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.

  • Jeff Hutter

    As a business guy who has worked in hospital, home, and now dental care, there are distinct benefits for the practitioner in focusing on clinical care, while leaving the increasing burdens of business issues to business professionals.   MD’s have almost totally abandoned solo practice–we should look for what they have gained in implementing that trend in dentistry.   

  • Kim Henry, D.M.D.

    Thanks for being a shill for the propagandists of corporate dentistry. It is one thing for dentist-owners to contract with a mangement company for a cut of their collections. It is quite another for a private equity group to give a dentist a large sum of money for a practice, then claim they are not the “owner.” Yet these same corporate suits can sell the practice to whatever other corporate entity they want.

    Non-dentists should not own practices. Period!

  • DTM

    First, it’s the wrong question. The right question is: Are they good for patients? Since every American is one. . Answer, NO! 

  • Cath

    Thank you all for your comments on this article.  Sign up for The Wealthy Dentist newsletter in the sidebar to the right and you can further offer your opinion on this subject in this week’s survey.

Disclaimer

© 2017, The Wealthy Dentist - Dental Marketing - All Rights Reserved - Dental Website Marketing Site Map

The Wealthy Dentist® - Contact by email - Privacy Policy

P.O. Box 1220, Tiburon, CA 94920

The material on this website is offered in conjunction with MasterPlan Alliance.

Copyright 2017 Du Molin & Du Molin, Inc. All rights reserved. If you would like to use material from this site, our reports, articles, training programs
or tutorials for use in any printed or electronic media, please ask permission first by email.