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This is one of my core beliefs and one of the guiding principles of my dental advocacy: dentists are healthcare heroes.
As the only health care providers most Americans see regularly, and with knowledge of the proven links between oral health and systemic disease, dentists are the gatekeepers of their patients’ whole-body health. Not surprisingly, most dentists I speak to are concerned about losing clinical autonomy when joining a DSO. It’s not a power trip – they are genuinely concerned about the health of their patients and feel a professional and moral obligation to give them the best possible care.
If the horror stories of DSOs turning dental offices into quote vending machines at all costs are true, then they have no interest in participating (and I totally agree)! So my topic for this article is – what BEN what happens to your clinical autonomy when you join a DSO? The answer is … it depends.
There are two options when joining a DSO:
- Sell your practice 100% (similar to selling a private dentist when you retire)
- Sell a portion of your practice (usually around 60%)
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The question on everyone’s mind: “Should I stay or should I go?”
What to do when considering a DSO
If you decide to sell 100% of your practice, you give up all decision-making rights over any aspect of the practice. You change from a management role to an employee role, a role that must follow the direction of the practice owner. This is like selling your practice to another dentist, but staying on as an associate. Whatever the new dentist says goes.
Many DSO 1.0 and 2.0 models follow this percentage. A dentist sells 100% of his practice to DSO and then stays for a predetermined number of years, becoming subject to all policies, quotas and procedures that DSO sets. There is zero autonomy.
The second option is to sell a percentage of your practice and keep the rest, which creates a partnership between you and the DSO. As an owner-partner, you are still expected to provide leadership, direction and growth. This is the model you are most likely to find in a DSO 3.0 model. Dentists I have worked with sell about 60% ownership of their business and during negotiations, they specify what roles they want the DSO to cover and what roles they want it to cover. It is a true partnership.
Most dentists I know choose to outsource the business side of the practice, things like payroll, collections, taxes, accounting and marketing. They then maintain aspects of the business, such as philosophy, team training, hiring and chairside work. But it all depends on the dentist. If you absolutely love marketing, go for it. If you are tired of the job, give it up. It’s all about choosing what makes you happy and handing off your least favorite tasks to someone you trust will do them as well (or better) than you.
This model has an additional benefit. By designating your least favorite jobs, you free up time in your schedule that you can fill exactly as you choose.
Interested in getting a new certificate? Do it! Want to pursue more lucrative dentistry like sleep/airway or implants? This is your chance! Have you always dreamed of mentoring younger dentists or taking a longer break? The world is your oyster!
Perhaps even better than freedom, you continue to benefit financially from your efforts. If you choose to pursue higher-profit dentistry as a partner-owner, you will still receive the profits. If DSO recapitalizes (that’s a column for another day), you’ll see your multiple grow even higher. Talk about a win-win!
Here’s the final takeaway: you can maintain your clinical autonomy if you choose the right DSO. Ask questions during negotiations and don’t be afraid to lay out your terms right out of the gate. Sell only a portion of your practice instead of 100%. If DSO disagrees with your terms, take your practice elsewhere. Be sure to get a second opinion on any official offer and, if possible, work with a trusted partner through the process to help you get the right deal.
Editor’s note: NextLevel Practice is a recent financial supporter of Dental Economics.
Author’s note: Finding and negotiating with a DSO can be overwhelming. That’s why we offer free, no-obligation DSO consultations. Schedule a one-on-one meeting with our DSO expert to get your questions answered before you hit the market.
Editor’s note: This article appeared in the October 2023 print edition of Dental Economics magazine. Dentists in North America are eligible for a free print subscription. Register here.
