June 18, 2024

Currently, one out of every four dental practices in the U.S. is partnered with a DSO.  That number is expected to grow to more than 50% of all dental practices in the next 5-10 years. When the time comes for you to sell your practice, you too will have to decide if the DSO path is right for you. But first, a few things you ought to know about DSOs.

While the core function of any DSO is to provide services to dental practices in order to help them grow (e.g., finance, marketing, operations, legal, and human resource management), there are actually three types of DSOs that exist today: the dental service organization (DSO), the dental partnership organization (DPO) and the dental entrepreneur group (DEG). Understanding how these types differ will be critical in choosing not only which type is the best fit for you and your practice, but also whether or not to align your practice with a DSO at all.

The Dental Service organization (DSO). Under this DSO model, you would sell 100% of your practice. As a result, the day-to-day operations are fully controlled by the DSO investors. The benefit of this model is that due to the DSO assuming all non-clinical functions of the practice, you’ll be free to focus on treating patients. However, you would become nothing more than an employee of the DSO with no ownership rights or decision-making authority outside the realm of clinical work.

The Dental Partnership Organization (DPO). A DPO (also called an Invisible DSO), currently the most popular type of DSO, is generally 51% to 80% investor owned. Under this model, you retain an equity stake in your practice. As compared to the DSO, DPO investors are less involved in the day-to-day, allowing you to operate with more autonomy and decision-making authority.

Dental Entrepreneur Group (DEG). A DEG is less than 50% investor owned. As a result of this smaller stake, the investors are less involved in running the practice and primarily focused on its growth.

Questions or comments? Please contact us at (646) 213-9044 or Admin@AndrieuxLaw.com.