By Dr. Brendan Hallissey, Guest WriterAs I started to write my thoughts on this subject, I was wearing my 1-month-old son in a Babybjörn. He was intermittently falling asleep on my chest and fussing a little to remind me that I should continue to bounce up and down to keep him happy. After our journey of opening a practice, nearly reaching burnout, and then selling to private equity, I felt as happy as I had ever been. It was a long trip to get to this point, but it all seemed to happen at the right time.
I grew up in a small town in Maine, and, like many people from the sticks, I felt some kind of yearning to escape and “make it.” I didn't know exactly what that was. But my mother had always spoken to me like an adult, so I realized that to “make it,” I would have to make money. Like a lot of people, I viewed being a doctor as a good choice and went through different iterations of what type of doctor I would become. Being an analytical person, I explored many avenues as I advanced through school, but I realized the path that fit my personality best was dentistry. I liked that it was a respected field in which I could help people, but it would not require me to be called into the hospital at any time of day or night and have to carry the stress of life-or-death situations on a regular basis. Despite the urban legends, the dentists I knew all seemed happy with their careers, and I definitely wanted to find happiness.
My family life was tumultuous as a child, due in part to my parents fighting and worrying about money. I thought that having the kind of money a dentist can make would make me happy. I thought that buying a practice was the solution to our problems. But I learned there was a different path.
Buying My Practice (and All the Stress and Debt That Came with It)
Ten years after graduating from dental school, my wife (also a dentist) and I were the owners of two practices and too many headaches. I learned from seeing the financial stresses of debt on my family that it can very negatively affect your happiness, and, up until this point, I had done a pretty good job of managing it. As the employment market in our area tightened after the 2008 financial crash, my options were to commute over an hour to work, sit home while my wife worked, continue to work in a group practice that I was getting squeezed out of by new ownership, or purchase a practice. I opted for the last option, and, in doing so, I took on over $1 million in debt. We muddled along and saw the opportunity to take on an additional practice that would change my wife's half-hour car commute to one in which we could walk or bike together each day.
Mr. Money Mustache—with his lessons on frugality and, quite frankly, avoiding driving—had some definite influence there. While we were saving on commuting, we added several hundred thousand more dollars to our debt load when we bought the additional practice. We also doubled the headaches.
Much stress came about from several other dentists' tales of embezzlement. Given my risk-averse nature, I was doing all of the banking and books for both businesses. In addition to working at her own practice, my wife was continuing to work 30 hours a week as an associate at another office in New Hampshire, and I was working part-time at that New Hampshire office to try to earn more to pay off our massive debt—in particular, she was concerned about her school debt from a private dental school.
As we were thinking about starting a family, the debt seemed like an insurmountable obstacle. Could we really raise a child, giving him the attention we wanted to give with the amount of work we were doing both in and out of the practices? The stress was coming to a head in 2016, and it became apparent that we needed to find an option that could improve our work/life balance. I now know that we were heading toward burnout, but I had never even heard the term at this point (except as a reference to stoners).
Sometimes, though, your salvation just falls from the sky—or at least gets delivered into your mailbox.
More information here:
A Dental Career Reimagined — I Thought I’d Be Rich But I Found Wealth in Another Way
The DSO Down-Low: How Private Equity Has Infiltrated Dentistry
Private Equity Comes Calling
I received a mailing from a company I had never heard of called Heartland Dental. I was skeptical of the offer to affiliate my dental practice, because what I knew—or thought I knew—about “corporate dentistry” was all negative. It was the big bad Boogeyman that was going to take over and crush us poor little independent practitioners. It was all about profit, and the quality of care was substandard.
We were desperate for a change in our lives, so I figured it couldn't hurt to check it out. What I found is that Heartland Dental has pretty specific criteria for considering an affiliation and that we didn't quite fit it. Armed with the knowledge of what would make us a better fit, I worked on improving the business side of our practices with the aim of having the option to affiliate our practice. Over the next year, I worked on the areas I needed to affiliate (cutting down on our overhead and travel expenses so we could improve our profitability on paper), and I was soon in a position where earnest negotiations could begin.
As a practitioner in my prime with two profitable businesses, I was definitely going against the grain of the traditional model of “buy a practice, work until you are 60 or 70, sell to a young hungry dentist, and use the money to pad retirement.” The problem here is that the financials of our industry are unpredictable 30 years in the future.
At the time I was researching my options, it was 2016 and I came up with the following: according to the Centers for Medicare and Medicaid Services (CMS), healthcare expenditures accounted for 17.8% of the US’s total GDP in 2015, and they were expected to rise to almost 20% by 2025. While 2023 was 17.6%, the projections still hold true that healthcare will continue to grow as a portion of GDP.
I can see healthcare as a commodity, yet there are significant headwinds mentally for many people seeing healthcare this way caused by our society's political leanings or feelings about healthcare. At the time, Medicare For All was a popular talking point, and I had no idea how this might affect dentistry. I like to think of healthcare as a business in the same way that Ronnie Coleman, an eight-time Mr. Olympia, thought about bodybuilding: “Everybody wants to be a bodybuilder, but nobody wants to lift no heavy-ass weights.” In this case, everybody wants healthcare, but nobody wants to pay for it.
It would be wonderful if we could treat all of healthcare as a free and basic right, but the aforementioned debts my wife and I held required us to get paid for our services—not just to cover our own debt payments, but also for our living expenses, retirement planning, and a premium for the fact that we have skills that not everyone has. There has to be some incentive for people to go through the rigorous schooling and training required to attain these skills. The counterargument sounds something like, “Are you just going to leave sick people dying in the streets?” Of course, nobody wants to do that. But the public discourse playing out at the time seemed like a very deep risk to our long-term financial success.
I personally believe having only catastrophic insurance would help reduce the cost of healthcare by helping commoditize it. If people are directly paying their fees for checkups, medications, and minor or routine procedures, there would be competition. Fees would come down and become more uniform. Currently, though, insurance seems so opaque to most people that price discovery and value for cost are difficult to assess. Price pressure primarily comes from government and insurance companies. The government decides what amounts it will pay. This is presumably not enough to economically sustain many institutions, and so it charges an individual a rate that is higher than a market-driven rate to make up the difference. Insurance companies then pay somewhere in between, and based on the efficiencies of the institution, they may choose to participate or not with the plan based on whether it makes economic sense.
I'm glad to see that there are some medical facilities that are stepping out of this model and going straight fee-for-service and charging fees that are much more reasonable. I do not, however, see this taking over anytime soon, because the current system is so entrenched. How this process will play out in my life is another very deep risk.
At least for the foreseeable future, we will have a system that is highly unpredictable. Will the emotional element win out with a groundswell of political force that changes the entire system to a single payer one? Will the power of insurance companies to dictate fees and care increase? Will another economic crash drastically change the available dollars for healthcare expenditures? Will Medicare and Medicaid go defunct and cause some other kind of drastic restructuring? No one can know for sure. The only thing I knew for sure was that I would have years of debt service with deep risk of an entire industry upheaval. That thought caused me to lose a lot of sleep.
More information here:
Why More and More Dentists Are Going ‘Out of Network’ — And Why That’s Actually Good News
Is Dentistry Worth It? Comparing It to Being a Pediatrician, a Planner, and a Plumber
Thinking About Selling to a DSO
In the smaller space of dentistry, which in 2014 accounted for 3.4% of total medical expenditures according to the CMS, the times they were a changing. For a long time, dentistry had a nice little niche from a practitioner's standpoint. Insurance was a minor part of the payer base, if at all, and market forces set fees at a point that allowed some of the older generations of dentists to make financially and personally rewarding livings in an industry with relatively low overhead and regulation.
Technological changes, increased government regulation, and a growth of insurance company rules and participation had shrunk the profit margin achievable for the small independent practitioner. This was concerning to doctors with more career ahead of them than behind them. As I looked ahead, I felt as though the future would involve increased supply and compliance costs, decreased insurance company payments, and uncertain economics which would affect year-to-year the available money people were willing or able to pay to take care of their dental needs. Staring at this uncertainty vs. the certainty of our debt service, transitioning into the realm of a Dental Service Organization (DSO) became more appealing.
What Is a DSO?
Before we go any further, let’s talk about how a DSO works (at least in my case).
There are different types and structures. I know Heartland’s best, but there are differences with other DSOs.
For Heartland, the DSO is contracted with a local state corporation that employs the doctors of that state. The doctors practice according to their license in their state and have complete clinical autonomy. The Heartland DSO takes care of many back-end services that a dental practice needs—like supplies ordering, negotiating with labs and suppliers, ensuring compliance with state and national regulations, payroll, mentoring and education offers for affiliated doctors, marketing, and HR.
I have not worked for another DSO, but I hear from colleagues that some others are much more restrictive on issues, like which supplies or labs you use, and that some try to influence your clinical decisions in ways that make doctors feel uncomfortable.
DSOs can be owned by one or a few doctors; sometimes, they're majority private equity with as little as one doctor, if required by state law.
Our DSO has many doctors and employee stockholders. KKR purchased a majority stake in Heartland in the last few years. There are still many doctor-owners, and it has been woven into the fabric of the company by Dr. Rick Workman, the founder of Heartland, that doctors continue to have the ability to purchase an ownership stake.
In many ways, I view this as a mutual fund of dental practices. In a sense, you are buying a share of all of the affiliated offices instead of having all of your risk concentrated in your own single office.
The Benefits of a DSO
Here's what a DSO could provide for me as the owner of a dental practice:
- No more concerns about payroll, unexpected expenses, or embezzlement: Having a large company to be a part of mitigates risk. If a snowstorm shuts down my office for a week or blows down some trees and closes us for a month, our staff will still get paid—thanks to the other practices that are part of the company. If a hurricane closes an office in Florida, my productivity can help it out while they clean up and rebuild. The shutdowns during the early months of COVID proved this; I slept like a baby knowing I was part of a team of incredibly bright doctors that would band together to figure out the best path forward.
- Eliminate the debt load and access equity now: My wife and I had been aggressively paying down our debt, but there was no guarantee that our economic situation would remain unchanged and that we could even pay it in the future. There was also no guarantee that the practice would be an asset that I could sell in 30 years. As the DSO space grows, including starting new offices, I believe that the economics will dictate that practice values decline because it will be cheaper to start a new practice than to purchase an existing one. Combine this with the increasing debt load of recent graduates of dental school, and the pool of available buyers will also decrease. A student with $500,000 in debt and a skill set that is not as advanced as a dentist with years of experience under their belt will not be able to finance or sustain a thriving practice. Working for a DSO that can provide guaranteed income and mentorship will be a bigger and bigger percentage of first-career choices for new graduates.
- Eliminate much of the headache of managing the business of dentistry: The DSO has already accumulated many “best practices” through years of experience and the brain trust that is created by so many doctors sharing the ideas and practices that have worked for them.
- Lower cost of healthcare for my family and employees: While I believe a market-based healthcare system would be better and less expensive, being a part of a larger group means that we can negotiate better rates within the current system. I couldn't afford to pay for employee healthcare as a solo practitioner, but all of our team members became eligible for a nice health insurance plan when we were affiliated.
- Maintain profitability better than on my own: As part of a large group, we can negotiate better prices on all of our expenses that were not available to me as a solo practitioner. In short, there is power in numbers.
Making the Jump to a DSO
I started to research what it was like to work with Heartland. In all, I talked to more than a dozen different doctors who had been working for the company for different amounts of time. I got some great perspectives and what I believe were candid responses to my questions. One thing I heard in the process was, “I know I sound like I'm drinking the Kool-Aid, but I like the taste of the Kool-Aid.” Ultimately, we worked out a deal that eliminated our business debts, merged our practices, paid off my wife's remaining educational debt, and left us with just our home mortgage as a debt.
Could we have sold for more in the future? Maybe. Could we have done a lot worse? Definitely.
I had the opportunity to purchase Heartland stock as part of our sale. We opted instead to pay off the nearly $400,000 in other debt that we had. A portion of the sale price was paid out over the following five years. This money was at risk if I had chosen to leave employment before the end of the term. As an affiliated doctor, I worked in my original practice for four years. My wife's practice was merged with mine, and she began working part-time.
All Heartland-affiliated doctors are paid in the same way. We have a base salary and then have a profitability bonus. Just like the spread of intraspecialty pay in medicine can be quite broad, doctors who offer more services or are more productive can be compensated well for this.
No employees were laid off with our merger. Actually, we grew and hired more employees. Our hard work in growing our practices and improving our profitability while aggressively paying down our debts allowed us to accumulate a significant amount of illiquid equity. The sale allowed us to access this equity at a time when it served our family better by improving our quality of life. A few years later when our dental practices were shuttered by the COVID pandemic for more than two months, I thought back to how glad I was that I had pulled those chips off the table instead of continuing to let it ride into my 60s.
I spoke to other doctors who found themselves in tough financial situations made worse by the economic shock of the pandemic as they tried to evaluate if an affiliation with Heartland could help them as well. Perhaps I would have mathematically done better by grinding out a couple more years, but I prefer to be early than late, and I have no regrets about the timing of my sale.
Once the deal was all lined up, we began trying to start a family. Nine months later, we were blessed with a little boy, and my wife took off three months to spend with him while not worrying about business or educational debt. Our practice grew, thanks in part to the support and the best practices education that all of us have received. I traded feeling tired and being up late doing books for late-night diaper changes and feedings. I couldn't have been any happier with the decision. I get home from work earlier, and aside from the odd emergency call, I do not have any work-related responsibility outside of normal office hours.
More information here:
Selling Your Practice to a Private Equity Firm
Why I Still Sleep Well
I had one nagging thought in the back of my mind. I felt like at some point I may be asked to compromise my ethics and I would have to find a new job. Eight years later, how’s it all going? I’m still working for the same company, and I’ve never been asked to compromise my ethics. I realize how foolish that thought was. A company cannot grow and sustain growth by shady dealing. I’m a better doctor. I am more engaged with my patients (QuickBooks no longer calls me to the back office to worry about the overhead). I have moved to a different state, saying goodbye to the snowy Maine winters that no longer feel as good on my aging joints. I have taken on a role as a mentor to other doctors where I get to help them grow clinically and share the financial wisdom that The White Coat Investor freely shares. I am even more convinced I made the right choice.
The growth of DSOs has continued, and while current valuations are still good for selling a practice, my concerns that the values will diminish by the time I’m 65 seem more valid. Technology is rapidly growing in dentistry. Lasers, artificial intelligence, 3D printing, and robotics are normal parts of our conversations, and they aren’t free. Regulation has continued to increase, and payers have continued to clamp down on reimbursements.
I continue to sleep well having chosen to be early instead of late selling my practice.
I imagine I’ll get some hate mail about being part of a big bad corporation. Before you hit send or submit, realize that you have the right to choose a different path. There will likely still be at least a niche of private fee-for-service practices. Maybe we will see a complete return to the old days. I doubt it, but maybe. The tide is coming in, and I believe DSOs are the future of dentistry.
If this article makes you consider transitioning your practice, I urge you to do your due diligence. Not everyone is a fit for the DSO life. If you really like having control over every aspect of your practice, you’re probably not going to like being part of a group. If you find yourself wishing you had more helpful colleagues to guide you and encourage you, you may love it. It’s your practice; do what you want with it. All I know is that in 2015 and 2016, I was getting so burned out I was focused on FIRE and leaving clinical practice altogether.
After the relief of stress I found working as a Heartland-affiliated doctor, I took the approach of cutting out the parts of the work I enjoyed the least while growing in the work I enjoyed the most. As part of a large network, I now have the opportunity to work with many other doctors through our educational offerings as a teacher, mentor, and coach. I could spend my time being more financially productive, but the time I spend working with younger doctors, helping them achieve their goals, is something I believe will fill my cup for years to come.
Today, my version of “making it” is working on perfecting a life from which I do not want to retire. I can care for my patients, volunteer at a local indigent clinic, mentor and teach colleagues, and be a more involved husband and father. Our practice sale was a blessing for my family, and I hope that the insight shared here can help other docs with one of the most important decisions of their professional lives.
[FOUNDER'S NOTE BY DR. JIM DAHLE: The title of this piece is slightly misleading, but bear in mind that titles are mostly designed to draw you in to read the article. Being accused of writing clickbaity titles is one of the greatest compliments that can be directed at our content director. Dr. Hallissey certainly sold his practice, but as he explained well in the article, that may or may not be right for you. As a general rule, I'm a big fan of ownership, whether it's owning your own home, owning your practice, or owning stocks and real estate as investments. Owners get control and, when things go well, the lion's share of the benefits. There's a lot of value in that. But as Dr. Hallissey explained well, there's usually plenty of hassle and risk to go along with that value. Sometimes, it makes sense to reduce the risk and the hassle, even if it means giving up some or even all of the benefits of ownership. But you better go in with your eyes open to selling a practice, just as much as when you go into buying or starting a practice. Who the new owner is really makes a difference, and not every new owner/company/DSO/private equity is the same. “Private equity” (which is an incredibly vague term, of course) has a terrible reputation for harming doctors and decreasing the quality of care. Just as I warn employers, “If you treat doctors like labor, they'll start acting like labor,” I also warn doctors, “When you give up ownership, don't be surprised when you're no longer treated like an owner.” Hope you enjoyed the post.]
What do you think? Are you considering selling your practice? Would you ever sell to PE? Would you ever want to work for a PE-affiliated office?
Private equity’s invasion into dentistry is dismantling the profession we’ve worked so hard to build. These firms aren’t here for patients or providers, they’re here to exploit the hard labor of docs while they sit in their cubicles, profiting off of our expertise and sweat. They’re taking upwards of 70% of collections, leaving us with a fraction of what we’ve earned. Why do you think they’re so eager to buy out practices? Because it benefits them not us.
Beyond financial exploitation, their operations are riddled with inefficiency. HR departments in these DSOs are infamous for constant payroll issues, mishandling 401(k) contributions, and offering little in terms of actual support. It’s a headache you can’t escape, all while they paint a rosy picture of “private equity shares” as if they’re guaranteed gold. What they don’t tell you is that these shares are high-risk, with no real promise of the exponential growth they hype up.
At the end of the day, private equity firms are focused on one thing money for them. They don’t care about the integrity of our profession, the well being of our staff, or the long term sustainability of patient care. Their takeover of our industry is an absolute shame, and it’s on us to push back before our practices and livelihoods are entirely corporatized.
Also, this piece sounds suspiciously like an ad for Heartland which should really be disclosed…
Thanks for reading this Joe. I felt much the same way before I started researching Heartland. It’s not an add and it’s quite clear I’m happy drinking the Kool-Aid as well. One of my.main points is that you must do your research because not all DSOs are the same. I can confidently name dozens of colleagues that I am happy to call personal friends that are financially successful and skilled and would also not want to leave and go back to the old model. If I could waive my magic wand I’d love to create a less rgulated and outside influenced dental career. I’m a fan of fee for service. I don’t think we’re going back any more than we can stop the tide from coming in. Thanks for engaging in the discussion.
There are really three issues here (in no particular order): what’s best for the future of the profession, what’s best for patient care, and what’s best for the individual dentist/doctor/owner (of course there’s also what’s best for the PE/DSO firm but we all know what the single motivating factor there is). I’m sure Dr. Hallissey is a great dentist and great person, and I know many great people who have sold their practices to PE or DSOs. The decision makes sense for their families, their lifestyle, and their finances: great. But I think failing to acknowledge the impact this is going to have on the profession, and the impact this is already having on many small doctor-owned practices, is a serious oversight. As more practices sell to PE, those practices have greater power negotiating with insurance companies on reimbursement rates or can take advantage of economies of scale to see large volumes of Medicare/Medicaid patients and still profit, while smaller practices continued to get squeezed between higher labor and supply costs and lower reimbursements.
If this sounds like it patient care can only benefit from such a structure by reducing costs, keep in mind that the PE firm exists to make money so increased profits do not necessarily translate to lower costs for the patient. Second, as more graduating doctors find it difficult or impossible to buy or start a practice, they will become lifelong “associates” with neither the wealth, knowledge or perspective that comes with owning the practice. As Dr. Dahl says, they may start to act like labor–and an ownership that prioritizes profits and a workforce that acts like labor is rarely a winning formula for great patient care. Has the rapid hospital consolidation over the last two decades been beneficial?
I truly do not blame individual dentists for “selling out.” It makes sense from their perspective, and few are going to sacrifice the opportunity for generational wealth for their family at the outside chance of “saving” the profession for the next generation. The logical alternative would be to move back toward a fee-for-service model to remove insurance companies from the treatment plans and reimbursements, but that’s an even more difficult road for many.
Professional organizations at the national and state level are absolutely failing doctors and the profession by failing to address this head-on, to the extreme detriment of the professionals and the communities they serve. I don’t have a crystal ball, but take a look at optometry over the last 10 years or so. PE is coming now coming for dentists and pediatrics and will continue to move up the volume/cost/training chain until the money backing the DSOs finds something better to do.
You’ve made a huge mistake.
Just say no to the DSO
Thanks for the engagement Dave. I have more harmony in my work and personal life and more career satisfaction. I no longer feel like I need to retire early and to the contrary find more career enjoyment that will keep me practicing and caring for people longer. 8 years seems long enough to prove this out for me. Not all DSOs or docs are the same but Heartland has been far from a mistake: its been a blessing.
I’m someone who never thought they’d be a part of corporate dentistry, but I’ve now been with Heartland Dental for 10 years.
Not all DSOs are the same. Heartland Dental was founded by a dentist and the culture revolves around the mantra that Heartland is doctor lead.
Heartland has provided me with clinical autonomy, incredible work/life balance, better pay than I ever expect, incredible friendships, and educational opportunities that have turned me into a practitioner I’m so proud to be.
Dr. Hallissey is right, Heartland is not for everyone…and that’s okay. However, for a lot of dentists it’s provided an incredible lifestyle and fulfilling career.
Thanks for sharing your experience. Glad it has been good for you.
Glad to see you’re exploring all sides WCI. But c’mon man. It’s not like you would want to join a practice that wasn’t the democratic unicorn group yours is/was. Please don’t sell out to PE like the rest of the selfish money hungry boomers.
Remember, wealth mostly has to due with luck. Being in the right place at the right time. Yes talent and hard work matter. But don’t throw the younger talented docs under the bus just because they were born later than you.
I disagree that wealthy is MOSTLY due to luck. I think it’s mostly due to hard work and good habits over a long period of time.
A democratic EM practice isn’t all that profitable for the democratic partners to sell. It’s far more profitable for a practice owned by 1-2 docs to sell. I think the most I’ve ever heard of the docs making off selling a truly democratic practice is a mere million. Often they just lose the contract to the CMG and don’t get paid anything.
I am intimately aware of a group of democratic radiologists that made nearly 5 million (pre-capital gains taxes) each for the sale of their group. They gutted the practice for EBIDTA at over 10x and never looked back. The group, who previously recruited some of the top rads in the country, over time could not recruit even poor candidates and the patients suffered. The non-partners were given a few dollars and told to keep the practice afloat for the 5 years of servitude that the partners were required for terms. IMHO the only people who agree to sell are 1) People who were never meant to be in the profession, and 2) Boomers who probably did not start the practice to begin with but are partners and feel they deserve money for existing. This encroachment of private equity and venture capitalists is a stain on medicine and the people responsible are nothing more than selfish humans masquerading as physicians/dentists.
$5M Wow. Pretty hard for a doc to turn that payday down. 90% of doctors have net worths under $5 million. Not sure taking that kind of cash makes someone a “selfish human masquerading as a physician.” What if the group just blew up a few years later and you missed out on $5 million? You kind of owe something to yourself, your family, and your favorite charities in addition to your patients and it can be hard to balance those things in a situation like this.
You could also sell out, get your $5 million, and if you really wanted to keep doctoring go somewhere else and do so as soon as you can. If nobody will work for these PE firms, they can’t own all the jobs.
Private equity in everywhere, in my town, two cardiology, and one GI group sold to private equity. I am not familiar with the terms, but I would presume it is substantial cash, otherwise, why sell?
My experience is reverse of PE/DSO/CMG.
17 years ago, my partners and I wrestled the ER contract from Emcare [now Envision], the biggest CMG in Emergency Medicine nationwide.
We have, from the first year and consistently after earned 2 to 3 times the average income of ER doc [ including ER docs in other hospital in town].
These CMGs, DSOs, and private equity firms make money by bilking the hard-working doctors/dentists. There is simply now other way.
Now, I got may be 5 years left to retire, what if PE came knocking, and someone offered me 5 million? would I take it, and sell out the young doctors in the group?
There is undoubtedly a difference between a doctor- or dentist-owned practice in which the OWNER is held by their professional peers to a professional standard such as the American Dental Association Code of Ethics in dealings with their patients (who are also the customers) and a “corporate” or private equity owned practice in which the owner is responsible to shareholders for profit and the employee dentists/doctors/providers bear all the same professional responsibility without the same control over the means and methods of care. The corporate and equity owners may consider the third-party payors (insurance) as their primary customers and neither the providers nor their patients have much influence on the means and methods. As the passionate commenters suggest, the dental profession and even the dental industry can be harmed from the perspective of patients who envision getting to know their doctor and develop a long-term relationship regarding their care preferences. Accepting specialty referrals from corporate dental offices often yields patients who don’t know which doctor they saw and don’t care, because they won’t see the same provider at their next visit. I can’t help but think that care suffers in such circumstances. Unless a code of professional conduct or ethics would legally apply to everyone with an ownership stake in the delivery of dental care or healthcare, there won’t be an incentive to do what is right for the patients.
My question for Dr. Hallissey is this: Did Heartland review and approve your column before you were able to submit it?
My understanding is that employees and employee-owners in DSOs are, by their contracts, heavily censored from any statements that may reflect negatively on their employers.
That’s a good question. The answer is no, the only approval I received was from the White Coat Investor according to their guest post guidelines
As I shared when I was researching Heartland I was given names and contacts for about 50 different docs if I wanted to contact them. I have since received dozens of similar calls. We are encouraged to share honestly. Why would we want to fool someone and have them join our team and then leave or be dissatisfied based on lies? There’s no business case for that. An unhappy doc is generally not productive and often a financial drain. I played team sports my whole life and enjoy the comraderie of my fellow Heartland docs. I am supported and get to support others in need. When I owned my practice I often felt a level of competition and lack of collegiality that made me uncomfortable. Perhaps DSO dentistry is not right for you but I would hope you’d conceded that it is right for many of us who are ultimately held to the same ethical and state board standards as any other practitioner. There are no separate set of laws or rules governing me now than before affiliation.
It is well known that nearly all of the DSOs have non-disparagement clauses that extend years beyond the termination and/or exit of employment. Dr. Hallissey is no doubt aware of these clauses – which contain severe penalties if you are found to violate them.
It comes as no surprise that there are no negative aspects about Heartland nor DSOs in general in this post. I wonder why?
What has your direct experience been with this? You seem to have a strong conviction to incite such a response laden with knowledge of such consequences. Please share your own personal experience. I would also encourage you to read the article its entirety; in doing so, you would ascertain that Dr. Hallissey seeks to explain the multi-faceted humanity involved in his decision (the primary focus of his vignette) vs. creating an advertisement for Heartland. The aim here is to provide a perspective, not a judgement, and give a forum for “seeking to understand”. Please afford him that courtesy.
I think it is extremely rare to have a job that has no downsides, so an article that is only positive raises suspicions that something is being omitted. There is an entire section on the benefits, but no section on the downsides. Just my 2 cents.
Also, I have worked for private equity and there was non-disparagement clause that did on occasion conflict with my desire to be upfront and honest with other physicians. They had an extremely aggressive corporate attorney.
The purpose of this article is not “this is perfect for everyone.” Please, read it again to understand his perspective and decision making process, which is the point of the piece.
Your suspicions are understandable, however, I will reiterate that the purpose of this piece is not an ad for Heartland, but moreso to offer explanation for why some dentists make this decision. And, for us, it has been a blessing.
Is anything ever sunshine and roses in any employment experience? 80/20 rule and that is if you’re lucky.
I am sorry to hear that you had an unfavorable experience. We hope, as we do for everyone, that you have been able to find a place where you feel fulfilled, validated, and, God willing, moments of joy.
Thank you–I am indeed now a shareholder in a practice and do feel fulfilled by my work. I wish you all the best as well.
Please submit a guest post listing your upsides and downsides when you sell your practice. Here are the guidelines:
https://www.whitecoatinvestor.com/contact/guest-post-policy/
I would never sell lol. We are always bringing new physicians into the group as older physicians retire. Someday I’ll retire, but I’d never vote to sell.
Alexis, please tell us: do you and your husband have non-disparagement clauses with Heartland Dental? Answer truthfully, because most of us already know the answer.
Neither of us recall signing anything to that effect in our contracts – i don’t recall and just asked Brendan who is currently driving the van (on our way back from grocery shopping), and he is not aware of one. It’s never really come up, and to the contrary, when we have helped with recruiting, we have been encouraged to share what we like and what we don’t so that we get doctors coming in with eyes wide open. I hope that helps answer your inquiry.
I do not recall is not an answer. It is a term used by anyone who does not want to answer a question. It would be easy enough for you to look at your contract and answer this question definitively. It is a yes or no question. Until then, one must assume the answer is YES.
Bless your little heart. I’m going to pray for you.
I currently do not have a contract to look at as I am a private per diem contractor, but the next time I sign one, I will examine it.
As a matter of principle, speaking ill of anyone or disseminating disparaging content about anyone including a former employer is not a trait neither myself nor Brendan aspire to possess. The thirst and frankly perverse obsession for the “bad and ugly” details emanating from several of the comments on this forum is reflective of a much uglier issue plaguing our humanity, and, unfortunately, in our profession that purports to care about people yet in the same breath is all to eager to tear one another down.
It’s a truly sad state of affairs when the first go-to for someone is to doubt another individual’s integrity rather than even attempt to celebrate a decision that has been fruitful and beneficial for his entire family that he has eloquently encapsulated in a piece of prose he did not have to write.
And, for the record, my husband is a man of few words, but always honest ones. For him to be inspired to write them in an essay, let alone proclaim them publicly, that’s a huge deal for him and anyone that knows Brendan would 150% echo my evaluation on that subject.
Try reading Good Energy by Casey Means. That would be an excellent starting point to unravel this constant state of SNS reactions and subsequent actions regarding other folks’ life decisions. It’s not good for our health nor for our peace and that of those around us.
John Chapter 8 would also be a good resource.
I haven’t looked at my contact in 8 years. I haven’t needed to. I’ve always been treated fairly. I don’t have anything disparaging to say. The whole point is to share the counterpoint to the negativity that exists in the conversation. I t would be a short and uninteresting article for me to discuss the downsides. Here’s mine;
1. I wish our 401k allowed us to do the mega backdoor Roth conversion.
2. I miss some of the combined business and leisure travel I did when I owned my practice
3. I miss the credit card points I accumulated buying supplies for my office.
There it is, the dirty secrets I was hiding
Dr. Alexis and Dr. Brendan,
Neither of you answered my question directly. You both imply that you did not sign a contract with a lengthy and onerous non-disparagement clause. Your collective non-answer leads me to three possible conclusions:
1. You had the absolute best attorney in the U. S. to have negotiated a contract without a non-disparagement clause, even when the thousands of dentists who have sold out to DSOs are incredibly scared to say anything negative on the record due to the clauses they have signed.
2. You both are, and I hate to say it, blissfully ignorant about what you signed. I suppose I don’t blame you, because many of these DSO sales contracts are 100+ pages, written by massive and well funded DSO legal teams.
3. You did sign one, but you are prohibited from acknowledging it, which is why you are giving us all “non-answers.”
Regardless, your article is very biased, and it is quite clear to anyone reading this, but certainly that is your prerogative.
For a biased perspective, but from the other side, I strongly encourage everyone to listen to the “Just Say No to the DSO Podcast”. You will see that – if you are a successful private practice dentist – selling out to a DSO and drinking the Kool-Aid is the worst financial decision you could ever make.
I could certainly elaborate on my up close experiences with DSOs and seeing patients who left these corrupt offices – but I fear the large legal machine behind these behemoths. I can only hope that successful White Coat Investor dentists look beyond this article to see that they will only lose if they sell out to a DSO.
I am ignorant of whether I signed one or not, yes. I’m also ignorant of whether I’m precluded from purchasing pokemon cards. It has no bearing on my life. Each year our company solicits feedback for improvement. I’m still opining for a better 401k with the mega backdoor roth option, but I really don’t have anything bad to say beyond that. For me I want to share that there is a good life available for some on this side. I wasn’t aware of the anti DSO podcast, but if that exists, I’m sure those that agree with you are getting the message they want out. Our new docs and those discovering they no longer want to be owners deserve to hear more than one voice when making decisions. I don’t want anyone to join our company that doesn’t want to be all in. I want colleagues that understand being a part of a team and want to succeed together. As a ice hockey and football player I grew to love the way a good team makes one another better than the sum of individual talents, and I guess the knocks to my head made me forget whether there was a clause that opened me to attack from my company should I decide I wanted to publicly grind an axe.
Stick to the facts and clearly identify your opinions and you shouldn’t have to worry about legal machines. I think people would be interested in your experiences. Even less risk if you don’t identify the DSO.
It never surprises me more than people have these preconceived ideas that all DSO’s are created equal. I have been affiliated with Heartland since 2017. All I can say is that if it was as bad as people are saying why am I still practicing? The main thing is what are you looking for? A place that is doctor oriented and wants their doctors to be the best in the industry. I still practice as I did before selling. I get to do exactly what I did prior to selling, and not have to worry about anything but providing the best dentistry for my patients. Heartland will make suggestions and ask if there is anything that they can do to make your life easier. I know it sounds to good to be true and I was skeptical when I sold. The reason Heartland is growing so much is because of the way they treat their doctors. Is Heartland perfect? No. But if I had to sell my practice now I would still sell it to Heartland.
To be fair, if there were non-facdtual negative statements about a specific company they would be removed in the editing process to prevent libel issues. We considered removing the name of the particular DSO in the editing process but figured we didn’t have to due to lack of libel and that withholding info from the audience would do more harm than good. But you’re right, most business mergers/acquisitions/whatever have non-disparagement agreements. They’re not evil. But we would have accepted this post (or a similar one) written anonymously that recounted a totally negative experience with an anonymous DSO. We don’t think the author got paid to write it and we didn’t get paid to run it so accusing us of (or implying that this is) advertising are simply wrong. we do appreciate the concern though. Ask yourself if you would feel any differently about this post if the specific DSO had not been named. The answer is probably no.
Good point. Let’s hear the rebuttal from the doc who works for the contract management group and hates the admin. Oh wait, we did and he got fired? Nvm.
I don’t know the situation you’re talking about. I’m assuming. The implication is you can’t find out whats behind the curtain because everyone is afraid of getting fired. At least in my situation I shared my honest thoughts. There are people that are no longer with companies that certainly are free to share their opinions as well. We all have a bias. I’ll own mine. I want to help other dentists find career and financial fulfillment. This has worked for me. It is not fair to assume a one size fits all approach. Please correct me if I’m misreading the intent of your comment.
Thank you for sharing your experience Dr. Hallissey. Two questions.
1. How are the investment bankers being paid?
2. How is the debt being accumulated by this DSO being paid? Or more likely “serviced”?
I’m sorry to say Nino that I do not know the answer to this question. I know how I’m paid and I know that some of the profit from my practice pays for the service my DSO provides. It feels fair to me and I don’t begrudge anyone from making an honest dollar. I could go back out on my own and open a practice again. Emphatically that choice is unappealing to me so I don’t really care how that part of my overhead is shared out because I’m satisfied with my earnings and treatment. If that changes there’s nothing to prevent me working elsewhere. 8 years in and I’m still happy to choose working with Heartland.
I’m not sure that it’s good for the health of the profession if >70% of dental practices get bought out by Heartland, Aspen, and Western Dental.
You don’t have to look too long at the role of giant corporate chains gobbling up much of veterinary medicine and optometry to picture a pretty grim future for dental school grads in 20 or 30 years. Heck, the duopoly in dialysis has affected nephrology pretty strongly.
If dental schools didn’t charge $500k in student loans, or if owner doctors in private practice treated associate dentists fairly, we wouldn’t see DSOs growing so rapidly. I’m a new grad who joined corporate because my owner doctor in private practice was taking my crown cases. Even when patients specifically asked to see me, if they had good insurance, the owner doctor would take them instead.
If owner doctors across the country treated associate dentists well, this wouldn’t be happening. It’s starting to backfire on you owners. Am I completely happy in corporate? Not entirely, but it’s definitely better than my experience working as an associate in private practice.
I don’t think that independent practice owners should take advantage of associates. I also don’t think DSOs should take advantage of associates (or former owners).
Maybe it’s too Pollyanna of an attitude, but don’t offer associate terms that you wouldn’t be willing to work under as an associate. Then again, we try to hire associates who have an ownership mentality and plan to buy into the practice. (None of this “sell 49% instead of 50%, continue to rule as sole boss” garbage either.)
Yes, dental school can cost $400K to $600K. Buying into a practice may cost that much (or more). Buying a condo or starter home in a high cost of living location will be another big chunk of money. But that’s an argument for ownership, not for being a permanent W-2 associate with limited upside.
What? Doctors take advantage of other doctors? Say it isn’t so….
Thanks for sharing your valuable perspective. In Emergency Medicine, the growth of Contract Management Groups is partially due to “kitchen scheduler” doctors scraping money off their employee docs while doing little work. When groups of docs don’t treat new docs fairly, don’t be surprised when they don’t want to join your group. Most groups/partnerships aren’t democratic and even many of those which are democratic agree that some are more democratic than others.
I’m not sure either. But you do have to recognize a few things rather than just being 100% against all things DSO/Private Equity/Whatever.
# 1 If you’re selling your practice and a DSO will pay you twice as much for it as somebody else, are you really going to turn that money down in order to “maintain the health of the profession?” Maybe you will, but most won’t. That’s the money they’re going to send their kids to college with or live on in retirement or whatever.
# 2 Ownership is not always pleasant nor profitable. Maybe some docs aren’t cut out to be owners. Maybe ownership just isn’t right for that period of their lives or ever. If it was so much easier or better for the doc, the patient, and the practice to not be associated with a DSO/PE/whatever, then nobody would be doing it. It’s a free market. Long term readers (and even those who just read my founder’s note at the end) know I’m a huge fan of ownership for control and income reasons. So I hate the trend toward the employment of docs, both physicians and dentists. But I do understand why many docs choose to be employees. And maybe it doesn’t matter so much whether that employer is the military, a university, another doc, or a DSO. All employees are being paid less than they’re generating or they will eventually be fired or the business will go out of business. That’s how business works.
# 3 This is a post written by someone who says it’s been pretty darn good working for/with a DSO. There are other comments in this section agreeing with them. So clearly, this is a controversial topic where reasonable people can disagree.
So people can stop sending me emails like this one:
I mean, really? You don’t even want to have a public discussion about this? We should censor anyone talking about it on the forum, Facebook group, and subreddit? And if not here, where? And do you really believe NO ONE who has sold out to a DSO or private equity is happy about it? Really?
The OP was never meant to be an owner. The mistake was thinking they were and that’s really the bottom line of this post.
[Inappropriate, offensive comment deleted and poster’s IP address added to the hold list so future comments will require approval. Please remember when commenting anonymously on the internet that we’re talking about/with real people here. If you don’t see why your comment was offensive, then we definitely need to hold future comments.]
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That’s a great lesson to learn after you’re half a million dollars in debt! Hindsight wears 5.0x loupes.
I “lucked out” (?) in not truly having a chance to be an owner given spouse’s military moves after I left the military. I quickly decided that a 50-60 hour a week job with benefits, despite my control freak nature which manifests in my family finance management and elsewhere, outweighed the headaches and minutiae of owning and running a practice (and trying to delegate anything to someone else). IE my compensation package for a fulltime medical job paid better than I was likely to earn running my own practice for only that many hours a week.
This is partly due to me being one of those docs who spend too long with patients and, as I see as my daughter advances in management positions in her career, my haphazard leadership/ management skills. (We even share the same cleaner and clearly she manages that relationship more productively and effectively than I with the same person.) The Army didn’t waste doctor time with much in the way of management training, that was for less cog in the machine; shut up and produce more, officers.
Non-doc here chiming in! First, what Brendan has gone through with the massive debt is not ok. Indeed, what most docs have to go through with student loans is super not ok. We need to find a way, as a country, to educate doctors without individualizing all this risk.
Second, as a patient, I have started to try and understand if a doctor (or dentist, or vet) that I might see is PE-owned. If so, I will not see them because I will not be able to trust them. This is not at all about any individual doc’s “goodness”- I know that people get into health care to help others. As a non-expert, I simply will not know if they are recommending something because it is medically best vs best for their profits. The presence of financiers makes trust impossible- it is a systemic problem, not a problem with the individuals involved. We collectively need to finance health care in a different way that will work for everyone. Except the financiers and insurance companies- they can go pound sand!
Lastly, we should not pretend that “competition” is the answer here- this is not the kind of market where that will work. Individuals will never be able to understand quality in a way that brings appropriate “market” discipline and most “transaction types” are not repeated. When my father was dying and needed home health aids, I had zero interest in “shopping around” – I just wanted to call someone that would be good and have things handled. I would understand if docs viewed things differently- this is just one normie’s perspective.
Stephanie I agree with much of what you said but I’ll push back on the trust piece. I have known private practice owners with questionable ethics that I wouldn’t trust to care for me and know many affiliated docs that is be happy to have care for me and my family.
I feel much less financial pressure now than when I had debt service to manage as an owner.
I would love a better system to train doctors without the massive debt. It certainly would have served my wife better because I don’t think our country does a good job of supporting women that want to have a family and a career. At the pace positive change happens in government I don’t think that will be resolved soon. Healthcare is relational. Please don’t paint all of my amazing colleagues with a broad brush of mistrust. I have never felt like I’ve been asked to compromise my morals and I’d leave if I did feel that way.
I appreciate what you are saying about trust. What I was trying to express was that as a non-expert, I don’t have and probably will never have the ability to make these evaluations myself. If we have a system that provides bad incentives, which the presence of financiers definitely provides, that system is one in which I have lost trust in the entire system. I can’t remember the last time I had a medical appointment where we didn’t discuss money. It used to be that I took my dog to the vet and felt comfortable doing whatever the vet recommended. Now, with nearly every vet practice in my area being PE-owned, I say no to everything and only after doing my own online research, do I sometimes proceed with their recommendations. Of course I should be engaged in my own health and I am, but I also want a system where I can take advice from my doctor without worrying that it’s medically unnecessary and mostly just making me poorer. Until we take the profit motive out of each medical appointment, I don’t see how us laypeople can be expected to trust doctors. I’m not sure what the perfect system is, but it seems clear that having investors involved like we now do is going in the wrong direction. And if the root problem is student debt, fix that. Our current approach to student debt is absolutely bananas!
I’m not sure your second point is really valid. I mean, I see a dentist who owns her clinic and she recommends or at least offers lots of treatments that aren’t truly necessary but that will generate more profit for the clinic. Tooth whitening for instance. Why would you think a doc owner would be less interested in profit than a PE owner? That hasn’t been my experience at all, but I would be interested to see data that suggested it is true. There is now some data in the physician world that suggests patients being cared for by PE owned clinics/hospitals have worse outcomes so it wouldn’t surprise me if that occurred in the dental world too, but I don’t think we can pretend all docs have no interest in profit whatsoever.
The nice thing about docs in control is that somewhere deep down there is someone who went into this primarily to help people and once they’re financially secure, that will usually continue to be their priority. Is that reason enough to avoid any docs at PE owned clinics or hospitals? I don’t know. It’s certainly an option though. I think you might be the first patient who ever told me they actually cared though. As near as I can tell the patients I’ve seen in our ED haven’t changed since we went from a PE owned hospital to a non-profit owned hospital either in volume, acuity, payor mix, or type. They mostly don’t know or care.
Well, my background is in economics and finance, so I am more attuned to incentives than the typical lay person.
PE firms have fiduciary duties to their investors and this means trying to maximize profits. A doc that owns their own practice at least has the option to not try and financially bilk their patients and just aim for reasonable profits.
Reasonable is in the eye of the beholder. If people will routinely pay me $200 to fix their cavity, I would likely charge $200. If it was $300, I’d probably charge that. Who gets to decide which of those is reasonable if not the market? Would I occasionally do one for free for a neighbor after hours? Absolutely, but I should get to decide when I work for free.
Now, before you go off on me too much, I am well aware that market forces don’t work very well in health care, particularly the emergency health care I do day to day. There is a place for regulation.
Agreed, reasonable is different to different people. The PE firm that owns my former vet’s practice surely believes it was reasonable to raise the price of a basic annual exam for a dog by 74% over the last 3 years (the people working there did not see commensurate raises!)
My uncle is a home builder who owns his business. His firm does not provide dental coverage. One of his best guys missed a bunch of work last year and my uncle found out it was because the man was in so much pain due to dental problems. He couldn’t afford to go to the dentist but he couldn’t really afford to miss work either, but sometimes he did anyway. Is that reasonable in one of the wealthiest countries on the planet? Does the answer depend on whether lots of other people can afford to go to the dentist?
It’s a political question. Is dental care a right? It sounds like you believe it is. You might be surprised to learn that lots of people don’t feel the same way.
I’m not much of a philosopher (if that’s even the correct word), so truthfully I get a bit lost when people talk about “rights” and these more theoretical discussions. I feel on firmer ground when people talk about more specific scenarios. So what I can say is that in our wealthy country I think we can do a lot better. It doesn’t make sense to me that we have scenarios like what my uncle faced, or so many others, where people can’t get preventative care and then have these much worse health outcomes down the road. Like women who can’t get cervical cancer screenings and then later end up with full blown cervical cancer – totally preventable and not expensive to screen for. It doesn’t seem…well I guess the word is reasonable. If we didn’t have the money, well, that’d be a different conversation. But we do. We do have the money.
You’re talking about “we do have the money” by taking money from others (taxation) to do what you want. You don’t “have the money” because it’s not yours to spend, it’s mine. You can donate to all the people needing dental care and I can donate to sick kids or add to my Ferrari collection. You’re either talking about taking people’s money through taxation or taking labor from doctors to force them to fix these issues. Neither of which is something you have. You just want to use the power of the state to take it.
Your analysis seems pretty incomplete. To take one example, Elon Musk, a very wealthy person, is the largest recipient of U.S. federal dollars. His wealth did not come from nothing. Dude, we live in a society! But it must be said, we do NOT need to levy net additional taxes to pay for universal health care — we have trillions of bloat in our current system that we could use to pay for care rather than administrative junk. Think about what a medical practice would look like if you didn’t need today’s ratios of billing admin people to medical people. Think about the cash compensation that millions of employers could offer (not to mention their owner profits) if they did not have to pay HR people to constantly navigate health plans, and have every single employee waste hours and hours every year on enrollment junk. It’s hard for me to fathom someone operating in our current system and just thinking…it’s fine? It’s a total disaster! I’m not interesting in forcing doctors to do anything…but I do think many doctors would prefer a system where they did not have today’s reimbursement nightmare.
Doesn’t Elon earn the money he receives? He isn’t getting reverse taxes. You can argue whether it is useful to buy his company’s services but I for one think starlink is pretty freaking amazing. You’re also very correct in my opinion that we have plenty of waste. The aforementioned Mr Musk claims he can help with that. I wish him luck.
Dr. Dahle asked the question is healthcare a right? I believe you’ll find people all over the map on this. How broad do we define healtcare? Does everyone get equal amounts or quality? I think ultimately we’ll move to a two tiered system where you get a basic level paid for by taxes and those that follow WCI principles and become wealthy can and likely will pay for better and our faster care outside of this system. I’m very interested to hear if you or others have better ideas. I’m certainly in favor of improving the value citizens get for their taxes but the prior comment from Trey indicates that its unlikely we all agree on what is appropriate to spend tax money on and many people would prefer to just have lower taxes and decide how to spend the money themselves.
“To take one example, Elon Musk, a very wealthy person, is the largest recipient of U.S. federal dollars.”
Stephanie, your example tends to point me *away* from having the federal government take a larger role in healthcare, since it will either use the funds inefficiently or to further enrich the very wealthy. (This is not the entirety of my view, but your example of Elon Musk undermines rather than supports your argument).
Also, the “reimbursement nightmare” that many doctors would prefer to do without has its roots in the Great Society programs — very well-intentioned services that have proven to be unsustainably costly and highly detrimental to the actual delivery of healthcare.
I still can and do give away treatment for free. A Colleague shared in an locally hosted thread just this week about how she gave away free work to a patient that had recently lost a home in a fire. Dr. Workman himself commended her. At least in the n of 1, we are all driven by profit to pay for our personal wants and needs, but for my DSO, docs are always able to do the right thing for the right reason. Being profitable gives me the freedom to decide if I and when I want to do charity. I earn a good living, so I’m happy to give away my services at a local free clinic to pay forward the blessings I have. I still continue to give away services when the situation touches my heart. I’ve never once been asked about why I was giving the service away by any “bean counters”. I’m sure many negative commenters live in communities that have hosted Free Dental Days, where Heartland teams donate the time and talents to give back. It’s about the culture, not the practice ownership model.
I know that you and many other very generous practitioners in health care do good work like this. I also know that millions of Americans need dental care and don’t get it. Private charity is not getting people enough of the care they need. It doesn’t do the job in health care, it doesn’t do the job in preventing people from going hungry, from having to sleep rough, or having other basic needs met. It’s not enough.
The question is how much is enough. For example, most cities have a food bank where you can walk in and get 3 days of groceries, no questions asked. Plus soup kitchens, food stamps etc. It’s a political question as to when you get there, but at some point government/society/charity is enough.
Clearly we’re not at enough when it comes to health care in the US. Every day there are people who do not get the care they need. I don’t think this is a philosophical debate.
Well, let me argue the other side and maybe that’ll help you see how a reasonable person could disagree with you.
If health care is a right, you should be able to walk into an ED and demand to be seen for free. Thus forcing me, as an emergency doc, to work for free. Why should docs have to work for free if hotel staff, grocery store staff, hotel owners, and grocery store owners don’t have to? Or should we be able to just walk into a grocery store and take out what we want? And if I can get whatever I want without money, why bother working at all?
And if somebody wants to buy a video game instead of a cervical cancer screening with their money, who are you to tell them they can’t?
I don’t believe in forced labor for doctors or anyone else! And I was pretty clear that I am not claiming “rights” (you’re the one bringing that up!) But…you seem to make some silly assumptions about financing and paychecks for healthcare workers under a dream scenario where the US provided some healthcare to everyone. Lots of people check out books from the public library for “free” and the library workers all get paid. We drive on non-toll roads (no charge out of pocket to use the road) and the road maintenance crews all get paid. We have no tuition for public elementary schools and the teachers all get paid (a little). The specific financing mechanisms for each of these examples are different from one another, and also different in different places in the country, but the workers get paid, as they should. Being from outside the industry, my impression is that many workers in the healthcare sector need to be paid more and have better work conditions. I think we could reallocate existing resources to accomplish that. Wouldn’t it be cool if you didn’t have to pay auto premiums for potential medical expenses?! (ditto for workers comp)
Will there be unicorns and rainbows too in your new system where we all get free medical care and the docs all get paid more? At a certain point people may work less if taxes are high enough to pay for everything no matter how much they work.
“ if I can get whatever I want without money, why bother working at all”
Jim- are YOU the person arguing for forced labor??? 😲
I am not a healthcare economist, but analyses such as those done by the CBO demonstrate that anyone being serious about the numbers will understand that we do have the financial resources to provide universal healthcare.
“Bottom-line estimates should reassure those concerned about the economic feasibility of single payer: The CBO projects that such reform would achieve universal coverage, bolster provider revenues for clinical services, and eliminate almost all copayments and deductibles—even as overall health care spending fell.” (https://pnhp.org/news/congressional-budget-office-scores-medicare-for-all-universal-coverage-for-less-spending/)
We can spend our money on health care or we can spend it on aircraft carriers and Social Security and interest payments. So far we’ve collectively decided the latter is better. That’s politics.
Stephanie,
Several of the libraries in my city have become the local hangout spot for some of the homeless population, with litter on the front steps and worse in the bushes. I think twice before bringing my children there. Our roads severely under-maintained, with a pothole taking months to fix and a 2-mile highway project that has been going on since Moses. Most of our schools are underperforming, with the exception of a couple of elementary and charter schools, and practically every professional I know sends their kids to private schools at considerable expense. None of these examples makes me excited about the prospect of government-established universal healthcare.
Re: the interest in data. This is not a peer-reviewed journal article but my impression is that KFF does generally good reporting and is the kind of thing that often is the inspiration for academic research: “Edwin Zinman, a San Francisco dental malpractice attorney and former periodontist who has filed hundreds of dental lawsuits over four decades, said he believed many of the worst fears about private equity owners had already come true in implant dentistry.”
https://kffhealthnews.org/news/article/dental-implants-investigation-failures-unnecessary-healthy-teeth/
Wouldn’t surprise me. They’re definitely seeing it in medicine.
I joined Heartland Dental out of residency. It was a great choice for me and has resulted in a very fulfilling career both clinically and financially. Corporate ownership of medicine, pharmacy, veterinary, and even mortuary services is wide spread and not at all a new phenomenon.
Thanks for sharing. Glad your experience has been good.
Thanks for this post. I recently came into considerable wealth after sale of a business, and have been considering investing in private equity. As you note the role of PE in healthcare has often been demonized, which has kept me from investing for ethical reasons, but your post is a good counter argument.
You mentioned you decided against buying stock in Heartland at the time of the sale. Was this a purely financial decision, or was there a moral element?
Personal finance is personal. We didn’t buy in with our proceeds because we wanted to get debt free. It wasn’t the most financially correct decision but it was right for my family. It allowed my wife to take a nice maternity leave and work back in slowly. As an investing nerd and former FIRE and Mr Money Mustache devotee I set us up for lean FIRE over the next few years. I wasn’t sure if I’d stay in the career past 40. The change I wrote about also changed my perspective. I’m not alone. Many docs I know continue to practice because it’s rewarding and enjoyable well past financial independence.
My financial plan is just broad based boring index funds. I don’t need any home runs. I sleep well hitting singles consistently.
As for investment do your diligence obviously. I can only speak for my own experience. I’m sure there are some bad actors in the space. Our company culture is led by doctors and that makes it much more doctor friendly.
If I could go back in time and talk to my 25yo self I’d tell me to buy in. At the time I affiliated at age 36 however my life and risk aversion had changed.
I’m curious- does your wife still own her own practice? I’m thinking this changes the equation for your family significantly.
No, I do not. Mine was part of the sale and a merger. I have also continued to work for Heartland, although I have not been working for over a year because of every dentist’s fear (back injury – as in I cannot even pick up my own baby or sit in a chair comfortably), an experience which has only reaffirmed that this was a good decision for us. And yes I have disability policies, but thankfully have not had to wake them up.
Wow, what a refreshing take to hear! The profession has changed so much in the last 10, 20, 50 years, so it’s hard to compare apples to heavily-in-debt apples when it comes to practice modality. Thank you for sharing what your debt story looks like and how selling your practice actually brought you more peace of mind and probably better quality patient care since you’re not stressed about making payroll, insurance fee schedules, and inflated supply costs! Great information here, Brendan.
This was helpful! Great dentists are great dentists, regardless of the ownership of a building or the LLC. Keep doing what you do doc and keep killing it
Thank you for the post, Brendan, and I am glad that you’ve had a good experience with Heartland and made the best decision for you and your family. My general thoughts are: not all DSOs are the same, the growth of the DSO model will more likely hurt doctors and patients in the long-run than not (though I hope against this), and the growth of the DSO model and corporate dentistry in general is happening and will continue to happen, particularly in urban and suburban areas with higher populations and more desirable locations for dentists to live.
There are a wide variety of DSOs out there and both myself and colleagues have had varied experiences. While some situations allow for doctor clinical autonomy and do little to compromise patient care, there are many DSOs that have the opposite effect, with focus on the bottom line being the likely main culprit. And while in your experience staff retained their jobs and eventually more staff was hired, I know of other examples where DSOs maintain the status quo for a short time but eventually aggressively cut costs, whether through lay-offs, reduced employee benefits, switching to lower-quality vendors and labs, etc.
As you mentioned, gone are the days of a dentist emerging from their education with minimal loans and a landscape where starting a practice or being mentored by an older dentist before eventually buying that practice was common. The explosion in student debt is partly to blame for this: when a DSO practice is willing to pay you more right out of school than a smaller, privately owned practice and you have six-figure debt, it’s hard to turn that down. And while it sounds like your DSO has good mentorship for younger doctors, that is not the case for all of them. I know many young doctors who really need that mentorship and oversight their first 1-3 years out of training but do not get it at DSOs. And younger doctors are more often than ever jumping around to different practices and that can hurt both their clinical growth and also have downstream effects on the patients and staff as the DSOs shuffle through different doctors.
To conclude, I feel that DSO growth is inevitable and I hope that in the long-run the field of dentistry continues to be a rewarding path for dentists, aspiring dentists, staff, and most importantly that their model is generally able to deliver effective and compassionate care to patients.
Gino I think you’ve made very thoughtful comments. I continue to find my position so rewarding because I get to do my little part to mentor younger docs. As a profession, supporting those coming after us should be a priority and I’m proud that mentoring is baked into our culture. Part of my goal in writing this is to reach those newer docs and for them to see that it is possible to work in the DSO space and find great career and financial satisfaction. Docs have freedom of movement. They can and should find the right spot. For me and many of my colleagues it’s with Heartland. I believe those companies that are not in it for the right reasons will ultimately fail. Recently Walmart closed all 51 of their Healthcare centers. Smile direct club shut down. Both of these enterprises had plenty of financial backing. I don’t know why they ultimately shut down but I bet it was harder than they thought to do what Heartland does well.
Besides, if Heartland is as awesome as a bunch of docs here are saying, wouldn’t you want them to grow and be successful and run the crappy DSOs out of business?
I joined heartland right out of dental school. I joined with the primary reason of having a great amount of mentorship and that is exactly what I was able to get. I am 2 years out of dental school and currently doing molar RCT, surgical extractions and much more. I fell very comfortable doing these things because I have received an immense amount of guidance. However, like with everything, you get what you put into it. There are mentors available in heartland to teach, but I had to be willing to learn and put work into learning.
Great article Brenden! Happy to call you a friend. What is incredible is that without a company like Heartland our paths would have NEVER crossed. While I don’t have the exact same backstory as Brenden’s, I have similarities… many, many Dentists do. Some continue down the path of ownership, some decided to affiliate. Both paths are right for them and two things can be true. But before folks throw shade, it has been my experience as a dentist for 16 years (nearly 6 with Heartland), people get defensive when they are close minded and have a big ego. So before people continue painting Heartland like ‘all the other DSOs’… your statements are misguided. Period. There is no ‘censorship’… that’s laughable actually. Heartland is a company based on a solid set of core values and unwavering principles. We are doctor led. When I affiliated almost 6 years ago, zero changed in my day to day dentistry, and my team was taken care of. Same quality of work using the same materials… in-fact, got a bump in pay due to the efficiencies of Heartlands systems.
The rush to criticize or defend this piece and its author is as predictable as it is boring. The caucusing of “For DSOs” and “Against DSOs” provides some tribal validation for each camp but the far more interesting and important discourse in my opinion is HOW did we get here and WHAT can be done about it?
To the degree that one perceives DSOs as a monster, rather than castigating those consumed by the monster, instead ask “who created this monster?”. Who allowed dental school to go from $58,000 in 1980 (that’s inflation adjusted) with 1-2% interest to over $300,000 today with 6-8% interest? Who allowed non-dentists to own and operate practices? Who seeded the control of fee schedules and reimbursements from those doing and receiving the treatment to those paying for the treatment? Who decided that to graduate dental school you only need to know how to fish, not how to operate the fishing boat?
Of course the author sold his practice to megalithic corporation, that is completely understandable given the present circumstances facing most early and mid career dentists. His story is relatable and his decision is rational on both a human and economic level.
Our profession taught him how to fish (dental school) and our industry allowed, even encouraged him, to then purchase a cruise ship. Our culture says, “Hey you know how to fish, that’s an ocean thing, you must then know how to operate a cruise ship, that’s an ocean thing too.” Turns out, he hated operating that ship and servicing its massive debt while also trying to fish for food, and why wouldn’t he? Those are two totally different skill sets, one he was trained for at great cost, and one he was not trained for at all. Whose fault is that?
To hear him criticized by those who paid 1/6th of the cost for their education and whose past industry allowed those fishermen to buy affordable fishing boats (homes, cars, practices), is neither helpful nor interesting. The author just wrote a story saying that he was drowning and I’m not sure how it helps to blame him for drowning, criticize him for grabbing a lifeline, and demeaning the entity that threw him that line.
Instead let’s ask, “Why are so many of the new generation of dentists drowning in the first place?”
In my view, a lion’s share of the fault falls at the feet of those doing the complaining, specifically those in state and national organized dentistry.
What more important role is there for the ADA that to protect and preserve the integrity of the profession for practitioners and patients? And where have they been as the professional has changed so radically under their watch? What have they done to mitigate the rising costs of dental school, the total failure there to provided business and financial literacy training, to require owners be actual operating dentists, to lobby for inflation adjusted fee schedules, to keep overhead costs from ever increasing, etc?
The abdication of the ADA’s duties are only one of myriad variables and causes. There are many other generational, economic, and cultural reasons for this shifting landscape in dentistry. My point is that we would be much better served to identify them and advocate for changing them than we will ever be by blaming and shaming those who are harmed by them.
Beautifully said Tyler! I never wanted to be tied to the anchor of my practice to keep your cruise theme going. I just felt like it was what I was supposed to do.
You have said everything with this post. The cruise ship metaphor is about as accurate as it gets. Thank you for this!
I wrote my reply above before getting to read yours, but you hit the nail on the head. The national/regional/state level organizations have absolutely failed in this regard (extremely low interest rates over the last 20 years is the other causus belli, which forced pension plans to shift money to private equity in order to hit their investment targets, then private equity had to go out and figure out how to deliver that return through car washes, restaurants, dental practices etc).
Even though I’m sometimes surprised by acquaintances who have sold to DSOs, I certainly don’t “blame” them. They can continue to be the same dentist they were the day before, and outside of that their primary responsibility is probably to their family and not to an unnamed, unknown future dentist. However, enough make that decision and patient care will likely suffer when the next generation joins a professional almost entirely bereft of true private practice.
How did Heartland deal with the 25% holdback during Covid when the office was shutdown?
As I understand it, unless you keep up production, the holdback goes away.
Many offices boomed from June-Dec, 2020, once they got back to work, but I always wondered about the above situation for those who did not.
That’s a good question, that I don’t know the answer to, but I bet it was handled in a fair manner, because I have not heard one person complain about the issue and Heartland kept all of us receiving our salaries during the shutdowns. I felt very well cared for as a doc through the whole process and reassured that while I collaborated with my colleagues on a regular basis we would come through an uncertain time as well as anybody if not better.
Given their circumstances outlined in the column and in the comment section, I think the Drs. Hallissey made a very prudent choice to sell their practices. My first comment did not criticize that choice, or Heartland dental, in any way. Not all owner-operator dentists provide quality, patient-centered care, and not all DSOs or DSO providers are “evil”.
Self-regulation in a profession as many state dental practice acts are codified, were established when, and assume that the provider was/is in control of all aspects of practice. As the industry has changed, a freshly-licensed dentist assumes all the same risks and responsibilities, yet has no say in operations and lacks the experience to judge what is acceptable when hired by a corporate or DSO practice.
I hope they are all so fortunate a to have as good an experience as the Hallisseys. But we know better. There is patient care, and then there is business.
Comment updated at commenter request:
I have heard few positive experiences of selling to a DSO but many, many negative experiences of selling to or working for PE.
The Heartland recruiter at our school stated that associates are typically paid 25% collections, which seems low. Certainly lower risk but lower ceiling compared with owning. I worry that new grads are getting less experience in dental school and higher debt, making them vulnerable to accepting work in unideal situations, Whether that is with a DSO or private practice. This is obviously a multi factorial issue with no single solution, but shrinking opportunity to own for new grads does not make me optimistic for the future of dentistry.
I am glad it worked out for you personally.
Careful with specific negative statements about specific individuals or companies. WCI does provide IP addresses etc. when subpoenaed. It’s okay to state facts and clearly stated opinions, but libel/defamation laws apply even on seemingly anonymous internet pages.
Fair point. I will clarify that I do not know what their intentions are for opening up a dental school (they may be altruistic and increased dentists could lead to increased access to care) and from other comments it seems like there are plenty of dentists that want to stay long term. So they are obviously doing something right for people to have that desire.
The Heartland recruiter at our school stated that they typically start associates off at 25-30% collections. Not sure if that is still accurate.
All GP heartland docs get 25% collections when that number is over the base salary. 25% is Non negotiable. While the base is (depends on how desperate or hard to fill the job is.) $120k-$150k base is avg in a major city. More rural places you can get $200k.
After bonus above your collections if your office is “profitable” you can get profit sharing (very IFFY).
Pretty much after the extra profitability it will be max 30%.
Overall heartland is a good place to start for a brand new doc. Get experience and CE. If you don’t become a stockholder the income is kinda bleh esp for working so hard. Can go to private practice (as associate) and make more with less craziness.
I’ve been with Heartland 8 years. Many other commenters have been for that long or longer with no intention of leaving. Doctor retention year over year is high. Not everyone is a fit, and that’s ok. I want all of my colleagues to find success and stay long term. That makes us a better company. I started to earn more money after I affiliated, because I learned how to run a business better than I had before. I am amazed at what some of my colleagues are able to accomplish when they combine their amazing clinical skills with top notch business support.
I know a colleague that left for a higher percentage and later came back saying 35% of nothing is still nothing. The percentage is not the final influencer. What is the patient flow like? What expenses are charge to the doctor? Is an owner taking planned work from the associate? I worked as an associate before buying my 1st practice. I was happy for a year until the practice sold to another private owner. The new owner started pushing me out for no reason other than financial reasons. It was stated before and definitely true for me. There is no guarantee that an owner will treat associates fairly. Within Heartland new doctors are treated as equal colleagues. I have welcomed several younger doctors in to work with me over the past 8 years and always made a point to let them know that while I’m more seasoned and will provide leadership ultimately they have equal footing with me and their opinions are just as valid as mine.
Also WCI, feel free to delete my above comment. I’m not sure how to/if I can on my end
I’d rather not delete it completely as it generated a useful discussion. But if you want to modify it out of concern for libel or something, let me know. Or just post it as a reply to this and I’ll replace it.
Thanks WCI. If you want to replace it with this:
I have heard few positive experiences of selling to a DSO but many, many negative experiences of selling to or working for PE.
The Heartland recruiter at our school stated that associates are typically paid 25% collections, which seems low. Certainly lower risk but lower ceiling compared with owning. I worry that new grads are getting less experience in dental school and higher debt, making them vulnerable to accepting work in unideal situations, Whether that is with a DSO or private practice. This is obviously a multi factorial issue with no single solution, but shrinking opportunity to own for new grads does not make me optimistic for the future of dentistry.
I am glad it worked out for you personally.
After reading the comments here, it seems that I was mistaken in my previous comment. It seems like Heartland is one of the good players in the game, and that they treat their dentists well, which results in a high retention rate. Sounds like a good/sustainable business model, and I was wrong to assume ill intentions about their opening of a dental school. I think there will always be room for organizations that let docs have clinical autonomy and that focus on patient care over profits.
I worry that too many dental schools will lead to over saturation and high debt, which sounds like a recipe for over diagnosing and burn out in order to pay off said debt.
25% collections seems low when you can own your own practice, but I understand people not wanting to deal with the headaches of owning by themselves. And with a base salary and incentives and a good work life balance, the high retention rate is understandable.
There’s no guarantee that you can run a private office with s lower overhead. Early on I had large expenses and sometimes didn’t pay myself. My profitability improved after affiliation because I had business support that I never had or knew about before.
Yes, I think people who haven’t owned a business have no idea that some months your pay is non-existent or even negative. Many years WCI has had a month with a “negative profit”, usually but not always in association with paying big bills for WCICON. You always worry “What if we had 6 of those in a row?”
Is this article a recruiting and sales pitch for Heartland? It seems odd that we have a few general anti-DSO posts (including my post above) and then a few posts gushing about selling to or working for Heartland specifically.
I would expect a more balanced mix of people who had good experiences (and poor experiences) working for Heartland, but also Aspen, Western Dental, PDS, MB2, etc.
I find your comment insulting to me as the CEO of WCI. Have you ever read anything here that was an advertisement that we didn’t identify as an advertisement in some way or disclose the financial relationship? If so, please let me know and we’ll get that fixed ASAP.
Since there is no comment at the top or bottom of this post saying it is sponsored or an advertisement or whatever, you can safely assume we did not get paid to run this post. While the guest author’s paycheck obviously comes from Heartland (as disclosed) I don’t think he got paid anything extra to spend the time writing this to launch this important discussion, much less participate in the discussion.
If you would like to share your experience working for Heartland, Aspen, Western Dental, PDS, MB2, etc. please do so.
My thoughts are my own. I have NO remuneration for writing this. Nor do I get paid for taking my time to talk to doctors interested in joining heartland, meeting with dental students that are getting ready to join the workforce, or participating in webinars, etc. I do it because I mean everything I’ve said. I appreciate the Heartland is a very open company. I do not know about the others, but I would love to have a more honest and open discussion for the betterment of our profession. I really do hope that there will be a winnowing effect and that focuses on profit over ethical and responsible care would fail. Shining light on the differences between companies could be a good start.
There is nothing wrong with profit. Many or the most profitable providers I know are also the most philanthropic. I don’t know any Scrouge McDuck’s swimming in bathtubs of gold just scheming away at how they can scam a few more bucks from the unsuspecting public. In this day of social media, how long could that really go on?
If you hurt people, don’t treat them fairly, are not empathetic, not skilled, and just trying to steal from them word would get out, FAST.
I strongly disagree with selling to private equity, especially for physicians. While the experience may vary by specialty, my perspective as a nephrologist is based on the significant downsides we faced when our practice sold to PE and joined a Medical Services Organization (MSO):
1. Financial Impact Post-Sale: We received a lump sum equivalent to about 3–4 years of income. However, in return, we now pay approximately 25% of our revenue (not profit) to the MSO, plus an additional 15% for management services and EMR. Adding our usual overheads, this amounts to around 75% of revenue—leaving little room for meaningful income. We were told this is going to be negated by Income repair due better contracts, more efficiency etc- NOTHING happened, their solution for INCOME REPAIR- work more
2. Salary Drop and Burnout: After the initial payout is gone, there is a steep drop in salary. This forces physicians to work significantly harder just to maintain a reasonable income, which leads to increased burnout.
3. Rising Overheads: There’s a marked increase in middle management, adding layers of bureaucracy and cost without improving patient care or practice efficiency.
4. Hiring Challenges: New graduates are reluctant to join practices with such high overheads (over 70%), making recruitment incredibly difficult.
5. Loss of Autonomy: This cannot be overstated. Decisions that used to be made by physicians are now often dictated by administrators, leading to frustration and a loss of professional satisfaction.
6.Opaque Financials: Despite being shareholders in the MSO, we rarely (if ever) receive clear financial updates or insights into the organization’s performance. It feels like operating in the dark.
While private equity or MSOs may work for those nearing retirement who want to “cash out,” for anyone mid-career or younger, it’s a trap. The short-term financial gain comes at the expense of long-term stability, job satisfaction, and autonomy. My advice: RUN AWAY unless you’re on the verge of retiring. This model is not sustainable for the future of medical practice.
Thanks for sharing your experience. Very helpful. Like you, I’ve heard this story many times.
This sounds like a terrible deal. I would not like that either. I sincerely hope that companies like that will fail. I write to share that it is possible for a better way. We as doctors must be treated fairly. I enjoyed reading this recent article on AI in Medicine: https://www.whitecoatinvestor.com/artificial-intelligence-doctors/
I’m optimistic that AI, if used appropriately, will continue to help us improve care for patients. I’m optimistic that many of these middle men and gatekeepers will get cut out and we can get real time feedback on how our diagnoses and results match up to best practices while spending more time with patients and less time doing paperwork.
Sam –
Thanks for your thoughts.
I have an honest queston for you – if these places end up being so bad, paying under market rate, and are difficult to recruit to as you say – then what happens as the practice ages?
Logic would say profits/revenue would fall as less docs join on, and the practice would eventually wilt and die.
So doesn’t it seem that the market should (eventually) take care of these issues?
There are two sides to every story. This post was so pro-DSO, that to balance things out, I would enjoy reading a blog post from someone who didn’t think the Kool-Aid tasted so good. The debt burden of new dentists is a serious problem. In my opinion, promoting DSO’s as a solution to this problem is not in the best interests of our profession. Cognitive dissonance is real.
Great. Here’s how to submit it:
https://www.whitecoatinvestor.com/contact/guest-post-policy/
Great Post Brendan! Right off the bat, I will admit Heartland is not for everyone. This is the greatest time in world history to be a dentist, so success can be found everywhere and takes many forms.
Mission work was one of the main drivers for me to become a dentist. My dad is a dentist and I was fortunate to travel with him to Peru many times and assist him on mission trips when I was growing up. Heartland has not only encouraged, but accelerated my passion for mission work. I lead Heartland’s Honduras mission trip efforts, and helped start our Kentucky mission trip efforts. I am vice chair of the Heartland Dental Foundation board and a member of our mission committee.
Before Heartland, I was performing mission trips, but at a small level. Now we are taking multiple trips a year with 16 doctors on each trip. I believe we are just getting started as well. I hope the previous commenters read this and consider their harsh judgement on the ethics of 2,500+ dentists who they do not know. As a group, Heartland is doing incredible things domestically and around the world.
Aside from mission work (my passion point), I get the opportunity to teach new doctors and accelerate their career. Helping the next generation is very rewarding. I would most likely not have this opportunity to expand my career without Heartland.
Last point, financially, it has been a wonderful 11 years with Heartland. The financial peace combined with a good work/life balance has created a wonderful level of margin and peace in my life and the lives of my family. I feel like I am living a dream.
Thanks Brendan for the post! Keep up the good work!
Thanks for sharing your experience.
Why did you have high travel expenses that need to be controlled prior to the sale? As a non dentist, im not sure i understand what goes into travel budget of office owner.
The business entity pays for flight and lodging and a continuing educating conference in Hawaii or Colorado or Florida; the doctor gets a few days or half days of Continuing Education credits and spends afternoons or a few days golfing, skiing, fishing, etc. The business doesn’t pay for the green fee or lift ticket or bait, but the trip wouldn’t happen if the travel and lodging weren’t deductible.
You guys take your fair share of lumps from all different sides, so consider this another jab.
I’ve been grateful throughout my career to have benefited from Dr. Dahle’s books, blogs, and recommendations, and bogleheads posts because they have been insightful, even-handed, and true. However, today’s post scraped the bottom of the editorial standards barrel–and it stinks a little!
Normally, I would expect to see the faint grey words “Advertisement” when I read outright propaganda like this.
DSO’s and Private equity companies might make negotiations with insurers and suppliers more favorable, but the large weight of management fees, real estate management fees, IT fees and whatever other creative fees loom large, pressing down on the other end of the scale. Additional corporate structure adds layers of bureauocracy in adjusting supplies, obtaining repairs, hiring, firing, or any of the other things that we do to keep the doors open. Those things still must be done.
Dr. Hallissey trumpets the same old tropes about what makes dentistry hard and how our corporate saviors will make all the hard things better. But the hard things of dentistry are not running the business. Payroll and bookeeping are not onerous with modern web based applications. They take a few minutes a week and help an owner keep tabs on the workings of the business. Sure there will be air conditioners that break, equipment will always wear out, roofs and parking lots will deteriorate. These are not hard things to fix–they only seem difficult after dealing with the stuff that actually is difficult–the stuff that dentists do when with their heads down and fingers wet–taking care of our patients and staff. The DSO doesn’t eliminate the hard stuff. DSOs do the easy stuff and tell you it was hard.
The hard stuff is to care for patients and staff with precision and compassion. Additonal layers of middle managemnt does not improve anyone’s ability to do these.–it makes the important things that we do harder while taking a nice chunk of the profits.
If White Coat Investor still holds to the goal of helping those wearing the white coat get a fair shake, this article would have been better left in the reject pile. Esau sold his inheritance for dinner. Too many dentists are trading their autonomy for a deal that looks awfully similar.
We did not get paid to run this piece.
I approved this post to run personally because it had a pretty unique perspective on DSOs, significantly different from this one we ran not too long ago:
https://www.whitecoatinvestor.com/dso-private-equity-dentistry/
I think the discussion happening today in this comments section is an important one to have. If you disagree with the post, then comment away (politely) and share your experience, stats, data etc.
But it’s insulting to me to call this an advertisement. We can and do sell 5 sponsored posts on this website every year for the scholarship (100% of proceeds go to the WCI scholarship). We clearly identify those and have been very careful for the last 13 1/2 years to carefully identify our conflicts of interest. Don’t you think if this was a Heartland advertisement we’d reveal that relationship in a note on the post like I have for the last 13 1/2 years? Is that how little you think of us? If so, why do you keep coming back to read more?
If physician/dentist employers start wanting to advertise here, we’ll probably take their money. But none have ever wanted to so far. It’s ridiculous that a hospital spends $50K or more on recruiters to hire a doc these days and none of that $50K seems to ever end up here.
With a divisive election in our recent history, is it not ok in 2024 to say that 2 intelligent, well educated people can fall on opposite sides of an argument?
I still have friends that run wonderful and successful practices. I was at a recent implant conference with Dr. DiBona, who was recently published an aforementioned article on here with a differing opinion. She’s a brilliant and talented doctor. We can be friends and still disagree on this issue while we both continue to provide great patient care and provide a wonderful life for our families. Lumping us all together is no more appropriate than saying all (choose your political party) members are bad.
This article feels more like an advertisement for selling to private equity than genuine advice. The author seems to be justifying a string of poor decisions- jumping into private practice without much preparation, taking on huge debt, and not having a solid financial plan. Both the author and their spouse are dentists; wouldn’t it have made sense to work as associates for a few years to gain experience and stability first? And the spouse working 30hr side hustle job as an associate while running a private practice? Sounds like they jumped into something they were not ready for.
The claim about doing their own books to avoid embezzlement is also absurd. If you’re concerned about that, the solution is to hire trustworthy professionals and set up solid checks and balances, not waste time micromanaging. The narrative feels like fearmongering, with exaggerated risks meant to nudge dentists toward selling to DSOs. Instead of taking responsibility, the article paints corporate buyouts as the only way forward, which does more to normalize corporate takeovers than to offer real solutions for struggling dentists. I feel like this article should have been screened prior to being published…
Thanks for sharing your perspective in a reasonable, polite way.
What “screening” would you have preferred to see on this article? Should I email them all to you for approval? Guess what? When regular WCIers send me well-written stories about their personal financial lives and decisions, we usually run them, especially if they offer controversial perspectives likely to generate useful discussions like this one that is being had right here right now.
Would you really feel any differently about this article if it had not named Heartland? And see comments above about advertising.
If you are that interested in more of the story, I’m happy to share.
Both of us worked as associates. I was quite happy until the practice was sold to another solo owner. The new owner was not fair to me. Work that I diagnosed and planned disappeared from my schedule. My pay was artificially getting lowered by 50 to 70%. Due to a non-compete, and the economic downturn in the the mid to late 2000’s my options to move to a new practice were limited.
So I purchased a practice, because at least I knew someone else would not be stealing my patients out from under me.
On embezzlement, I have 3 good friends that shared tales of embezzlement with me. One case was by the professional hired to handle practice sale. It’s not all stealing a twenty, white collar crime happens too.
The side hustle was about debt. My wife had private school debt that felt crushing to her. She was grinding out extra work to try to eliminate it. Dr. Dahle preaches writing big checks and she was doing it. We also wanted to start having babies. Working her grind and having babies would not have worked for us. Without the debt she felt free to cut back and focus on the family for a season.
If you want to be mad about something, how about the travesty of not supporting women that want to have children when their fertility is at its peak, but are not able to because our society pressures them into focusing on career during those years and then charges them 10s of thousands of dollars for fertility treatment once they’re finally at a point that it is socially acceptable to have babies.
I wish that we had married sooner and started a family sooner in retrospect. I wish we could go back in time and tell her to go to the state school that would cost her half the money, but obviously we can’t.
I hope that sharing this will help others that come after me make better decisions.
Did I make some poor choices in retrospect? 100%.
Did I course correct and find a path that serves my family well? 100%
If you have a secret to never making poor decisions, that would be an article worth reading.