DSOs on the rise: What’s driving more dentists to sell their practices?

The dental industry is undergoing a profound transformation as more practitioners choose to join dental service organizations (DSOs) rather than pursue private practice ownership. This shift raises critical questions about the future of independent practices: What drives the DSO trend, and what does it mean for private practices?

More private dental practices are selling to DSOs than ever before. According to the American Dental Association: 

“Thirteen percent (13%) of dentists nationwide were affiliated with a dental service organization in 2022, and for dentists less than 10 years out of dental school the rate is much higher, according to new data released by the ADA Health Policy Institute. This is an increase over the 10.4% of dentists affiliated with a DSO in 2019 and the 8.8% in 2017.”

Men and women alike are flocking to DSOs in greater numbers, trading ownership of an individual practice for the relative ease of a group practice. Dr. Bicuspid shares in their recap of an ADA Health Policy Institute webinar:

“The decline in ownership can also be seen among both male and female dentists. For male dentists, practice ownership decreased from 89% in 2005 to 80% in 2021. For female dentists, ownership slipped from 68% in 2005 to 60% in 2021.”

This trend is particularly pronounced among younger practitioners. According to Dr. Bicuspid: 

“The percentage of dental school seniors entering private practice who plan to join a DSO increased from 12% in 2015 to 30% in 2020.”

This significant increase suggests that dental schools and industry advisors may be presenting DSO membership as a more advantageous career path than traditional private practice ownership.

But can it be that simple? What else could be driving this shift? This article takes a deep dive into the financial, operational, and industry-wide challenges prompting more dentists to sell their practices to DSOs — or bypass private ownership altogether.

Key takeaways on the rise of DSOs: 

• Private practices aren’t disappearing altogether
• Challenges persist that make it difficult to sustain a private practice
• DSOs aren’t the perfect or only solution for struggling private dental practices

The challenge of private ownership: What’s happening to small dental practices?

Owning a dental practice presents a unique set of challenges. When dentists go to dental school, they’re taught the intricacies of oral health, not how to own a business. This lack of business training makes owning their own practice all the more difficult for dentists, whether they start their business from scratch or buy an established practice. 

Dental Products Report shares: 

“42 percent of surveyed dentists said they received little to no business training. 41 percent said they had some training. 7 percent said they were well-trained [in business practices].”

When you consider that very few dentists feel prepared to run a business, it’s easier to understand why emerging dentists would opt for working within a DSO rather than operating a solo practice.

But why are established dentists selling to DSOs? Is it more than just a lack of business knowledge? It appears so.

Our research reveals that staffing and operational challenges are deeply interconnected and represent the most significant hurdles for private practices. Inefficient administrative processes create a cascade effect: workplace chaos, staff stress, and dentist frustration. Without resolution, these challenges frequently lead to professional burnout.

“The systematic review revealed that 13% of dentists experienced burnout syndrome, with emotional exhaustion being reported the most often (28%).” –Dr. Bicuspid

Add in the burden of monstrous student loans, and it may not be surprising to hear that dentists have the highest suicide rates of white-collar health professionals. 

Ultra Dent says, “Some statistics even put the suicide rate of dentists at three times higher than other white-collar workers. One study showed that among white-collar health professionals, dentists hold the highest suicide rate: 7.18%. Suicide stats for the general population in the U.S. sit at around 0.42%—a staggering and concerning chasm.”

Dentistry is a high-pressure business. Dentists are providing the service, managing a team, building patient relationships, and managing their finances, all while balancing their personal life. Struggling to fill positions in their office—and keeping those positions filled—only further aggravates the pressure and stress.

Why has staffing been an ongoing issue for private practice owners?

Managing a dental practice and navigating insurance systems demands specialized expertise that's increasingly difficult to find in today's job market. Furthermore, the dental industry's traditionally conservative approach to technological advancement presents additional challenges for private practice owners attempting to modernize their operations.

The Journal of American Dental Association explains the wide range of solutions available to today’s dentists: 

“Dental practitioners frequently find staying abreast of and considering new and emerging technologies to be a challenge. These technological advances range from electronic patient record innovations to diverse social media platforms to a myriad of patient care-focused digital technologies, such as scanners, 3-dimensional printing, 3-dimensional imaging, and tooth aligners, to novel artificial intelligence applications. These technologies are changing the way patients are scheduled, tracked, recalled, communicated with, and treated.”

With all of these concerns overwhelming the dentist and their team, it’s no wonder they’re turning to DSOs. When a dentist joins a DSO, they won’t have to worry about business-related problems, like staffing or operations — or try to belatedly learn how to manage a practice successfully. 

Let’s pinpoint the allure of the dental service organization: What’s so great about DSOs?

Joining a DSO is often a win-win for both a private practice owner and the organization, and it’s clear that more and more dentists want to play on a team. White Coat Investor shares: 

“The largest DSOs have been growing 13%-14% annually, and the overall growth rate is expected to be 17%-18% compounded annually each year between 2024-2030. The market share is expected to be over 30%-40% by 2030 with a market size of $454 billion-$761 billion.”

That growth can only be achieved with the help of dental business owners looking for business solutions for their practice. And the solutions offered by DSOs can be too good to pass up if you’ve been struggling with staffing or operations for years.

White Coat Investor asks us to put ourselves in the private dental practice owner’s shoes. 

“A DSO is a company that says to a dentist: ‘Hey, we know you would rather do a root canal and a crown that you are really good at instead of dealing with HR, payroll, marketing, billing, and all the business stuff that you aren’t so good at or just hate. Let us buy into your practice, and we will handle all that stuff for you so you can just focus on being a great clinician.’”

The opportunity to concentrate on the work dentists were trained to do without the hassle of running a business — which they were never prepared for?  Yes, it’s clear why DSOs seem like a perfect solution. 

Pros to selling to a DSO: 

Let’s explore the specific benefits a dentist might see when selling their practice to a DSO: 

• Financial benefits

  • Upfront cash payment. Selling to a DSO provides an immediate cash influx, which can be used to pay down student loan debt, fund retirement, or pursue other personal and professional goals.
  • Revenue sharing. DSOs may also offer revenue-sharing arrangements to practice owners, allowing them to earn a percentage of the practice's revenue for a set period of time. This can provide financial security and stability during the transition.
  • Lower overhead costs. DSOs may provide dental practices with new equipment, supplies, and marketing, which reduces the practice’s overhead costs.

• Reduced administrative work

  • Delegation of non-clinical tasks. Many DSOs outsource tasks such as insurance verification, insurance billing, and patient billing to RCM companies to ensure expert handling. This is a huge relief to dental teams, as it allows them to focus on patient care and clinical tasks.
  • Access to technology and resources. By partnering with DSOs, dental practices may gain access to new technology they could not afford on their own.
  • Reduced HR responsibilities. Major human resource tasks, such as recruiting, training, and benefits administration are managed by the DSO.

• Professional support

  • Continuing education opportunities. DSOs often provide continuing education opportunities that keep dentists and dental teams informed about the latest trends, technologies, and best practices.
  • Clinical support. Sometimes practices are offered shared access to clinical mentors and specialist dentists, providing additional expertise and resources for managing complex cases and improving patient care.
  • Reduced stress. With the DSO managing the operations, staffing, billing and administration, dentists have far less to worry about. Instead of being spread dangerously thin, they can dedicate that time and energy to their patients and their practice.

• An easier path into or out of dentistry

  • Dentists who are closing in on retirement can get that upfront cash payment for their practice without worrying about selling to and then training an emerging dentist. For newer dentists, participating in a DSO may mean paying off their dental school loans without accumulating additional debt to equip a brand new dental business.

But of course, no business model is perfect.

Exploring the Achilles heel: Is there a downside to DSOs?

DSOs are not the ideal solution for every struggling dental practice. In fact, despite their steady growth, the perception of DSOs is primarily negative among dentists.

Dental Products Report reported on Dental Money Digest’s survey of dentists who were asked their opinion of DSOs. The sample size was small, just 64 dentists, but the results were telling:

These feelings aren’t unreasonable among dentists—there are distinct disadvantages to selling to a DSO. 

Cons to selling to a DSO

Selling to a DSO is a consequential decision for dental practice owners, and a balanced analysis uncovers practical criticisms of DSOs, such as:

• Loss of autonomy

  • Giving up decision-making power. Many dentists find it challenging to relinquish control. After years of captaining their own ship, having someone else dictate how their dental practice operates can be a difficult adjustment.
  • Changes in practice culture. An established practice team might not mesh well with the changes brought on by the DSO. At a higher level, it might seem like they don’t care about the people working within the practice.

• Potential reduction in income

  • Revenue sharing. Practice owners who sell to DSOs typically receive a portion of their practice's revenue, rather than the entire profit, which can result in less income than they earned while operating independently.
  • Pressure to produce. In its drive to reach revenue goals for the entire group, organizations often prioritize revenue generation, which can lead to a focus on production over quality of care.

• Uncertainty about the future

  • Contractual obligations. Signing a DSO contract can be intimidating for dentists, as they’re committing to giving up full control over the business. This can be a new and daunting prospect for dentists.
  • Dependence on the DSO's success. The success of the practice depends on the DSO's ability to support and enhance it. If the DSO is not successful in its role as an overall administrator, the dental practice will reflect the organization’s failure.

David Cristofaro, VP of Healthcare Insights, points to this as the difference between reputable and disreputable dental service organizations:

“Critics argue that the corporate nature of DSOs may prioritize profitability over patient care. However, reputable DSOs focus on maintaining high-quality standards by enforcing clinical guidelines and providing oversight to ensure consistent care across their practices. Keeping this in mind, for the dentist, there will likely be conflicts in treatment decision-making pertaining to cost, and it is something the dentist must keep in mind.” 

Read more: High A/R for DSOs? Why dental service organizations struggle with collections

To DSO or not to DSO: What’s right for dentists?

To recap: 

• Private practice owners struggle with operational and staffing challenges because their training is in dentistry, not in running a business.
• An increasing number of emerging dentists and practice owners are turning to DSOs to take the business side of dentistry off their plate.
• But the DSO model isn’t perfect for everyone — while there are clear benefits, the lack of autonomy and profitability pressures should be considered.

The growth trajectory of DSOs shows no signs of slowing. They provide a valuable solution for struggling practices and offer an attractive exit strategy for retiring dentists, particularly in an environment where newer practitioners are hesitant to take on practice ownership.

However, we don’t see the single-office private practice disappearing any time soon. Some dentists want to keep control of the helm, even though that means managing the myriad responsibilities and stresses of a business owner.

Solutions partners with dental businesses of all sizes and types—from private practices and emerging groups to DSOs and oral surgery practices. Our solutions help dental businesses collect more and worry less. 

If you’re a dental business owner, you can redirect your attention to patients while DCS manages your revenue cycle: Book a free 30-minute consultation today.