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Acquiring dental practices is an important growth strategy for dental support organizations. In an earlier piece I wrote about a trend towards de novo locations, but there is still plenty of opportunity for dentists who have solid practices and would like to transition to a dental support organization. It is important for a dentist owner looking to affiliate with a DSO to understand what the DSO is looking for and what the DSO’s strategy is. This helps the owner dentist align themselves with a DSO that shares a similar vision and career/transition path.
Location, Location, Location
We all realize that location is important when it comes to your practice, but what do dental support organizations look for when it comes to location? This is a hard question to answer as every DSO has a slightly different strategy. What is fairly commonplace when it comes to affiliation location strategy is that most DSOs typically prefer having a strong presence or hub in an area before they start adding single affiliate locations. This hub or regional center may consist of five or more DSO locations in a geographic area which can assist and support each other in the region if needed. Once a solid hub is established, the DSOs will look for strategic affiliation targets and add these to the region and expand outward.
Size Matters
What happens when a DSO with an affiliation strategy wants to expand into an area but does not have a regional presence? They can certainly choose several strategic locations, find talent and build out de novo locations. However, many DSOs with an affiliation strategy would rather find existing practices and leverage their location knowledge and patient base to grow. One important thing to keep in mind is that most DSOs hesitate to affiliate with a single practice when entering into a new market. What they look for is a local dental group practice with three to seven (maybe more) locations to give them an instant, strategic, regional hub. These local, smaller group practices are highly appealing and also much more valuable to a DSO in these newer markets. Another option for a dental support organization, but not quite as appealing, is a single location multi-specialty group.
If you are an independent practice owner looking for a DSO to partner with, it is important to understand how your practice(s) will strategically fit into an organization. Spending time understanding how DSOs operate and choose their affiliate partners can help you plan your own transition/affiliation strategy.
Written by Camille Faye, contributing editor Group Dentistry Now
