A shifting economy amid various industry challenges has led DSOs to zero in on specific investments to support organic and inorganic growth.
Here are five investments DSOs are making this year:
Workforce support
DSOs are continuing to rethink employee support to improve hiring and retention rates as workforce shortages continue to challenge the industry. These initiatives often involve enhancing benefits and compensation and improving company culture.
Tend launched a compensation model that allows dentists to earn up to 40% commission and equity in the company. In addition to commission and equity in the company, dentists are also provided mentorship, continuing education and a full benefits package. The commission model represents one of the highest commission structures in the U.S. dental industry, which Tend said is aimed at combatting industry-wide challenges and making the field more sustainable for clinicians.
Hopkinton, Mass.-based Simply Dental Management made several internal changes earlier this year in response to employee feedback. The DSO adjusted communication practices and launched a portal for employees to access forms and other announcements. It also made changes to its employee benefits. SDM said it plans to conduct check-ins each year to continue receiving employee insight and track progress.
Sarasota, Fla.-based Dental Care Alliance launched its Women of DCA employee resource group to support the personal and professional development of women in the dental field. Women of DCA will provide resources and opportunities for women to grow within the field and give back to communities, while also supporting overall wellness and recognizing the contributions of women at the company.
Many dental leaders have found that company culture can be just as important, if not more important, than compensation and benefits for prospective employees. A company’s culture can often make or break a company.
“My acid-test question for assessment of organizational culture is ‘Given your existing culture, would your business survive if it were in another industry such as a café or a clothing boutique?’,” James Mah, DDS, dean of the UNLV School of Dental Medicine in Las Vegas, told Becker’s. “Elements of positive culture such as listening to customers, ability to learn, honesty, adaptability, teamwork, communication generally shift the answer to ‘yes’ and demonstrate that positive culture is not only transferable but can be the most valuable asset for an organization.”
Education
Several DSOs have launched educational programs and partnerships this year to support their clinicians’ growth and help bring more people into the field.
New Hyde Park, N.Y.-based Dental365 introduced its Advanced Learning Series to give Dental365 providers the opportunity for individual, experiential learning in a small group setting. The Advanced Learning Series consists of one-day lectures presented by a group of speakers.
Additionally, Heartland Dental and Concorde Career Colleges broke ground on their first co-branded dental training campus in Fort Myers, Fla. The campus will train up to 190 hygienists and dental assistants each year.
Denver-based Espire Dental also partnered with Zollege, an operator of dental assistant schools, to expand access to dental assisting programs. Through the partnership, Espire Dental will launch 12-week dental assisting programs at its dental practices located in Lakewood, Loveland and Colorado Springs, Colo.
Technology
Several DSOs have added new technology this year to improve operations and enhance patient care.
Chicago-based The Aspen Group is continuing its partnership with Planmeca to add its digital imaging technology to its Aspen Dental offices. The DSO’s ClearChoice brand had already been using Planmeca’s digital technology across its network. Now, the Aspen Dental brand is integrating Planmeca’s Viso and ProMax CBCT imaging units, as well as the ProX, ProSensor HD and ProX GO 2D intraoral imaging systems.
Additionally, ClearChoice recently launched First Look, an AI-powered simulator that allows patients to preview potential treatment results. Prospective patients can upload a photo of their smile into the simulator, which will generate what a potential smile transformation could look like, even before consultation with a ClearChoice practice.
Houston-based Specialty1 Partners also introduced its Acumen Intelligence Engine, an analytics platform. Acumen combines practice management, HR, finance, procurement and revenue cycle streams into one platform to help Specialty1’s partner practices to optimize resources and improve patient care.
De novos
Although acquiring existing practices is helpful for DSOs to boost growth, some companies see additional benefits from opening de novo offices.
Boca Raton, Fla.-based Sage Dental, which employs a strategy that combines acquisitions and de novos, told Becker’s that opening new offices can be an effective strategy to build up a presence when entering states.
“We aim to build new state-of-the-art practices in premier retail locations as part of our brand definition, while also acquiring outstanding practices with strong clinical leaders that are excellent cultural fits,” said Mr. Mizouni. “As constructing a new de novo practice takes time, we typically begin by identifying and building new locations, then acquire strong, established practices along the way as the opportunities become available.”
Henderson, Nev.-based PDS Health has opened more than 30 offices this year and plans to open between 80 and 100 offices by the end of this year. Dan Burke, chief enterprise strategy officer at PDS Health, called de novos “the right path” for the company.
“When you’ve invested in the way we have for scale — in Epic as our practice management system, in revenue operations, in clinical infrastructure — opening new practices from the ground up just makes sense,” he told Becker’s. “Each one is built to fit our model and culture from day one. Every new office is a direct expression of our culture, not something we have to retrofit. Additionally, prior to ownership, our owner dentists have worked as associates for another owner in a PDS Health practice. Thus, when a would-be owner dentist is ready to purchase their office, they know exactly what they are getting.”
Acquisitions
While some DSOs are specifically focusing on de novo offices, other organizations are opting to consolidate the market further by acquiring smaller DSOs or existing dental practices.
One of the most notable developments from this year is Park Dental Partners’ filing of its initial public offering. The Minneapolis-based DSO plans to raise $20 million through its initial public offering to support organic and inorganic growth, among other initiatives.
Additionally, six DSOs have gained new investments this year to help support their growth: Motor City Dental Partners, Blue Cloud Pediatric Surgery Centers, Allied OMS, OMS360, Max Surgical Specialty Management and Silver Creek Dental Partners.
Becker’s has reported on dozens of DSO acquisitions so far this year, which includes several DSOs’ entry into new markets. Executives largely agree that the DSO market continues to be in a growth phase.
“The scale just has to make sense for the systems, the policies [and] the administration,” Jeremy Jonckheere, vice president of strategic payer partnerships at PDS Health, told Becker’s. “The big number I look at when I’m thinking about all of this is that about one-third of all new graduating dentists are going to join a DSO coming out of school. Beyond that, about one-third of all dentists are thinking of retiring in the next three to six years. Those two numbers alone say the industry is just going to continue to grow like crazy.”
