What is a DSO & Should You Join One?

There’s a lot that goes on behind the scenes of dental offices, but what is a DSO dental office? Are they worth joining? Here’s what you should know about this option.

What Is A DSO?

A Dental Services Organization (DSO) is a support company that handles various administrative and support tasks on behalf of your dental practice so you and your team can focus on providing services.

While the details depend on the DSO, most offer help in some or all of the following areas:

Accounting

What is a DSO useful for? Many dental practices join them specifically for help with accounting and other financial issues. This is especially important if you take different types of payments from your customers, including pay-over-time or cash. DSOs can prepare financial statements, help submit tax paperwork, and otherwise manage accounting issues.

Claim Management

A DSO’s claim management services focus mainly on interacting with health insurance providers, including Medicare and private options. Since DSOs specialize in this, they can let you accept patients from new insurance providers without worrying about all of the paperwork.

This is especially useful if you often deal with complex claims and don’t want to force your staff to spend their limited working hours dealing with them.

Note that patient privacy laws affect things like claim management, but reputable DSOs always follow things like ADA requirements.

Human Resources

Many dental practices have trouble handling human resources issues. This has less to do with anyone’s skill and more to do with the fact that taking care of patients means staff can only spend so long training others, finding new hires, and otherwise managing personnel.

DSOs offer support services for all of these areas, ranging from providing extra education to handling vendors and suppliers. This is important because dental staff often work at the same location for many years, if not decades, so finding the right fit for the office is essential.

Marketing

Marketing is an increasingly important activity for dental practices. While a practice may need a website update or specialized IT services, getting those might be outside of the budget. DSOs can streamline this process and make marketing and outreach efforts much more practical.

R&D

Research and Development are the last things on many dentists’ minds, but obtaining the right education can make a practice significantly more successful. The crucial thing to understand here is that every practice has unique demographics and clients, so there are no universal strategies.

Instead, DSOs can help research the area, determine what strategies are most likely to be effective, and provide personalized guidance and support. This includes research for growth strategies, up to and including moving the practice or expanding it to new locations.

What Effect Do DSOs Have On Patient Care?

Dental Service Organizations are still relatively new, at least in their modern form. However, studies show that participating in DSOs generally lowers costs for patients, reduces the number of treatments necessary, and ultimately saves money. This disproves a widespread belief that DSOs are only about maximizing income.

The main reason for this effect is the economy of scale. DSOs can provide services in bulk, including through techniques like creating standardized forms and using data-supported suggestions to figure out what works for each dentist. Some can even suggest cost-effective treatments that won’t reduce a patient’s standard of care.

Instead of having 500 office staff spend 2 hours each on processing certain forms, a DSO might have one person spend 20 hours working on a version that helps everyone involved. That would be too much for an individual practice to spend, but it collectively saves the group about 480 hours of labor that staff can put towards other things.

This support has a positive effect on dental practices. By lowering costs and freeing up time, dentists and office staff alike have more time to learn and improve. That growth tends to attract better customers, resulting in business expansion and overall success for everyone involved.

Do DSOs Offer Any Other Advantages?

Yes. DSOs have some advantages not already discussed above, and when asking “What is a DSO good for?” these are important considerations.

Low-Cost Supplies

Dentists who participate in DSOs can get supplies much cheaper than elsewhere. This is generally because the organization can buy in bulk and negotiate for lower costs per unit. It’s also easier for some dental practices to sell or trade with each other if they end up with too many extra supplies.

This is one of the most important areas for saving money at dental practices. Adjusting costs can be hard because patients may not have flexibility, ultimately limiting earnings potential. Reducing supply costs has essentially the same effect on revenue as raising fees but with no drawbacks or hardship for patients.

Access To Financial Support

Many DSOs offer financial support to members including financing for equipment, company expansions, and lines of credit. Like buying supplies, a lot of this has to do with the economy of scale.

The DSO is a single organization with many revenue streams, so even if one member has trouble, payments from all of the others can fill the gap. That makes DSOs unusually low-risk for lending institutions, and a lower risk means better rates.

Are There Any Downsides To DSOs?

DSOs offer many advantages to dental practices, but there are some drawbacks to keep in mind.

DSOs Have Expectations

Dental Service Organizations have expectations for all members, essentially insisting that everyone conform to their expected standards for services. This can include ensuring you perform a certain amount of work or otherwise meet their expectations.

DSOs are realistic and generally don’t set impossible or unrealistic quotas for the area, but some dentists won’t like giving up control. It’s also quite difficult and expensive to leave a DSO before your contract finishes, so you need to be sure you agree with the organization before you join it.

Owning The Practice Gives You More Money

DSOs reduce costs, but they take their fair share of your income. Essentially, you’re hiring them as staff to support your practice. This is a constant fee, so you can’t reallocate funds to focus on building equity in your practice and paying down student loan debts the next. DSOs may offer more benefits long-term, but that doesn’t help if you need short-term flexibility.

Are DSOs Worth It?

In the end, only you can decide whether joining a DSO makes sense. They have plenty of advantages, but also several drawbacks. If you’re still not sure whether a DSO is right for you, contact Benevis today and start talking with an expert who can provide the answers you need to make an informed decision.