The Ecosystem Powering Your Dentists

Henry Schein built its name distributing dental supplies, but post-pandemic market changes challenged the small clinics it served. 

Products in the Henry Schein distribution network, with 90% of orders delivered next day.

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There are 135,333 dental practices in the United States. Most are independently owned and run as small businesses. That independence matters in patient relationships. It becomes a liability when costs start moving faster than revenue.

The economics have been grinding down small practices for years. Overhead rose roughly 5% annually in both 2023 and 2024, per industry survey data, while insurer reimbursements stayed flat or declined. The ADA confirmed this pattern repeatedly: equipment prices and staff wages rising with or above inflation, reimbursements not keeping pace. One in four dentists has already dropped out of at least one insurance network. For the rest, the gap does more than compress margins. It narrows options, pushes owners to defer investments, and pulls attention away from clinical work toward vendor management and billing disputes.

The workforce shortage made everything worse. Thousands of hygienists and assistants left during COVID and did not come back. By 2022, staffing shortfalls had cut dental practice capacity by an estimated 11% nationwide, forcing clinics to turn patients away when demand existed. As of Q3 2025, one in three dentists was still actively recruiting, and 90% of those reported finding dental hygienists "very" or "extremely challenging," a number that had not budged in three years, according to the ADA.

Patient volumes didn't pick up the slack. Since 2019, inflation-adjusted consumer dental spending grew only about 8%, per BEA data tracked by the ADA. Overall U.S. healthcare spending climbed roughly 40% over the same period, from $3.8 trillion to $5.3 trillion, per CMS. Dentistry was the outlier, and small independent practices carried the consequences.

This was Henry Schein's customer base: cost-squeezed, understaffed, and running lean with limited leverage over any of it.

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Henry Schein's answer wasn't to sell more supplies. It was to become harder to replace.

The foundation was the distribution network, which covers more than 300,000 branded and corporate-brand products with 90% of orders arriving next day. For a small practice without a dedicated procurement team, that kind of reliability turns supply ordering into background noise. Fewer stockouts, fewer emergency calls, less staff time hunting down backorders. That alone earns loyalty. But it wasn't enough to build a defensible business on.

The bigger move was layering technology on top. Through its Henry Schein One division, the company provides practice management software used across tens of thousands of offices, including Dentrix and the cloud-based Dentrix Ascend platform. The Global Technology segment generates about $600 million in annual revenue. More importantly, software creates daily touchpoints that supply orders don't. When a platform sits at the center of scheduling, documentation, billing, and patient communication, it becomes part of how the office runs. Switching means retraining staff, migrating records, and rebuilding workflows. Most practices won't do that without a compelling reason.

Schein extended that logic further into services designed to absorb the operational headaches small practices can't afford to staff internally: revenue cycle management, equipment repair, continuing education, financial services, and practice transition support. Specialty products like implants and orthodontic supplies added another layer.

The result is a model where a practice can consolidate procurement, software, and back-office support under one vendor relationship. For an independent clinic running lean, that consolidation is genuinely useful. For Henry Schein, it means more wallet share, stickier retention, and a competitive position that pure distributors can't easily replicate.

The strategy paid off in market position first. Henry Schein holds an estimated 47% of U.S. dental distribution, well ahead of any competitor. More than 1 million healthcare professionals worldwide now rely on its network for supplies, software, or services. Those numbers reflect how deeply the company embedded itself in daily practice operations before anyone else could.

Financially, the mix is healthier than it used to be. In 2024, Henry Schein exceeded its internal target, with 41% of operating income coming from its high-growth technology and specialty businesses, beating the 40% goal set under its 2022-2024 BOLD+1 Strategic Plan. That shift matters because distribution revenue is volume-dependent and margin-thin. Technology and specialty revenue is stickier and more profitable.

The top line held up too. Revenue reached $12.67 billion in 2024, up 2.7%, and operating cash flow came in at $848 million, up $348 million from 2023. That came despite a serious cyberattack in 2023 that disrupted operations across the business. All three segments returned to simultaneous growth by late 2025.

The software side shows the clearest momentum. Over 10,500 dental offices were on Schein's cloud platforms as of Q3 2025, up 20% year over year. Cloud subscriptions renew automatically, grow with the practice, and rarely churn.

The model isn't finished. Dental spending remains soft relative to broader healthcare, and independent practice economics are still under pressure. But Henry Schein is no longer just a distributor waiting on procedure volumes to recover. It's the operating infrastructure many of those practices run on.

Key takeaways to consider..

47% - Henry Schein’s estimated share of the dental market

1M+ - Healthcare professionals globally rely on the network

67% - Gross margin for software services (vs. ~25% distribution)

55% - Gross margin on specialty dental products

$12.7B- Topline revenue for 2024

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