The American Dental Association (ADA) defines a Dental Support Organization (DSO) as “a group practice that contracts with a dental management organization to conduct all of the business activities of the practice.” DSO models emerged as early as the 1990s when a group of orthodontists joined together to manage all business aspects of the orthodontic practices, separating out these functions and allowing practitioners to focus on patient care.
DSOs assist dentists in delivering high quality patient care by providing support services for the business side of the dental practice. Because DSOs take care of these mundane, repetitive, and time-consuming non-clinical tasks, dentists can use that saved time to help improve their clinical expertise, add additional procedures to their service offerings, and enhance the level of care they provide to their patients.
The most recent statistics on DSOs provide evidence for their efficacy. In 2020, the ADA Health Policy Institute estimated that over 10% of practicing dentists in the United States are affiliated with DSOs, resulting in a 20-23% penetration of the dental market. Further, it is estimated that an additional 6,000 to 8,000 solo practices will likely transition to DSOs within the next few years.
Why Dentists Partner with DSOs
DSOs have impressingly evolved since their inception. They can now be found in a variety of configurations, specialties, sizes, and structures at both a regional and national level. Dentists and dental specialists choose to partner with DSOs for a variety of reasons. Let’s take a closer look at several of them.
Practice Management Benefits
Some dental professionals join DSOs to minimize their cumbersome non-clinical duties to improve their work-life balance. Dental practice management has become increasingly more complex over the years, from staff management to billing and regulatory compliance. Affiliating with a DSO means dentists are no longer required to spend time on distracting practice management functions and can spend more time on providing quality patient care. They can even get home in time for dinner with the family or take some time off when they need to.
Practice management benefits for dentists who join DSOs include:
- Dentists no longer need to worry about staff or human resource issues. The DSO takes care of staff hiring, training, ongoing team management, and payroll.
- They’re freed from the stresses of practice financial management functions. DSOs take care of patient and insurance billing, managing collections, assets, contract negotiations with laboratories and other vendors and filing taxes.
- Dentists that join DSOs also benefit from overarching licensing along with regulatory and legal support. DSOs typically handle practice and equipment licensing, state registration and regulatory compliance requirements, and legal matters, such as malpractice coverage.
- Dentists no longer need to spend valuable clinical time marketing the practice. Instead, the DSO takes care of all marketing, website development, advertising, and branding functions.
- Some DSOs even offer centralized patient scheduling services to help get new patients scheduled and returning patients coming back.
Practice Growth Benefits
Practice growth is made far easier and possible with the joining of DSOs. They are business experts and are well capitalized, since many are backed by large private equity firms. DSOs bring with them years of experience, best practices, methodologies, and systems to yield positive-growth results. With the dentist focused more so on what he or she does best, which is practicing dentistry, the practice can grow exponentially.
Financial and practice growth benefits for dentists that join DSOs include:
- DSOs can frequently leverage bulk discounts and other purchasing options not available to single practitioners because they often own several practices regionally or nationally.
- DSOs can often better negotiate contracts with laboratories, insurance companies, distributors, and other vendors to achieve more favorable pricing, which enhances practice revenue.
- With their wider reach, DSOs provide more opportunities for networking among dentists and specialists.
- DSOs can increase practice profitability by often introducing newer methods, equipment, and learning.
- DSOs have the capability to improve patient retention and treatment acceptance rates since they have access to education programs designed to better patient care and customer service.
- With their wide array of resources, DSOs can also update practice technology, equipment, amenities, décor, and branding.
Retirement Planning Benefits
Other dentists affiliate with DSOs because they are ready to transition into retirement. When it comes time for retirement, dentists may want to start thinking about working less by potentially taking Fridays off, scaling back to working only a handful of days per week, traveling, or taking vacations. Any time a DSO acquires a practice, the selling dentist is typically required to stay on at the practice for a few years or more before they begin to reduce hours or number of procedures. Therefore, they need to start thinking about retirement planning well in advance of their retirement date goal, especially if they are considering the DSO route.
Benefits for dentists that join DSOs prior to retirement include:
- Most DSOs allow or require you to continue practicing after the sale, potentially limiting procedures to the ones a dentist prefers doing.
- With additional resources, DSOs allow dentists to take time off and indulge in vacations to properly prepare themselves for retirement.
- DSOs may allow dentists to work less hours and even reduce their work week by a few days.
- DSO partnerships assist dentists in diversifying investment and minimizing long-term risks.
Benefits of Used Dental Equipment for DSO Practices
One of the benefits of a dental practice partnering with a DSO is they will likely get an upgrade to their existingdental equipment. One such upgrade is new extraoral imaging systems, which are typically one of the most significant investments within any dental practice.
If an acquired practice or practices use analog or older digital extraoral imaging technology, the DSO may opt to upgrade them to a newer digital panoramic or cephalometric X-ray machine and/or a dental cone beam system shortly after acquisition. Upgrading to new imaging systems can help improve efficiency from both a patient flow and clinical perspective.
DSOs are experts at finding affordable, practical ways to manage a myriad of dental practices. One way they can do this is to choose used dental equipment, particularly extraoral imaging devices, for their dental offices.
Purchasing certified pre-owned dental X-ray machines from reputable dealers like Renew Digital can save DSOs up to 50% off the cost of new extraoral imaging systems from leading brands. When you look closely at these price cuts across numerous dental practices, the combined savings can be significant. The savings could potentially be in the tens of thousands or even hundreds of thousands of dollars. The DSO can then use this saved capital for other activities, such as marketing the practice(s), upgrading practice décor, and expanding the organization.
Fastest Way to Increase Profitability
We all know that imaging technology purchases are expensive, even for DSOs. The DSO’s first objective is to quickly recognize their return on investment by using the dental X-ray equipment, billing out for X-ray and/or dental cone beam services, and increasing practice production. The latter is done by the addition of new procedure types or increased performed treatments completed by the newer technology.
If a DSO or dentist purchases a brand new panoramic or cephalometric X-ray or dental cone beam system, they would likely pay double the price than they would for similar used equipment. It will then take twice as long with twice the production to finally recoup the initial imaging investment. Why not get a head start on profitability by implementing the most cost-effective and affordable imaging solutions for all the practices within the DSO?
Eligible for Section 179 Tax Savings
Another easy way to realize a faster return on large capital investments is through tax savings. Pre-owned dental equipment is also eligible for Section 179 tax savings, which allows dental practices and DSOs to deduct the full price of qualified equipment purchases up to $1,050,000 in 2021. In tax year 2021, they can also take 100% bonus depreciation on both new and used qualified equipment purchased. When buying used equipment for a dental practice, DSOs can make even more capital purchases, then deduct all of those expenses and bonus depreciation, allowing them to get up to 50% more equipment.
Consistent Technology Between Locations
Not only does purchasing used dental equipment significantly save DSO owners money in comparison to acquiring new dental imaging systems, but it gives them the ability and flexibility to purchase previous model panoramic, cephalometric and/or cone beam systems for each of the practices. This allows them to keep imaging technology consistent between locations.
All extraoral imaging systems, but particularly dental cone beam systems and related software, can present a learning curve for dentists, staff, and IT members alike. If all or most of the offices within the DSO group have consistent dental X-ray equipment (having the same manufacturer, model and manufacture date, and so on) then it is easier for dentists and staff to operate the equipment at any given location, and even less complex for the IT staff to support.
Where DSOs Find Affordable Used Dental Equipment
If your DSO is looking for high quality affordable panoramic X-ray, cephalometric X-ray or cone beam systems for one or more locations, take a look at the various models available on RenewDigital.com. Our expert Sales Team understands the unique needs of DSO practices and can help find digital panoramic, cephalometric, or dental cone beam models to fit almost any size imaging space or budget. Be sure to ask about special pricing for large group practices as well.
All pre-owned dental equipment from Renew Digital includes installation, training, and a full onsite labor and replacement parts warranty. Plus, it’s backed by Renew Digital’s 5-star customer service and support team. Just contact their US-based help desk online, by phone, or via email anytime for help.
Most certified pre-owned 2D panoramic and cephalometric X-ray machines from Renew Digital integrate directly with leading dental imaging software for a streamlined, uninterrupted workflow. Each used dental cone beam machine also includes the latest 3D imaging software so you get all of the latest features and functions, without the “brand new” equipment price.
Want to learn more? Contact Renew Digital today via our online contact form or by calling 888-246-5611. We look forward to helping you find the best used equipment for your DSO.
