If executed properly, private dental and oral surgery practices can grow their footprint without the need for private equity to step in, according to this practice owner.
Melville, N.Y.-based All County Oral & Maxillofacial Surgery has expanded to double digit locations in New York and is looking at continued growth while staying independent.
Even as private equity firms and private equity-backed DSOs have continued making their presence felt, there is still plenty of room for independent practices to carve out their own space in dentistry.
Ross Chavkin, DDS, founder and owner of the practice, and Suzanne Villani, All County’s COO, recently connected with Becker’s to talk about what has guided the practice’s decision to remain independent and how it operates without private equity funding.
Note: Responses were lightly edited for clarity and length.
Question: As private equity’s influence in dentistry has expanded, what has guided your decision to remain independent?
Dr. Ross Chavkin: I joined a practice that had two locations back in 2006. At the time, we were a very small mom and pop kind of shop, and my partners were old school type oral surgeons. I helped the practice basically double within a very short period of time. I saw very early on that either you were going to grow, or you were going to get swallowed up. About 10 years ago, DSOs started becoming more prevalent in the area, and it never really interested me. We are still in a very rapid growth phase right now. We’re trying to scale up as much as possible, and in doing so, we’re also trying to maintain the autonomy of being your own boss.
The associates that work for me have the ability to basically build their own schedules. We’re doing the back office stuff for them, so they’re practicing as if it’s similar from a management standpoint, to a DSO, because my staff is doing all the legwork. We’re doing all of the hiring, the firing, the ordering, all of that. That makes it very easy for an oral surgeon to join my practice and basically build a name for themselves while not having to worry about the back end things. I still think you can run a private practice in this economy right now without having private equity backing you up.
Q: How do you control costs across numerous practice locations without the backing of private equity?
Suzanne Villani: Watching all the profit margins of each location is super important, on top of keeping our production high and our costs low. When we bring in new technology, they need to be systems that are going to be working for us instead of against us. We recently brought in a system just for ordering supplies that helps to set budgets for each of the teams. That is a way to control costs at each site, and obviously just having different budgets per location depending on their profitability. I usually will take whatever they produce from the month before and give them a percentage for the next month. That is a guideline to keep them in check just to be able to continue to control those costs.
Q: Do you think that there is a ceiling for independent growth?
RC: If you can continue to be profitable and show profit margins that exceed industry averages, a regular bank wouldn’t have any issues financing you. We just purchased our first non-oral surgery practice, and we’re actually working on the concept of combining oral surgery and periodontics under one roof. I think that can be a big advantage, because you can typically buy periodontal practices for less than oral surgery practices. If I can pick up an office that’s already built out, and we can match an oral surgeon into that location, it’s a home run for me. I’m brainstorming that concept to see if we can maximize the growth potential on something like that.
At the Becker's 5th Annual Future of Dentistry Roundtable, taking place September 14-15 in Chicago, dental leaders and executives will gain insights into emerging technologies, practice growth strategies and the evolving landscape of dental care delivery, with a focus on innovation, patient experience and operational excellence. Apply for complimentary registration now.
