Heartland Dental Files IPO Amid Expansion to Over 750 Clinics, Offering Comprehensive Support to Dentists Through DSO Model

Dentistry is an ever-evolving industry, where continuous innovation by practitioners is essential to enhancing efficiency and patient experience. In recent years, the rise and development of Dental Support Organizations (DSOs) have emerged as a major trend in the U.S. dental sector, with affiliations with DSOs becoming increasingly common for dental practices. VCBeat (WeChat ID: vcbeat) provides an overview of how Dental Support Organizations (DSOs) operate in the United States.

Modern dentists are facing numerous challenges. They must not only keep pace with technological advancements but also contend with rising costs, government regulations, and legal issues. In today’s dental industry, many dentists are in difficult circumstances, and young dentists burdened with over $300,000 in student loans often struggle to raise capital for their new practices.

The support provided by Dental Support Organizations (DSOs) is designed to help dentists address these challenges, ranging from equipping clinics with cutting-edge scientific technologies to managing administrative affairs; DSOs offer a wide array of services.

The precise definition of a Dental Support Organization (DSO) remains ambiguous, and their scale varies significantly. A DSO may consist of as few as two dental practices or encompass hundreds to thousands of clinics. The support provided by DSOs to their member practices is not standardized but rather diverse.

However, despite differing definitions across stakeholders, DSOs have consistently maintained that dental practices require specialized organizations to support their growth and development. The Association of Dental Support Organizations (ADSO) was established in response to this need.

Quinn Dufurrena, Co-Executive Director of ADSO, said, “Initially, we were just a research group. The CEOs of about four or five large DSOs came together to discuss the best dental practices, as well as operational strategies that worked and those that did not.”

Young dentists just entering the industry can not only build their own teams immediately but also gain valuable educational opportunities. For experienced and successful dentists, support from Dental Support Organizations (DSOs) helps alleviate the non-clinical burdens of running a dental practice, allowing them to focus on patient care. Furthermore, dentists supported by DSOs have the opportunity to engage with peers facing similar challenges and provide mentorship to students aspiring to become dentists.

“Dental support organizations are becoming increasingly prevalent, largely to establish a new reality,” said Samson Liu, Executive Vice President of Clinical Affairs at Heartland Dental. As the largest dental support organization in the United States, Heartland has more than 700 affiliated dental practices across 32 states. Nationwide, there are ten dental support organizations each with over 200 affiliated dental practices.

Top 10 Dental Support Organizations in the United States

1. Heartland Dental: Over 750 clinics

2. Aspen Dental: Operates over 600 clinics

3. Pacific Dental Services: Operates over 500 clinics

4. Smile Brands: Operates 350 clinics

5. American Dental Partners: Operates 285 clinics

6. Great Expressions Dental Centers: Operating over 280 clinics

7. Dental Care Alliance: Operates over 260 clinics

8. Affordable Dentures & Implants: Over 220 clinics

9. Western Dental: Operates over 220 clinics

10. InterDent: Operates 200 clinics

For dentists, the greatest challenge is not diagnosing dental diseases, but rather the administrative tasks required to operate a practice. In 2016, Dental Products Report and Vennli jointly surveyed 404 dentists to explore their perspectives on practice management.

The survey indicates that 82% of dentists consider operational tasks a significant concern. DSOs address issues for clinics such as human resources, regulatory compliance, and accounting.

Robin Edwards, a regional partner at Affordable Care, stated, “Dentists affiliated with DOS can access accounting, legal, procurement, recruitment, property management, and human resources services—all of which are in urgent demand. Affordable Care has more than 200 affiliated dental clinics.”

For dentists who decide to join a DSO, their practices do not need to undergo significant functional changes. “My practice looks no different from any other,” Janik said. “I am still a dentist, I remain responsible for operations, I make every decision myself, and I have full authority over hiring and terminating staff.”

DSOs can provide comprehensive support to dental practices, specifically including the following:

For dentists, a critical issue is their capacity to comply with government regulations.

While physicians are responsible for ensuring their compliance with government regulations, this does indeed impose a burden. By joining a Dental Support Organization (DSO), the process becomes simpler and more efficient.

Dr. Andrea Janik, supported by Pacific Dental Services, stated, “My practice is now doing well in terms of compliance with government regulations.” Pacific Dental Services supports more than 400 practices across 14 states in the United States.

The organization provided online help modules for the clinic where Andrea Janik works, which are used by doctors, assistants, and receptionists to ensure compliance. For example, if you need training on how to use a defibrillator or certification under the Health Insurance Portability and Accountability Act (HIPAA), you simply log in and complete these training sessions and requirements. The online modules include a Q&A section to facilitate completion of the training by physicians and staff.

Andrea Janik also stated that the assistance provided by dental support organizations (DSOs) in ensuring clinic compliance with legislative requirements has afforded dentists greater flexibility and time to deliver higher-standard care. These built-in reminder tools not only assist dentists but also benefit other staff members within the clinic.

Dentists who have joined DSOs state that the use of cutting-edge technology is their primary concern.

Dr. Dufurrena stated, “Technology is indeed crucial for dental clinics. Without certain technologies, it would be difficult for us to provide high-quality dental care; however, the drawback is that these technologies are prohibitively expensive. One of the advantages of Dental Support Organizations (DSOs) is that they have sufficient capital to purchase such equipment. Leveraging economies of scale, they can acquire these technologies at lower costs.”

Of course, the technologies provided by DSOs to physicians are not identical across all organizations.

Hal Muller, President of Henry Schein Special Markets, stated, “Dental practices supported by DSOs vary widely in their equipment and technology. Some organizations are fully paperless and digital, while others choose to maintain traditional methods. However, all are committed to using state-of-the-art equipment. Many dentists previously struggled with equipment procurement, thereby reducing the financial burden on their practices. Nevertheless, equipment used within a single DSO is often standardized.”

DSOs can help their affiliated physicians stay current with technology through purchases and vendor agreements.

Mongrain stated, “Given our scale of operations and the way we support physicians, we are able to leverage bargaining power in negotiations with supplier partners, thereby streamlining their sales processes. We also have dedicated negotiation specialists who secure the most favorable pricing for us.”

DSOs also provide advice and support to dentists seeking to adopt new technologies, and frequently offer guidance on bulk purchasing for clinics.

Supported dentists can utilize the latest cutting-edge technologies and products in the industry. While technological advancement is a key focus, basic equipment must also be ensured.

In the long run, the equipment recommended by Heartland Dental’s clinical leaders will prove beneficial rather than costly and unnecessary. Today, countless new dental technologies are continually emerging; however, our clinical leaders do not adopt these innovations wholesale. Instead, they thoroughly review all available technological options, evaluate their pros and cons, and select those best suited for dental practices. The development team can then secure the most competitive pricing for these recommended devices.

When new equipment is needed, doctors typically only need to submit a simple request to the DOS.

Edwards stated, “AffordableCare can always assist clinics in procuring, maintaining, or repairing equipment. Purchasing equipment through a dental support organization is as simple as sending an email or making a phone call.”

The accessibility of new technologies is a major draw for many physicians.

Janik stated, “We have the latest and greatest CEREC technology. We also have the beautiful Sirona VELscope laser system for oral cancer screening. Pacific Dental Services takes pride in its modern and emerging advanced technologies, leveraging its group purchasing power to make equipment more affordable before introducing it into individual clinics.”

Many dentists also noted that insufficient communication with insurance companies is another major challenge.

Janik stated, “Insurance has been a significant driver for my clinic. The patient population I serve and the contracts they hold with insurance companies are important to both patients and DSOs.”

DSOs help clinics manage insurance matters, which indeed alleviates a significant burden for physicians.

Once a patient schedules a consultation, the regional support team will first verify that their insurance benefits align with the provided documentation. This allows dentists to focus squarely on patient care, rather than spending time calling insurance companies to gather information.

Helping physicians assume the responsibility of managing insurance tasks indeed allows them to focus on treatment.

Dufurrena stated, “Dentists were never meant to be involved in insurance-related administrative tasks. Now, they can return to their core professional duties and devote their time to what dentists should actually be doing, while Dental Support Organizations (DSOs) handle all the rest—a significant advantage. The fact that DSOs represent a large number of dentists also enables these organizations to secure better reimbursement rates in negotiations with insurance companies. In other words, this is another example of economies of scale. If your organization has enough dentists, you have sufficient leverage to negotiate more favorable rates.”

Survey results indicate that female dentists face different clinical circumstances than their male counterparts. The primary concern for female dentists is how to establish a professional community.

By establishing professional communities, they can share information and also carve out time to care for their families. They need individuals who complement their skill sets.

Joining a DSO helps build a community of dental professionals.

Janik’s clinic also regularly invites specialists in endodontics, oral and maxillofacial surgery, and orthodontics for visits. The DSO to which Janik belongs holds a national conference annually, creating opportunities for communication with other members within the organization.

Janik said, “We will make some updates to the overall business data. We have a life coach who discusses interpersonal relationships and continuing education with us. Therefore, in addition to fostering this network and clinical culture within my own clinic, I have also maintained very close connections with others.”

Physicians have found that such a culture is a source of camaraderie and support.

Mongrain said, “At Heartland, we have a very open community where everyone is candid with one another. We share extensive information and data, and our culture is rooted in mutual support. There is no desire to undermine others. Most of my closest dentist friends are Heartland physicians; it is a collegial community where you never feel alone.”

The survey also reveals that men are more willing than women to own their own clinics. Nevertheless, some male physicians also appreciate this sense of community.

Attitudes among male and female dentists are shifting. Whether driven by a growing awareness or a genuine desire for better work-life balance, many recognize that private practice often falls short in this regard. Dentists who own and manage private practices must remain on call at all times, whereas joining a Dental Support Organization (DSO) can create greater flexibility and freedom in their personal lives.

DSOs not only attract novice dentists who have just entered the field and lack any resources, but also appeal to seasoned dentists approaching retirement.

Dr. Dufurrena said, “There are few remaining dentist assistants who recognize the traditional owner model, so dentists around my age have to seek alternative paths. As a result, a large number of older dentists are also joining DSOs as part of their exit strategy.”

Dentists can sell their practices to DSOs while continuing to work, making for a rather appealing pre-retirement lifestyle. Dr. Dufurrena noted that many dentists who join DSOs sign agreements committing to remain with their practices for a substantial period, during which the DSO helps them manage their practices effectively.

They can continuously recruit young dentists, while established dentists can exit the practice. Therefore, rather than hiring an assistant and eventually bringing them on as a partner, they prefer to join a Dental Support Organization (DSO), which can sometimes provide them with young dentists.

Dufurrena stated, “We will recruit physicians and then train and support them using highly advanced programs. Subsequently, we will acquire your clinic’s assets, while you may continue to work and manage these assets until your retirement.”

DSOs have already transformed the typical model of dental practices, and this ill-defined model will continue to evolve in the future.

Dr. Dufurrena stated, “There is an issue within our dental industry: we are not entirely clear about the distinction between Dental Support Organizations (DSOs) and affiliated group practices. The terminology is often used incorrectly, which makes it difficult to define precisely. Increasingly, dentists from individual practices are forming small affiliated groups. As these groups expand to include four to six practices, they recognize the necessity of centralizing data, systems, and equipment. At this point, they evolve into DSOs. Ultimately, we will see not only a growing transition from single practices to affiliated groups but also an increasing shift from affiliated groups to DSOs.”

The accessibility of advanced technology holds immense appeal for young dentists. “All DSO administrators recognize that this generation of dental school graduates expects to use in their practices the same technologies they utilized during their training,” said Muller. “In the coming years, this trend will accelerate technological advancement.”

But for those who believe that DSOs will dilute patient care, Dr. Mongrain’s expectations are precisely the opposite.

He stated, “Many physicians are concerned that DSOs will take full control of clinics rather than delivering high-quality patient care. I personally believe that, ultimately, the market will determine which models prove successful.”

Communication is one of the most critical components of patient-centered care and clinical workflows. With the continuous development of multi-specialty group practices and Dental Service Organizations (DSOs), it is essential to maintain communication processes within a unified organizational framework, integrating personal computer (PC) and mobile data while safeguarding patient information.

As the DSO market continues to evolve, information security within organizations and smartphone-based clinical communication will become essential. We need to deliver a truly patient-centered dental experience that enhances collaboration among dental teams, improves the profitability of dental practices, and, most importantly, optimizes patient treatment outcomes.

References:

http://www.dentalproductsreport.com/dental/article/top-9-benefits-dsos-dentists?page=0,9

https://www.beckersdental.com/2-uncategorised/33218-top-10-largest-dsos.html

http://theadso.org/about-adso/dso-industry/

http://www.dentaleconomics.com/articles/print/volume-108/issue-1/macroeconomics/fighting-against-commoditization.html