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Dentists: what to consider if you want to join a dental service organization

How does joining a DSO affect your clinical autonomy?

Oct. 20, 2023
Are you worried about losing your clinical autonomy if you go with a DSO? That is a very legitimate concern, and whether you retain it depends on a few factors.
Gary Kadi, Founder of NextLevel Practice

Her'e's one of my core beliefs and one of the central tenets of my dental advocacy: dentists are health-care heroes.

As the only health-care providers who most Americans see regularly, and with the knowledge of proven connections between oral health and systemic disease, dentists are the gatekeepers to their patients’ whole-body health. It’s no wonder that most of the dentists I talk to are worried about losing clinical autonomy when they join a DSO. It’s not a power trip—they are genuinely concerned about their patients’ health and feel a professional and moral obligation to give them the best care possible. 

If the horror stories of DSOs turning dental offices into quota-driven sales machines at any cost are true, then they have no interest in participating (and I wholeheartedly agree)! So my topic for this article is—what does happen to your clinical autonomy when you join a DSO? The answer is … it depends. 

There are two options when joining a DSO: 

  • Sell your practice 100% (similar to selling to a private dentist when you retire)
  • Sell a portion of your practice (usually around 60%) 

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The question on everyone’s mind: "Should I stay or should I go?"

What to do when considering a DSO

If you choose to sell 100% of your practice, you give up all rights to decision-making for any aspect of the practice. You change from a leadership role to an employee role, one that must follow the direction of the practice owner. This is the same as selling your practice to another dentist but staying on as an associate. Whatever the new dentist says, goes. 

Many DSO 1.0 and 2.0 models follow this percentage. A dentist sells 100% of their practice to the DSO and then stays on for a predetermined number of years, becoming subject to all the policies, quotas, and procedures that the DSO sets. There’s zero autonomy. 

The second option is to sell a percentage of your practice and retain the rest, which creates a partnership between you and the DSO. As partner-owner, you are expected to still provide leadership, direction, and growth. This is the model you will most likely find in a DSO 3.0 model. Dentists who I have worked with sell around 60% ownership of their business, and while in negotiations, they specify what roles they want the DSO to cover and what roles they want to cover. It’s a true partnership. 

Most dentists I know choose to hand over the business side of the practice, things such as payroll, collections, taxes, accounting, and marketing. They then retain aspects of the business, such as philosophy, team training, hiring, and chairside work. But this all depends on the dentist. If you absolutely love marketing, hang on to it. If you’re tired of hiring, hand it off. It’s all about choosing what makes you happy and passing off your least favorite tasks to someone you trust to do as well (or better) than you. 

There’s an added benefit to this model. By assigning your least favorite jobs, you open time in your schedule that you can fill exactly how you choose. 

Interested in getting a new certification? Do it!  Want to pursue more lucrative dentistry such as sleep/airway or implants? This is your chance! Always dreamed of mentoring younger dentists or taking a longer vacation? The world is your oyster! 

Perhaps even better than the freedom, you continue to financially benefit from your efforts. If you choose to pursue higher-profit dentistry as partner-owner, you’ll still get the profits. If the DSO recapitalizes (that’s a column for another day), you’ll see your multiple rise even higher. Talk about a win-win! 

Here’s the final takeaway: you can retain your clinical autonomy if you choose the right DSO. Ask questions during negotiations and don’t be afraid to set forth your terms straight out of the gate. Sell just a portion of your practice instead of 100%. If the DSO doesn’t agree with your terms, take your practice elsewhere. Be sure to get a second opinion on any formal offer, and, if possible, work with a trusted partner through the process to help you get the right deal. 

Editor’s note: NextLevel Practice is a recent financial supporter of Dental Economics.

Author's note: It can be overwhelming to find and negotiate with a DSO. That’s why we offer free, no-obligation DSO consultations. Schedule a one-on-one meeting with our DSO expert to get your questions answered before you head out into the marketplace.

Editor's note: This article appeared in the October 2023 print edition of Dental Economics magazine. Dentists in North America are eligible for a complimentary print subscription. Sign up here.

About the Author

Gary Kadi | Founder of NextLevel Practice

Gary Kadi, founder of NextLevel Practice, is on a mission to help dentists beat the odds. While most dentists now don’t retire until age 69, and 96% of them aren’t financially free, Kadi has developed the strategies and methods to empower dentists to retire on their terms. The more than 6,000 practices he’s worked with generate over $1 billion in combined collections. Kadi has helped them discover true freedom—becoming time-free, debt-free, and frustration-free.

Updated July 14, 2023

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