The DSO Quandary-To Be Or Not To Be

For fear of sounding Shakespearean, one of the biggest challenges that group dental practices face is whether to convert their business model to a DSO structure.

What I find interesting is that many of these structures are created because they seem “like the thing to do” given of the current trend in the marketplace. There has been substantial growth in this type of business structure whereby dentists and non-dentists want to participate in and develop the dental service platform. However, does it make sense for you?

The reason why someone should be investigating this type of model is because they want to dedicate their organization to more effectively manage the dental delivery process through financial management, purchasing, marketing, overall process improvement as well as looking for ways to increase the size of their practices’ footprint through expansion or internal growth. Oh, and yes to make more money, while improving the patient experience. In many instances, non-dentists will participate in this type of venture as an investor and visionary as they have the skillset to objectively identify the opportunities for improvement and possess the business acumen to manage the financial consequences of the various initiatives.

In order to effectively manage this process a substantial investment must be made in establishing contractual business relationships that are both legally compliant from a regulatory perspective as well as tax efficient.

Additionally one needs to invest in a centralized infrastructure that will enable the organization to effectively accomplish its goals.

Where do you fall within this dynamic? What is your vision? Do you have the right team to set this process in motion? Will your practice be large enough to justify the cost of implementing these changes? Do you feel this is necessary given the above factors?

If your answer to these questions is yes, then you need to begin the process sooner rather than later as this can take several months to implement.

Align yourself with advisors who are experts in creating and managing a DSO organization. This will include legal, accounting and industry consultants who can help guide you in choosing among the various business models that exist and most importantly identify the model that works best with the unique aspects of your vision.