In this recent episode of "The DrBicuspid.com Podcast" (which you can hear by clicking here or hitting the Play button at the end of this article), Editor-in-Chief Kevin Henry interviewed Chip Fichtner, co-founder and principal of Large Practice Sales, about the current state of practice sales and the role of invisible dental service organizations (IDSOs) in the industry.
Fichtner explained how IDSOs partner with dentists to provide support and resources while allowing the dentists to retain ownership and autonomy. He highlighted the growing trend of younger dentists partnering with IDSOs and the benefits of such partnerships, including increased profitability and access to new technologies. Fichtner also emphasized the importance of understanding IDSOs and their impact on the dental industry.
"Invisible DSOs want to become your silent partner by buying anywhere between 51 and 80% of a practice for cash upfront. Doctors retain ownership in the balance and continue to lead their practice with their brand, their team, their strategy and full autonomy for years or decades," Fichtner said.
"One of the major changes we've seen in the last three years is the number of younger doctors that are partnering with invisible DSOs. In our billion dollars of transactions in the last 24 months, over $150 million of those transactions were for doctors in their 30s. So this is not a retirement strategy. It's not selling. It's not a transition. It's not an exit. It's a partnership where independent dentists can benefit from the resources of a larger partner but not be homogenized to fit some sort of corporate standard, not be micromanaged, and continue to run their practice but do it with the support of somebody bigger," Fichtner explained.
"Those support services are getting more and more relevant. We have, for instance, a client on the East Coast that does $4 million in collections. It's all insurance-based. And his new partner is getting reimbursed by those same payers at a 20% higher rate. So the profitability of his practice this year, because he just partnered with them, will grow by about $800,000 just because his new partner has leverage and has been able to get more money out of the insurance company. That's just one of the benefits of a partnership," Fichtner said.
Takeaways from podcast
IDSOs are becoming increasingly popular among dentists, with over a thousand operating in the U.S. These DSOs offer partnerships that allow dentists to retain ownership and autonomy while benefiting from the resources and support of a larger partner.
Younger dentists are actively seeking partnerships with IDSOs, recognizing the advantages of increased profitability and access to new technologies.
Understanding IDSOs is crucial for all dentists, as they are rapidly growing and have resources that independent practices may not have access to.
Factors to consider before partnering with an IDSO include practice size, profitability, labor costs, and fee structures.
Podcast chapters
0:00 Introduction and background
1:03 Getting started with practice sales
3:14 Understanding IDSOs
5:04 Trends in practice sales
6:19 The role of partnerships in practice management
8:54 Value and timing in partnering with IDSOs
10:50 The importance of understanding IDSOs
13:17 Factors to consider before partnering with an IDSO
14:13 The impact of preferred provider organization networks on practice sales
15:30 Conclusion and contact information
You can click the Play button below to listen to the podcast. Learn more about Large Practice Sales.
