By Theresa Pablos, DrBicuspid.com associate editor

November 7, 2017 -- More dentists than ever were associated with dental service/support organizations (DSOs) in 2016, and that number is expected to rise, according to new data from the ADA Health Policy Institute. These organizations were also in more states in 2016 than the previous year.

Marko Vujicic, PhD
Marko Vujicic, PhD. Image courtesy of the ADA.

This is the second year that the Health Policy Institute compiled data on DSO affiliation. In a November 1 webinar discussing the reports, the institute's chief economist, Marko Vujicic, PhD, said DSO affiliation is just one of multiple ownership trends that share the same theme: Group practice is on the rise.

"They're all kind of pointing in the same direction -- dentists organizing themselves in larger groups," said Vujicic, who is also vice president of the Health Policy Institute. "DSOs are part of that, but there are many, many other models of large group practice that are not what many consider dental service organizations."

Continued rise of DSOs

After noticing the steady decline of solo practices and the rise of DSOs, the Health Policy Institute began tracking DSO association in 2016 and published its first-ever report on the topic earlier in 2017. To come up with the numbers, the institute's researchers used the location data they had for ADA member dentists, including practice addresses. They then cross-referenced the addresses with those on file for companies that are members of the Association of Dental Support Organizations (ADSO) or well-known DSOs that were not ADSO member organizations at the time.

Using that same methodology, the researchers found that 8.3% of dentists were affiliated with DSOs in 2016, up from 7.4% in 2015. They also found sharp age gradients for dentists affiliated with DSOs, with almost 20% of dentists younger than age 35 participating in a DSO.

Percent of dentists affiliated with a DSO by age

Dentists of all ages were more likely to be affiliated with a DSO in 2016 than 2015, and the biggest growth happened for dentists ages 35 to 49. More states also had DSO-affiliated practices in 2016 than in 2015.

Change in percent of dentists affiliated with a DSO since 2015

The Health Policy Institute also found that more women (11%) than men (7%) chose to practice in the dental service organization model, and pediatric dentists (9%) and general dentists (9%) were the specialties most likely to be affiliated with a DSO.

The changing workforce

The increase in the number of dentists affiliated with DSOs aren't the only thing changing about dentistry's workforce. Dentists tend to be younger and more diverse than before, too.

Because of new dental school graduates, the average age of dentists has declined after rising for several years, and more women are dentists than ever before. Dentists are also more racially diverse, although they are generally not as diverse as the rest of the U.S.

In a previous 2017 webinar, Vujicic and other panelists said that student debt could be one of the reasons driving dentists to group practice, but regardless of the cause, Vujicic doesn't think it's a trend that will be slowing down anytime soon.

"Supply-side trends are straightforward," he said. "We're comfortable predicting that we will see a rising supply of dentists. We will see a continued and slow decline in the percent of dentists in solo practice, and [we'll see] continued slow and steady increase of dentists who are organized in larger groups that includes the DSO participation rate but also includes different kinds of larger practice models."

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Last Updated hh 11/6/2017 3:50:37 PM

4 comments so far ...
11/7/2017 12:39:20 PM
mikeydds
Umm... ya think?  (if you sense my sarcasm)
 
When newly minted dentists have (1) extremely high student debt and (2) are not able to find traditional DDS jobs due to the delayed-retirement of the baby boomers... something has to give.  This creates a sense of desperation to find a job quickly after D-school to start paying off those loans.  Enter corporate dental companies!!  They swoop in and hire these rookie dentists, work them like hell until they're burned out (usually 2-3 years) and then dump them to hire new dentists to keep their payroll low.  Its a vicious cycle.  They even recruit inside D-schools before graduation!!  
 
2 things will fix this... 1-close some existing dental schools... 2-baby boomers need to start retiring.
BOTH are needed to curb the rise of corporate dental companies.
 
Cheers
-Mikey

11/10/2017 12:52:38 PM
Muel318
Well Mikey, you've figured out the law of supply and demand. The pieces that are missing are payors (insurance plans) and overhead (mostly tedious and costly regulations and technology). Young dentists may have to work harder to achieve what we've achieved (I set up my practice in 1979), but they still have it better than most professions. What other job has an entry level salary over 6 figures?
There are good and bad DSO's just like there are good and bad dentists, but we cant make them go away. They will go away if there is no money in it for them and not before. If employers keep insisting on cheaper plans (PPO's) insurance companies will keep selling them.

11/10/2017 1:59:33 PM
mikeydds
The decrease in insurance fee schedules should not discriminate between corporate and private practices since, theoretically, the fee schedules apply to everyone.  So unless corporate dental offices can negotiate higher fee schedules, I believe the connection you're making between low insurance payments and corporate-dental growth is not applicable.  Additionally, supply and demand would suggest that the negotiating leverage of corporate-dental in larger towns/cities would be greatly diminished since most dentists reside within large, metropolitan areas (i.e. distribution problem).  If there is an negotiated increase in fee schedules for corporate offices, its probably minuscule at best, but please correct me if I am wrong.
 
Overhead?? Yes, that's a problem, but I believe it will be WORSE for younger dentists who own their practices.  If insurance companies are paying less and less, how will a young dentist afford to buy new(er) x-ray/CBCT/CAD-CAM machines??  In 20 years, I doubt Patterson and Schein will bring down the selling price due to shrinking reimbursement payments.  True, a 6 figure salary is nice, but is offset by extremely high tuition rates... NYU is 5-600K!!  Nobody with a 5-figure salary could pay that off during a 30 year career.
 
Lastly, 50 years ago, I would imagine most MDs owned their own practice.  Nowadays, most MDs (and their practices) are part of hospitals and are considered employees/independent contractors.  If you had a time machine and asked an MD from 50 years ago what he/she thought of the business of medicine today, I'm pretty sure it would negative.  I believe dentistry is headed the same way, regardless of supply and demand.
 
-Mikey
 
 

11/11/2017 9:05:09 AM
Muel318
I don't know if large groups get better reimbursement from plans. They are numbers guys so if they think they will make more I wouldn't be surprised if they negotiate. Larger groups are better at creating a profit margin on lower fees. Solo's cant compete there.
I think dentistry falls short in understanding what the population of patients think. Yes, MD's do not have the professional status or income (relative) to 50 years ago. Patients might like Marcus Welby better, but would rather go to MGH for proton beam therapy if they have cancer. It wouldn't fit in Marcus' basement.
The public believes that the quality of medical care is better now than 50 years ago, and it is because of research and technology. Dentistry is following. Organized dentistry is missing the boat in trying to get the public and the politicians to believe that the quality is better is smaller offices. The ADA and state societies need to come up with a better strategy to protect the profession that we know and I don't know what would do that. My Dad had a solo practice from 1929 till the 70's and thought his was the golden age. Couldn't understand why a dentist should have to fill out insurance forms, and that was when we could do full balance billing. We still shouldn't get too frustrated. It's a great profession.