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    Is the solo practice dead?

    The rise of DSOs has many solo practitioners nervous — but what does the future really hold?

    The business of dentistry, like so many industries, is different than it was 20 or 30 years ago. That change can be chalked up to such influences as the economy, technology and our culture. Dental service organizations (DSOs) are becoming much more prevalent and, given the current climate, may overtake solo practices in the coming years.

    So, it begs the question: Is the solo practice dead?

    It depends

    The short answer is, “It depends”.

    “If the continuation of the industry as-is goes forward, the answer is, ‘Yes,” Dr. Marc Cooper, president and founder of the Dentist Entrepreneur Organization, a national consulting and training firm out of Portland, Oregon working exclusively in the group practice space says. “The 80/20 rule will prevail. The growth of DSOs, managed group practices, is growing about 20 percent per year. My understanding of the ADA Health Policy Institute statistics is solo practices are shrinking at the rate of about seven percent per year. They’re about 55 percent now. The trend lines are such that the growth is exponential for DSOs and is declining steadily first solo practices.”

    Dr. David Burt, a general practitioner at Mountainville Dental in Allentown, Pennsylvania., says that the solo practitioners will always have a place in the industry and that they are not going anywhere. Unlike medicine, dental operates on a different model.

    “Medicine has pretty rolled over to corporate,” Dr. Burt says. “We all know that, we’re all living in, we are all seeing it all the time. But that’s because, other than going for checkups, medicine is, ‘You go because you’re sick.’ Dentistry is not like that. Dentistry is an elective procedure. We are physicians and contractors, at the same time. It becomes a different kind of a beast. Where your primary care physician sits there, listens to you, and writes scripts, we sit there, figure out what’s going on, see if you’re dealing with pain or not, and make esthetics looks better, or function better. People get to decide.”

    Dr. Roger Levin, CEO and chairman of dental practice consulting firm, the Levin Group in Owings Mills, Maryland., observes that there is a place for everyone in the dental space.

    “There’s so much noise about the death of private practice, that a lot of people are buying into it, but it’s just not true,” Dr. Levin says. “DSOs are growing, they’re continuing to grow. Small groups coming online with multiple dentists. So, there will be fewer solo practices, but for the next 10 to 20 years, we will have solo practices with doctors who enjoy that level of independence and freedom and understand how to make it successful. I think a big part of it is business management. If you manage your practice properly, it can be extremely successful at different levels of revenue. I’m not suggesting it’s going be the only model of the future, but it is one of the models of the future. There’s no data, whatsoever, suggesting that any form of practice is going to completely disappear in the near-term. They’re going to change, but they’re not going to disappear.”

    Related reading: What's next for the solo practice?

    David and Goliath

    Solo practiceDSOs, because of their sheer size, have organizational advantages that make it a challenge for solo practitioners to compete. Whereas the solo practitioner has to wear many hats – HR, payroll, etc. – in addition to actually performing dentistry, DSOs are able to hire specific people – even entire departments – to handle specific tasks.

    “Solo practices are extraordinarily vulnerable to the forces that are occurring in the industry,” Dr. Cooper says. “DSOs have the capacity for high-end executives to do all of the business functions, and that’s their only job. You have someone in charge of HR, they’re handling all the staff issues, all the staff interactions, all the performance reviews, all the recruiting, all those areas. The chief financial officer really looks at the numbers every day, all the KPIs in a close fashion, does analysis, tells you where you can turn the dial to get better on the lever, so you have a whole set of professionals managing a dental enterprise, whereas a solo practice has to do all of that themselves.

    "It’s a novice compared to an expert in terms of running a business. And then you have the capacity to deliver care for less per patient, because of the economies of scale. In addition, they’re able to leverage, in terms of their transactions, reductions in most expenses, because they’re buying in a much larger volume. So, it costs less to do per patient, they have a capacity to increase access by opening from 7 to 7 and on Saturdays, they can recruit better staff because they have better benefits packages and probably higher salaries.”

    Trending article: Will this insurance move put an end to solo practices? 

     

    Next: Does one size fit all?

    Robert Elsenpeter
    Robert Elsenpeter is a freelance writer and frequent contributor to Dental Products Report and Digital Esthetics. He is also the author ...

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