The Advantages and Disadvantages of the DSO Model - Pt. 2

As a dentist, your future was once somewhat well-defined. Things have changed. And among those changes could be having to weigh your future alternatives such as the advantages and disadvantages of the dental DSO model.

Not everyone is quick to consider this model as a future option. If you’re one of those that sees the potential you’re likely already aware of the advantages.

A run-down of the DSO model’s advantages

We covered these in a recent post. A quick recap can help you think through the model’s supportive appeal.

There’s a practical perspective to consider and an operational perspective. Each have potential, specific advantages.

Advantages for new dentists

• Potential for student loan and start-up cost coverage
• Mentoring and associate relationships
• Support navigating the changing healthcare environment
• Competitive marketing resources

Advantages for experienced (veteran) dentists

• Career potential beyond the stresses of solo/private practice ownership
• Cost coverage for practice overhead, supplies, and technology upgrades
• Hiring and HR support
• Competitive marketing resources
• Positioning for retirement transition

Advantages for retiring dentists

• Facilitation of debt and practice valuation
• Transitional support for current staff
• Development of an associate relationship and transition of practice leadership

Advantages for overall practice operations

• Administrative workflow coverage (e.g. billing, payroll, accounting, compliance, HR, staff recruitment and hiring, staff development/training, etc.)
• Compensation and benefits for you (the dentist) and your team including signing bonuses, production bonuses, and incremental salary increases.
• Schedule and workflow consistency
• Purchasing power for supplies and equipment, technology upgrades, property and facility maintenance/management, insurance networks, dental lab relationships, etc.
• In-house marketing resources and/or capability to outsource to proven third-party vendors.

These are the common advantages you can expect from affiliation with a dental DSO. Each could vary depending on the size and scale of the DSO you choose.

Wisdom would also apply to being aware of the disadvantages associated with the DSO model.

A few potential disadvantages of the DSO model worth considering

Scheduling tension

You might feel that your schedule - while more consistent (and full) - is tighter with less flexibility. It’s common to experience a sense that you’re losing touch with your patient base and personal attention has been sacrificed for the “bottom-line.”

Production…production…production!

Meeting and exceeding metrics is good motivation and good for your revenue stream. Even so, organizational goals can drive you to push treatment and potentially alienate your patients.

Loss of independence

This has much to do with “ownership.” Affiliating with a DSO transfers “power” to their leadership structure.

You could be trusted with practice leadership but you can often feel more like an employee-leader instead of an independent leader of the practice.

Vanishing vendor relationships

The DSOs vendor reach can be substantial. Although vendors are often selected by price and order fulfillment over relationship loyalty.

Loss of earned equity

A DSO affiliation typically involves the purchase of your practice. The structure and details of your agreement could result in the loss of any equity you’ve built to date.

Culture clash

Your dental practice has unique culture. It’s important to evaluate the related reputation of a DSO’s corporate culture. Patient perception will follow your affiliation whether or not they’re aware of your corporate structure.

Keep in mind that not all dental DSOs are the same. Each have their recognized strengths and weaknesses.

It’s vital that you perform due diligence.

• Get input from respected industry leaders
• Create a list of key questions and get answers from the DSO
• Seek perspective from other practices who have joined the DSO
• Be clear on how the DSO is structured from purchase to compensation to production to scheduling to contractual terms and limits.

Discover more about the ins-and-outs of the DSO model in these resources:

What Is a Dental Service Organization (dental DSO)?

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

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