Reaping the Benefits of the DDSO Model

"[DDSOs] create room for dentists to invest in themselves, and really move forward with their entrepreneurial spirits." - Frank Brady, D.D.S.

Frank Brady, D.D.S., has invested heavily in continuing education, but not just for his patients. Through the DDSO Alliance, as well as his personal experience, Brady has become an advocate for this relatively new model of dentistry that, he says, offers considerable advantages above and beyond the more well-known DSO model.

We’ve all heard the expression, “Having the best of both worlds.” But the reality is, how often does that actually happen?

In dentistry, however, what comes closest to fulfilling that axiom might be the DDSO model, or dentist-owned direct support organization. Frank Brady, D.D.S., a third-generation dentist based in Washington state, says the DDSO model has a lot of advantages over DSOs.

“You have the actual dentists who are operating in the practice as clinicians, also doing all the business and managerial stuff,” Brady says.

CLARIFICATION

Brady says his experience with the DSO model is that it elicits everything from anger to excitement among dentists. For some, there’s the element of making a huge sale; for others, complexity and confusion. But the DDSO model puts the tools, techniques and protocols in the hands of dentists so they can participate in the corporatization of dentistry.

“The DSO is not dentists,” Brady explains. “It’s corporate money people who control, for all intents and purposes, the management of the practice.”

In contrast, the DDSO model allows a dentist to take part in the management and capitalization of the practice based on their individual interests and desires. For the dentist who is 80 percent clinician and 20 percent businessperson, the DDSO enables him or her to take part in the benefits of business ownership and expansion.

“He might be a clinical mentor to other dentists in the group, while others who may be co-owners handle more of the business management,” Brady says. “It really seems to create an ideal situation for all dentists involved.”

Related: Be a Dentist-CEO to Lead Your Team to Success

THE KEYS

Brady recalls how the medical field began to corporatize in the 1970s. By comparison, dentistry, being more of an independent profession, has taken longer. But history is repeating itself, and Brady dedicates himself to educating dentists on the DDSO model so that “we don’t have to go all the way to what some people predict will be the corporatization of dentistry.”

According to Brady, there are 45 elements that overlap to form a successful foundation for exploration into the DDSO model, but he narrows that down to several of the most important.

“It creates room for dentists to invest in themselves, and really move forward with their entrepreneurial spirits,” he says. “The DSO lumps all dentists together as simply clinicians.”

Brady also believes that partnerships simply don’t work.

“There’s a 60 percent failure rate on partnerships,” he says.

As such, he advocates co-ownership. That means a dentist owns his or her own 100 percent-owned subchapter corporation, which then partakes in the interest of the practice. In other words, the dentist has a solo practice within the framework of a group. They can reap their own tax benefits, and it gives them the autonomy they need.

That provides opportunity for vertical investment that comes with the ownership of a dental group or DDSO, such as the purchase of commercial real estate.

“Dentists can buy the building either individually or in a group,” Brady says. “They can have an affiliate for the laboratory, basically having their own labs that they can outsource and have special rates. There’s a whole, huge sector of vertical businesses that get thrown off of DDSOs.”

BUILDING ALLIANCES

Brady is also a founding member of the DDSO Alliance, which helps educate dentists on the benefits of the DDSO model, including a blueprint process to help dentists reach their goals.

“It’s a business study club for dentists, focusing specifically on multiple doctors, multiple location practice ownership,” Brady says. “But it’s also like a big Independent Physician Association (IPA).”

He explains that when medicine began corporatizing, IPAs became a sort of lobby groups just for hospitals, and soon physicians started getting better discounts; better rates on liability insurance. Similarly, the DDSO Alliance is like a big buyers group, having the economy of scale purchasing power of some of the largest DSOs, even though the DDSO might only have two or three locations.

“It’s one big mastermind with the goal of everybody learning from each other’s mistakes,” Brady says. “Everybody shares what they’re doing, and what worked well for them, as well as what didn’t work well, so others don’t make the same mistakes.”