In this episode, DrBicuspid editor-in-chief Kevin Henry interviews Chip Fichtner, co-founder and principal of Large Practice Sales, about the current state of practice sales and the role of invisible dental support organizations (DSOs) in the industry. Fichtner explains how invisible DSOs partner with dentists to provide support and resources while allowing the dentists to retain ownership and autonomy. He highlights the growing trend of younger dentists partnering with invisible DSOs and the benefits of such partnerships, including increased profitability and access to new technologies. Fichtner also emphasizes the importance of understanding invisible DSOs and their impact on the dental industry.
“Invisible DSOs want to become your silent partner by buying anywhere between 51 and 80% of a practice for cash upfront. Doctors retain ownership in the balance and continue to lead their practice with their brand, their team, their strategy and full autonomy for years or decades,” Fichtner said. “One of the major changes we’ve seen in the last three years is the number of younger doctors that are partnering with invisible DSOs. In our billion dollars of transactions in the last 24 months, over $150 million of those transactions were for doctors in their 30s. So this is not a retirement strategy. It’s not selling. It’s not a transition. It’s not an exit. It’s a partnership where independent dentists can benefit from the resources of a larger partner but not be homogenized to fit some sort of corporate standard, not be micromanaged and continue to run their practice but do it with the support of somebody bigger.
“Those support services are getting more and more relevant. We have, for instance, a client on the East Coast that does $4 million in collections. It’s all insurance-based. And his new partner is getting reimbursed by those same payers at a 20% higher rate. So the profitability of his practice this year, because he just partnered with them, will grow by about $800,000 just because his new partner has leverage and has been able to get more money out of the insurance company. That’s just one of the benefits of a partnership.”
Takeaways from podcast
Invisible DSOs are becoming increasingly popular among dentists, with over a thousand operating in the US. These DSOs offer partnerships that allow dentists to retain ownership and autonomy while benefiting from the resources and support of a larger partner.
Younger dentists are actively seeking partnerships with invisible DSOs, recognizing the advantages of increased profitability and access to new technologies.
Understanding invisible DSOs is crucial for all dentists, as they are rapidly growing and have resources that independent practices may not have access to.
Factors to consider before partnering with an invisible DSO include practice size, profitability, labor costs, and fee structures.
Podcast chapters
00:00 Introduction and Background
01:03 Getting Started with Practice Sales
03:14 Understanding Invisible DSOs
05:04 Trends in Practice Sales
06:19 The Role of Partnerships in Practice Management
08:54 Value and Timing in Partnering with Invisible DSOs
10:50 The Importance of Understanding Invisible DSOs
13:17 Factors to Consider Before Partnering with an Invisible DSO
14:13 The Impact of PPO Networks on Practice Sales
15:30 Conclusion and Contact Information
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