The potential impact of Trump’s second term on real estate professionals focused on the healthcare sector presents challenges and opportunities across multiple sectors. His administration will have the advantage of the majority in the Senate and House, which may make it easier for the Republicans to pass new policies and policy changes, including those affecting the healthcare industry.
Fluoride in the water
For decades, communities throughout the United States have added fluoride to public drinking water to help prevent tooth decay. Numerous scientific studies support this policy, considered one of the most effective public health measures for improving public health. According to the CDC, drinking fluoridated water reduces cavities by 25% and keeps teeth strong in adults and children.
The U.S. Public Health Service (USPHS) recommends an optimal fluoride concentration in drinking water of 0.7 milligrams per liter (mg/L). However, although the federal government provides these guidelines, state and local governments determine whether to fluoridate their water. Some communities have opted not to do so because of concerns about potential health risks or personal beliefs.
Trump’s nominee for the Department of Health and Human Services (HHS), Robert F. Kennedy, Jr., has long criticized water fluoridation even though the American Dental Association (ADA) and the American Academy of Pediatrics (AAP) still recommend it.
In responding to a September 2024 ruling of U.S. District Judge Edward Chen, in which he said he “does not conclude with any certainty that fluoridated water is injurious to public health,” there is still an “unreasonable risk” of harm. He said the Environmental Protection Agency (EPA) must address the optimal fluoridation level via regulatory action.
Charlotte W. Lewis, M.D., M.P.H., FAAP, and a member of the AAP Section on Oral Health, said, “There is nothing about the current decision that changes my confidence in the safety of optimally fluoridated water in the U.S. Water fluoridation is a public health policy based on a solid foundation of evidence. When new research is published, health experts scrutinize it to make sure it meets high standards for public safety.”
The ADA said it “remains staunchly in support of community water fluoridation at optimal levels to help prevent tooth decay.”
Should the HHS roll back its recommendations, more communities may opt to remove fluoridation from their drinking water supplies. In the dental space, these potential changes to water fluoridation policies and EPA regulations could necessitate significant infrastructure modifications in medical office buildings.
Property owners and managers should prepare for potential water system upgrades, particularly in facilities with dental tenants. These modifications could impact existing properties and new development specifications.
Deregulation
Trump can use the Congressional Review Act (CRA) to reverse Biden-era healthcare regulations. The CRA facilitates bypassing committee hearings and Senate filibusters. Trump could use the CRE to reverse any rules finalized after August 2024. His administration could deregulate healthcare, potentially affecting dental practices and insurance.
Among the significant healthcare rules at risk are:
- Nursing home staffing requirements
- Managed care wait time standards
- ACA discrimination prohibitions
- Telehealth/AI regulations
- Behavioral health network requirements
- Mental health parity rules
- HIPAA compliance for dentists
ACA changes and dental insurance coverage
The 2010 Affordable Care Act (ACA) didn’t explicitly mandate changes to dental coverage, so it has received relatively limited attention in the national (and political) discourse surrounding the ACA. The previous Trump administration’s attempts to repeal the ACA failed, and it’s unlikely that the second administration will pursue a complete repeal. It may, however, focus on modifying specific elements of the law.
The ACA didn’t directly address dental coverage, but research published in the International Journal of Environmental Research and Public Health (2021) suggests a potential “spillover” effect, saying, “This review of studies conducted so far clearly showed that the ACA resulted in gains in dental care coverage for adults and children, but there were mixed results on its impact on dental care access or utilization.” Polls conducted before the 2024 election showed that 90% of voters support Medicare adding a dental benefit.
Tax policy impact on dental M&A
Capital gains, corporate and estate taxes, and other factors may influence the dental M&A market. These tax policies directly impact individual practice owners and dental service organizations (DSOs).
Dental M&A has historically shown resilience in the face of changing political administrations, interest rates, and inflations. Kyle Francis, founder and president of an advisory firm, said, “There is no indication that M&A within dentistry are slowing because of the election year. Conversely, according to Harvard Business Review’s research on consolidation, we are at the height of the industry’s consolidation wave. This means we expect practice values and private equity interest to remain consistent — but only for a few more years.
“We anticipate continued robust activity in dental M&A… Smart investors and dental support organizations (DSOs) recognize the enduring value of quality dental practices and are likely to maintain their acquisition strategies irrespective of short-term political fluctuations.”
While campaigning, Trump proposed reducing the capital gains tax rate, which would directly benefit those seeking to sell their dental practices. Lower capital gains taxes would allow sellers to retain more of the sale price. Unlike Kamala Harris’s proposal to levy a financial transaction tax (FTT) on bond and stock trades and derivative transactions, Trump has floated measures designed to reduce operational costs and increase business investment. He also expressed interest in lowering the corporate tax rate below its current 21% rate.
Finally, the incoming administration’s focus on market-driven healthcare emphasizes regulatory reduction and private-sector growth rather than expanding government programs via tax increases. Key elements of the plan include:
- Streamlining regulations to reduce administrative burden
- Creating tax incentives encouraging business investment in healthcare infrastructure and technology
- Promoting competition-based solutions over public funding mechanisms
Tariffs’ effect on the dental supply chain
The first Trump administration enacted stiff tariffs on many countries, and the Biden administration kept many of those tariffs. The incoming administration’s proposed trade policies could significantly impact dental supply chains and costs. The plan includes:
- A universal 10-20% import tax
- 60% tariff, specifically on Chinese goods
- A focus on rebuilding domestic manufacturing
What does this plan mean for the dental industry?
- Higher costs for imported dental supplies, equipment, and materials
- A potential shift toward U.S. manufacturers; however, building domestic capacity will require substantial time and investment
- The heavy reliance on Chinese manufacturing affecting the personal protective equipment (PPE) supply chain
We know, from historical precedent from the pandemic, that rapidly scaling U.S. production is full of challenges. Should these policies be enacted, the cost implications may include dental practices facing higher operating costs. Practices may need to adjust their pricing or streamline expenses in other ways. Expect an initial period of market adjustments as supply chains realign and adapt to new tariffs. While it’s an opportunity for the U.S. dental equipment and supply manufacturers to expand, the process will take time — and costs could soar.
To navigate a potentially evolving landscape, dental industry and CRE professionals specializing in this sector should remain vigilant about policy changes and proactively adapt business strategies to address changing demands and costs effectively.
Are you a commercial real estate investor — or looking for a specific property to meet your company’s needs? We invite you to talk to the professionals at CREA United, an organization of CRE professionals from 92 firms representing all disciplines within the CRE industry, from brokers to subcontractors, financial services to security systems, interior designers to architects, movers to IT, and more.
