Emerging DSOs should not grow too quickly

Dec. 17, 2019
If you want to add more offices, go for it! But before you dive into such a life-changing decision, listen to the dentists who have been there, and who know the problems that can be avoided by making sure your current office is top notch.
Chris Salierno, DDS, Chief Editor, Dental Economics

Do you have an itch to add another location?

Last month I had the pleasure of serving as emcee at the inaugural Maeva DSO Accelerator & Management Meeting, hosted by Maeva Dental Advisors. The crowd was predominantly dentists who own a handful of practices and who are looking to grow. Vincent Cardillo, Maeva’s president and CEO, had a clear message for the group that was echoed by many of the speakers—focus on growing your existing practices rather than adding other locations prematurely.

We have frequently discussed the “great consolidation” in the pages of Dental Economics. The trend is clear, and currently 8.8% of US dentists are affiliated with a DSO. There is noticeable DSO growth on the macroeconomic level as measured by the number of dentists and locations. However, on the microeconomic level, an individual DSO or multipractice group might want to heed Mr. Cardillo’s advice and make sure that their current house is in order first. 

I asked the participants to list their biggest headaches as group practices. Here are their answers, in no particular order:

1.    Wasting money on marketing, and insufficient new patients

2.     Patient no-shows

3.     Recruiting and retaining dentists

4.     Low associate production

While large DSOs have the financial foundation to support a poor performing location, small DSOs may not. The four problems listed have something in common—they may be indicative of a poor team culture and poor patient experience. While DSO leadership monitors tangible metrics such as earnings before interest, tax, depreciation and amortization (EBITDA) as a sign of practice health, it is important to make sure that the intangibles, such as esprit de corps, are somehow being tracked (e.g., patient satisfaction surveys, online reviews, decreased associate turnover, etc.). 

The four headaches listed could be a sign that dentists and patients are being turned off by some element of the practice culture. Whatever the problem(s) may be, it would be prudent to fix them before taking them with you to a new location.

Chris Salierno, DDS, is the chief editor of Dental Economics and the editorial director of the Principles of Practice Management e-newsletter. He is also a contributing author for DentistryIQ and Perio-Implant Advisory. He lectures and writes about practice management and clinical dentistry. Additional content is available on his blog for dentists at Dr. Salierno maintains a private general practice in Melville, New York. You may contact him at [email protected].