Choosing a Group Practice Management Model? Your Best Path to Success

Are you worried that your solo dental practice is going the way of the dinosaur? It may feel that way when you see the exponential growth of large group dental practices. According to a 2014 American Dental Association (ADA) brief, dental organizations with more than 10 offices and the number of offices they controlled have been rapidly trending upward, from 157 in 1992 to 3,009 in 2007ⁱ — and the growth continues.

Considering what ownership model is best for you isn’t a simple solo vs. group question anymore, though. The industry is quickly evolving, so before you decide what’s the best fit, educate yourself on the many models and options that there are now. You can get ahead as you understand the pros and cons of each and capitalize on dental trends.

Recognizing the industry shift toward multiunit organizations (and the lack of standard names and definitions) the ADA has suggested six terms for principal types of group dental practices, of which we’ll mention three relating to private practices:ⁱⁱ

• Dental Management Organization Affiliated Group Practice — A group that is dentist-owned but contracts with a management agency, such as a dental service organization (DSO), to handle the business activities.
• Dentist Owned and Operated Group Practice — A single organization of any size, owned by one or more dentists, with multiple dentists working at one or more sites. This is the most familiar model.
• Hybrid Group Practice — A group practice that does not clearly fit into either of these categories and can exhibit characteristics of more than one.

Working off these definitions, let’s talk about the benefits of different types of private practices in more detail.

Does a DSO = Corporate Dentistry?

In the Dental Management Organization Affiliated Group Practice, or DSO, model, one or more licensed dentists are the practice owners who make all clinical decisions, and the DSO assumes control of operations, equipment and agreements. Often, this is called “corporate dentistry” because a corporation runs the nonclinical aspects of a practice, but the term is also often used for other group business models. And usually when you hear the words, it’s said in a negative way.

“Too often when I hear people talk about large group practices, they refer to us as corporate dentistry, and there’s a negative connotation to the business model,” Dr. Christian Bauer says. However, “there isn’t a nondentist calling the shots … Our dental practice management partners are here to help support us in making us a successful practice.”ⁱⁱⁱ

Alongside niceties like the supportive team that makes some dentists appreciate the group-ownership trend, DSOs offer tangible financial benefits. As insurance reimbursement goes down, and regulations on midlevel providers increase across the dental industry, practices need to find ways to manage their resources more efficiently. DSOs and large organizations benefit because they have the resources to meet these burdens. This “perfect storm” puts DSOs in prime position to exploit shifts in the changing marketplace^iv, which increasingly makes them an attractive model to many dentists.

The DSO Model May Provide More Job and Personal Satisfaction

While every DSO model may not offer all the benefits below, the advantages that they do offer are impressive. Here are some of the perks, as well as a couple of personal experiences from your colleagues who’ve worked with DSOs:

The Dentist-Operated Model May Give You More Control of Your Future

Despite these advantages of the DSO model, those on the Dentist Owned and Operated Group Practice side feel just as passionately about why owning their group dental practice (or working for a dentist-operated private practice) works best for them:

Consider Hybrids and Other Innovative Ways to Grow

Certainly, both of these models have their benefits. But what if you want something different? A hybrid ownership model that takes different elements and combines them to create a unique model for your practice may be the best fit for you. Consider success cases such as Dr. David Ting of BDG Dental Services Inc., who started with a solo practice in the early 2000s, then innovated through setbacks to create his own multilocation ownership model — now a thriving organization of 23 locations and a corporate team.

Dr. Ting wasn’t just analyzing models; he was looking for what worked best for his practice. He actively found ways to maximize profits with newly discovered revenue in the cracks. These new efficiencies and consistencies included everything from changing to a less expensive lab, to using every inch of office space deliberately, to replicating operatories so providers had zero downtime as they moved around to work in different locations. He also found how important it was to his organization’s goals to standardize software for all offices. This move effectively centralized provider and patient information and allowed better organization-wide reporting that gave him more control over his business.

Aside from hybrid models like this, another way some have been innovating in today’s complex market is by scrapping dentistry as we know it and coming up with something new altogether. “Concierge dentistry” (also known as Private Fee for Service Dentistry) focuses on a spa-like experience for patients. These practices offer a highly personal, comfortable environment where clients can feel relaxed, pampered and free from anxiety. Because patients expect to pay more for this higher level of service, concierge dental practices have the flexibility to create their own price scale.

Whether you follow this trend or pursue a hybrid model, the main thing is to be smart in your business strategies. Try something new and innovative. Implement and evaluate the plans that you have success with. Build relationships, use word-of-mouth marketing, hire the best clinicians and make patient experience your hallmark. Move if you must, or open new locations in the best demographically positioned towns to make the highest gains in new patients.^v

Choose Your Future

Like everything in life, “it’s complicated.” There’s good in many models, so your ultimate decision must come down to your unique personality and situation.

Some prefer sharing the administrative load to create economies of scale, and some are independent trailblazers who want to do it all themselves. “Each person has different goals and ideas about what they like and don’t like,” Dr. Bauer reminds us. “Some truly enjoy being in a small, private solo practice, while others — like me — enjoy being in a privately owned but larger group practice that’s supported by a partner that relieves the stress of investments and expansion.”^vi

You’re not doomed to extinction. Even though the dental industry is evolving, there’s still room in the market for many different types of practitioners and ownership models — and for future innovation. You’ve taken the first step in the right direction by educating yourself. By keeping an open mind, watching for trends to capitalize on, being flexible in your approach and positioning yourself well, you can thrive and succeed in a changing marketplace.

ⁱ_{California Dental Association, CDA EXPLAINS NEW ADA CLASSIFICATIONS OF DENTAL GROUP PRACTICES (2014), //www.cda.org/news-events/cda-explains-new-ada-classifications-of-dental-group-practices.}

ⁱⁱ_{Albert Guay et al., A PROPOSED CLASSIFICATION OF DENTAL GROUP PRACTICES, American Dental Association (2014), //www.ada.org/~/media/ADA/Publications/ADA%20News/Files/HPRCBrief_0214_2.ashx page 3.}

ⁱⁱⁱ_{AEGIS Communications, WORKING IN THE DENTAL PRACTICE MANAGEMENT MODEL: TWO VIEWS, INSIDE DENTISTRY (2011), https://www.dentalaegis.com/id/2011/09/working-in-the-dental-practice-managemenet-model-two-views#sthash.qtTaqQRX.dpuf.}

^iv_{'Corporate dentistry' — defined, DENTISTRYIQ (2016), //www.dentistryiq.com/articles/apex360/print/volume-3/issue-4/special-focus-corporate-dentistry-2-0/corporate-dentistry-defined.html. “Traditionally structured dental practices-and their owners, partners, and employees-will continue to see increasing competition with DSO-"owned" practices for the foreseeable future. Macroeconomic changes in the dental insurance marketplace are going to result in declining insurance reimbursements. Likewise, regulatory changes may increase the scope of procedures that midlevel providers (MLPs) may perform and the issuance of government contracts. These macro changes will favor the larger organization that can both afford to meet the regulatory burden of insurers and governmental purchasers and profitably leverage the expanded practical scope of the MLP. Being the largest organizations in the industry, DSOs may be in a prime position to exploit these changes.”}

^v_{Jayme Amos, GROUP DENTAL PRACTICE VS. PRIVATE PRACTICE - THE LOOPHOLE, How to Open A Dental Office (2015), //howtoopenadentaloffice.com/group-dental-practice/. “Why is it that some practices, even in today’s economy, are seeing 1,000 new patients in their first year of opening? The answer is that the first practice to open in the best demographically positioned towns will make huge leaps in new patients. And new patients equal practice growth. The practice who opens first, in the right town, poised for the best growth, will win. If you choose your location properly, patients will come, they will stay and they will be yours. If you don’t open in that town right now, those patients will go to the practice that does open in that town. The concept is called the “first mover strategy” and, when your strategic location is chosen with the right team to help you open your practice on time and on budget, you can create tremendous success.”}

^vi_{Supra, INSIDE DENTISTRY.}