Strategies for Scalable Growth as a Dental Service Organization

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As a dental service organization (DSO), pursuing disciplined yet ambitious growth is key to long-term success. Effectively scaling your operations requires strategic planning across factors like practice acquisitions, talent recruitment, integrated technologies, patient-centric care and financial optimization.

This article outlines 5 core strategies to help position your DSO for sustainable expansion:

  1. Seek Value-Based Practice Acquisitions

Acquiring well-run, value-oriented practices is foundational to intelligently growing your DSO. Rather than pursuing acquisitions based on quantity alone, focus on practices demonstrating quality patient care, strong community connections and cultural alignment with your organization.

Perform in-depth due diligence around the profitability of target practices using key performance benchmarks:

  • Average annual revenue
  • Revenue attributable to insurance vs. out-of-pocket payments
  • Net production percentage after non-dental production is subtracted
  • Average revenue per patient visit
  • New patients per month
  • Active patients seen in the last 12-18 months
  • Cancelled/failed appointments

Analyze both current financials and proven historical performance. Well-managed practices with steady returns across 3-5+ years make solid acquisition targets vs. chasing fluctuating short-term revenues.

Seeking reputable practices known for patient satisfaction also bolsters your DSO's brand reputation. Avoid purchasing troubled practices hoping to “turn them around” without reasonable contingencies.

The image shows a person wearing a white lab coat and a face mask, seated at a dental chair with various dental tools around them.
  1. Recruit & Develop Best-Fit Talent

Your organizational aspirations rely upon building a skilled, high integrity clinical team. Develop thoughtful recruitment pipelines drawing dentists, specialists, hygienists, assistants and technicians best suited for a DSO model.

Foster long-term retention by ensuring positions align with individual competencies and interests. Then nurture talent with:

  • Competitive compensation packages with transparency around profit-sharing -Robust benefits like health/dental insurance, retirement plans, professional development funding -Incentives connected to KPIs like patient visit metrics tied to quarterly bonuses -Leadership pathways facilitating growth from clinician to practice management

Also provide abundant training around your protocols and technologies. Set talent up for success by welcoming new team members with thorough onboarding.

The image shows a modern dental office interior with a focus on the chair and equipment, suggesting a professional setting for dental care.
  1. Integrate Centralized Systems & Technologies

Centralizing key technologies, tools and processes is essential for improving consistency, tracking KPIs and identifying optimization opportunities across practices.

Core systems to standardize span:

  • Patient management software centralizing scheduling, charting, billing and reporting
  • Telehealth platforms enabling remote video visits -RCM partner overseeing billing and collections -Marketing technologies like Reputation management and automated patient communications -Shared clinical systems including imaging, lab, device integration

Consolidating around unified solutions allows you to leverage volume efficiencies and standard operating procedures while still customizing at the practice-level. Uniform data tracking also helps executives make insightful comparisons and decisions using system-wide analytics.

  1. Deliver Ongoing Patient & Provider Support

While centralizing systems enables scalability, a local feel matters for attracting and retaining patients. Balance efficient infrastructure with services demonstrating your commitment to compassionate, individualized care.

Patient & provider support tactics include:

  • Neighborhood-based practices near patient homes
  • Regionally-focused marketing reinforcing community connections
  • Local office staff delivering personalized front-desk and hygiene experiences
  • Real-time communication channels like chat, ramping inbound call teams
  • Round-the-clock access via telehealth platforms and on-call dentists
  • Surveys gathering patient feedback used to continuously improve their experience

Also offer clinicians pathways to share input around enhancing patient care, voicing concerns and shaping future growth initiatives.

  1. Optimize the Profitability Mix

As you expand, ensure your balance of practitioner dealings, specialty offerings and insurance contracts drive profitability.

Strategic focus areas influencing your fiscal efficiency include:

  • Payor mix - Balance higher revenue commercial insurance plans while still welcoming affordable insurance options like Medicaid to widen access for all patients. Introduce sliding-fee discounts for uninsured patients rather than avoiding them altogether.
  • Specialist ratio - Catalog recruitment needs around procedures producing higher ROIs like implants, cosmetic services, orthodontics, pediatric specialties, sleep dentistry and surgery. Hire more specialists in tandem with general dentists.
  • Office economics - Acquire and open new offices factoring ideal space, equipment and team size relative to the neighborhood revenue potential. Right-size offices, hire appropriately and manage materials/lab spending sustainably.
  • Compensation models - Structure practitioner compensation rewarding productivity and loyalty. Consider percent of production, equal salary + production percentage and incentive-based pay around specific revenue goals.
  • The image is a composite of three separate photographs featuring a dental professional and a patient in a dental office setting.

Evaluating the profitability mix holistically helps executives course-correct growth plans for optimal financial returns long-term. You expand access for patients while operating efficiently.

Execute Disciplined, Patient-First Growth

Disciplined DSOs purposefully scale operations without compromising personalized care or community connections. Following these best practices for strategic acquisitions, talent development, network integration, patient experience and profitability helps dental organizations grow sustainably.

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