DSOs’ and DMOs’
INROADS INTO DENTISTRY
A Dental Service Organization (DSO) is a group practice
working under contract with a Dental Management Organization (DMO) that manages
all business and personnel activities and decisions of the practice. DSOs and
DMOs are making serious inroads into the profession.
A bit of history: As recently as 2011, one well respected
dental practice management advisory company* reported 72% of the dentists in
their significant client base were in solo practice. In a May 2017 survey
conducted by this same company, only 56% of their client base remained solo,
demonstrating a startling move to group practice. This survey supports other
evidence that the dental practice model we’ve known for generations in the U.S.
is changing from solo to groups of two, three, or four or more dentists.
Group practice offers advantages such as increased hours of
operation, economies of scale, expanded use of the office and staff work hours,
and a wider scope of procedures available in-office. Management of group
practice is, however, more difficult and time consuming. Obviously, more personalities
are involved among a group of dentists and among the increased number of staff,
often bringing a propensity for
increased interpersonal conflicts. Individual dentist’s preferences for certain
instruments, equipment, medicaments and such complicate inventory control and
ordering. On and on—practice management typically becomes more laborious in
group settings. That truism is a major factor in many dentists’ willingness to
sign contracts with DSOs and, subsequently, DMOs. When an outside company is
running the practice, it would seem to some dentists, particularly the younger
doctors, that the burden of management is lifted and they are, therefore, free
to concentrate only on patient care. Unfortunately, that is not true; but
that’s a topic for another discussion.
Just how widespread is the DSO/DMO onrush? The American
Dental Association Health Policy Institute (HPI) released a survey of new data
in March 2017 via webinar. An excellent infographic summarizing data from the
webinar is available at ADA.org/HPI. The data is broken down by
gender, age, specialty, and state.
Interesting highlights from the survey: By gender, 10.2% of
female dentists and 6.1% of male dentists are in group practice contracted to a
DSO. By age, DSOs have enrolled 16.3% of 21-34 year old dentists, 9.8% of 35-49
year olds, 3.4% of 50-64 year olds, and 2.5% of practicing dentists 65 years
and older. Specialties are listed on the infographic in descending order with
pediatric dentists in first place with 8.1% practicing within a DSO. Prosthodontists
are fewest in number with 3.6% involved in a DSO. 7.7% of general practitioners
have opted for a DSO contract. Six states report no DSOs operating within their
borders: AK, DE, MT, ND, SD, and WV. Arizona and Texas report the highest
concentration of DSOs and DMOs at 17.5% and 15% respectively.
For additional information, including the infographic and an
opportunity to view the entire webinar, go to ADA.org/HPI. Suggestion: see
where your state falls in the ratio of concentration of these for-profit
organizations that are changing the landscape of private practice. Begin now to
evaluate the positives and negatives of DSOs and DMOs so that if the time comes
to choose whether you will retain ownership and control of your practice or to
sell to a management organization, you can make an informed decision.
*The management advisory company mentioned above is The McGill and Hill Group, LLC. Go to mcgillhillgroup.com for more information on their services.
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