Dentaltown December 2019 - 14

howard speaks
column

DSO PARTICIPATION, BY GENDER

FEMALE
DENTISTS

11.4%
MALE
DENTISTS

7.3%

DSO PARTICIPATION, BY SPECIALTY

GENERAL PRACTICE
(9.0%)
ALL SPECIALTIES
(7.8%)
ORTHODONTICS
(8.8%)
PEDIATRIC DENTISTRY
(8.5%)
ORAL SURGERY
(7.7%)
ENDODONTICS
(7.4%)
PERIODONTICS
(7.3%)
PROSTHODONTICS
(5.5%)
PUBLIC HEALTH
(5.0%)
Source: ADA (all)

14

DECEMBER 2019 // dentaltown.com

100,000 people. It's an efficient business model, because
the dentist can centralize that first layer of management:
HR, accounting, payroll and marketing.)
In 2017, 18.4% of the dentists in Arizona were
affiliated with a DSO, according to the ADA Health
Policy Institute. That's more than double the national
average of 8.8%.
Right now, every DSO has hopes and dreams for a
national company that can someday do an IPO. But right
now, I think the economics don't add up: When you have
to support a second layer of management headquarters,
that often means another 12-14% off the top. There's
no efficiency on earth that a large DSO could ever do to
pay for that themselves-they'd have to get your lab bill
and supplies to zero just to break even. That's why I've
always said these companies can't go public yet.
But I will say that the first DSO model that makes
it coast to coast and gets to be publicly traded will be
invented in Arizona. Arizona's going to be the home to
all things dentistry as people try to innovate on what's
the next business model for dentists. Right now 18%
of dentists in Arizona are part of DSOs; I believe when
the final business model is done, that number will be
50%-and when it does, it's because that company has
created an incentive that makes dentists want to stay
with it for life, and not quit within a couple of years.

An all-ages influx
But before then, I think that a lot of dentists are
going to move to Arizona. And not just necessarily the
young graduates, either!
When I was a young doctor, the fi rst associate I
hired was my age. I was immature and I thought that
I needed to fi nd the coolest, most fun dentist who I
wanted to hang out with.
But as I got older, I realized the best associates were
dentists who didn't want to own a practice. They'd likely
already owned a practice for 20, 30 years, so they'd
gotten that out of their systems; they'd raised families,
now their kids are off to college, and they're sick of East
Coast winters and are already thinking about selling
their practices and looking forward to retirement. I'd
hire them and they'd fi nish out their 10-year career
here in Phoenix.
So I think if that's your situation-you're looking
out the window in New Jersey and it's overcast, freezing
drizzle and you're wondering, "Why do I even live here?
I'm miserable and it's not like I'm ever going to run into
Bruce Springsteen or Bon Jovi"-it's time to trade Bon
Jovi for a saguaro cactus. I'm very proud of Arizona. ■
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Dentaltown December 2019

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