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June 2019--There is a lot of turnover in dentists at DSOs. If you want to have a successful DSO, you need to be able to attract and keep great doctors. Brian Colao, Director of Dykema's DSO Industry Group, says there are four keys to creating a DSO that dentists want to join.


The biggest headache many DSOs report is the recruitment and retention of associated dentists. What does you DSO need to do to be attractive to dentists and keep them? Here are the four essentials.

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The 4 Keys to Becoming Attractive to Dentists

1: Get Along with Your Doctors

The nonclinical administrative support services division of the DSO needs to get along well with its associate dentists. If you do not support them well and provide the business essentials that bring in patients and facilitate a good experience for patients, your dentists are not going to be happy and will quickly tell their colleague friends. Not only does productivity wane, but your dentists look for greener pastures. With a poor reputation out there, other dentists will not seek employment with you. You do not want to end up in litigation with your affiliated doctors. That only makes it worse, and it can end in bankruptcy.

2: Put Patients in Seats

The affiliated dentists are depending on you for the marketing that brings in patient calls. The dentists are depending on you to staff the phones with receptionists who like the phone and enjoy communicating with patients and are motivated to convert callers into booked appointments. If you’ve attracted a top performing dentist who likes doing higher end procedures, you need to bring in patients who are seeking those services.

3: Follow Regulations and Protect the Doctors’ Licenses

If you are not legally compliant in any way… if you are lax when it comes to HIPAA and OSHA… if anything the DSO is doing could cause patients to make claims against you for improper practice of dentistry… if the Dental Board is coming in to examine you over patient concerns… then your dentists are going to leave. The number one thing they will not tolerate is putting their license to practice in jeopardy. Hiring a compliance attorney to advise your DSO is affordable.

4: Compensate Doctors Fairly

Given your DSO has a sound reputation for supporting its clinical teams well, putting patients in seats, and following regulations, about 80% of a dentist’s decision will come down to fair compensation and what is competitively available to them. The other 20% may be factors such as location and the culture of the DSO.

The best compensation plans are the ones where the associate dentists feel they are working at “their” organization and not working at “your” organization. Top performers who stay intend to end in part ownership. Getting to that ownership point requires bridging compensation that is attractive and motivating. There needs to be a recognizable plan for developing associate dentists into partnering dentists.

Keep in mind that any DSO can match the salary you are paying, so straight salary does not help your retention. Same thing goes for compensation that is straight production. A dentist can go across the street and get another DSO to increase their 29% to 30% compensation.

Even though production-based compensation is the industry standard, if you want to retain your best producers, you must do it in conjunction with bridging to equity. One way is to pay as if the associate is a 20% owner. If they are getting 20% of the profits, they are incentivized to stay. The drawback to this is that the income is phantom equity and taxed as ordinary income.

At some point, the associate likely wants to become a bona fide owner. A level of ownership that is meaningful could be 10% to 30%, it depends on the organization and the financial resources of the dentist to buy in as an owner. Associate dentists are finding they can obtain loans to purchase a percentage of ownership.

We dig into the various compensation models that are out there and the pros and cons of these models during our annual Dykema Conference. It’s important to realize that retaining your best dentists means providing them with a recognizable path to grow their income.

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