by Book review: Transforming the Cottage Industry: The Rise of Dental Support Organizations, by Quinn Dufurrena
The greatest obstacles to the growth of dental support organizations aren’t questions about quality of care or even about the economics of a group practice vs. that of a solo practitioner. Rather, the greatest obstacles are the attitudes of dentists themselves. That’s because successful DSOs demand new styles of leadership, which rely less on an autocratic approach to practice management and more on collegiality and collaboration. There’s another obstacle – and it’s a big one: fear of change.
The irony, according to Quinn Dufurrena, executive director of the Association of Dental Support Organizations and author of Transforming the Cottage Industry: The Rise of Dental Support Organizations, is that the DSO model actually marks a return to old-style dentistry, with an emphasis on patient-doctor interaction. That means less time fretting about payroll, insurance, procurement and the like, and more time building relationships with the people in the chair. The added bonus: A work/life balance that better suits today’s professionals.
The hazards of change
DSOs help dental teams create value “by being trustworthy, caring and having honest relationships, which we are now seeing as a singular priority in newer and emerging business models around the world,” writes Dufurrena. “As dentists, we need to protect this most sacred of doctor-patient relationships and not allow greed, control or power to divert any of us from our much needed vocations …. [T]he balancing act between good clinical work and demanding business responsibilities for any solo dentist has eluded most practitioners. The DSO model endeavors to put balance back into the equation.”
The younger generation of dentists gets it and wants it, he says. And increasingly, the members of that younger generation are women, many of whom are more comfortable acting as colleagues than all-powerful practice owners. But women aren’t the only ones who want a new approach to their professional and personal lives. “Change from an autocratic model to a more relational and collaborative model of business is happening everywhere,” he writes.
The DSO model calls for change. And that’s never easy.
“The U.S. healthcare system is no longer sustainable,” writes Dufurrena. “Woodrow Wilson said, ‘If you want to make enemies, try to change something.’ So, we will certainly make enemies within the dental community, but when dealing with healthcare, we can no longer afford the status quo of any model of care that is inefficient.
“It is time to change the way we view oral healthcare and embrace all of its ramifications.”
Success, he writes, “is equal to being open to change and is directly proportionate to the quality of our relationships with each other, with our patients and within ourselves. [O]ur quality of relationships in dentistry has waned due to the overwhelming needs of running a practice.”
Medical precedent
Dentistry – like medicine before it – is at a tipping point, Dufurrena believes. “The power of community and the group is undisputed in business, psychology and biology, and a key to unlocking the timeliness and the ethical business practices of the DSO model.”
Medicine was built on small, independent medical practices. But that model is changing, for sound reasons, says Dufurrena. “[I]ncreasingly, doctors are giving up their independence to join larger groups or hospital systems, often getting help with back-office functions, like billing and insurance negotiations, while staying in their old offices and seeing their same patients.”
So-called physician “supergroups” create efficiencies of scale, centralize human resources and accounts payable, contract and bill under a single tax identification number, and negotiate better rates with insurers, says Dufurrena. “By centralizing things like payroll, billing, accounts payable and claims management, you can reduce the overhead that each practice has to pay out independently.”
Just as medical doctors before them, the new order of dentists are seeking better relationships and a better quality of life while delivering better care to their patients. “This flies in the face of the autocratic, all-powerful approach that is inherent in the solo practice model and the old-guard mentality.”
Sears had everything
Dufurrena peppers his book with real-life anecdotes. One is the story of Ed Meckler, DDS, founder of what is now DentalOne Partners. Meckler had an idea to open a dental office in a Sears store in Cleveland in 1981. (There had been a precedent within Sears with its in-store optical locations.) In the first year, thanks to advertising and the use of the Sears credit card, the office saw 22,000 new patients, Meckler told Dufurrena. Soon he had 38 such offices. In 1995, with a favorable opinion from the Attorney General that established that a non-dental support company could affiliate with a dentist, Meckler pursued private equity money. The company expanded, and Meckler recapitalized in 2007 with two new private equity groups.
“Now we were off and running,” he told Dufurrena. “The idea was that private equity could invest in a model that supported the nonclinical aspects of the dentist’s practice. Their support gave the dentist the business acumen that most dentists did not have and offered cutting-edge IT systems, marketing at highly professional levels, and analytics that they had never seen. It also permitted the dentists to devote their time and attention to clinical, patient care. It was simply a win-win scenario.”
Meckler encountered early resistance from the dental community. Such resistance remains today. And it is fueled in large part by fear of change, largely on the part of older, primarily Caucasian males who have controlled the current dental (and medical) model for centuries, says Dufurrena.
“The dental industry, as a whole, has not exactly embraced DSOs with open arms,” Rick Workman, DDS, founder of Heartland Dental, explained to Dufurrena. “Fearing the impact that new ideas and competition will have on their comfortable private practices has solo providers circling their wagons. Realizing that going toe-to-toe with the DSO model in a fight they can’t win, they are taking the offensive by challenging the credibility of and attempting to regulate the DSO industry.”
Profits vs. patients?
Some professionals would have the public believe that dentists must choose between profit-centered and patient-centered care, writes Dufurrena. “They want us to believe we will lose our rights to control the clinical side of our practice and that the corporately driven business side of the practice will cross over into the clinical side and dictate clinical protocol.” In some cases, the media has bought into their argument. Lawmakers have as well, writing legislation to regulate the DSO model out of the industry.
But changing long-standing models calls for vision and courage, says Dufurrena, citing the example of Henry Ford in the early 1900s. At the time, most automakers believed the best way to maximize profits was to build cars for the rich. Ford, on the other hand, believed he could build lower-cost cars and sell them to the general public – and make more profits than ever.
“History is firmly on the side of the DSO model,” writes Dufurrena. “New models of healthcare delivery have been loudly challenged by doctors only to be enthusiastically received by patients and ultimately prevail. Competition drives innovation and price containment in all industries. The DSO model creates competition and gives patients (the consumer) a real choice in their dental care and the freedom to more effectively utilize the benefits their employers provide as well.”
Relationships, inclusion and the pursuit of meaning
Far from creating profit-minded automatons, DSOs can actually bring about more meaningful work – and lives – for dentists and their teams, argues Dufurrena.
“One of the core distinctions at the heart of the DSO model is the emphasis on relationships” to self, patient and community, he writes. He quotes John Mackey, CEO of Whole Foods, who proposed in his book, Conscious Capitalism, that relationships are the new model for good business. Conscious capitalism leads to a refocusing on purpose and underscores the importance of attending to all stakeholders, according to Mackey.
Says Dufurrena, “In the conscious-capitalism model, profit is seen as a necessary outcome of doing business with heart, with people in mind, with service being central, and with quality and ethics mandatory. The developing DSO model supports all of this thinking.”
Some may ask, “How can our vocation as dentists become transformative for everyone concerned when profit is no longer the bottom line, but rather the inevitable outgrowth of ethical, responsible relationships?” writes Dufurrena. The answer: “When the business side of a dental practice is effectively and creatively managed, then the dentist has time to address these essential questions that in the end makes [him or her] a far better practitioner.
“With a DSO handling the business side of a practice … the dentist has more free time to give back to society in new ways and has time to volunteer and make an even greater difference with [his or her] skills.”
Although this model might feel new to some, “it is rooted in some of the most powerful tribal collective wisdom that we are simply remembering and not inventing anew inside of dentistry,” he says.
The new leader
This new model calls for new leadership and new skills, says Dufurrena. A high IQ and strong technical skills are merely “entry-level requirements for executive positions.”
The effective leaders of tomorrow will be those with “emotional intelligence,” which Dufurrena describes as “the ability to perceive emotions, to access and generate emotions so as to assist thought, to understand emotions and emotional knowledge, and to reflectively regulate emotions so as to promote emotional and intellectual growth.” In other words, the leader of tomorrow will be cut from a different cloth than that of today.
Practical considerations
Setting aside the loftier discussions about meaning and values, the growth of DSOs has a much more down-to-earth explanation – money. “Students leave school more in debt than ever before,” says Dufurrena. “Buying a practice is no longer as viable or preferable.” According to a 2013 American Dental Association report:
- The school debt load of new dental graduates has grown to an average of approximately $200,000 and more.
- More than four out of 10 dental school seniors say that educational debt has a great influence on their professional choices after graduation.
- A growing number of couples are entering dentistry with even larger debt burdens, making the purchase of a practice even more difficult.
Given these facts, along with a desire on the part of young dentists to maintain a work/life balance, and it’s no surprise that the solo practice model isn’t working anymore, at least for many new dentists.
“The DSO community is growing and adapting to a changing environment with clarity and creative collaboration,” says Dufurrena. “Like any other movement, it’s not perfect, but the industry is learning and maturing.
Training, tools, fitness, partners
Innovation rarely occurs without risk, says Dufurrena. He quotes author and speaker Bill Buxton, who wrote in a March 12, 2008, Business Week article (“Why Risk is Important”) that risk leads to growth in our personal and professional lives. Entrepreneurs can manage that risk by following the example of ice climbers.
“There are four things that the prepared ice-climber brings to the base of any climb: training, tools, fitness, and partners,” writes Buxton. “The lessons for business are simple: The four considerations employed by the ice climber are exactly the same as those used by the serial entrepreneur or the effective business person.”
Says Dufurrena, “It is said that the world reserves its more amazing rewards for the courageous and the bold and for those with the courage to pursue their dreams with confidence and an open mind and heart. Our changing times will call for the courageous to step forward and will ultimately see others fall to the side. Where will you choose to stand? Our cottage industry is transforming – let’s embrace it.”
