News and Updates

Forbes Article Claims State Anti-DSO Proposals Increase Costs and Decrease Access to Care

A December 2018 article in Forbes magazine boldly claims that “protectionists” in many states urge legislators to curb a dentists ability to contract with DSO’s. Here are some of my thoughts:

1. Legislators are facing increasing costs of health care. These costs are the single most expensive and the fastest growing budget item lawmakers have to deal with. We agree it is obvious. A 2016 American Dental Association Health Policy Institute reveals that in Nevada 17% of dentists affiliate with a DSO. In Texas the numbers are similar but in Arizona a whopping 19% of dentists are affiliated with a DSO! This data is 3 years old and some estimate that the numbers may be approaching 30% of dentists are affiliating with DSO’s. The question must be asked, If these DSO’s are the answer to containing dental health care costs why have these costs continued to go up?

2. The article recognizes the challenges facing state legislators, “Among the most pressing are rising health care costs and the lack of access to care that has become a crisis in certain parts of the country, particularly in rural areas.” A Journal of the American Dental Association reported, “Complete tooth loss has decreased by more than 75% for those aged 65 through 74 years over the past 5 decades in the United States." Further, “Improvements in tooth loss measures, such as edentulism and complete tooth retention, have been most significant among the nonpoor, whereas those who are poor have experienced fewer improvements.” So Americans are keeping their teeth well into their elderly years is something dentistry should be celebrating.

3. Patrick Gleason the article’s author continues, “Misguided proposals seek to limit a dentists’ freedom to contract with service providers”. These “arrangements free up dentists to spend more of their finite time focusing on patients”. Dentists always have and always will hire professionals to provide non-clinical support such as accounting, payroll, lab services, consultants, etc. Many dentists enjoy some, none, or all of these nonclinical aspects leaving them free to support their local professional community as they deem necessary. DSO’s seek to provide these services for their cut of the pie which can be as much as 25% perhaps even more. How can this be cost effective adding a 3rd party to all transactions? Is this unseen 3rd party fully disclosed to the patient who has no idea who really beneficially owns the practice?

Does the patient know that their dentist may be paid bonuses on how much dentistry they sell or add on? A July 2018 Bloomberg article reports, “Corporate dentistry has come under fire at times for pushing unnecessary or expensive procedures.” “In 2013, a US Senate committee found that some company controlled dental clinics were providing unnecessary procedures to children in order to collect more money from Medicaid.” So much for cost containment.

But, the Forbes article gets to the real story in the last 2 paragraphs. “ Global capital flows are expected to shift to the U.S. in the coming months and years, as federal tax and regulatory reform have made the U.S. more competitive, evidenced by the U.S. regaining its spot atop the World Economic Forum’s new Global Competitiveness Report.” So your local dental business has now become a target from those demanding their investment opportunities and those investment dollars must not be hindered.

So much for grow local, live local, shop local.

-Dr. Jackie Stanfield