ADA explores growth of large group practices
April 09, 2012
By Karen Fox, ADA News staff
The ADA is taking steps to increase dialogue with large group practices and gather information regarding this rapidly expanding career option.
This sector of the dental workforce has experienced significant growth in a relatively short period of time. According to the ADA Health Policy Resources Center, in just two years the number of large dental group practices has risen 25 percent.
For now, it’s still a small piece of the overall dental delivery system pie. In a 2008 sampling frame, the Health Policy Resources Center concluded that solo dentist practices account for 92 percent of all dental practices, and very large group practices with 20 or more dentists make up only 3 percent.
However, in analyzing its data on individual dentists, the HPRC has concluded that the rate of solo practitioners is falling. In 2010, 69 percent of dentists were solo practitioners compared to 76 percent in 2006.
There are many factors fueling the growth of large group practices supported by dental service organizations, and this practice type has many implications for the profession and organized dentistry. A key aspect of large group practice that sets it apart from traditional dental practice is ownership. Dentists in these settings may have an ownership stake, or part of an ownership stake, but many are employees of the practice. The group practice model offers many benefits to employee dentists that are similar to ADA membership benefits, too. With this segment of the dental profession growing, how can the ADA remain relevant to dentists in large group practice settings?
In January, members of the Dental Group Practice Association led by Executive Director Edward Meckler met with ADA President William Calnon, ADA President-elect Robert Faiella, Executive Director Kathleen O’Loughlin and ADA staff to examine areas of mutual interest and potential opportunities for future collaboration.
“This meeting was a first step toward exploring possible collaboration with large group practices and finding out how the ADA can best represent dentists in this environment,” said Dr. Calnon. “We’re a big tent organization. This sector of membership is growing, and we need to find ways to be relevant to dentists who are seeking this type of practice.”
The ADA New Dentist Committee turned its focus on group practices in a Jan. 20 mega issue discussion. The program included Dr. Meckler, who is also chairman of DentalOne Partners, a large group practice, and representatives from Coast Dental and Affordable Dental Care, who provided an overview of their organizations and answered committee members’ questions. New dentists with employment experience with these groups shared their experiences.
Constituent societies have stepped up efforts to reach out to dentists in group practices. The Minnesota Dental Association’s Membership Committee has looked at ways to expand its value for newer dentists who work in large group practice settings. More than 12 percent of dentists in the state are employed in large practices but only 55 percent are members. The committee’s goal is to increase the large group dental practice membership market share to 70 percent by the end of this year.
Some ADA-recognized specialty organizations are also closely monitoring the impact of large group practices on their membership. The American Association of Orthodontists surveyed new graduates in 2009-11 and found that 16 percent of respondents are practicing in a nontraditional setting, defined as either an interdisciplinary practice or a practice where they are employees or independent contractors.
“Overall, our membership is still at 69 percent in solo practice, 16 percent in partnerships, 6 percent in associateships, 4 percent in interdisciplinary practice and 5 percent in large corporate practice,” said Chris Vranas, AAO executive director.
“The traditional orthodontic practice includes a single practitioner, or a single practitioner with an associate or two, and is community-based. We are following trends whereby recent graduates are moving into larger group-type practices and multidisciplinary practices due to economic factors, such as the need to start practicing right away to finance educational debt and the fact that fewer orthodontists are retiring because of the economy,” said Mr. Vranas. “We are doing our homework now to make sure we continue to provide benefits and services to assist members in all types of practice.”
At the NDC meeting, the ADA Health Policy Resources Center described models of large group practice, which include:
- Group practice organizations—Typically, the group practice organization is a de novo or “starting from scratch” practice. There may be several offices or branch locations, each typically has one dentist. In this model, the dentist is an employee. GPOs grow through acquisitions of solo, small and large groups, and by starting new locations.
- Dental service organizations (sometimes called dental management service organizations)—The DSO works with an existing practice rather than developing a new practice. In most cases the dentist retains ownership while contracting with the DSO to provide materials, human resources, marketing and information technology for a fee. DSOs grow by adding solo, small and large groups to the administrative arrangement.
- Geographic or multispecialty model—This is the traditional multiple location practice. Some dentists may split time among locations. In most cases, the number of practices is limited by geographic reach. These practices grow by acquisitions of solo, small and large groups, and sometimes they are acquired, too.
States regulate who can own and operate a dental practice, what entities may employ a dentist and what level of control nondentist owners and managers may have over a dental practice. Some dental management companies operate either as group practices or dental service organizations depending on state law. Group dental practices also vary their operations in terms of branding, scope of treatment and insurance options. Some are publicly traded and others are privately held.
The Dental Group Practice Association represents dental group practices and dental service organizations. DSOs do not practice dentistry, Dr. Meckler emphasized. “A DSO contracts with dental practices to provide critical business and management support,” he said. “The creation of DSOs with a professional manager who handles the nonclinical operations frees up dentists to practice dentistry, spend more time on other pursuits or any combination that allows them to maximize their personal interests and potential.”
One of the goals that Dr. Meckler had going into the meeting with the ADA was to correct what he sees as misconceptions that exist between DGPA members and their affiliated dentists and ADA members. For example, ADA membership encompasses much more than many group practice dentists think it does, and dentists in large group practices “do dentistry just like everyone else.”
“Our affiliated dentists graduated from the same dental schools and passed the same boards as dentists in private practice. There is nothing different in the way they practice dentistry,” said Dr. Meckler. “But instead of the dentist hiring an accountant, we’ll do it. Instead of the dentist contracting with an ad agency, we’ll do it. Large group practices are not something to worry about; it’s just a different model that removes the daily business and red-tape concerns from dentists so that they can do what they went to dental school to do: practice dentistry.”
Dr. Meckler said the meeting “was a very positive meeting; an early step in understanding the growth of the DSO industry and how DSOs and the ADA should be interacting in the world in which we live.” There is much common ground for the two groups. For example, DGPA reiterated its support for the dentist as the leader of the dental team, and identified political advocacy, information sharing and ADA participation as valued by dentists who practice in large groups. Working together to resolve mutual concerns, including those regarding third-party payers, were identified as potential areas of collaboration for the ADA and large group practices.
It’s not known how many dentists in large practice settings maintain ADA membership. Dr. Meckler, an ADA member since 1974 who is now on the board of directors for ADA Business Enterprises Inc., says DGPA “fully supports ADA membership. I would love for all of our affiliated dentists to be members of the ADA. A number are but not all.”
He believes the reason that more dentists in large group practices don’t join the ADA is that group practices offer so many benefits such as insurance and business support services. As a result, the perceived value of membership may not be as strong.
“Many dentists say, 'I don’t need ADA membership.’ But what they don’t recognize is that there are other advantages that we can attain from ADA membership. So No. 1, we need to create awareness of the importance of ADA membership for our doctors,” he said.
Dr. Meckler launched his career in 1974 as a busy practitioner in Cleveland looking for ways to grow his business while centralizing functions “that might make my life a little easier.” In 1980, he founded the Sears Family Dental Centers.
“The first office saw 22,000 patients in one year and I couldn’t hire dentists fast enough,” Dr. Meckler said. The company is now known as DentalOne Partners Inc., servicing more than 150 practices in 14 states.
While large group practices have something to offer dentists of all ages, Dr. Meckler said this career option is particularly attractive to new dentists. In fact, he attributes some of the growth of large group practices to new dentists and the challenges they face in a changing marketplace, which include record high levels of educational debt. According to the American Dental Education Association, in 2011 the average amount of dental school debt per student was $180,557.
“Dental students graduate with debt, and they have to start their careers and begin to practice. Now they have to pay off loans and get a loan to start a practice. They ask themselves, 'How will I ever get out of this?’ “ said Dr. Meckler. “The dental services organization has grown out of that. I’ve been in this business for 31 years. Our model is not new. The needs of young dentists have changed.”
Many young dentists may indeed be seeking practice opportunities that do not involve practice ownership. Although recent ADA research among young practitioners indicates that a small group practice with shared ownership is very attractive, most of the dental students and recent graduates surveyed indicated an expectation that they would be practice owners within 10 years.