By William S. Barrett, Esq., CEO, partner and co-chair, National Dental Law Group at Mandelbaum Barrett PC.
The increasing expansion of dental support organizations (DSOs) has become a polarizing topic in the dental industry over the last several years—some professionals credit DSOs as being a useful tool in the practice of dentistry, while others blame the DSO business model for destroying dentistry as we know it.
Despite this back and forth, the DSO model continues to be a popular and growing option for many dental practitioners. According to the American Dental Education Association, in 2021, 18.1% of dentists intended to work in DSOs immediately after graduating dental school, while the American Dental Association Health Policy Institute reported that 10.4% of all dentists in 2021 were already affiliated with a DSO.
Based on current trends, these numbers will only continue to grow in the foreseeable future. Declining insurance reimbursements and regulatory changes will favor larger organizations with more available capital, and well-documented changes within the industry will also drive consolidation.
As time goes on, even established individual practices may find it difficult to compete against DSOs for talented dental associates because of the DSOs’ abilities to offer higher guaranteed compensation and robust benefit packages.
Further, in exploring potential practice exit strategies at the time of retirement, even the most established and independent private practitioner dentists might find that selling to a DSO provides the most practical exit strategy because their access to capital and debt is more advantaged than that of most individuals. This is especially true in very large practices with multi-million-dollar valuations.
Response from Dr. William L. Balanoff, executive clinical director, Orthodontic Care of Georgia, and CEO, Oral Care Perfected.
The near future in dentistry we must consider the near past first. COVID-19 was an extreme challenge for dental offices for two reasons. The first reason was the supply of Personal Protection Equipment (PPE) was limited or not available in dentistry. Hospitals and the medical field take first priority in the supply of PPE during an epidemic. Secondly, patient care dropped significantly as offices temporarily closed and patients quarantined.
The near future of dentistry looks bright from my perspective. Dental offices across the country are reopening, supplies chains are catching-up to overall demand and dental supplies are reengaging in trade-shows / events. In fact, I will be attending the International Dental Show in Germany with Delta Dental in September.
As president of Orthodontic Care of Georgia, we have seen a massive increase in patients. The state of Georgia opened faster than other states and the result was quickly realized. As Founder of Smile Perfected, we have seen substantial growth over the past quarter, which can be attributed to more and more dental practices opening and the need for oral health care increases.
Some of the challenges our dental service organization (DSO) faces is employee recruitment for the new boom in dentistry. Doctor, auxiallies, RDH and dental assistant jobs are in high demand. The challenges patients face is returning to the dental office after potentially a year away from recommended dental maintenance. Periodontal disease and tooth decay will all see increased frequency as patients return to their dentist. The other challenge as an orthodontic group is the ever growing “do-it-yourself” mail-in aligners. The in-person examination and direct treatment planning by an orthodontist, for the patient’s entire dentition, is something dentistry should require.
As for practice advancements on a microscale, dentists and dental professionals need to be prepared for a continued and ever advancing technology boom in dentistry. The modern dental office should stay on the cutting edge of dentistry by investing in available oral scanning and 3D printing and other state-of-art tools. This will help patients of course, but beyond that the value of the practice will rise.
Practice advancements on a macroscale are two-fold. Capital investment firms and DSOs are looking to invest in or buy small group and single ownership dental practices. This is a direct result of the overall long-term value dental offices present and the current financial state of smaller practices. This is an advancement for a couple reasons. One is because it gives smaller dental practices access to much needed capital to grow their office with the ever increasing costs in technology and supplies. The second is a robust organization will help improve the overall day-to-day running of the practice by access and large pool of talented dental professionals.