DSO vs DPO – What’s in a Name?

Abbreviations are a funny thing. Originally used as a tool to save us time and increase the speed of communication, the abbreviation has been co-opted by modern society to largely replace long form writing in mediums such as texting and tweeting (or is it called Xing now?). As too often happens, what started out as a means to simplify our daily lives has actually made them more complex. How many times in the past six months have you received a text or email with an abbreviation that you had no idea what it meant?

The use of abbreviations has also become pervasive in the professional world to an absurd extent. During my time in corporate America there were so many abbreviations that it was difficult for a new employee to take part in conversations. No wonder Elon Musk famously disallowed their use at his companies.

I feel the same thing is happening in the dental industry. In an effort to streamline conversations, we have created terms that encompass incredibly broad swaths of our industry without regard for the nuance that exists within these groups. “DSO” has become synonymous with “corporate dentistry.” “PE” has become inexorably linked with any type of non-bank financing. Don’t even get me started on “EBITDA,” which I’ve heard used in place of everything from net profit to cash flow.

But I digress. I’m not writing this article to wax poetic on etymology. I’m writing it because I think it would benefit a lot of pediatric dentists to clarify at least one of these abbreviations and dive into some important distinctions. I’m talking about DSOs vs DPOs

The DSO, or Dental Service Organization, has been popularized in the dental industry over the last two decades. It’s predecessor, the MSO (Medical Service Organization), is what led to the great consolidation of family practitioners in the US, and is largely responsible for the “Doc in a Box” model that we are now familiar with.

In contrast, the DPO, or Dental Partnership Organization, is a relatively new term. I can’t identify when it was first used, but I can tell you that it is probably the fastest growing term in dentistry right now. I believe this is partially due to the fact that the term DSO has traditionally held a negative connotation in our industry, and any astute DSO can recognize that by changing one simple little word, they can suddenly appear more friendly and partner oriented.

In an effort to ensure that DSOs don’t co-opt the term DPO and ruin it for true DPOs, I’m going to highlight some key differences between the two organizations. By the way, this is not an article that is disparaging DSOs and promoting DPOs – there are good and bad organizations in each category. This article is to help identify the benefits of each and help you as a pediatric provider as you do your research.

Let’s first start with the similarities between DPOs and DSOs.

First, both types of organizations are designed to provide non-clinical support to dental practices. This can include HR support, operational guidance, procurement management, IT and tech resources, accounting and finance support, and marketing assistance to name a few. The level of involvement in each of these areas varies widely based on the organization, with some offering a high level of integration and oversight, and others taking a more laissez-faire approach, offering you the services but not requiring the use of them.

The nuance between a DPO and a DSO lies more in the structure of the organization and the purpose of its existence. In my opinion, most DSOs that exist today are not service companies, but rather investment vehicles designed to roll up practices and sell them within 3-5 years.

A DPO, on the other hand, is more in line with the original intention of a DSO – to help provide non-clinical services in support of the clinician. I’ll highlight some advantages of a DPO below.

Naturally, since we are a DPO, I’m going to be biased in my opinion. My goal is to ultimately help highlight the differences and allow doctors who are considering their options to be armed with the most accurate information available.

DPO(Alcan) Advantages

1. Autonomy in Decision Making: DPOs offer more autonomy, allowing dentists to make decisions about patient care, office management, and business practices. DSOs tend to become controlling to ensure they can hit their revenue projections for their investors.
2. ‍Personalized Care Focus: DPOs are focus heavily on patient outcomes and patient experience. DSOs rarely discuss this point in their pitch decks to investors.‍
3. Flexibility in Practice Style: Dentists have the freedom to choose their own treatment plans, equipment, and practice philosophies. Clinicians at DSOs typically have less leeway when it comes to supplies and practice modalities.‍
4. Potential for Higher Profit Shares: Depending on the structure, affiliated practices with DPOs can retain a higher percentage of profits than a DSO allows for.‍
5. Collaborative Environment: Rather than assume a top-down approach, a true DPO establishes a cohort of like-minded professionals that contribute to elevated patient experience and increase clinical acumen.‍
6. Control Over Work Environment: Culture is typically the first thing that goes out the window when a DSO takes over a practice. A DPO nourishes the culture of an affiliated practice and provides tools to maintain the uniqueness of a practice.‍
7. Clinician-led: This is actually cheating a bit – both DPOs and DSOs are, for the most part, NOT led by clinicians. As a non-clinician myself, I very much believe in the importance of an organization that is led first and foremost by a practicing clinician. Alcan would be a much different organization, not for the better, were it not for Dr Alex’s leadership and guidance.‍
8. Long term focus: In my opinion, most DSOs today are focused on short term gains at the expense of everything else. With a DPO, there is more alignment and focus on creating a sustainable organization.
9. Ownership: Most DSOs and even many DPOs will purchase a majority, if not all of the controlling interest in a practice. Without exception, this leads to a shift in the locus of control, with the result being that the partner doctor will absolutely have less say and less control when it comes to their practice.

In Summary:

Obviously, this is an oversimplification of the differences between a DSO and a DPO, but hopefully this article served its purpose in highlighting the fact that there IS a big difference between the two types of organizations. I will leave you with a parting thought – beware a wolf in sheep’s clothing. There are a lot of DSOs that recently started calling themselves DPOs without changing a thing about their strategy or tactics. I’m hoping that as the industry evolves, DPOs will establish themselves as organizations dedicated to the long-term growth of the profession and will be respected and admired for their contributions to patient care. In the meantime, we will continue to practice what we preach within our own Cooperative.