US Dental Practices Could Save Millions by Exploiting Economies of Scale
The US dental care industry in Colorado was analyzed to see how efficiently dental practices operate. The study used two methods, one called data envelopment analysis (DEA) and another called stochastic frontier analysis (SFA). The findings show that most inefficiency in dental practices comes from not allocating resources optimally. To fully benefit from economies of scale, a dental practice should aim for an output level of $1.68 million, with an average cost of 50.6 cents for each dollar earned. Both methods used in the study gave similar results.