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?