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6 advantages of DSOs—or are they?

Feb. 8, 2023
In this series, Dr. Roland Caire, Jr., explores the many facets of DSOs: the good, the bad, and the ugly. Here, breaks down 6 "pros" for joining a DSO, and explains why there may be more than meets the eye.

This is a continuation of the previous article of this series, "DSOs: The devil is in the details," in which I looked at some advantages of DSO affiliations and how those advantages have played out in my experience (or not). I came to my DSO associateship after 37 years of private practice ownership. In the last three years I've worked in four different DSO-affiliated offices and had ample opportunity to see how things happen in real life.

Let me repeat that I have no animus toward the DSO industry. I’m merely sharing my experiences so others who follow will enter into DSO agreements with more insight.

Following are additional pros and cons of the most publicized advantages of a DSO associateship.

Negotiating with insurance companies

I was lucky in private practice. I had reached a point where my practice was all fee-for-service. For my patients with insurance, we would help them get reimbursed, but I was never at the mercy of insurance companies. But that luxury took many years to attain and was slow-growing; today it would be even harder. Dealing with insurance companies is a time-consuming fact of dentistry. So, it was a relief to hand that duty over to someone else.

However, I was handing over the execution, but not the responsibility. What happens if a DSO employee upgrades services or falsifies claims? The dentist is ultimately responsible, even though they may never know until it's too late.

What if a DSO employee gets overwhelmed and back-burners filing claims? If the dentist is paid on collections, there can be a huge impact on their remuneration. I once discovered an employee hadn't filed insurance claims for over a month. Another time I found out an employee, for some reason, hadn't filed $30,000 in claims for services. So, even though I don’t have to physically process any claims, I still have to keep a watchful eye over those who do.

DSOs will “negotiate” with insurance companies, but not necessarily to the provider's advantage. They may sign on to capitation plans where the DSO gets a monthly fee for providing discount services, but that fee doesn't necessarily make it to the provider's paycheck. And they may contract with plans that require the provider to do services at discounted rates, with the provider having no say in the arrangement.

DSOs can also initiate or terminate insurance contracts with little or no notice to the provider. I've had patients scheduled for treatment show up only to discover that the DSO was no longer accepting their insurance, but hadn't yet notified the patients or the office managers. One of these patients was in the middle of a comprehensive treatment plan and had to go elsewhere to afford completing it.

Malpractice insurance

Most DSOs will pay for a provider's professional liability insurance, and that can be a huge benefit. However, the how and what are big factors in assessing this as a benefit.

There are basically two types of malpractice policies: “occurrence” and “claims-made.” An occurrence policy handles claims for any acts that happen during the term of the policy. A claims-made handles any claims for acts during the policy's term, but requires a “tail” to cover any claims made after the policy is terminated.

My current DSO affiliation reimburses me for my liability policy, which is an occurrence type. I decide on the coverage (the DSO requires a minimum). I pay the invoice and present the invoice to the DSO, and they reimburse me. This arrangement is more ideal than the plan I had with my previous DSO.

I was naive when I entered my first DSO agreement and just saw that the DSO would obtain and pay for my malpractice policy, which was a claims-made policy. It specified that I would only be responsible for paying the tail when I left the company. I figured I'd probably work for the company until retirement, and if the company was paying for the main part of the policy, how much could the tail amount to?

As it turned out, I left the company 18 months later and the cost of the tail was more than twice the annual premium of my current occurrence policy. So if I had paid for an occurrence policy myself and the DSO had not been involved, I would have saved money.

Negotiating with and paying suppliers and labs

Most DSOs will pay for all supplies and dental lab costs. Their advantage there is having the power to negotiate because they're buying for hundreds of offices. The cost doesn't directly affect me anymore because I'm not footing the bill, but there are several ways in which it does affect me.

Working for a DSO, you can only use labs that the DSO has contracted with based on certain fees and restrictions. Often, that means longer turnaround times, no remake allowances, dealing with overseas labs, and use of aftermarket parts—maybe not a big deal until you have to tell a patient their denture could take months to be completed. Or that a crown that took three weeks to arrive needs a remake that will take another three weeks.

Another drawback is the lack of relationships with your lab techs. When I was in private practice, I had the cell phone numbers of my lab techs, and they had mine. If there was a question or problem, we discussed it. You can’t really have that kind of communication with an anonymous lab tech in another country.

Similarly, you can only use supplies that the DSO has approved, based on the costs of those supplies that the DSO has negotiated. That's not a problem unless your favorite composite isn't on the company's formulary or you want to try a new product. In those cases, your only options are to find a new favorite or pay for the product yourself.

Professional community and mentorship

Most DSOs provide for interaction within their community of practitioners. I have been fortunate to have specialists in most of my offices, and that has allowed for mutual camaraderie and growth. All dentists have a similar foundation having come through dental school, yet all have had different experiences in practice. The similarities provide a launching place for friendship, and the differences provide an opportunity for growth and learning.

State-of-the-art technology

I can't honestly say I've experienced cutting-edge technology in my DSO experience. When I left my first DSO, they were still using paper charts. When the panoramic x-ray machine in that office broke, they were reluctant to replace it. Until a recent upgrade at my second DSO, they were using a Windows operating system that was over a decade old. CBCTs? My current DSO has two for 13 offices. It's safe to say that every piece of technology I've encountered in my DSO involvement was introduced 15 to 20 years ago.

Continuing education

Every state in the US requires a minimum amount of continuing education for relicensure. Most DSOs make achieving that goal easier in two ways.

The DSOs I have affiliated with provided in-person and online CE courses. In both cases, the selection of the topics was in sync with the goal of increasing production in certain areas.

But DSOs will also sometimes pay or reimburse fees for continuing education topics of your choice, with an annual allowance, which allows you to expand knowledge and certifications in areas such as implant surgery, sedation, laser use, or facial cosmetic enhancement. Some will reimburse for dental association membership fees and/or meetings.

Additionally, they may provide required training in HIPAA, CDC, and OSHA regulations, However, because they are corporations, DSOs may also require you to undergo regular corporate training on such topics as diversity, active shooter drills, sexual harassment, and online security—subjects that are useful and important, but not specifically related to dentistry.

In the next and final chapter, I'll wrap up all the observations from my experience into a list of items you should be aware of should you decide to enter into an employee contract with a DSO-associated practice.

About the Author

Roland Caire, Jr., DDS, FAGD

Roland Caire, Jr., DDS, FAGD, is a practicing general dentist with over 40 years of experience. Aside from dentistry, he has extensive experience in professional music, theater, and visual arts. Combining those interests, he launched a YouTube channel to address dental questions with humor, wit, and a cast of motley characters. You can follow him there and on social media by searching for rcairedds. If you have any questions or comments, send them to [email protected].

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