Many new dentists are opting to join DSO practices. Why?
Starting Salary
– With a guaranteed steady patient
flow and competitive salary packages, it’s not surprising that this is a
major factor in the decision for new graduates. Many affiliated dentists earn more than their counterparts
in private practice, due to higher profit margins and higher patient
numbers.
Ease Of
Employment – New graduates can face
difficulties finding immediate employment for a number of reasons.
Dentists are retiring later now than in previous years, so the number of
practices for sale/partnership has reduced. Recovery from the recession
has also been slow, so fewer private practices are hiring associates or
graduates with little experience. It can be difficult for a new graduate
to get their foot in the door. DSOs are willing to employ new graduates
and are able to support them to a degree that private practice usually
can’t. So for the lack of other opportunities, DSOs may be the only place
for a graduate to find work.
Student
Debt - The average graduating dentist has $200,000 to $250,000 in education
debt, creating a barrier to practice ownership. Accessing
finance is becoming more difficult, so the first few years for a solo
practicing dentist can be challenging.
Work Life Balance – Modern
employment trends are evolving, and lifestyle preferences such as regular hours, mobility and
flexible work hours are now becoming increasingly important. A successful
business isn’t all about money, and increasingly, married professionals and
dual profession families require the lifestyle that practice ownership doesn’t
always allow.
Opportunities To Acquire
Experience –
Increasing their confidence and speed while building patient numbers is a big
attraction for new dentists. DSOs are able to offer clinical supervision,
ongoing education, in-house training and other benefits that usually aren’t
available in a private practice. The opportunities for interaction with other
dentists and peers is also an attractive feature of a larger practice
structure.
Exposure To Newer Technologies
- Technology is improving patient care, and many patients are now
demanding it. DSOs have the
financial ability to invest in new technology including CAD/CAM, digital radiography, intraoral cameras,
implants, online scheduling and paperless offices with which smaller practices
cannot keep up. Exposure to these areas of dentistry can provide new
opportunities to build state-of-the-art practices.
Equity Shares/Becoming An Associate
– DSOs are structured differently in different states and have different
levels of ownership and control over the practice. But the ability to
immediately start paying down loans, accumulate capital and start a practice without making a significant personal
contribution are attractive features of their corporate structure.
Cost Of Initial
Investment - Setting
up or buying into a practice is expensive, and supporting $250,000 of
student loans plus $300,000 to $500,000 in debt for a new practice is very daunting. Doing so can result in pressure to increase turnover, so rather than jump straight into private
practice, graduates can enjoy a good salary and let the DSO take care of
the responsibilities for the costs and day-to-day operation of the office.
What do you think? Are DSOs right for you? What plans are you considering for post-graduation?