November 20, 2023
DSOs: Myths vs. Facts
To some, DSO (dental service organization) can be a four-letter word. It can be easy to cast judgment when you don’t have all the facts. We’re here to dispel all those rumors and present you with all the information you need to form your own opinion. Here is a sampling of myths we hear surrounding DSOs supported by facts that matter.
“A DSO will eliminate my existing staff by firing employees who have been here for years.”
When a DSO comes in, that doesn’t mean staff has to go. Many doctors are concerned that their dedicated staff members may be fired once a DSO takes over the practice; however, that isn’t the case. In fact, one of the most important components of an ownership transition is consistency. DSOs understand it can be jarring to walk into the office they’ve been going to for years and not see a familiar face. Experiences like that can deter patients from coming back. Instead, DSOs see value in maintaining staff after a transition to make it easier on the patients.
“The best time to sell your dental practice is when you’re ready to retire.”
You don’t need to wait until you’re ready to hang up your coat to retire. It’s actually advantageous for dental entrepreneurs to sell their practice before they choose to retire. This approach lets you offload the managerial tasks to the DSO and return to doing the clinical work you love. The earlier you start exploring your transition options, the more opportunities in terms of deal structure and potential partners will be presented.
“DSOs and corporate dentistry are basically the same thing.”
DSOs and corporate dentistry have less in common than you might think. Corporate dentistry is the name that was often given to the original DSOs because they had a very analytical, less tailored approach to purchasing and operating dental practices. While some out there still operate that way, now DSOs are much more individualized and offer a boutique feel. That means, of the 375 established DSOs, chances are you can find a group that holds similar values and will offer the right transition for you and the dental practice you’ve worked so hard to establish.
“DSOs are just here to take over the world.”
Consolidation doesn’t mean DSOs are taking over the industry. By our calculations, we expect to see 60% to 70% consolidation in the next seven to 10 years. This leaves 30% to 40% of dental practices with individual owners. Luckily, there are opportunities for both models to exist in the ever-changing dental ecosystem. Rural, niche, fee-for-service (FFS) and hyper-individualist practices aren’t attractive to DSOs because they require specific skill sets and deter private equity groups.