As DSOs compete for a limited pool of practices, nearly every group pitches itself as different from the rest. For dentists weighing a partnership, the harder question is what life will actually look like after the deal closes.
That gap between expectation and reality is one of the biggest reasons sellers end up unhappy, according to Mike Rice, CEO of Chicago-based Phase 1 Equity. The orthodontic and pediatric dentistry group is majority-owned by doctors, who also hold a majority of its board seats. Phase 1 Equity has grown to more than 30 locations across eight states, adding four practices so far in 2026.
During a fireside chat at Becker’s 5th Annual Future of Dentistry Roundtable in Chicago, Mr. Rice discussed what he and his partners believed was missing from the traditional DSO model, how the company decides when to slow its growth and what dentists should ask before choosing a partner.
Editor’ s note: Responses have been lightly edited for clarity and length.
Question: What did you and the founding partners of Phase 1 Equity believe was missing from the traditional DSO model that led you to believe there was room for something new?
Mike Rice: There are a lot of models out there, and everybody says theirs is a little different. That’s true to some extent, but there are a great number of similarities. For us, it came down to three or four core principles. First, we wanted to be a doctor-centric organization, so we felt it was important for doctors to hold majority equity. Some companies start out that way, but not everybody practices that today. We also thought doctors needed a meaningful voice within the company, so they hold a majority of our board seats and head up our committees.
Second is transparency and communication. I’ve seen this for a long time in the DSO world, in healthcare overall and even beyond healthcare. A lot of times, a seller who stays with the organization after the sale finds that life afterward is drastically different than they thought it would be, whether that is what they were actually told or just their perception. I’ve been through more than 100 transactions myself, so I know what that looks like. We felt education, communication and transparency were absolutely core to what we were trying to do.
Finally, I’ve always been with companies that view healthcare as local. Personally, I don’t want to go to a Walmart or Walgreens for everything in my life, including healthcare. I like a practice, a hospital or a surgery center that’s embedded in its community. You hear a lot about clinical autonomy, and that is absolutely a must. But a doctor can spend years building a practice with a certain vibe that works for them, their employees, their patients and the community. We didn’t want to come in with our mandates and changes and turn that upside down. That’s one of the things that made those practices special and successful, and we wanted to foster that environment, not change it.
Q: As CEO, what indicators tell you the organization is growing at the right pace, and what signals would tell you to pull back?
MR: I’ve worked for organizations where adding five or 10 practices a quarter was almost a mandate, and that becomes very hard. When you’re trying to add the right practices, you’re checking a lot of boxes and trying to create a win-win. When you’re forced to add too fast, you can’t check all the boxes, and you can run into issues. Where we are today, we don’t have a set number of practices we have to add. Anybody who’s been around growth knows it doesn’t come in a straight line. It ebbs and flows. Sometimes the phone doesn’t stop ringing, and other times you’re begging for it to ring.
When you’re finding a lot of good practices, the biggest thing you can do for the doctor coming aboard goes back to transparency and communication. Diligence is a very important part of bringing on a practice. It’s not only validating what you think is coming aboard, but also developing a roadmap. Integration is the cornerstone of any successful addition, and that roadmap has to be communicated to the selling doctors so they know exactly what to expect on day one, day seven and day 30. For me, when you’re not able to execute the integration plan you’ve laid out and communicated, that’s a red flag. That’s when we slow down the practices that are still a ways out and give our team time to catch up. I’ve had to do that throughout my career, because a selling doctor is only going to do this once. You might do it 100 or 150 times, but they’re doing it one time, and you want to make sure both they and your team have a great experience.
Q: If you were a dentist being approached by several DSOs, what questions would you ask to find the right partner?
MR: The best decision you’ll ever make is an educated decision. Don’t start this six months before you sell your practice; start it six or 10 years before. The good thing for doctors today is that they have a lot of options, so understand and explore them.
A few things come to mind. First, understand that offers have become complex. Back in 2021, offers were a bit simpler. Today, there are a lot of moving parts, so make sure you clearly understand them.
Second, understand exactly what’s going to change on day one, day 30, day 180 and day 360. The biggest reason a seller ends up unhappy is the gap between what they thought would happen and what actually happened. Maybe they misheard, or maybe they were told something that didn’t come to fruition.
Third, check references, and don’t just take the two or three references everybody loves to give. Ask for a list of every practice that’s joined over the last six to 18 months, and ask if you can call any of them. That tells you a lot about an organization. I’d also want to understand what they plan to do for growth and what impact that will have.
Lastly, understand the impact on your staff. Doctors see their staff as an extension of their family, and many have worked together for 10 or 20 years. Nothing will upset a doctor more than their office manager of 20 years saying, “I’m out of here. I can’t take it anymore.”
