available, there are 202,500 dentists in the United States. Based on current age brackets, roughly 34 percent of those doctors, somewhere around 70,000, are over 55, and about 50,000 are over 60. The average retirement age in dentistry runs around 68 or 69. So a substantial portion of practicing dentists are approaching retirement age, we jokingly settled on calling them experienced doctors rather than older doctors at our owners conference, since several of us in the room, myself included, fell into that category too.
Part of the underlying problem is that the number of younger doctors entering the field, based on current dental school enrollment and graduation rates, including newer schools opening up, isn't going to fully replenish the projected wave of retirements over the next five or six years. Right now there are roughly 202,500 dentists in the US. We're projecting that number to dip to around 195,000 by 2028 or 2029, and it won't rebound until around 2033, once new graduates start filling the ranks, potentially reaching around 205,000 by then. These projections could shift with changes in enrollment or relicensing trends, but that's the current trajectory.
Here's the real problem though: younger doctors simply aren't buying practices the way they used to. There's even been reporting from the ADA on this, describing practice ownership as being delayed among younger dentists, meaning people are buying practices later in their careers than before. Back in 2005, 25 percent of dentists under 30 owned their own practice, and 55 percent of dentists 30 to 34 did too. Compare that to the most recent figures, from 2025: only about 8.8 percent of dentists under 30 currently own their own practice, and the 30 to 34 bracket has dropped to somewhere in the low 20 percent range. Ownership rates don't really start resembling those older figures again until you reach the 45-and-over bracket.
So think about what that actually means. A large share of US practices are currently owned by doctors 55 and older. Eventually those experienced doctors will retire, but younger doctors aren't buying at anywhere near the same rate. How does that play out? We're projecting that roughly 36,000 practices will come onto the market over the next ten years, but there won't be enough buyers to absorb them. We estimate about 19,000 of those will actually be purchased, split between solo doctors and DSOs, unless current trends shift meaningfully, which means an estimated 17,000 practices will simply disappear, the owner handing the keys back to the landlord or selling off the charts. You've probably heard of doctors selling their charts before, this is exactly why that happens.
So as a buyer, you're heading into a situation with a large volume of practices for sale and not nearly enough buyers to absorb them. DSOs won't buy them all either, since they have specific criteria for what they're willing to acquire. That's the landscape right now, and it applies even in your own town, whether you're a new practitioner looking for your first office or an established doctor looking to add locations. Combine this with the rural and suburban dynamic I mentioned earlier, and it becomes something of a multiplier, since retiring doctors aren't only concentrated in metro areas, they're retiring in rural and suburban areas too, further thinning out the doctor-to-population ratio there.
Here's another interesting piece: 31 percent of dentists five years or less out of school are currently DSO affiliated. Where do DSOs concentrate their practices? Predominantly urban areas, not rural ones. So you end up with a lot of younger doctors clustered in cities, while rural areas simply don't have many dentists at all. So if you're considering buying a practice, remember, location alone won't determine your success, but if you want to make things easier on yourself, consider going where the competition genuinely isn't. It's a basic supply and demand issue.
How do you actually find areas where dental supply relative to population is low and income is decent? This is exactly where the internet becomes genuinely useful. Between county-level data, various statistics organizations, and state health department websites, you can piece this together fairly easily when scouting a location. Here are a few examples I pulled together, and to be clear, this isn't necessarily out in the middle of nowhere, some of it sits close to major metro areas.
Take the Dallas-Fort Worth metro area as an example. According to the Texas Department of Health Services, the average dentist-to-population ratio there is 56 per 100,000, already below the national and urban averages. About an hour away is Kaufman County, whose largest city is Forney. Out there, the dentist-to-population ratio drops to 28 per 100,000, roughly half the Dallas figure, despite being only an hour's drive. And median income? Dallas sits at $76,500 a year. Kaufman County actually runs higher, at $89,500. So picture this: you're a doctor practicing in Dallas-Fort Worth looking for a second location, you find a practice for sale an hour away in Kaufman County, and you're opening in a market with meaningfully less competition and comparable or better income levels. You can find similar patterns essentially anywhere in the country.
Here's another example: Chicago's Cook County has 71 dentists per 100,000 people, with median income around $83,500 a year. Kendall County, a little over an hour away depending on traffic, south of Aurora, has only 25 to 31 dentists per 100,000 people, with median income actually running higher, at $111,000, according to Dentagraphics and USA Facts. So again, picture a satellite office an hour outside Chicago, out in Oswego in Kendall County, meaningfully less competition, all within a reasonable commute. It's not going to make or break your success on its own, it's more like wearing an actual bathing suit instead of shorts when you go swimming, not strictly necessary, but genuinely better if you have the option. You could even live in Chicago and commute to a practice out there. There are examples like this all over the United States.
Depending on how mobile you're willing to be, there are areas with even lower dentist-to-population ratios, officially designated as underserved areas. This is a real, formal designation from the Health Resources and Services Administration, part of Health and Human Services. To qualify, an area needs at least one full-time dentist per 5,000 residents, or per 4,000 if dental needs in that area run unusually high. So if an area has 100,000 people, roughly 25 or fewer dentists would qualify it as underserved. These areas get scored from zero to 26, with a higher score indicating a more severe shortage.
Here's where it gets genuinely interesting: you can cross-reference these underserved designations against median income, and some of these areas carry surprisingly strong incomes, not the rural poverty you might assume. A few examples, and again, how far you're willing to go depends on your own mobility. Elbert County, Colorado, about an hour and a half southeast of Denver, has a median household income of $124,360, and it's officially designated underserved with a score of 9 out of 26, despite sitting relatively close to Denver. Schuyler County, New York, south of Rochester and Syracuse near the Finger Lakes, has a median household income of $69,500 and an underserved score of 12. Camden County, North Carolina, in the far northeast corner of the state, has a median household income of $89,170, and interestingly cycles through periods with zero actively practicing dentists at all, carrying an underserved score of 14. Borden County, Texas, in oil country south of Lubbock, has a median household income of $65,625 and a score of 16. For comparison, Kendall County, the one I mentioned near Chicago, carries a score of 4, still technically underserved despite being close to a major metro.
So you can sometimes find a genuinely underserved area just outside a city, or you may need to travel further out to find a true dental desert. It depends entirely on how far you're willing to go. We've had clients who were licensed in a particular state without being tied to any specific area within it, genuinely willing to relocate. We'd run a demographic study, identify an underserved area or one with a low dentist-to-population ratio, and see if they were interested. It's worked out well in a number of cases, including one periodontist client who moved to a city that had only two other periodontists, despite being a fairly major city itself.
The broader point, and this is something we do with every client buying a practice, is running a full demographic study: income levels, age distribution of local residents, population size, number of other doctors in the area, and a few other factors worth examining. We actually cover this in depth in a seminar called the DSO Summit, since a lot of our clients are pursuing this multiple-practice strategy right now given the buyer's market, but doing it the right way, staying fee for service rather than joining every plan available, delivering genuinely excellent care, and placing associates who are there for the long term. I'll put a link to that seminar on the episode webpage, along with a link to the HRSA site where you can research underserved area designations yourself.
So, given that we're in a genuine buyer's market, your location might work out fine whether you're buying your first practice or an additional one. And again, location isn't the only factor behind success, your ability to market, sell, and execute as an owner matters considerably more. But if you're open to looking beyond just the street or neighborhood you're already familiar with, and genuinely considering an area outside your current one, here's some practical advice.
Say you're in Chicago considering Kendall County. First, check what listings are actually available there. Then go visit and get a genuine feel for the place, you don't want to open somewhere you don't actually like. From there, a few guidelines depending on whether this will be your first practice, where you'll personally be working, or a satellite location you won't be working in directly.
If this is going to be your first practice and you'll be working there yourself: first, make sure you genuinely like the area. Say you're living in Dallas and considering a practice in Kaufman County without actually relocating, I'd strongly recommend driving that actual commute during rush hour before committing. If your planned start time is 8:30 in the morning, get in the car and see how long it genuinely takes. I've done this myself, when I moved a significant distance from my previous office location, the first thing we did before committing was drive the actual commute during rush hour, because if that turned out to be an hour and a half or two hours each way, I knew that excitement in the beginning would eventually turn into real regret. Go drive it during rush hour and see how it actually feels. If you're still happy with it, great, if not, you can adjust your plans before committing.
Next, find out how difficult it actually is to recruit other providers in that area, especially important if you're heading somewhere genuinely remote. How hard is it to find a hygienist, for instance? You can ask other doctors in the area, ask the doctor you're buying the practice from if applicable, talk to supply reps, or check job boards like Indeed. You can usually tell if a market is tight based on whether postings include signing bonuses or above-average pay, a $4,000 signing bonus for a hygienist is a clear signal that hygienists are hard to find there. Worth knowing upfront so you're not caught off guard, though it's not necessarily a dealbreaker, you can always recruit providers from elsewhere in the state. We've had clients successfully advertise in a nearby city to attract people looking for a slower pace of life who are willing to relocate, I've covered that strategy in other episodes.
If the area you're considering isn't too far from a major metro, say Oswego relative to Chicago, plenty of providers may be willing to make that commute rather than relocate entirely. As an example close to home, if I have a practice in New Port Richey, about an hour from Pinellas County near Clearwater and St. Petersburg here in Florida, doctors and hygienists alike are willing to make that drive. That said, if you're heading into a genuine dental desert or a more severely underserved area, recruiting can be considerably harder. If you're the one actually practicing there, at least you're present day to day, and general staff are usually easier to find anywhere, since staffing needs tend to scale with the local population, it's specifically clinical providers that can become the real bottleneck.
If it's a satellite location instead, a second or third office you won't personally be working in, a few different recommendations. First, make sure your primary office is running smoothly before taking on a location an hour, two, or three hours away, you don't want a struggling remote office compounding a primary practice that isn't already under control, and definitely don't want your only associate there to quit unexpectedly, that's a genuine nightmare scenario I've seen happen. If the location is genuinely remote and far from you, I'd recommend running a test job posting for a doctor before actually buying the practice, to see whether you can even find someone willing to work there. Sabri, whom you've heard on the podcast before, did exactly this for a client considering a remote practice purchase, suggesting they post a job ad in the nearest city first to gauge interest. They got zero responses, and ultimately walked away from the deal entirely, since they simply couldn't find a provider willing to relocate there. Compare that to a scenario where you personally move out to a more rural area as the owner doctor, with your own hygienist and staff already in place, and you're recruiting an associate from a nearby city who's licensed in your state, at least you're physically present. But trying to place an associate alone out in a genuinely remote area while you remain in the city yourself is considerably riskier, especially if that associate doesn't work out and you're left with no one there at all.
Even if you won't personally be working at a satellite location, I'd still recommend visiting and developing real familiarity with the area, unless you're already from there. You don't want to open a location and only afterward discover things about the area that make you regret the decision.
But as I've said, there's genuinely never been a better time to buy, we're in a real buyer's market window right now. Location isn't the sole determining factor in your success, but it can absolutely help, and it's worth real consideration before you buy. Don't get fixated on staying exactly where you already are, look outside your immediate area, and you might find a market with meaningfully less dentist supply than you'd expect, giving you a real advantage once you get started.
I hope this helps, and I genuinely wish you the best with it. If you have questions about any of this or where the data came from, I'll put a link to the HRSA site on the episode webpage. If you have questions about demographic research specifically, you can email me directly at jeffb@mgeonline.com. And if you'd like to learn more about MGE, I'll also link the DSO Summit seminar on the episode webpage, or you can find us online at mgeonline.com or call us at (800) 640-1140. Folks, have a great week, and we'll see you at the next episode.