The Dental Industry Shift: DSOs on the Rise

The world of dentistry is going through some big changes, and these changes are affecting how dentists retire or pass on their practices to others. In the past, when a dentist wanted to retire, they usually sold their established practice to a younger dentist. But now, there’s something new in town – Dental Support Organizations (DSOs), and they’re changing the dental game. Dentists are looking for better ways to run their practices efficiently and make a good transition, and DSOs have become a popular choice for this.

If you’re thinking about retiring from your dental practice or buying one, it’s a good idea to get advice from a dental DSO (healthcare business attorney) to make the process smooth.

Understanding Dental Support Organizations (DSOs)

 A Dental Support Organization (DSO) is a company that owns and runs many dental practices. These organizations provide various services, like helping with buying a practice, marketing, and handling administrative tasks. The main goal of a DSO is to make dental practices more efficient and profitable by centralizing how things work and making systems consistent across different locations.

Normally, DSOs buy dental practices through a special agreement. In this agreement, the person buying the practice pays some of the money upfront, like around 60%. The selling dentist then continues to work there as an employee for the next three to five years to get the rest of the money. During this time, the DSO takes care of the financial and business side of things, essentially taking over, while the dentist still works there.

Recent Rapid Growth

The American Dental Association predicts substantial DSO growth, anticipating nearly 100% market expansion from 2018 to 2025. By 2035, it’s expected to more than triple in size.

Recent data from the ADA Health Policy Institute tells us about how many dentists are teaming up with DSOs:

1. About 13% of dentists in the United States are working with a DSO, showing that many dentists like this way of doing things.
2. Among dentists who graduated from dental school within the last 10 years, 23% of them are working with DSOs. This means younger dentists are more interested in the benefits and opportunities DSOs offer.
3. Dentists who’ve been out of dental school for 11 to 25 years have an affiliation rate of 11%. As they get more experience in their careers, some choose to explore the benefits of DSOs.

In summary, data reveals DSOs’ growing popularity in dentistry, particularly among young dentists seeking practice management, support, and professional growth.

Pros and Cons of DSOs

Dentists considering DSOs must weigh pros and cons for the right decision to meet their needs. Remember that each Dental Service Organization works differently, and the agreement you make will have a long-lasting impact. Here are some things to think about, which you can talk over with a dental DSO attorney:

Pros:

1. Financial Stability: DSOs offer steady income, which helps dentists avoid the ups and downs that come with being an independent practitioner. When you sell your practice, you also get some money upfront.
2. Support: DSOs help with marketing and handle administrative tasks, so dentists can focus on taking care of patients.
3. New Technology: DSOs usually have the latest dental technology, making it possible for dentists to give top-quality care.
4. Less Stress: a DSO can help reduce work hours and the stress that comes with running a business. This gives dentists more time to rest, connect with others in the field, and communicate with their patients and staff.

Cons:

1. Less Control: Dentists give up control of how their practice operates every day after selling to a DSO.
2. Different Culture: DSOs might have a different way of doing things that doesn’t match the practice’s culture, causing difficulties and disagreements.
3. Staff Changes: When a dental practice is sold, staff often leave, which can affect the continuity of patient care and the stability of the practice.
4. Revenue sharing: DSOs typically use a revenue-sharing model, where practice owners get a percentage of the practice’s revenue rather than the full profit. This can sometimes mean a lower income for the practice owner compared to when they ran the practice independently.

Whether you’re thinking about buying or selling a dental practice to a DSO, it’s a big decision. Dentists should weigh the advantages and disadvantages carefully before making a choice. The right decision can lead to a comfortable retirement, while the wrong one might mean losing money and feeling frustrated.

Where to Turn

Obtaining help from a knowledgeable and experienced Healthcare Business Law Attorney is crucial when considering venturing into a DSO model. If you’re in need of help, guidance or have questions concerning healthcare business legal matters or trademarks, we invite you to explore our website at Dike Law Group. To initiate a free intake discussion, please go to dorismeet.com, where you can schedule a meeting with one of our attorneys. Our services assist healthcare professionals in Texas and throughout the country.