As oral surgeons grapple with rising student loan debt and independent practices struggle to compete for new graduates, more providers are looking to partner with larger organizations.
Richard Hall, chair of the board for U.S. Oral Surgery Management in Irving, Texas, joined Becker’s Future of Dentistry Roundtable Sept. 14-15 to discuss three factors driving the shift.
Note: This response was lightly edited for clarity and length.
Richard Hall. Chair of the Board for U.S. Oral Surgery Management (Irving, Texas): Within oral surgery, when we looked at our value proposition, there were two things that were pretty apparent from day one. The first one was delivery of a collection of business services to support that clinical provider in the delivery of care, and take off the additional responsibility and burden they had to manage all the business aspects of the practice — everything from hiring and firing staff, to negotiating with payers, to negotiating their lease for their office. The delivery of those value-added services was obviously the biggest component. The second component was a wealth creation vehicle that they would have not had the opportunity to participate in if they didn’t become a partner in a private equity-backed DSO.
The third one, which we discounted for many years, was this sense of community. In our organization now, 56% of the business is owned by the surgeons. They’re the majority owner. Now, they have a common ownership in this much larger organization. They owned 100% of a very small, independent private practice, and now they own a very small percentage of a much larger entity, but that smaller percentage of that larger entity is actually worth significantly more than 100% of their small practice. So when they look at it, they go, “I removed the majority of the business burden I had, and now I can focus almost entirely on clinical delivery. I have money in the bank now that I got as a result of the initial transaction, and I can have that work for me through investments for the next 15 to 20 years as I continue my career that I wouldn’t have had if I hadn’t done this. I’m making as much money, if not more money, than I was making before because of the support that I’m receiving, the new technology that’s being added and the efficiency that’s being gained, et cetera. And now I have a sense of community that I didn’t have before.”
When we looked at our specialty, the average resident was coming out with in excess of $600,000 of student loan debt. That’s a hell of a hole to dig out of, even if you’re making really good money. What we saw was oral surgeons were just closing their practices. They would get to the end of the road, so to speak, at 65, 70 years old, and there would not be anybody to buy their practice, and they would just shutter it and close it down. That’s a shame because some of those communities really needed those services, and their legacy was washed away. This model created an opportunity for them to have longevity and maybe ensure that their legacy continued beyond there.
The other thing right now is recruitment. It’s very difficult for an independent practice to recruit in our specialty. Starting salaries are $500,000-$600,000 right out of school. For an independent practitioner to take on that kind of burden is difficult. If you don’t have that geographical pull — meaning that’s where they want to practice because either they’re from there or their wife is from there — it’s very difficult. And that’s only happened in the last couple years as well. When we started our business back in 2018, you could get an oral surgeon for $250,000 or $300,000, pay him a bonus, two or three years to partnership, and that was the model. Not anymore. It’s changed significantly over the last three years and it’s made it more difficult.
