If you’re a dental professional, chances are you have encountered term “DSO” at some point or another during your practice. However, if you’re not all too familiar with what exactly a DSO entails, we’re here to “fill” you in on the details. Understanding the basics of DSO’s can be exceptionally helpful for determining whether or not the DSO structure is a right fit for your dental practice.
Short for “Dental Services Organizations,” DSO’s are independent organizations which contract with dental practices to provide both business management and support for non-clinical operations. Though solo and group practice still predominate, DSO-affiliated practice is on the rise.
As of 2016, according to the American Dental Association, 7.2% of solo and group practices are affiliated with a DSO, with an even larger 8.3% of DSO-affiliated practices nationwide. This growth has been credited, in part, to the increased enrollment in state-sponsored healthcare programs seen attributable to the passage of the Affordable Care Act. Some prominent examples of DSO’s based California include Western Dental, Pacific Dental Services, and Smile Brands, to name a few.
Though the DSO structure varies widely, in general, the DSO is responsible for providing non-clinical management support, while all clinical aspects remain under control of the dentist –including staff employment –and the dentist retains ownership of the clinical practice. On the other hand, the DSO will own the non-clinical aspects of the practice, such as the equipment and furniture.
Moreover, the DSO handles a range of services related to business-side of the practice, such as arranging lease agreements for the practice premises, reviewing and maintaining regulatory compliance, marketing and public relations, billing and accounting services, and human resources. By law, however, the dentist must retain the ultimate responsibility for any clinical features of the practice. Below, we address some of the benefits and drawbacks faced by dentists when contracting with DSO’s:
Mitigating Management Time
It’s no secret that successfully running any small business requires a considerable amount of time. The case is particularly true for dental professionals who not only are responsible for patient care, but also find themselves in the role of HR, accounting, administration, and marketing as well. Thus, dentists in small private practices often find they are challenged to effectively balance the administrative facets of their practice with focusing on patient care and life outside of the office.
In an article originally published in the Daily Herald, practicing dentist Dr. Tim Quirt aptly explained,
“In my case, the non-clinical tasks of a large practice combined with providing the dental care meant I was working seven days a week and losing the passion and fire necessary for a caring profession…With a DSO I don't have to worry about training, human resources, banking, purchasing, and most accounting. I can't imagine a heart surgeon having to worry about payroll or if the hospitals quarterly returns are in, they have to stop focusing on patients.”
For such dentists struggling to properly support the business side of their practice, DSOs can step in to take over tasks such as negotiating contracts with dental suppliers, keeping the dentist current with regulatory and legal requirements, and interacting with insurance companies, leaving more time for dentists to focus on patient treatment.
Better Treatment and Greater Accessibility
Another benefit DSOs afford to both dentists and patients alike by DSOs is access to state-of-the-art technology. Because the DSO will typically own all of the practice’s equipment, the DSO is able to offer access to high-end technology that would otherwise be inaccessible for many dentists owning a small private practice, as such dentists would likely avoid purchasing such costly equipment.
Easier Transitions
A doctoral degree in either dental medicine or surgery is virtually always accompanied by a high price tag. For those new dentists who graduate with a significant amount of student loan debt, the transition from academia to actual practice can be quite challenging. Since dental students are not given instruction as to running a business, partnering with a DSO contributes an opportunity to allow the new dentist to attain skill proficiency while securing financial stability.
DSOs can even help those experienced dentists who have remained in private practice later in their careers when the time comes to transition to retirement. Because many DSOs are willing to employ dentists part-time, this scheduling flexibility can assist dentists who would like to begin reducing their hours and begin retiring, while still being able to practice dentistry.
Reporting for Duty
If you are not too keen on being an employee rather than your “own boss,” then a DSO structure may not be for you. Given that DSO’s are in control of management, the DSO could very well wind up dictating and controlling your work schedule. Moreover, as part of its human resources role, a DSOs promulgates specific rules and regulations to which the contracting dentist must follow. In the event you are just beginning your career in the industry, this may not be too much of a concern; however, dentists who have worked in private practice for a considerable time may dislike the transition from Therefore, if you prefer setting your own hours and envision resisting having to adapt to the rules of a new organization, then the DSO structure might not be for you.
Reputation
Just because the number of DSO’s is rapidly growing does not mean that such growth is popular among everyone in the industry. Some DSO’s do not enjoy a spectacular reputation due to both actual and perceived focus on treatment quotas rather than patient care. Additionally, some existing dentists in private practice can feel ill-equipped to compete against the advantages provided by the DSO structure (e.g. access to better equipment), which can end up leaving those DSO-contracting dentists to feel excluded from those in private practice within their community.
Money, Management, and Marriage
Though also mentioned as an advantage earlier in this article, the management role that DSOs occupy won’t work well with all dentists. If you’d prefer to determine your salary, which brand of supplies and type of equipment you like using,
Furthermore, some dentists who have worked in the DSO structure alike it to a marriage –renegotiating the contractual terms of your DSO relationship or even leaving the DSO structure altogether can be tricky. For example, most DSOs are sure to incorporate a non-competition clause into the initial contract with the dentist, thus restricting a later-departing dentist to practice outside of a particular geographical radius. Thus, if you are not careful when contracting with a DSO, you could forfeit some flexibility in the future, should the nature of your circumstances change.
The basic function of a DSO is featured in its name “Support.” Not every dentist needs this type of assistance, but contracting with a DSO could potentially provide all of the benefits earlier described in this article. Nevertheless, it is beneficial to have an attorney help you to decide whether or not the DSO-Practice structure would be a good fit for your Practice. We highly recommend consulting with a lawyer to discuss the risks and rewards of working with DSOs.
You and your practice deserve an attorney who is accessible to you when you have questions or concerns, as well as work efficiently to meet important deadlines. Call or fill out our form to learn more about how we can support you and your practice.
