What is a Dental Service Organizations a.k.a DSO? and Why should you take notice in 2024?

deepak nair
9 min readJan 1, 2024

This blog series breaks down DSOs step by step. This chapter covers basics like classification, market segments, legal entities, and practice traits. More chapters explore topics like mergers, HR, marketing, finance, and trends. Find links at the end for more. Enjoy reading!

The dental landscape can be a confusing place, leaving many scratching their heads at Dental Practice, Group Practice, DSOs, DPOs/GPOs, etc.

To understand DSOs, we first need to grasp the different types of dental organisations. Let’s start by broadly exploring what makes a dental practice and a “dental group practice” ( focus of this blog post) different, and how to identify them as such:

The American Dental Association categorizes the dental group practice market segment as follows:

1. Dental Management Organization Affliated group practice (a.k.a Dental Service Organizations/DSOs)

In a nutshell, Think of DSOs as dental chain stores. They own and manage multiple dental practices, often under one brand name. They typically centralize operations, marketing, and even some clinical functions. This can lead to economies of scale, potentially lowering costs and offering patients standardized care. However, some argue that DSOs can prioritize profit over patient needs, and raise concerns about corporate influence in dentistry.

Heard DPOs tossed around alongside DSOs? Let’s clear the confusion: What are Dental Purchasing Organizations? DPOs (a.k.a GPOs/Group purchase organisations) are like Costco for dentists. They leverage the collective buying power of their member practices to negotiate lower prices with suppliers of dental equipment, materials, and other necessities. This can significantly reduce operating costs for independent practices, helping them compete with larger DSOs. DPOs also offer other benefits, like practice management software discounts and educational resources.

DPOs out of the way, let’s get back and dive deeper into DSOs. But wait, why are they important? They are giants of the dental landscape, DSOs command a hefty 25% market share. This dominance fuels their trailblazing spirit, making them eager early adopters of new trends and innovations. It’s no surprise why: their scalability and cost-efficiency are potent growth engines. Think of it this way: running a solo practice? You’re likely facing 15–20% higher operational costs compared to their multi-location network.

But DSOs aren’t just about crunching numbers. They operate with the sharp focus of public companies, meticulously tracking their performance (quarterly reports, anyone?) and engaging in strategic market activities. Now, they’re also becoming major players in the booming trend of comprehensive care. Picture it: one-stop dental shops offering a full spectrum of services under one roof — some DSOs are already leading the charge in this exciting shift.

What is the Legal Entity Setup for DSO?

Think of DSOs as the business brains behind dental practices. They don’t handle the actual teeth, but they take care of everything else, like marketing, staffing, and finances. This way, they help dentists focus on what they do best: providing excellent patient care.

Why the two-company setup? Many states have laws that say only dentists can own and control the clinical side of dental care. So, DSOs use two separate companies:

Think of it like this:

  • Professional corporation: This is owned by the dentists and handles everything related to patient care, like fillings, cleanings, and surgeries.
  • Management corporation: This is owned by the DSO and handles the business side of things, like hiring staff, managing finances, and marketing the practice.
  • The dental practice is like the doctor in a hospital, providing the clinical care.
  • The DSO is like the hospital administration, handling everything else.

The DSO landscape exhibits significant heterogeneity, extending beyond standardized professional-management corporation agreements. Group practices under a DSO differ in their branding strategies, ownership structures, specialization focus, and even growth trajectories.

What are the some of the common/emerging themes across DSOs?

Leveraging Technology: These systems (either built in-house, or purchased software cloud/in-house, or mix of both) are far more than just digital filing cabinets; they’re the lifeblood of DSO operations, driving efficiency, collaboration, and ultimately, better care for patients.

  • Health Checks and Tracking: DSOs use sophisticated software to monitor the health of their practices in real-time. This includes tracking key metrics like patient volume, appointment schedules, and treatment trends. By identifying areas for improvement, DSOs can quickly optimize operations and ensure smooth sailing across their network.
  • Operational Efficiencies: From scheduling appointments and managing billing to streamlining inventory and reporting, DSO technology eliminates tedious manual tasks and automates workflows. This frees up staff to focus on what matters most: providing excellent patient care.
  • Collaboration and Communication: DSO systems foster seamless communication between different practices and departments. Dentists can easily share patient information, consult with specialists, and collaborate on treatment plans. This improves coordination and ensures everyone is on the same page.
  • Shared Services Setup: DSOs often leverage their centralized systems to provide shared services across their network. This can include everything from marketing and human resources to purchasing and training. This shared approach reduces costs and ensures consistency in quality across all practices.

Clinical Training: While robust technology systems form the backbone of DSO operations, their commitment to excellence extends far beyond software and data. They understand that the heart of dentistry lies in skilled clinicians, and they actively invest in nurturing bright minds and fostering a culture of continuous learning.

  • Embracing New Talent: DSOs recognize the potential of fresh graduates and actively recruit them, offering a welcoming environment where their enthusiasm and eagerness can thrive. Imagine stepping into a state-of-the-art facility, mentored by seasoned professionals, equipped with the latest tools — a dream start for any aspiring dentist! Not to mention a pathway to clear off some of the financial burden incurred in student loans.
  • Cutting-Edge Training Grounds: Forget outdated equipment! DSOs invest in training facilities equipped with the latest dental technology, from advanced simulation labs to cutting-edge diagnostic tools. This allows dentists to hone their skills on the most sophisticated technologies, ensuring they stay ahead of the curve and provide the best possible care for their patients.
  • Cultivating Expertise: The Power of Mentorship: DSOs don’t leave their dentists to navigate alone. They foster a culture of mentorship, connecting individuals with experienced professionals who can guide them, share their knowledge, and provide invaluable support. This ensures a smooth transition into practice and creates a network of collaboration and ongoing learning.
  • Location Flexibility, Career Harmony: DSOs understand that location matters. They offer diverse practice settings across various regions, catering to individual preferences and career aspirations. Whether it’s bustling city life or a relaxed suburban environment, finding the perfect fit becomes a reality, enhancing work-life balance and overall dental professional satisfaction.

Beyond Profits: While DSOs are known for their operational efficiency and growth, many are making a conscious effort to extend their impact beyond the business sphere. They recognize the importance of giving back to the communities they serve, building trust and creating a positive social impact.

  • Free Dental Care for Underserved Communities: Many DSOs actively participate in community outreach programs, offering free or discounted dental care to underserved populations. This might include partnering with local charities, hosting mobile clinics in low-income areas, or providing pro bono services to patients in need. By bridging the access gap and addressing oral health disparities, DSOs are improving the lives of vulnerable individuals and families.
  • Focus on Special Needs Dentistry: Recognizing the unique needs of individuals with disabilities or special needs, some DSOs dedicate resources to developing specialized services and facilities. This could involve creating comfortable and accessible treatment environments, investing in specialized equipment, and training staff to provide sensitive and compassionate care. This commitment ensures that everyone has access to quality dental care, regardless of their abilities.
  • DSO Education Forums: Sharing knowledge and fostering professional development is another way DSOs contribute to the community. They may host educational forums or workshops, inviting both their own staff and external dental professionals to learn from industry experts, share best practices, and stay abreast of the latest advancements in dentistry. This collaborative approach contributes to a better-informed and equipped dental workforce, ultimately benefiting patients in the long run.

2. Dentist owned and operated group practice

The classic model. Familiar to both dentists and the dental system, these groups have dominated the landscape historically. Think of them as “dentist collectives,” where two or more dentists, from general practitioners to specialists, join forces under one umbrella. They can be small, with a couple of partners sharing an office, or sprawled across multiple locations with dozens of dentists. The key here is control — these groups are owned and operated solely by dentists, who make the decisions and reap the rewards. Legally, they might be solo ventures, partnerships, or corporations. While some administrative tasks might be outsourced, the heart and soul of the practice remains firmly in the hands of its dentist-owners.

3. Not For Profit Group Practice

Not all dental group practices are about profit. Some amazing groups exist to help those who need it most, while also training future healthcare professionals. These non-profit heroes come in different forms:

  • Locally founded: Partnered with charities, educational institutions, or even government safety nets. Their focus varies based on their sponsors’ missions.
  • Federally funded: Community health centers, supported by grants, offer a nationwide network of care, including mandatory dental services. Patients even get a say in how these centers are run!
  • State and local initiatives: Government-backed clinics may also establish group practices within their facilities.

Think of it like this: These groups are like dental clinics with a double purpose: helping those who need it most and training future dentists to keep the cycle going. They’re a vital part of ensuring everyone has access to quality dental care, regardless of their circumstances.

4. Insurer-Provider Group Practice

In the dental landscape, there’s a unique category where dental care providers and insurance companies become one. These insurer-provider organizations (IPOs) offer healthcare through HMOs (Health Maintenance Organizations) and dental care through DHMOs (Dental Health Maintenance Organizations) or in-house group practices.

Think of it like a one-stop shop for healthcare: you pay a fixed monthly fee, and the organization takes care of all your needs, including dental care.

Here’s how it works:

  • HMOs: These manage your overall health through a network of contracted doctors and hospitals. When dental care is included, it’s delivered either through:
  • DHMOs: A network of independent dental practices, some of which might be group practices, providing care for a fixed monthly fee per patient. You choose a primary dentist for routine care and referrals. DHMOs were popular but faded with managed care. Now, ACOs are rising, with potential for future dental integration, especially for kids under the ACA.
  • In-house group practices: The HMO directly employs dentists, who are typically salaried.

5.Government Agency Group Practice

When it comes to dental care, the US government has its own team of providers! Think of them as a special kind of group practice, fully owned and run by agencies like the Army, Navy, Air Force, Public Health Service, and Veterans Administration.

These groups have a unique mission: providing top-notch dental care to specific populations, like our brave troops. They manage their own treatment facilities and set the rules for everything from checkups to fillings.

The dentists themselves are government employees, with some serving for shorter tours of duty, while others make it a career. Many fresh-faced dentists even join for a few years to gain experience before going private.

6. Hybrid Group Practice

Dental group practice models are a diverse bunch, and some defy easy categorization. The future promises even more innovation, so this category acts as a welcome mat for those yet-to-be-invented models. Think of it as a celebration of the dental world’s ever-evolving landscape and the exciting possibilities it holds

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Originally published at http://deepaksnair.com on January 1, 2024.