Dental Support Organizations (DSOs) have become a significant factor in dentistry and are expected to be an even bigger factor in the coming years. Previously, associating with a dentist in private practice was one of the best ways to get started in your career.
Some of those associate jobs ended up in a partnership or even a buy-out of the senior dentist. Years ago, when we got started working with dentists, it was common to hire an associate to work extra hours for the practice, see emergencies and new patients, and allow the senior dentist more time off.
What happened to tradition?
Two factors have made this approach less common. First, many, if not most dentists are looking for new patients themselves. Almost all of the dentists in the St. Louis area can use new patients and are having a hard time maintaining an acceptable flow of new patients.
Second, the high debt burden of young dentists makes it very important that they begin working soon after graduation and earn a significant and reliable salary.
Many general dentists in private practice cannot offer those opportunities. If they did try to hire an associate, it would likely cause them to reduce their own income and many cannot afford to do that.
Understand the DSO business model
DSOs are geared for growth. It is the crucial element in their business plans. They usually will spend heavily on marketing and will usually participate in network with numerous PPOs and even, in some cases, in state Medicaid plans.
Again, while there are exceptions, the goal of most DSOs is growth because that is the way they will increase the value of their business (and believe us, it is a business) so they can sell it to another DSO in 3 to 5 years.
You should understand the basic business model of DSO’s if you are thinking about working for one. They may not disclose their detailed plans to you, but you should find out about ownership, number of practices owned, past track record retaining employees, etc. because you are taking some risks in working for them.
How will you be paid?
So, topic number one is compensation. Usually you will be paid a percentage of the collections from dental services you render to patients. That will often be approximately 25%. And usually it will be expected that your collections are sufficient to justify your compensation.
For example, one DSO expects you to have collections of $100,000 for each $25,000 of compensation. That would mean, your collections need to be $600,000 to justify compensation of $150,000.
If you are coming right out of dental school, you may not have a good idea of your ability to produce a given amount of dentistry. You should talk to a member of the faculty or a dentist in private practice to advise you on the production requirements of a DSO job offer.
Non-competes and training are key
Topic number two is the restrictive covenant. If your ultimate goal is private practice, don’t accept a job offer with a restrictive covenant that will prevent you from practicing in the area or areas where you might want to practice someday.
Topic number three is training:
- What kind of training will be available to you?
- Will you be trained to place and/or restore implants for example?
- Will be you trained on the job or will you attend courses?
- Will you have to attend courses on your own time or company time?
- Will you have to pay some or all of the cost of training?
Don’t forget about benefits and culture
Topic number four is fringe benefits. What are the benefits? Medical insurance, 401K plan, Employee Stock Ownership Plan (ESOP), etc.? Most employers are eager to explain their benefit packages to you.
Topic number five is information specific to the office where you will be working. Is it an existing practice or is it a start up? Will you be the only dentist in the office? Are you replacing a dentist who has left (there is turnover in DSO offices)? What about the location (see number 2 above)?
Get the inside scoop
Topic number six is inside information. What can you find out about the DSO or the office where you will be working? Do you know anyone who has worked for them? Do you know anyone who knows anyone who has worked for them?
This type of information can be very useful in your decision making.
A final word – we are not opposed to employment with a DSO. There are a lot of them out there – some are just start-ups, some have achieved some growth, and others are well established. You need to know what you are getting into and what you will be getting out of it.
If private practice is your ultimate goal, consider the training and experience that will be received while employed by a DSO, all of which will be useful in private practice. If you like the idea of being an employee, then the DSO employment route may be the answer for you.
By Bill Otten and Kim Rey