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Partnering with a DSO: Weighing the Benefits and Drawbacks

As the dental industry continues to evolve, many practice owners are considering partnerships with Dental Support Organizations (DSOs). DSOs acquire dental practices and manage key operational functions such as back-office operations, marketing, and administrative duties. These partnerships can significantly impact a practice, and understanding the pros and cons is crucial for making an informed decision.



Benefits of Partnering with a DSO


Operational Support

A major advantage of partnering with a DSO is the comprehensive management support they provide. From handling payroll and human resources to managing marketing campaigns, DSOs take over the administrative burden, allowing dentists to focus more on patient care. This can enhance efficiency and patient satisfaction as dentists can prioritize clinical work without being bogged down by business operations.

 

Economies of Scale 

Due to the large number of practices under their management, DSOs benefit from economies of scale, meaning they can negotiate better deals on dental supplies, lab services, and other operational expenses. For an independent practice, these savings can be difficult to achieve. By partnering with a DSO, practices can significantly lower their operating costs and improve profitability.

 

Professional Growth

Continuing education and professional development are essential for staying competitive in the dental industry. DSOs often offer professional growth opportunities, such as access to advanced training programs, certifications, and seminars. Independent practices may struggle to afford these resources, making the support provided by a DSO a valuable advantage for career progression.

 

Expansion Potential

DSOs have the resources, expertise, and financial backing to help practices expand more quickly and efficiently. Whether it’s opening new locations or investing in additional staff, a DSO can provide the tools necessary to grow your practice in ways that might be out of reach if you were operating independently.

 

Access to the Latest Technology

Keeping up with cutting-edge dental technology can be cost-prohibitive for many independent practices. However, DSOs often provide access to the latest tools, equipment, and software, helping practices maintain a competitive edge. This can lead to improved patient outcomes and an enhanced reputation in the market.

 

Drawbacks of Partnering with a DSO


Less Autonomy

One of the most significant drawbacks of partnering with a DSO is the potential loss of control. Operational and administrative decisions are often centralized, meaning dentists may have less say over the day-to-day running of their practice. This can be a difficult adjustment, especially for those who value independence.

 

Cultural Shift

Every dental practice has its own culture, built over time through the relationships between staff and patients. Joining a DSO can require significant adjustments to this culture, which may be unsettling for staff and patients accustomed to a particular way of doing things. The transition process can be challenging and may lead to some discomfort before a new equilibrium is reached.

 

Contractual Obligations

DSO agreements often come with long-term commitments, including exit clauses that may restrict flexibility. This could limit your ability to make decisions about the future of your practice or pivot if the partnership no longer aligns with your goals. It’s essential to carefully review any contracts before committing to ensure you understand the terms and conditions.

 

Profit Sharing

While DSOs can help increase profitability, they typically retain a substantial portion of the profits generated by the practice. This can be a sticking point for some practice owners, as it means giving up a portion of the financial rewards in exchange for operational support. It’s important to weigh the financial implications carefully.

 

Conclusion: Is Partnering with a DSO Right for Your Practice?

Deciding whether to partner with a DSO is a significant decision that requires careful consideration. While the benefits—such as operational support, cost savings, access to professional development, and cutting-edge technology—can be attractive, the potential downsides, including reduced autonomy, cultural shifts, and profit-sharing, should not be overlooked.

 

Each DSO operates differently, so it’s crucial to find one that aligns with your practice’s long-term goals and values. Ultimately, the decision to partner with a DSO should be guided by your specific circumstances and vision for the future of your dental practice. At CPA by Choice, we are available to answer your questions, feel free to call us or send us a message.


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