Last updated on April 22nd, 2022

New dental school graduates are joining DSOs in record numbers. Should you be one of them?

There are many reasons for falling private practice ownership and the increase in Dental Service Organizations (DSOs). New dental school graduates have their own reasons, and they are compelling enough that, according to data collected by the American Dental Association, the number of grads who said they planned to join a DSO increased from 12% in 2015 to 30% in 2020. That’s an increase of more than 100% in just five years.

But why? While some of the reasons are monetary and obvious, others are rooted in the changing expectations and desires of a new generation of practitioners as well as the expanding options offered by DSOs.

Mounting Debt

The American Dental Education Association reported that the average education debt owed by dental school graduates reached $301,583 in 2021. That’s a big pile of cash that has to be paid back. Not only does it have to be paid back, but for a recent graduate who wants to open a private practice, it’s a big hurdle in the path to qualifying for a business loan. Taking a position with a DSO negates the need to borrow to establish a practice. There are even some DSOs who will assist new associates with paying down student debt.

Economic Uncertainty

For some graduates, the unsettled nature of the economy has become a major factor in their decision. One big shock after another has rocked the confidence of recent college graduates, not just dentists. Many of them came of age during the Great Recession of 2007, the most severe global downturn since the Great Depression of the 1930s. While the recession officially ended in 2009, the lingering effects were evident until 2014. These graduates may have watched their own parents or the parents of friends lose businesses, lose jobs, lose homes, and lose their retirement funds. Collecting a regular paycheck while working with a larger organization, one presumably better able to weather economic storms than a solo practice, is very attractive.

Continuing Education

One important non-monetary benefit of DSOs is the ability to tap the knowledge of more experienced colleagues. While entering a private practice as a new associate also provides access to experience, the number and variety of potential mentors available through a DSO are much larger. For DSOs that support a large group of offices, that opens up an almost unlimited bank of knowledge that younger dentists can access and absorb. Particularly for aspiring specialists, the ability to network with knowledgeable practitioners within the DSO is like receiving regular, free CE at work.

Work-Life Balance

The ability to “turn work off” and go home is a huge psychological benefit. When a practice owner flips off the lights at night, he or she still has the burden of decisions that have to be made, accounting that needs to be reviewed, HR issues to deal with and more. Should the current office lease be renewed? Or maybe look for a new location? While many DSOs encourage their associates to be involved in administrative issues, in most cases, it’s not required. When the dentist leaves the office, they leave the work behind. For young dental graduates who have started or are about to start a family, that can be the difference between being “on” 24/7 and actually enjoying life.

Mobility and Flexibility

Regional and national DSOs may offer the opportunity to move, a luxury that most practice owners don’t have. Don’t like the rain in Portland? Check out a branch in Phoenix. Too hot in Texas? There may be openings for you in Chicago or Boston. In addition to mobility, many DSOs offer flexible schedules. You don’t have to be married to the chair, and more dentists are opting for shorter work hours and fewer days in office. In particular, it’s been shown that female dentists tend to work fewer hours: No surprise given many of them have pressing responsibilities at home. That trend is likely to accelerate quickly as 51% of the graduating class of 2020 were women, up from just 40% two decades ago.

You Can Always Opt-Out 

Going into a DSO right out of school isn’t a lifetime commitment. You can work in a DSO for a few years, find out what you like and what you’re good at, then look for or start a private practice. Some new dentists use those years to pay down their loans, and a prospective private practice owner with less debt and more experience is likely to be a lot more attractive to the loan officer at the bank.

DSOs may not be the path for you, but given the large numbers of recent graduates diving in, it’s the path for many new dentists and worth consideration for many more.

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