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Inside Dentistry

September 2013, Volume 9, Issue 9
Published by AEGIS Communications


Group Practice: A Closer Look

Financial and administrative advantages mean group practice is on the rise

Sudhakar R. Chokka, DDS

It is the probably the dream of every dentist to one day own their practice. Private practice, or solo practice, accounts for the majority of how dental care is delivered in the United States. However, private practice dentists have fallen in number consistently over the past decade. In 2006, according to American Dental Association research, 76% of dentists were solo practitioners. In 2010, that number dropped to 69%. In the past 2 years, group practice has risen by 25%.

The reasons for the rise and fall of these two types of dental practices are many. Typical student debt today can be between $200,000 and $300,000. Because an additional loan would be required to purchase a practice in a still uncertain economy, many students are discouraged from entering private practice. In addition, the administrative aspect of running a successful dental practice by oneself is daunting for some. Human resources issues, insurance contracts, legal issues, marketing, financial reporting, billing and collections, and staffing are all areas in which dentists receive minimal training.

Group practice can provide a solution by allowing practitioners to practice dentistry with other professionals to share the administrative and practice management burden. Group Practice Types

Group practice can generally be categorized by size and management. One style of group practice has several dental practices closely laid out geographically. Each of these offices may have 1 to 3 dentists employed there. These practices may be owned by a single dentist corporation or by some other dental entity. Typically, the administrative costs, management, and advertising are spread out over the offices, resulting in less overhead per office. This dental setting may prove to be attractive to dentists and patients who are looking for a smaller, individualized, private practice atmosphere.

Another type of group practice that is gaining in popularity is dental offices that are contracted with dental support organizations (DSOs). These DSOs will provide administrative and business support services pursuant to a contract. In this dental setting, there are different ownership models, but these large group practices may have several general dentists and various specialties all under one roof. The convenience of a one-stop dental setting is attractive to patients.

Lastly, the traditional group practice is one that is owned by several dentists all practicing in the same location. These doctors all share space and staffing, usually own the building and equipment, and are responsible for providing revenue to the practice as well as all management. This type of practice may also employ associate dentists to provide patient care.

Advantages and Disadvantages

The primary advantage of a group practice is shared responsibility and a collaborative effort to the help ensure the success of the practice. Having several dentists in one location provides flexibility for patients to access dental care and is also a safety net for the dentists, who will have coverage for emergency visits, vacations, and unexpected absences. Another distinct advantage of group practice is the camaraderie and reassurance of practicing shoulder to shoulder with other dentists and specialists. For recently graduating dentists in particular, another appealing feature of group practice is that they are more often practices willing to invest resources to train the new dentist.

There are financial advantages as well. In a group practice, by incorporating other providers such as specialists into the practice, there are multiple streams of revenue adding to the topline revenue. Because costs are shared and spread for the office, the reduced costs should result in increased bottom-line profit.

Any strength taken to the extreme can be a weakness, so the primary disadvantage of group practice is your partners. The possibility may arise where you discover your partner is no longer a fit for the office. Differences in clinical, leadership, financial, ethical and staffing approach can destroy the relationship and result in an extremely dysfunctional work environment. Your practice, and perhaps even your professional reputation, may suffer if this dentist continues to work with you. To sever ties in a business partnership can be extremely stressful and expensive. Due diligence prior to the formation of the legal structure must be emphasized.

Conclusion

Ultimately, the decision of a dentist to enter solo practice or group practice hinges on what is the better fit for the dentist. Both settings have pros and cons, and it is up to the dentist to explore these factors and decide which setting will be both more compatible for the temperament of the dentist and beneficial to the current stage of his or her dental career.

About the Author

Sudhakar R. Chokka, DDS, has been practicing dentistry for more than 20 years. He is a lecturer, mentor, and National Dental Board Advisory Member for Pacific Dental Services and has authored dental articles for various publications. His practices are supported by Pacific Dental Services.


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