TWO TYPES OF DENTAL MANAGEMENT COMPANIES (DMCs)

With the increased presence of DMCs across the country, corporate dentistry has become a growing presence in the profession.  Depending on state laws, these companies are organize in one of two ways:  (1) Dental Group Practices (DGPs) are those in which practice ownership is by non-dentists.  Venture capital firms are often the owners of DGPs, with equity either privately or publicly held.  (2) Dental Service Organizations (DSOs) in which the DMC owns most tangible assets (equipment, building, etc.), providing dental support services while the dentist continues to own intangible assets (goodwill).

Statistics available from the American Dental Association state that about 6% of dental practices surveyed were part of a DMC in 2010.  ADA research also shows that new-to-practice dentists in the survey pool were approximately three times more likely than older peers to join a corporate practice in order to gain immediate significant income for student loan debt retirement.

As I have mentioned previously, the McGill Advisory, an excellent newsletter published monthly by John K. McGill & Co., a member of the McGill & Hill Group, has a most informative article on Corporate Dentistry in the July 2012 issue.