Understanding and Evaluating Associateship Opportunities
Ownership Implications

Course Author(s): David G. Dunning, MA, PhD;Robert D. Madden, DDS, MBA

Ownership Implications

Founder of Heartland Dental, Dr. Rich Workman, asserts: “DSOs are often connected with the ‘corporate dentistry’ or ‘private equity’ stigma when referenced or discussed. With these phrases, detractors infer that dental practices and practitioners give up control—that in choosing to be supported by a DSO, they illegally transfer all clinical decisions and duties made in their practices to DSOs.”35 All related dental decisions and clinical care are the providing dentist’s sole responsibility. The DSO provides services such as marketing and all administrative responsibilities as the owning dentist corporation deem necessary to run the practice.

In structure, typically, a dentist-owned professional corporation contracts with a DSO-corporation to provide administrative services for that office. This is in compliance with many state laws which require that only licensed dentists can own a dental practice. Accordingly, ownership options, if available among DSO-affiliated practices, typically take the form of stock in the local affiliated dental practice or possibly as stock in the larger corporate DSO. Thus, some type of an equity or ownership position may be available to dentists in a DSO-affiliated career track.

This philosophy of managed healthcare has emerged in other healthcare delivery systems, such as pharmacy, medicine and optical. For decades, health professionals, physicians, pharmacists, and optometrists, have successfully utilized outside sources for nonclinical responsibilities. This evolution has taken place because the laws of medical boards have continually modernized to fit the current needs of these healthcare professionals. With this modernization, a clear distinction between clinical and nonclinical services has been made with regard to these healthcare sectors.36

In dentistry many of the laws governing the profession have not been modernized to accommodate the new industry trends and shifts. Many of these governing laws have not been updated since the early 1940s. The clear distinction between clinical and nonclinical services supplied by the DSO in dentistry has not been made by governing boards. Consequently, many misunderstandings have occurred because of this failure to clearly define roles and responsibilities. These misunderstandings or misinterpretations do not necessarily originate from whether or not the DSO model is right or wrong, but more from a lack of education about what DSOs actually do for a dental practice.