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How DSOs can enhance your practice

October 13, 2016

Robert Elsenpeter

Article

DSOs can offer numerous perks to dentists - but is it the right path for your practice?

Dentists are dentists because they love the work and, moreover, they want to help people. But the ability to do that work comes with the unexpected responsibilities of being a businessperson. Doctors must not only know the ins and outs of different composite and cement types, but they must also know the intricacies of HIPAA laws. Add to that, practices operate differently than they did in the past.

Joining a Dental Service Organization (DSO) is a resource that can help the doctor keep his or her energies focused on the work of being a dentist, while someone else handles the business side of the practice. Additionally, DSOs can also help when it comes time to buy an expensive piece of equipment or can even provide a sense of professional camaraderie.

Dental Products Report conducted a survey of 404 dentists to gauge their opinions on various issues involving practice operations. For the greatest concerns, DSO membership appears to offer solutions.

DSOs defined

DSOs offer solutions that can benefit doctors at any point in their careers.

· New doctors who want to start their own practices can find somewhere soft to land, not having to take on crippling amounts of debt (on top of already burdensome dental school bills).

· Doctors who are already in practice might want to purchase new (usually expensive) technology, or might not want to deal with administrative headaches, like keeping track of government compliance regulations or staying on top of insurance rules.

· Doctors considering retirement may want to find a graceful, easy transition.

“Dental support organizations have become more prevalent – due, in large part – to the establishment of a new reality,” says Dr. Samson Liu, DDS, Executive Vice President of Clinical Affairs at Heartland Dental. Heartland is the largest DSO in the country, with over 700 supported dental offices in 32 states. “Modern dentists are encountering a multitude of challenges, including keeping up with technology, increased costs, government regulation, legal issues and more. In today’s industry, many dentists are unable to transition or share their offices with associate dentists, and young dentists with $300,000 plus in student loans often cannot finance new offices on their own. The support DSOs offer is designed to help dentists meet these challenges. Young dentists just entering the industry can start off on the right foot – leading their own teams right away and gaining access to invaluable education opportunities. For experienced, successful dentists, DSO support helps alleviate the non-clinical tasks of running a dental office, so they can focus strictly on patient care. Plus, DSO-supported dentists have the opportunity to network with other dentists who are facing the same day-to-day challenges and mentor up-and-coming dentists.”

What really defines a DSO is sort of hazy. They can be as small as just two practices or as large as hundreds. The level of support that the DSO offers its members also varies, and there is no single, perfect analog representing a DSO.

Even with all that variability, DSO leaders saw the importance of a professional organization to help them develop and grow. The Association of Dental Service Organizations (ADSO) was born of that desire.

“It started out as a small study group,” Dr. Quinn Dufurrena, DDS, Associated Executive Director of ADSO, says. “About four or five of the large DSO CEOs were getting together and talking about best practices, what works and what doesn’t.”

Continue to page two to see the benefits of DSOs...

Continuing compliance

The most important issue for respondents to the Dental Products Report survey was their ability to stay in compliance with governmental regulations. It was the number one issue for men, number three for women.

While doctors are responsible to ensure that they keep up with regulatory mandates, it can be burdensome to do. By affiliating with a DSO, the process is easier and faster.

“There was an update to the HIPAA law last year, and there were new requirements that we had to meet,” says Dr. Bob Mongrain, DMD, Clinical Director, Heartland Dental. His practice – Berkshire Dental Group – is located in Broken Arrow, Oklahoma. “I got an email from the Oklahoma Dental Association telling me all these different things I was going to have to do to be in compliance. And on the same day, the practice administrator and the regional administrators that support my practice contacted my HIPAA team directly. They got us up to speed and changed the forms, made sure everything was compliant. They make sure that we are having our annual OSHA update meeting, that we are training on diversity – we have an entire HR department that makes sure that we’re doing the right things.”

“Compliance is so well-structured and built into my practice now,” says Dr. Andrea Janik, DDS, of Culebra Smiles and Orthodontics in San Antonio, Texas. Her practice is supported by Pacific Dental Services. Pacific Dental Services supports more than 400 offices in 14 states. “For my support package, I have a complete series of these online modules that not only I use, but my dental assistant staff, my front office staff and everyone uses to make sure they are compliant. For example, you’ll get an alert that you’re due for AED training or HIPAA compliance, and you just log in and watch the training. There’s an interactive question-and-answer session, and you complete the training. The nice thing is I have the confidence of knowing that someone who deals with compliance designed these specifically so that we are meeting the standard of what we need to be covering. Having the built-in reminders and having all of my staff have access to that is just wonderful.”

Insurance issues

Dealing with dental insurance isn’t just a headache for patients – it’s a source of stress for doctors, too. The survey showed dealing with insurance as the number one issue for men between the ages of 45 and 54. But it isn’t just male doctors who would like less to do with insurance.

“Insurance is a big driver for my practice, and I would say one of the reasons why a lot of my patients have chosen to come to us is, ‘Oh, my next-door neighbor told me about you, and you’re on my dental plan,’” Dr. Janik says. “So, yes, the patient demographic that I work with, using their dental benefits with a provider that is contracted with that insurance company, is as important to them and with my DSO.”

A DSO navigating insurance complexities takes a large burden off of the doctor’s staff.

“I have a regional support team that, when the patient makes the appointment, and when we enter their insurance information prior to the appointment, that office verifies the insurance benefit and makes sure that the plan that they have through Delta Dental or United Concordia, or whoever it is, is then attached to their file,” Dr. Janik says. “So that way when I say, ‘Oh, you need a co-fee,’ and I put in a code for the service, the co-fee automatically populates. The preparation on insurance is wonderful. That same office also files all of my claims, and they do all the follow-up. It’s really nice because my staff members that are in the office can really focus on the patients in front of them, not on the phone with the insurance company to put together information.”

Taking insurance responsibilities off the doctor frees him or her to focus on dentistry.

“The doctor doesn’t have to get involved in working with the insurance industry,” Dr. Dufurrena says. “The nice thing is that they can come into work and actually do dentistry and they don’t have to spend that much time, because the DSO can actually do that for them, which is a big advantage. The fact that the DSOs will have a lot of dentists in the network gives them a little benefit for help when we’re talking about getting better rates from the insurance company. In other words, it’s economies of scale. If you have a lot of dentists in a network, you have the ability to negotiate better prices.”

Continue to page three to read about support services offered by DSOs...

Support services

Dentists didn’t spend years in school to become payroll experts or figure out how to update a practice’s computer systems. They want to take care of patients. But many doctors find themselves wearing hats they didn’t expect to wear.

Eighty-two percent of survey respondents identified easing operational tasks as an important issue. DSOs offer a way for someone else to worry about such issues as human resources, accounting, and the practice’s computer systems.

“Having been in dentistry for 37 years now, it’s a lot more complicated than it used to be,” Dr. Mongrain says. “There are lots more laws that apply, lots more technology. There’s so much more to know than there was years ago. My biggest challenge and frustration being a private practice dentist was having to wear a lot of hats. I had to practice dentistry, but I also had to be an expert on HR, I had to be negotiating supplies, I had to be dealing with IT issues, looking for the best resources for marketing – all those things.”

DSOs offer these services and more to their members.

“Affiliated dentists have access to accounting, legal, purchasing, recruiting, real estate/development and human resource services which are all centralized,” Dr. Robin Edwards, DDS, Regional Partner at AffordableCare says. She is also a general dentist in Kinston, North Carolina. AffordableCare has more than 200 affiliated practices. “These are amenities that often have to be sought out on an individual basis for non-DSO dentists. Because AffordableCare only offers these services to their affiliated practices, they have a wealth of experience with regards to how each practice operates. This really customizes the services to the individual practice owner’s needs. Affiliated dentists also benefit clinically and technically from a network of doctors and laboratory technicians.”

When a doctor joins a DSO, these services are seamlessly provided, easing the burden on the doctor and the support staff.

“My practice just looks and feels exactly like any other kind of practice,” Dr. Janik says. “I am the practice. I run it. I make every decision. I hire and fire just like I would if I had started from scratch on my own and did this. What’s different is, for example, you see those commercials for bundling. You can bundle your cable and your home Internet and your cell phone, and you get better rates. I basically have decided that business support services, like payroll and HR and accounting and compliance and all these things, I just purchase my business support all in one package.”

Continue to the next page to read about what DSOs can mean for improved technology...

Technology trends

As with any other 21^st Century business, technology is a major component – and it may be and even bigger dynamic for dentistry. Dental work is constantly changing. It can be difficult to stay on top of (and afford) those new technologies. Survey respondents who were already in DSOs identified using the most up-to-date technology as their most important issue.

“Technology really is beneficial for practices,” Dr. Dufurrena says. “It’s hard to do quality dentistry now without utilizing some of the technologies, but the downside is that technology is expensive. When you’re talking about the digital age and 3D imaging, and all of those different machines – those things are expensive. The nice thing about DSOs is that they have the capital resources to purchase that equipment for the practices. They also have the economies of scale, so that they can get the technology at reduced prices.”

What DSOs offer their doctors in terms of technology differs from DSO to DSO.

“DSO-supported dental offices range as much as private practices when it comes to equipment and technology,” Hal Muller, President, Henry Schein Special Markets says. “Some groups are totally paperless, digital, and promote same-day dentistry, while others have stayed more traditional. However, all groups keep their offices up-to-date with new equipment. There is also the reduction in stress. Many dentists agonize about what equipment to purchase. In a DSO, the equipment is usually standardized across the offices.”

DSO-affiliated doctors are able to afford new technology through their organization’s purchasing power and vendor agreements.

“We are able to negotiate significant and sometimes dramatic cost reductions with our vendor partners, because of the scale of our operation and the way we support doctors,” Dr. Mongrain says. “We simplify the sales process for them. We can negotiate. We have people whose job is to negotiate the best rates possible.”

DSOs also offer suggestions and support for doctors that want new technology and have usually researched and are ready with advice for those contemplating big purchases.

“Supported dentists have access to the latest, cutting-edge technology and products in the industry,” Dr. Liu says. “While supporting the implementation of technological advancements is certainly a focus, this equipment also needs to be proven and effective. Heartland Dental clinical leaders recommend equipment that will be beneficial, rather than costly and unnecessary in the long run. There are countless new dental technologies emerging constantly, but rather than implement every flash in the pan, our clinical leaders research all technology options available and evaluate pros and cons. Then, our development team can negotiate optimal prices for recommended equipment.”

When a new piece of equipment is needed, doctors usually just need to ask.

“AffordableCare is always available to aid with the purchase, maintenance, or repair of equipment,” Dr. Edwards says. “It is as easy as sending an email or making a phone call.”

The accessibility to new technology is a huge attractor for many doctors.

“Pacific Dental Services-supported offices this year hit the one million and mark on CEREC crowns,” Dr. Janik observes. “So we have the latest and greatest technology when it comes to CEREC. And then we also have a great Sirona laser system, a VELscope for oral cancer screening. PDS prides itself on being modern and up-to-date and having the greatest advances in technology, and then they use their group buying power to really make those things a little bit more affordable and put them in all the offices. I worked in public health and a couple of different traditional private practices before I landed where I’m at, and this is the most well-equipped, up-to-date, latest technology office I’ve seen.”

Continue to page five to read about how DSOs can build community...

Creating community

Beyond the nuts and bolts of running a practice, DSOs offer something less tangible for their members – a professional community. In the survey, women ranked its importance at number four on their list; men ranked it at number nine.

“I think it does make sense that women would want to create a professional community,” Dr. Dufurrena says. “I think female dentists are going to practice differently than their male counterparts. By creating the professional community they can share coverage. They can take time off to raise a family and work part time, and to do that you need a sense of community. You need other people in the practice who can cover for you, and to me that makes sense.”

Working in a dental practice – especially as a solo practitioner – might feel isolating. However, membership in a DSO can make it less lonely.

“For me it’s huge,” Dr. Janik says. “Dentistry is a tough profession. We are doing surgery – on people that are awake – in their mouths all day. That is an intense thing. Having the camaraderie of other dentists and having the ability to work with them and learn from them really makes a big impact.”

Doctors find such a culture to be a source of fellowship and support.

“At Heartland, we have a really open community where it’s an open-book company, so we share a lot of information, a lot of data, and our culture is one of helping each other,” Dr. Mongrain says. “You don’t put people down. It’s not, ‘I’m going to beat you.’ Most of my best dentist friends are Heartland doctors, because it’s such a collegial community. You’re never alone.”

Preparing a practice

The survey also showed that men are far more interested in the ability to own their own practices than women (it was the number one issue for men; number eight for women).

And while the survey data revealed that opinion, some of the anecdotal experiences of the doctors we spoke with indicated different views. For instance, Dr. Mongrain observes that some male doctors favor a sense of community more so than the survey’s finding of practice ownership.

“It’s interesting to note that traditional male dental school applicants want three things: To work with their hands; to be with people; and to be their own boss,” he says. “But many of our graduates are not traditional anymore. Also, I think attitudes of male and female doctors are changing. There’s recognition, or a desire maybe, to have more of a work-life balance, and private practice does not allow a big work-life balance. You have to be there for that business all the time. Many of the doctors that choose to stay with us long-term are more interested in being a part of community.”

Conversely, the notion of owning one’s own practice appeals to some doctors, regardless of gender.

“One of the things that really attracted me to dentistry in the first place is that you can be your own boss,” Dr. Janik says. “From the selection of choosing dentistry as a profession I have always said, ‘That’s why I want to do this.’ You can do your own thing, and run your own business, and make your own decisions. So I never sought any other way. It was never ‘if’ I was going to buy a practice it was ‘when and where.’”

Continue to the next page to read about how DSOs provide excellent exit strategies...

Exit strategies

While DSOs are an appealing option to doctors who want to start their own practices, they can also be an attractive option for doctors who want to retire and want to do so cleanly.

“There’s not that many typical associate to partner to owner models, or they have become less so,” Dr. Dufurrena says. “So dentists my age need to figure out something different. There are quite a few older dentists that are using DSOs and affiliating with them as an exit strategy.”

In order to make a clean break, doctors can sell their practice to a DSO and continue to work until he or she is ready to retire.

“They can affiliate with a DSO,” Dr. Dufurrena says. “And a lot of them have a contract or an agreement that they’ll stay on with practice for so many years, and then the DSO can help them really build their practice up. A lot of times they can bring in younger dentists and then the mature dentist just exits out of that practice. So instead of the typical way of bringing in an associate and then making them a partner, they affiliate with a DSO and then sometimes the DSO can bring younger dentists into that practice.”

“A lot of times I hear, ‘I don’t know how I’m going to sell my practice when it comes time, and I don’t know how I’m going to get another doctor to replace me,’” Dr. Mongrain says. “We recruit doctors. We have very advanced programs to train and support them, and then, of course, we purchase your equity in the practice and allow you to free that equity up and continue to practice dentistry until you’re ready to retire.”

The future

Just as DSOs have changed the face of what a dental practice is in 2016, they are likely to continue evolving. This is especially true because DSOs, themselves, differ from organization to organization and are dynamic entities.

“We have a problem in the dental industry,” Dr. Dufurrena observes. “We’re not sure what the difference is between the DSO and a group practice. We’re not using the right terminology a lot of times, so it’s hard to tell. But there is a large growth of dentists coming from solo practice forming smaller groups, and as they get larger, and somewhere around four to six practices, they realize that it makes more sense that they will centralize their processes – their data, their systems, and things – and it’s about that point that they become a DSO. There is a rapid growth, not only going from solo practice to group practice, whether a small- or medium-group practice. There’s also a rapid growth of going from group practice to DSO-supported.”

The access to current technology is an important driver, and one that is likely to attract younger doctors to DSOs.

“The management of all DSOs realize that the current generation of graduating dentists expect to practice in an office with the technology they have used in dental school,” Muller says. “This will drive technology faster in this segment in the next few years.”

But for those who think that DSOs will dilute patient care, Dr. Mongrain expects just the opposite will be true.

“Many doctors are concerned about DSOs taking over and not providing good patient care,” he says. “I’m of the personal opinion that, in the end, the marketplace will show which models are successful and that it’s about taking good care of patients and providing great patient care. The comfort for a doctor who’s concerned about DSOs is that, in the end, the ones that take great care of their patients and allow the doctors to do what their licenses say, those will end up being successful, and the ones that don’t provide good patient care will not be successful. That it’s a market that has many new players in it, and over a period of time, I think we’ll see the best ones rise to the top. It’s a model that’s not going to go away, but I think that we’ll see a maturation, and the people that take good care of people will end up growing and some of those that don’t take good care of people will not be around.”

DSOs are a popular business model and, considering the benefits to the doctor, it’s easy to see why. They no longer have to worry about things like insurance, compliance, updating the practice’s computers, or any of the other things that detract them from why they became dentists in the first place – to help patients.