When Does a Dental Group Practice Become a DSO?

There is much confusion and fluidity in the nomenclature of our evolving sector of the dental industry.  Here at Group Dentistry Now we have decided to focus several upcoming articles on industry-specific terms and acronyms which are often misunderstood or misinterpreted.  In order to ensure that you don’t miss any of these exclusive and educational articles, subscribe HERE to GDN for free.

The term “dental group practice” was originally used to cover all multi-location dental practices, whether they had three locations or 400 locations.  Furthermore, “dental group practice” was (and is) often used to describe single location dental practices with multiple dentists practicing in that one location.  Obviously there can be rather drastic differences among these different types of practices which are all lumped together under the “dental group practice” category.  Grouping these different types of dental practices together can lead to confusion and misunderstanding of the true dental business models.  Perhaps a new term should be utilized for clarification.

The acronym “DSO” has been in existence for a while now, but really started to take root and became mainstream language in 2014 when the DGPA (Dental Group Practice Association) changed their name to the ADSO (Association of Dental Support Organizations).  DSO is an acronym that originally stood for dental service organization, but was more recently modified to dental support organization.  Some organizations still refer to DSOs as dental service organizations, but dental support seems to be taking over as the preferred way to reference this business model.  Whether the “S” stands for support or service, a DSO is different than a dental group practice.

Differences between dental support organizations (DSOs) and dental group practices.

The easiest way to differentiate between a dental group practices and a DSO is to review the non-clinical or support (service) side of the practices.  When support functions are centralized in one location and the individual offices are relying on this centralized point for non-clinical services, then the dental group practice has made the leap over to becoming a DSO.  Opinions differ on how many practices warrant this centralization, but several five location groups have tied all of their practice management software together, centralized their billing, marketing and created a central call center.  This structure in essential in a dental support organization.  There are still many more five location dentist-owned group practices that all operate fairly independently, handling support functions at each individual location.  The obvious benefit to centralizing is the leveraging of your scale and volume, while freeing up your individual locations’ staff to focus on customer service and patient care.

Larger DSOs

Many in the dental industry view DSOs as having large numbers of offices, some spanning several states.  These larger groups are also considered dental support organizations, just like the smaller ones mentioned above.  There are differences with the smaller DSOs (dentist-owned, single state) versus these larger groups(25+ practices).   In large DSOs, especially ones with private equity ownership or non-dentist ownership, the separation of support and clinical is a legal necessity.  The support (management) organization becomes a separate legal entity that manages and supports the individual clinical practices with services such as marketing, human resources, billing, IT, payroll and accounting.

Simply put, a dental group practice becomes a dental support organization when it begins to separate and centralize the clinical from the non-clinical.

In order to ensure that you don’t miss any of these exclusive and educational articles, subscribe HERE to GDN for free.