The Pros and Cons of Group Dental Practices

By Mark Buczko

Group dental practices are growing in popularity. But they’re not right for everyone. Before you take the plunge, learn more about their financial, professional and personal advantages.

Peering into the past, one glimpses a dental industry dominated by independent solo practices. No longer. Today, those practices are losing market share, and group practices and corporate entities are capturing it. This trend has given dentists of all experience levels more options while making their career choices more complex and risky.

Given these changes, it’s a great time to be entering dentistry or making a mid-career shift. Now you can choose from various practice types based on your clinical preferences, need for autonomy, financial resources and risk appetite. Your choices range from:

• Solo private practices that offer the ultimate in independence.
• Group practices owned and operated by one or several dentists.
• Multi-city or state group practices having dozens or more dentists serving as either owners and/or associate dentists.
• Dental service organizations (DSOs) that use corporate structures to segregate practice management from care delivery.

Choosing wisely from among these options demands rigorous due diligence. Fully understanding the financial, professional and personal pros and cons of each approach is essential. For now, let’s focus specifically on the group model to see if it makes sense for you.

Group Dental Practices Defined

According to the American Dental Association’s Health Policy Institute (HPI), group dental practices owned and operated by multiple dentists are the most common type. They range from two dentists working at one office location to dozens or hundreds of dentists working in multiple office locations. The larger the groups, the more likely it will contain a mix of general practitioner and specialist dentists. Group practices represent diverse legal structures, including single proprietorships, partnerships or professional corporations.

Practices owned by two or more dentists are just one option. ADA’s HPI identified five other group-practice variants. These include:

• A dental management organization affiliated group practice: Has an agreement with a dental management organization to handle the business functions of the group practice (also known as a DSO). This arrangement might also involve owning the practice’s physical assets.
• An insurer-provider group practice: Is part of an organization that insures the dental health care of enrolled consumers, as well as delivers dental care.
• A not-for-profit group practice: Operated by a charitable, educational or quasi-government entity. It’s often centered on delivering dental care to disadvantaged patients.
• A government agency group practice: Organized and operated by a government agency, this structure employs dentists as government employees or contractors.
• Hybrid group practices: Combines characteristics of one or more of the prior types.

Clearly, there’s a suitable practice model available to any dentist who doesn’t wish to practice alone. It’s easy to see why so many dentists are open to practicing within these models. For starters, new dentists emerge from dental school with astounding debt levels (almost $300,000 on average, according to the ADA). Opening their own practice would entail assuming more debt and lengthening the payback period. Another reason is the influx of women into the field, who often prefer more flexible work hours. The fact they tend to be younger than male dentists means they’ll be less likely to have the financial resources to launch their own businesses in the short term.

The economic reasons to start or join a group practice have been well documented. Achieving economies of scale helps group practices spread overhead across a larger client base, thereby boosting profitability. Equally powerful are the clinical benefits. With more dentists in the office (or in affiliated offices across towns or regions), the ability to learn from one’s peers and to send patients to in-house specialists can be highly beneficial.

Finally, the ability to have more of a personal life is a compelling reason to work in a group practice. Not having to manage an entire dental business by yourself—from clinical and financial matters to human resources and marketing—eliminates grueling workweeks and unrelenting stress.

Before joining a group practice, however, it’s crucial to understand exactly what you’re getting into. Here’s a rundown of the advantages and disadvantages of this increasingly popular dental-care delivery system.

Group Practice Advantages

The advantages of being in a group practice are compelling for the right person. By having more dentists, group practices can grow and maintain larger patient bases. Depending on the number of dentists, you might not have to expand your physical plant. This means expenses such as heating and cooling, phones, general liability insurance and rent might remain roughly the same. By producing more revenue, while maintaining or lowering overhead, group practices generate more net dollars.

There are other financial advantages, too. With higher cash flow, a group can more easily add new equipment, as well as make investments in marketing and clinical education.

Next, consider the professional advantages. When you’re the only dentist in a practice, you have to cover the waterfront in terms of providing care. Since most of your work will be common procedures, you’ll have less opportunity to do specialized work. This means when unusual cases arise, they may be harder, riskier and more stressful to perform. With a group practice, multiple clinicians can cover major specialty areas. With multiple dentists focusing on the procedures they enjoy doing and have the skills to perform, group practices boost productivity and profitability, while potentially lowering malpractice risks.

The ability to share ideas with peers is another group-practice advantage, as is the opportunity to learn from each other.

In terms of personal advantages, working in a group practice typically involves fewer hours, less stress, and more flexibility. Vacations are easier to schedule and don’t involve taking a revenue hit because you won’t be seeing patients. Taking sick days or the occasional long weekend is more doable when you have other dentists backing you up.

Perhaps the biggest personal benefit of working in a group practice is having other dentists on the team with whom you can commiserate. No one understands what you go through like another dentist. Getting peer support can spell the difference between merely surviving and thriving in dentistry for years to come.

Group Practice Disadvantages

No dental-care delivery model is perfect. That includes group practices. Here are some of the major disadvantages that can arise when you add one or more dentists to your practice or join a group practice as an associate:

• Erosion of personal vision. When you’re the sole dentist, you can create a practice that reflects your unique vision. The types of care you provide, the dental equipment you purchase, your customer-service philosophy, how you like to promote your practice—everything reflects your personal preferences and goals. The minute you add more clinicians, your decision-making must now take their perspectives into account. This might force you into making compromises you’d never make if you were working on your own.
• Emergence of professional conflict. The more dentists in your practice, the greater the possibility of conflict. Not only do they disagree on clinical and non-clinical matters, but staff members will also align themselves with their “favorite” dentist, turning dentist-to-dentist disputes into firm-wide disruptions. Worse, you might hire an associate dentist who initially appeared to be a winner. But over time, variances in clinical approaches, commitment to the practice, integrity and more emerged. This can make it difficult to maintain a strong professional relationship. Working with a dentist who doesn’t “fit” your business can quickly become a nightmare. But so can terminating that person.
• Customer-service problems. The larger a group practice becomes, the more likely communications will suffer. Lab work may get handed off incorrectly; patients might not get their post-op phone calls; supplies might not get ordered on time. If problems continue or increase, your patient-satisfaction metrics might suffer, leading to defections, bad online reviews and anemic future growth.
• Higher equipment costs: A financial disadvantage of group practices is that more dentists working increases equipment wear and tear and boosts maintenance costs. This can be a drag on practice profitability. You also might have to replace equipment sooner, inflating your capital expenses.

The point is, with group practices, you will benefit from offloading some of your work. But the downside is having to deal with more professional, financial and personal problems. This underscores the importance of doing rigorous due diligence on any dentist before bringing him or her into your business. There’s too much at stake to make this decision lightly or carelessly. And if you’re joining a group practice as an associate, fully researching the opportunity is essential.

What about Malpractice Insurance?

Adopting a group-practice model will have malpractice insurance implications. Adding more dentists with different and potentially riskier specialties will increase your odds of being sued for professional negligence. Therefore, be sure to speak with your malpractice insurance advisor to see whether your limits of liability need to be increased or if your entire policy should be upgraded.

If you’re a dentist joining a group practice as an associate, you face different insurance questions, namely:

• What type of insurance will the practice provide?
• Does the insurer have top claims-payment ratings?
• Are the policy’s limits sufficient?
• Does it protect your clinical specialty or specialties?
• Should you rely on it or purchase your own policy?

The last question is crucial. Given the hundreds of thousands of dollars you’ve invested in becoming a dentist, should you trust your practice’s insurance to protect your career? Here are some reasons why you might not want to:

• If your group practice has multiple dentists, there is a chance you may be sharing the policy’s coverage limits with all the practitioners in the practice. That means if there are one or several large malpractice claim payouts, there may not be enough protection left in the policy to cover you should you get sued.
• What if the owner or owners of your practice determine you were at fault for an incident? They may try to fire you before your case goes to court. That means you may no longer be covered under the practice’s policy. If you lose your case, your personal assets may be at risk.
• What if a patient injury resulted from errors that both you and the practice made? Whose interests do you think the insurer and defense attorney will primarily serve?
• Or what if you take issue with the insurer-provided attorney’s defense strategy? Will you just have to take it or leave it?
• What happens if the practice hits a rough patch and is unable to make future payments on its malpractice insurance policy? Will its financial difficulties leave you uninsured against client litigation?

Finally, what happens when you leave the group practice? Can you take your coverage with you? Will you be covered for the patients you treated even if they bring a claim after you have left?

If you’re not totally confident in your practice’s insurance policy, consider purchasing your own from an agent or broker and the insurance company you can trust. The peace of mind may well be worth the additional cost.