What’s the Difference between a DSO & a DPO?
If you’re researching how to sell your dental practice, you’ve likely seen the terms “dental partnership organization” and “dental support organization” come up. You may even have contacts at various organizations or know colleagues who have connected with one of them.
As you’re navigating the dental practice sales process, you might wonder what the difference is between a dental support organization and a dental partnership organization. The differences between the two may seem small, but they can impact your satisfaction as a dentist. Dentists who don’t research the difference between the two do so at their own risk. Selling to the wrong organization could be a disaster for your career and have a detrimental impact on your business satisfaction.
The dental practice transition advisors at Triumphant Transition Partners are here to help you answer these questions and determine if a dental support organization or dental partnership organization would be your best business partner.
Differences between Dental Support & Dental Partnership Organizations
Ownership
Generally, a dental partnership organization will grant the selling dentist greater ownership within the practice. Profit-sharing models are more common in dental partnership organizations. Dental support organizations are an excellent option for dentists who want to have some distance from the ownership and business direction of the practice.
Suppose you want to be in the driver’s seat within the practice and are hoping for the best financial deal possible. In that case, you likely want to primarily field offers from dental partnership opportunities.
Relationship to the Parent Organization
Dental partnership organizations allow the selling dentist to retain practice-level ownership. Even when a dentist sells their practice to a dental partnership organization, they retain a minority ownership of the practice, the very same practice they’ll be operating and seeing patients in. Profit distribution and equity are vested at the practice level, and if you’re a dentist who wants to control your situation, this can be a great way to bet on yourself. When in a situation with the right dental partnership organization, you’ll reap the benefits of your work, which is always great.
Dental support organizations, on the other hand, usually operate using the 100% sale model, and profit-sharing is much less common. Equity is generally vested in the organization’s collection of practices, not your specific practice. DSOs are great for dentists who don’t want to be in the driver’s seat but don’t offer the same financial incentives as DPOs.
Decision Making
DPOs tend to preserve the clinical autonomy of the dentist, and the dentist tends to retain a greater degree of control over the routine decisions of the practice. The dentist will have much more say in hiring, firing, strategic direction, and other routine business decisions within the practice. For many practitioners, this is a fantastic option that allows them to grow their practice, better tend to patients, and retain control of the direction of the practice. For others, focusing on patient care while allowing the dental support organization to manage the practice is a better trade-off.
Is a DSO or DPO Better for Me?
You might wonder which of these organizations is right for you as a dentist. There are, of course, some overarching trends that might be helpful. Generally, dental-support organizations subsume most decision-making authority within the practice and let the dentist focus on patient care. Suppose you’re a dentist looking to merely tend to your patients and want your partner to own the practice’s strategy, procurement, and hiring. In that case, a dental support organization is likely a good option.
However, if you want to remain involved in the practice’s leadership, ownership, and direction, a dental partnership organization is likely a better fit. You’ll retain much more of a voice in the practice’s future while benefiting from an external partner for capital, expertise, and economies of scale. That’s a tantalizing offer for many dentists.
It is worth noting, however, that each situation and practice sale is unique. Your particular goals, practice culture, practice values, and desired terms all significantly impact which option is right for you. Without a detailed consultation and assessment of your practice, offering a tailored recommendation and strategy for your specific needs is impossible.
If you are trying to determine if a dental support organization or dental partnership organization is right for you, call Triumphant Transition Partners today!