We are in a time of consolidation. Entrepreneurial dentists are grouping multiple practices together under their own leadership. Dental service organizations continue to expand by creating new offices and by acquisition. While the vast majority of dental practices in the United States are still independently owned and operated,1 we would be naive not to notice the trend toward the contrary.
First, I must say that I do not believe this trend should be cause for alarm on the part of the independent practitioners. For many of us, the consolidation of practice ownership stirs images of a dark future with no choice but to work as an employee for a large company. We look to our health-care cousins in medicine or optometry who have little freedom to practice on their own. The good news for my fellow independent owners is that our business model is alive and well. As long as we are proactive in maintaining and growing our practices, we will enjoy our independence for the foreseeable future. In their article, Bart Walker, JD, and Diana Castro, JD, write about the forces driving consolidation, but also the bottlenecks that they believe will slow DSO growth (page 16).
And for the entrepreneurial dentists among us who dream of trading chair time for executive duties, this is an incredible time to be in business. We have experts and resources like never before to help us grow from our one successful practice to many, many more. In this issue, Brady Frank, DDS, shows us the benefits of additional passive income when we own multiple practices (page 40). Jacob Puhl, CEO of the Dentist Entrepreneur Organization, instructs us that growing a healthy culture is perhaps more important than healthy KPIs (page 32). If we’re looking to grow by acquisition, Tarek Aly, BDS, wants to remind us of the checklist of considerations we should entertain before getting too far along in the buyout process (page 36). Brian Colao and Victoria Bahrami, JD, of the Dykema Dental Service Organization Industry Group, provide alternatives to traditional DSO legal structures that can help us preserve more autonomy (page 26).
As we grow the number of our practices, quality control becomes an increasingly challenging dilemma. Marty Jablow, DMD, shows us how we can leverage technology to help ensure our practices are providing care while maintaining standards (page 58). Tim McNeely writes about how to structure the sale of your small empire to maximize your financial gain (page 22).
If and when you do reach the level where you consider your collection of practices a DSO, you’d do well to heed the advice of Aspen CEO Bob Fontana (page 12). Like Jacob Puhl, he is a firm believer in creating a successful culture to remain competitive in a competitive landscape.
We’ve been following the consolidation trend in dentistry for a few years now, and there is no shortage of interest. DSOs want to learn how to take better care of their patients and of the dentists they employ. Entrepreneurial dentists are excited by the possibilities of managing multiple offices and building great wealth along the way. Since this issue can’t contain all of the lessons our colleagues can teach us, we’ve decided to create a new e-newsletter: Group Practice and DSO Digest. If you’d like to keep track of the content we’re developing, subscribe and stay informed.
The Great Consolidation is not about dentists losing their independence; it’s quite the opposite! Individual practices can continue to thrive while the business leaders among us can take advantage of new opportunities to serve many more patients indirectly.
Cheers,
Chris Salierno, DDS
Reference
- Guay A, Wall T. Considering large group practices as a vehicle for consolidation in dentistry. Health Policy Institute Research Brief. American Dental Association. http://www.ada.org/~/media/ADA/Science%20and%20Research/HPI/Files/HPIBrief_0416_1.ashx. Published April 2016.
Note: Want to stay in the loop about DSO trends and strategies for growing multiple practices? Look for our latest e-newsletter, Group Practice and DSO Digest, which is set to debut soon. (Subscribers of our Principles of Practice Management e-newsletter will automatically receive a copy. Not a subscriber? Visit dentistryiq.com/subscribe today.)
