Phase 1 Equity expands into six states, targets pediatric dentistry
DSO expansion strategy and 2026 growth targets relevant to practitioners evaluating affiliation opportunities.
Expansion and growth milestones
Phase 1 Equity, a Chicago-based dental services organisation majority owned by doctors, added nine practices and 20 locations over the past 12 months. The DSO entered New Jersey, Ohio, California, Tennessee, Louisiana and Pennsylvania last year and now supports more than 20 practices. CEO Mike Rice stated the company has an excellent pipeline and plans continued expansion in 2026.
Organic and inorganic growth strategies
Phase 1 Equity plans to address capacity constraints at existing practices through technology adoption, physical expansion and additional provider hiring. The company views adult aligners as an organic growth opportunity and has an active pipeline in pediatric dentistry, with Rice anticipating entry into that market within the coming year. On the inorganic side, the DSO is pursuing both practice affiliations and de novo openings in new and existing markets.
Model and industry outlook
Phase 1 Equity emphasises a doctor-centric platform with local autonomy, doctor governance, and collective decision-making on strategic initiatives. Rice identified staffing challenges and rising operational costs as the primary headwinds facing DSOs in 2026, alongside a higher cost of capital compared to 2021. The company is monitoring artificial intelligence applications in back-office operations and clinical settings as a potential offset to margin compression from inflation.
Frequently asked questions
How many practices did Phase 1 Equity add in the past 12 months?
Phase 1 Equity added nine practices and 20 locations over the past 12 months and now supports more than 20 practices total.
Which states did Phase 1 Equity enter last year?
The DSO entered New Jersey, Ohio, California, Tennessee, Louisiana and Pennsylvania last year.
What markets is Phase 1 Equity planning to enter in 2026?
Phase 1 Equity has an active pipeline in pediatric dentistry and anticipates entering that market within the coming year. The company is also pursuing expansion in both new geographic markets and existing ones.
What growth strategies does Phase 1 Equity prioritise?
The DSO uses both organic growth levers (technology, physical expansion, additional providers, adult aligners) and inorganic growth (practice affiliations and de novo openings). The company addresses capacity constraints at existing practices while pursuing new market entry.
What are the main staffing and cost challenges DSOs face in 2026?
Rising operational costs create margin compression in the current higher inflation environment. Staffing remains difficult post-pandemic, requiring improved compensation, benefits and workplace culture for recruitment and retention.
