The Advantages and Disadvantages of the DSO Model - Pt. 1

The undeniable presence of DSOs on the dental industry landscape is an indication they’re making an impact. Even so, as a dentist it’s a good idea to sharpen your perspective as you explore the advantages and disadvantages of the dental DSO model.

Does the model work for you? Or should you continue building your practice on your own?

Considering a DSO affiliation has one core upside as noted by the Association of Dental Support Organizations.

“Dental Service Organizations (DSOs) contract with dental practices to provide critical business management and support including non-clinical operations. The creation of DSOs has allowed dentists to maximize their practice with the support of professional office management. The DSO model enables dentists to focus on the patient while delivering excellent dental care.”¹

“Support” appears to be the “umbrella” term if you’re inclined to explore selling your practice to a DSO.

The appeal of DSO support

Perhaps you chose dentistry because you love the patient care aspect. Or as a clinician you also see dentistry as an opportunity to build a viable health care business.

Each motive has its rewards and challenges. For some, the challenges begin to outweigh the rewarding benefits of practicing dentistry.

Data from the American Dental Association’s Health Policy Institute indicates “a downward trend in solo owner/practitioners since 1999. At that time, 65% of U.S. dentists ran solo practices, but by 2019 only 50.3% of dentists practiced in this manner.”²

This “downward trend” is one reason there’s an uptick in DSO affiliations.

“In 2017 7.4% of all practicing dentists were affiliated with a DSO. This number grew to 10.4% in 2020 – a 40% increase.”³

The ongoing COVID-19 pandemic impact also factors into the decision for some.

“A recent survey of dental professionals found that 7% of dentists are considering affiliating with a DSO or merging their practices as a result of the pandemic.”⁴

Agree with the reasoning or not, DSOs have an appeal to a growing number of dental professionals. That said, it’s fair to explore the advantages and disadvantages of the DSO model from two fundamental perspectives.

Two perspectives to consider on the advantages of the DSO model

1-The practical perspective for the DSO model

You might differ with your colleagues on your ultimate reason for choosing a DSO. It’s vital that you approach your evaluation of DSO advantages with your current circumstances front-of-mind.

As a new dentist you might see the advantages different than if you’re a veteran dentist. For example the following could influence your decision as a new dentist.

• The weight of student loan debt and starting a practice
• The need for mentoring in practice management
• The desire to share clinical and business responsibilities with an associate or partner
• Navigating the challenges of the changing healthcare environment
• Marketing resources that help you rise above increasing competition

Those and more could be a tipping point for joining a DSO as a new dentist.

As a longtime (veteran) dentist your perspective could be influenced by challenges unique to your current situation.

• Feeling stressed, overwhelmed, or fearful about the future of solo/private practice dentistry
• An increase in overhead and the costs of doing dentistry
• Inability to afford upgrading your dental technology
• Supply cost increases
• The burden of hiring and dealing with HR and administrative tasks
• Marketing challenges
• Thoughts about retirement

With retirement on the horizon the following could factor into exploring DSO advantages.

• You’re feeling the weight of debt alongside declining practice valuation
• New patient numbers are on a downward trend
• Staff vacancies and low team energy
• Practice transition concerns or not having a viable associate alongside you

Again, the reasons vary dentist to dentist. But these nagging realities could be valid reasons to take a look at the DSO model and its advantages.

2-The operational perspective for the DSO model

As a dentist, HR and administration tasks probably consume a large chunk of your time. Though you likely have a team member tasked with those responsibilities you still provide some oversight.

The DSO model covers the gamut of the administrative workflows including:

• Billing, payroll, and accounting
• Compliance issues
• HR, recruitment, hiring, team development, etc

Your personal compensation and benefits are another area of consistent focus as a solo/private practice owner. There are related financial advantages of the DSO model.

• A consistent salary-based paycheck
• A signing bonus, production bonus potential, and salary increases
• Benefits for you (and your team)

Schedule and workflow consistency are among the challenges you might face on occasion. Dental production can ebb and flow creating stress on either side of the equation.

A DSO affiliation could improve your daily routine. Your workflows can have greater predictability.

And what about those longings to upgrade your technology or dealing with the challenges of practice overhead? The purchasing power of a dental DSO is an advantage for:

• Supply and equipment purchasing
• Technology upgrades
• Property and facility maintenance and management
• Insurance network support
• Dental lab connections

Marketing spend and monitoring ROI are key to your patient acquisition and patient retention. Again, a DSO can absorb those costs due to their in-house solutions and budget for outsourcing to proven third-party vendors.

These two perspectives (practical and operational) expose you to the initial advantages of DSO affiliation. Stay tuned as we will dive deeper into those advantages plus unpack some disadvantages of the DSO model worth considering.

In the meantime, check out the following resources for more insight into the DSO model:

What Is a Dental Service Organization (dental DSO)?

3 Lessons DSOs Learned From COVID-19: Cash Flow, Culture and Care

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Learn what makes Dentrix Ascend the right solution for your dental practice and for growing DSOs.

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¹ https://www.dentaltown.com/magazine/article/7054/the-cons-and-pros-of-dsos

² https://decisionsindentistry.com/article/charting-growth-in-dental-service-organizations/

³ https://explodingtopics.com/blog/dental-industry-trends

⁴ https://explodingtopics.com/blog/dental-industry-trends