Are Private Equity Firms Good for Dental Practice Management?

Are Private Equity Firms Good for Dental Practice Management?Dental practice management companies are popular among dentists because they allow dentists to focus on dental procedures over office administration.

Many dentists prefer to spend their time working with dental patients instead of dealing with the everyday hassles of managing a business.

Dentists argue that working with a dental management company makes them better dentists.

Thomas A. Climo, a dental consultant and past professor of economics in England, feels the use of widespread dental practice management companies in dentistry is inevitable due to the economies of scale and centralization of management.

As healthcare and dental treatment costs continue to rise, dental management companies argue that their model can streamline billing, payroll and marketing costs, thus keeping dental practices viable. This model is what attracts private equity investors to dental practice management.

Mr. Climo calls attention to the fact that private equity firms are more inclined to invest in dental practice management over a solo practitioner because of the mostly unprofitable nature of solo-owned dental practices. He suggests that there is very little genuine net income in solo dental practices anymore.

“Dentists put a lot of effort into building their practices,” Climo states in his recent article in Dentistry IQ, “and only with proper management can this effort be translated into business valuation dollars that make sense.”

Climo bristles at news reports that private equity investors influence the practice of bad dentistry, pointing out that private equity investors choose health care for its usually steady yield and low-risk — not to push unnecessary procedures on vulnerable dental patients in the name of profits.

Large dental chains can actually offer dental treatments at a lower cost.

The idea that private equity investors would promote pushing unnecessary dental treatments and bad dentistry is crazy to Climo because of the risk of lawsuits and litigation, something that interferes with the “low-risk” model that private equity firms look for in an investment.

Many dentists point out that the dental practice management model is similar to what dental patients already experience in other medical services and believe it will be the future model for providing affordable dental care to the public.

And Mr. Climo would argue that’s good for everyone.

To read more on this subject by Mr. Climo, see: The Emergence of the Dental Practice Management Company

Dentists, what are your thoughts on dental management companies?

About Jim Du Molin

+Jim Du Molin is a leading Internet marketing expert for dentists in North America. He has helped hundreds of doctors make more money in their practices using his proven Internet marketing techniques.


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