A DSO, or a dental support organization, is an entity that contracts with dental practices to provide administrative, marketing, and/or other business management services for the practice. DSOs do not perform any clinical services. Instead, the services they provide are strictly associated with the business operational aspects of a dental practice.
DSOs are becoming an attractive option for dentists, as they can dramatically reduce the start-up costs associated with starting a new practice. Some DSOs also offer networking, continuing education, and mentorship opportunities.
Common examples of DSO models include:
DSOs with internal management – dentists within the practice are the sole shareholders in the DSO (also called dentist-owned and operated group practices, DOOs).
DSOs without private equity ownership – DSOs without private equity ownership are owned by one or more individuals who may or may not be a dentist. Their revenue is based on the fees earned from providing practice management services.
DSOs with private equity ownership – these function very similarly to those without private equity ownership but are partly or wholly owned by a private equity firm and are usually focused on maximizing the value of the DSO to make it more attractive for acquisition.
Keep in mind that the two DSO models with third-party ownership have revenue interests that are not necessarily aligned with the clinical interests of the practice.
Source: DSOs vs. Texas’ Corporate Practice of Dentistry Doctrine: What You Need to Know / JD Supra