Dental, vet and physician roll-ups: where vendor cost leaks

Every acquired practice brings its own supply account, lab, software, phones and agency. Integrating vendors at acquisition is the cheapest fix there is.

A dental, veterinary or physician platform rarely loses margin in one big contract. It loses it one location at a time. Every acquired practice arrives with its own supply account, its own lab, its own phone carrier, its own marketing agency and its own software licenses. The deal model assumes those get folded into the platform. Many of them just keep billing.

The consolidation is real, and so is the contract pile

The pace of acquisition explains the problem. The ADA Health Policy Institute found that 16.1% of US dentists were affiliated with a dental service organization in 2024, and more than 1 in 4 dentists within ten years of graduation. PitchBook data reported by Becker's Dental counted 55 add-on acquisitions by Specialized Dental Partners and 53 by Smile Doctors between 2021 and the end of 2024.

Veterinary care has moved further. AAHA's Trends magazine cites Brakke Consulting estimates that 25% of general practices and 75% of specialty practices are corporately owned, and PitchBook figures showing $51.6 billion of private equity investment in the sector. Physician groups follow the same pattern: a JAMA Health Forum study found 4.9% of physicians across six office-based specialties worked in PE-acquired practices in 2019, with dermatology highest at 7.5%.

Every one of those add-ons is a bundle of vendor agreements signed by a practice owner who negotiated alone.

Supply and lab contracts

Supplies and lab work are large, recurring and personal. A dentist who has used the same composite and the same crown lab for fifteen years will not switch because a memo says so. That is why this category leaks.

In reviews like this we typically look for four things:

• Pricing that never moved. The platform negotiated a national distributor agreement, but acquired offices still order on their old account numbers at their old prices. Nobody linked the accounts.
• Off-contract ordering. Clinicians buy from a second distributor or direct from a manufacturer because the item they want is not on the formulary.
• Lab sprawl. Twenty offices, fourteen labs, each with its own fee schedule for the same crown and its own remake policy.
• Rebates nobody collects. Volume rebates depend on the platform reporting consolidated volume. If the accounts are not linked, the volume does not count.

Your counterparties are consolidating too. Patterson Companies, which supplies the dental and animal health markets, was taken private by Patient Square Capital in April 2025. Distributors run their own value creation plans. Negotiate like you know it.

Practice-management and imaging software

Software hides duplicate cost better than any other category because it looks like an IT problem. An acquired practice brings its practice-management system, imaging software, patient communication tool, review platform and often a separate online booking tool. Many of these are licensed per location or per provider, on multi-year terms.

The platform has a target stack. Migration takes months, so the old contracts run in parallel. Parallel becomes permanent. For every acquired office, check what it still pays for, when that term ends, and whether the notice window has already passed.

There is a continuity reason as well. After the 2024 Change Healthcare cyberattack, an AMA survey of practices that had not switched clearinghouses found 32% said their EHR or practice management system did not support a switch, and 36% cited payer system incompatibilities or contract exclusivity. Knowing exactly which systems each location depends on is a cost exercise and a resilience exercise at the same time.

Telecom and phones

Patients book by phone, so phones matter more here than in most businesses. Each practice has a carrier, a phone system, sometimes a call tracking number from its old agency, and a fax line nobody can explain. Platforms that move to a central contact center often keep the local lines running just in case. Those lines bill every month. Our telecom contracts piece covers the inventory method. In a multi-site platform, run it location by location against the integration checklist.

Local marketing and agencies

Acquired practices often come with a local agency on a monthly retainer, plus their own Google Ads account, review tool and website hosting. The platform then hires a central agency. Now two agencies bid on overlapping search terms in the same town, sometimes against each other.

Search is not cheap in these categories. LocaliQ's 2026 benchmarks put average search cost per lead at $72.97 for dentists and dental services, $40.04 for physicians and surgeons, and $31.50 for animals and pets. Two agencies chasing the same patients means two management fees and higher click prices. And Google's help page for Local Services Ads states that credits for invalid or low-quality leads are not available for health care verticals, so a practice running those ads absorbs its bad leads.

Decide at acquisition who owns local marketing. Move ad accounts, domains and tracking numbers under the platform, and give the local agency notice if it is not part of the plan. Our marketing cost work starts from that ownership question.

Duplicate contracts arrive with every deal

The acquisition model books vendor integration as a savings line. The contracts treat the acquisition as a non-event. Many practice vendor agreements renew automatically and say nothing about a change of owner, so they keep running. Some include change-of-control or assignment clauses that give you a reason to reopen terms. Few teams read them in time to use them.

The result is a platform paying for the national contract and the local contract for the same service, sometimes for years.

Why acquisition is the cheapest moment

Integrating vendors costs least in the first 90 days after close. Four reasons.

The integration team is already touching everything. Payroll, IT, credentialing and banking are being cut over. Adding vendor contracts to that checklist costs little. Doing it as a separate project in year two costs a second project.

People expect change. Clinicians and office managers accept a new lab or supply account as part of joining the platform. Eighteen months later, the old way has been quietly re-approved and every switch becomes a negotiation with your own staff.

The paperwork is in hand. During diligence and closing you have the seller's agreements in a data room and the seller's attention. Afterward, the seller is gone and the contracts sit in a drawer in an office you have never visited.

Notice windows do not wait. A software or agency contract with a 60-day notice window that renews three months after close locks in another year unless someone acts in the first month.

Every month of delay is a month of paying twice. Every renewal that passes resets the clock.

The next step

Add a vendor line to the integration checklist for every new location: each contract, its annual value, term end, notice window and the platform contract it should move to, with an owner and a date. For platforms already carrying a backlog across existing sites, a four-week Diagnostic or the Portfolio Vendor Desk builds that list and works the renewals in order of date, not size.

Sources: Becker's Dental, 16% of US dentists affiliated with a DSO: state-by-state breakdown, ADA News, HPI: More new dentists affiliated with DSOs, Becker's Dental, 6 DSOs among the biggest PE-backed buyers in healthcare, AAHA Trends, Corporate consolidation and the rise of private equity, JAMA Health Forum, Geographic variation in private equity penetration across select office-based physician specialties, Business Wire, Patterson Companies completes acquisition by Patient Square Capital, AMA, Advocacy Update spotlight on Change Healthcare cyberattack, LocaliQ, Search advertising benchmarks for every industry, Google Local Services Ads Help, How leads work.