AGD Impact December 2023

DECEMBER 2023 VOL. 51, NO. 12

Private Equity and Dentistry

Meet AGD’s New President Filling Schedule Holes

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December 2023 Private Equity and Dentistry

By Carrie Pallardy

Consolidation is driving changes in practice model patterns in dentistry. Private equity is a quiet but significant force behind the trend. Does the consolidation happening in the field herald the end of solo and small group practices? How does private equity investment affect patient care?

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2 Editor’s Note

Sunset or Sunrise… Where Do You Stand?

3 AGD News 4 New Dentists

From Employee to Employer

6 Legal Matters

OSHA and the Dental Office — Part Two: Infection Control and Occupational Exposures

8 Wellness

A Prescription for the Wellness of the Profession

9 Financial Management

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Dr. Merlin P. Ohmer Steps in as AGD President

By Caitlin Davis On Nov. 12, 2023, Merlin P. Ohmer, DDS, MAGD, took the reins of the AGD presidency during the annual meeting of its House of Delegates.

Having served two years in the presidential line as presidentelect and vice president, Ohmer is now in a position to continue the work he’s been a part of as well as put his own plans into motion.

Finding the Truth in the Controversial Employee Retention Tax Credit

10 Practice Management

Do You Have Holes in Your Schedule?

12 Member Spotlight

First-Gen Dental Student Brooklyn Janes Takes Over Student Perspectives Column

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Editorial Staff

Editor’s Note

Sunset or Sunrise…

Where Do You Stand?

W

e all go through good and not-so-good events in our lives. Making a living from dentistry, providing highquality services, evolving with staff and family issues can all create trials that sometimes feel overpowering.

I was recently mentoring in the Florida panhandle. The weather was hot but enjoyable. I took photos of the amazing sunrise early in the morning over the horizon of the sound. The water was emerald green, and the light from the sun rising was simply awesome. Any issues on my mind were forgotten for a moment as I sat in awe with my cup of joe. It sure made for the start of a wonderful day. Improving on that may be difficult to imagine, but, in the evening at precisely 7:40 p.m., the grand red-orange ball of the sun slowly sank into the water. I could not help but record my amazement of nature for a minute. It was so beautiful and so perfect.

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As I’ve established myself, I’ve learned to appreciate the smaller events in life.

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All of this makes me think of our beloved dental profession. I have mentioned in the past that I envy our young colleagues and the bright future that they hold in their hands. The sun is rising on their career. Even with incredible debt and uncertainty of the way they will practice, I hope they remember to step back and really enjoy the view. As the sun rises each day, clouds and rain may appear to dampen the vista, but that only makes those incredible observations even more impressive. Bad days lead to great days that are more appreciated.

On the other end of the spectrum is the end of the day — or the end of a career. A dramatic sunset can invigorate the psyche and help one

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realize that life has been good.

However, there is always the realization that tomorrow brings new experiences and new contests. To help accomplish a renewed sense of worth, one must also keep an eye on the future. This may mean evolving your dental techniques — or changing gears completely. Many dentists devote time to learning new procedures, becoming proficient and enthused again.

Others dedicate their energy to building relationships and elevating those around them. Still others dream of lying on the beach or walking the golf course. Whatever path you choose, you should feel that you did the best for yourself and those around you. Having no regrets is a pretty nice way to feel contentment.

As I’ve established myself, I’ve learned to appreciate the smaller events in life. Work is work, and dedication to the profession is certainly a pivotal part of myself, but giving more time to family and friends has become most important. Achieving clinical goals provides satisfaction, but taking time to enjoy my granddaughter drawing with chalk on the driveway or spending time at the park has been awesome.

None of us knows what the future holds.

We always hope for health and well-being for those we love and care about, but don’t forget about creating self-worth, either. Life is exciting.

Experiencing the sunrise and the sunset have equal value. Both motivate and energize. A perfect day is balanced with a restful, peaceful night.

Enjoy the moments.

As the sun sets on another year, I would like to thank you for being an AGD member and reading our publications. We hope we’ve furthered your career or at least given you some interesting tidbits to think about this year, and we look forward to serving you again in a bright 2024.

EDITOR Timothy F. Kosinski, DDS, MAGD ASSOCIATE EDITOR Bruce L. Cassis, DDS, MAGD DIRECTOR, COMMUNICATIONS Kristin S. Gover, CAE EXECUTIVE EDITOR Tiffany Nicole Slade, MFA MANAGING EDITOR Leland Humbertson, MA ASSOCIATE EDITOR Caitlin Davis MANAGER, PRODUCTION/DESIGN Tim Henney GRAPHIC DESIGNERS Robert Ajami Eric Grawe

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How to Reach Us Academy of General Dentistry 560 W. Lake St., Sixth Floor Chicago, IL 60661-6600 agd.org impact@agd.org 888.243.3368 312.335.3427 (fax) DISCLAIMER: The Academy of General Dentistry does not necessarily endorse opinions or statements contained in essays or editorials published in AGD Impact. The publication of advertisements in AGD Impact does not indicate endorsement for products and services. AGD approval for continuing education courses or course sponsors will be clearly stated. AGD Impact (ISSN 0194-729X) is published monthly by the Academy of General Dentistry, 560 W. Lake St., Sixth Floor, Chicago, IL 60661-6600. Canadian Mailing Information: IPM Agreement number 40047941. Change of address or undeliverable copies should be sent to: Station A, P.O. Box 54, Windsor, Ontario, N9A 6J5, Canada. Email: impact@agd.org. Periodical postage paid at Chicago, IL and additional mailing office. *AGD members receive AGD Impact as part of membership; annual subscription rates for nonmembers are $70 to individuals/$90 to institutions (orders to Canada, add $15).

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POSTMASTER: Send address changes to AGD Impact, 560 W. Lake St., Sixth Floor, Chicago, IL 60661-6600.

No portion of AGD Impact may be reproduced in any form without prior written permission from the AGD. Photocopying Information: The Item-Fee Code for this publication indicates that authorization to photocopy items for internal or personal use is granted by the copyright holder for libraries and other users registered with the Copyright Clearance Center (CCC).

The appropriate remittance of $3 per article/10¢ per page is paid directly to the CCC, Inc., 222 Rosewood Drive, Danvers, MA 01923, USA. The copyright owner’s consent does not extend to copying for general distribution, for promotion, for creating new works, or for re-sale. Specific written permission must be obtained from the publisher for such copying. The Item-Fee Code for this publication is 0194-729X. Printed in U.S.A. © Copyright 2023, Academy of General Dentistry, Chicago, IL.

AGD Corporate Sponsors Timothy F. Kosinski, DDS, MAGD Editor

Dental

Marketing

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AGD News Inside General Dentistry

AGD Podcast

Look for the following articles in the November/ December 2023 issue of AGD’s peer-reviewed journal, General Dentistry.

Create a Social Media Strategy

• Dental providers’ familiarity with and attitudes about alternative payment models in value-based care • A quantitative evaluation of the effects of potassium iodide on the clinical properties of silver diamine fluoride • The Controlled Substances Act: a primer for dentists To view past issues, visit agd.org/ generaldentistry.

Awards Nominate Colleagues for the 2024 Albert L. Borish, Distinguished Service and Humanitarian Awards AGD is seeking nominations for the 2024 Albert L. Borish, Distinguished Service and Humanitarian awards, all of which recognize exceptional achievements and contributions to the dental profession. Nominate a colleague today! Access the nomination forms by visiting agd.org/continuing-education-events/ get-recognized/awards. All nominations and supporting documentation must be submitted by March 15, 2024, to the AGD Awards Committee, Office of the Executive Director, 560 W. Lake St., Sixth Floor, Chicago, IL 60661-6600. For more information, email executive.office@agd.org or call 888.243.3368, ext. 4330. Award recipients will be honored during the 2024 House of Delegates annual meeting.

Rita Zamora is the founder of Rita Zamora Connections and Connect90.com, providing social medial solutions for dentists.

Since 2007, Zamora has provided social media marketing services to general and specialty dental practices. In a conversation with AGD’s podcast host, George J. Schmidt, DMD, FAGD, Zamora shares strategies that will help dentists promote themselves and their practices. During the conversation, she encourages dentists to identify the most important platform(s), whether it’s Facebook, Instagram, LinkedIn and even Google Business. Listen now, and learn the one big tool that Zamora shares that all dentists should have when they begin to promote their practice on social media platforms.

Visit agd.org/about-agd/publications-news/agd-podcasts to listen now.

Membership Help Your Colleagues Start the New Year Right with AGD Let colleagues know that before they ring in the new year, they can join AGD for 2024 and receive the rest of 2023 for free. Tell them the benefits of membership include access to free webinars as well as AGD’s extensive Online Learning Center, making it easy to commit to continuing education in the coming year. Once your colleagues join, you’ll each receive $50 in Referral Rewards that can be used toward AGD dues renewal.

Use the online form to submit referrals today: agd.org/my-agd/ access/member-center/refer-a-colleague/online-referral-form.

Scientific Session Mark Your Calendar Today Registration for AGD2024 in Minneapolis, Minnesota, July 17–20, will open Jan. 16. Mark your calendars and start planning your trip to one of the most beautiful cities in the Midwest. Stay tuned for registration information to come in mid-January. For more information on AGD2024 and a list of fun activities and options around Minneapolis, visit agd2024.org.

Get Recognized at AGD2024 Show your commitment to exceptional oral care by pursuing the Fellowship or Mastership awards or Lifelong Learning and Service Recognition. To get recognized at AGD2024, all requirements must be completed and applications must be received on or before Dec. 31, 2023.

For more information and to apply today, visit agd.org/ education/awards-recognition/other-awards.

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New Dentists

From Employee to Employer

By Clayton Sorrells, DDS

M

y time as an employee taught me more about effective leadership than any book I’ve ever read. If you have ever been an employee, you have probably had moments where you thought, “If I ever get to be a boss, I will never do that!” I also learned that things my former bosses did not do were more frustrating than the things they did. I now have five employees, and, every day, I am learning to be a better boss and a better dentist.

When I was an employee, I learned that the best thing a boss could tell me was, “I have noticed your hard work. Thank you.”

This is such a simple but essential statement. Many managers fail to let their employees know that they are doing good work. If you are constantly getting on your employees for the things they are doing wrong, you may need to step back and remember the last time you thanked them for doing something well. Your employees spend the majority of their week working for you; make their time worthwhile by offering some words of encouragement.

Recently, I faced the task of hiring a dental hygienist and a front desk employee. The challenge of determining fair compensation for the dental hygienist was my first hurdle. I spent countless nights researching industry standards, consulting dental forums and seeking advice from fellow dentists. It became evident that having a solid grasp of your practice’s overhead is crucial. This knowledge allows you to offer competitive salaries while maintaining financial stability.

My second hire — for the front desk position — presented a more straightforward task in terms of determining pay. However, the broader lesson here was learning to balance paying employees what they are worth with what my practice could afford. This was a hard idea for me to learn because I want my employees to be the best paid in the area. My wife wisely pointed out, “Clayton, I understand, but you’re just starting out, and you need to be able to pay the electric bill, too.” Valuing employees goes beyond pay; it involves creating a supportive and fulfilling work environment.

Through the hiring process, I discovered that I prefer a more relaxed interview style over a rigid and intimidating one. I want to understand if applicants can engage in meaningful conversations and interact pleasantly. I made it a practice to introduce each applicant to the office staff. After all, they will spend over 32 hours a week working together. Whether it is a hygienist or front office worker, you want someone who fits the office culture; this is what I tried to discover in the interviews.

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While I wish everything always ran smoothly, conflicts inevitably arise when people spend eight hours a day together.

Luckily, I have only had to deal with a few since I started working. I have learned that disagreements should be handled with understanding. At the end of the day, you have to make sure your employees are aware that you are the boss. You need to make sure your point is clearly stated and your expectations are not misinterpreted. I am not a confrontational person, but I have learned that if there is something occurring in the office that should not be, I cannot be afraid to tackle it.

If your employees say they need something to make their jobs better, perform due diligence to see if it is a want or need.

When my hygienist came to me and said, “Dr. Sorrells, I am not complaining, but this dinosaur of an ultrasonic scaler is hurting my hands.” I said, “I will take care of this.” It cost me $1,400 to take care of it, but my hygienist has never been happier, and her new ultrasonic scaler is not hurting her hands. I always try to put myself in my employees’ shoes — or in this case, their gloves. I would find another job if I had to use a piece of equipment every day that hurt my hands. However, there are times when employee requests may not align with the budget. In such cases, I communicate that it’s on my radar, but not the top priority, while also explaining what the current priorities are. This approach helps employees feel valued and informed.

This leads to my next point: Be transparent with your employees. I always hated when I was working and decisions were made that directly impacted me, yet I had no say in the decision. Yes, you are the boss and you do get to make the final decision, but try to include your staff in your thought processes.

More often than not, they are going to bring up something that you had not considered. Their feedback could change the course of your decision.

The awesome thing about being a practice owner is that you get to be a manager of people, too. My employees are incredible people, and I am sure to let them know that as often as I can. I consider it an honor that I have the ability and means to employ awesome people and make my office a great place to work. F Clayton Sorrells, DDS, is a new dentist and previous AGD chapter president at the Louisiana State University School of Dentistry. To comment on this article, email impact@agd.org.

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Legal Matters

OSHA and the Dental Office — Part Two: Infection Control and Occupational Exposures

By J. Kathleen Marcus, Esq.

D

ental professionals are generally well acquainted with the importance of infection control in the dental office. The regulations governing infection control — the ones that governmental bodies use when inspecting the dental office for evaluation of infection control — are less well understood. The Centers for Disease Control and Prevention publish the Infection Prevention Checklist for Dental Settings, which is highly recommended for dentists to help address the many potential issues.1 All state dental boards may sanction dentists for deficiencies in dental office infection control; however, dental board sanctions as severe as professional licensure suspension are distinct from violations of Occupational Safety and Health Administration (OSHA) Standards, which may lead to OSHA penalties against the owner of the dental practice. Understanding the requirements of both state and federal authorities is therefore critical.

Occupational exposure to hazardous substances in the dental office is also regulated by OSHA as well as other governmental authorities, resulting in the potential for penalties and fines from multiple authorities. In this column, OSHA’s role in infection control (other than via bloodborne pathogens) as well as occupational exposure to harmful elements is examined.

Hazard Communication Standard Under OSHA standard 1910.1200, the Hazard Communication Standard, employer responsibilities to employees regarding all potential hazards of specific hazardous chemicals include provision of OSHA material safety data sheets; personal protective equipment (PPE) to protect the employee from exposure, which may include respiratory equipment; and patient education concerning the hazardous chemical and its risks.2,3 Of those hazardous substances in dental offices, OSHA has specific criteria on the following:

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A. Beryllium. Present in some base metal alloys for use in crowns, bridges and partial dentures, beryllium is linked to a number of diseases, ranging from contact dermatitis to chronic granulomatous lung disease.4 While the greatest employee exposure occurs in dental labs where fabrication occurs, exposure can occur in operatories.

In light of this risk, OSHA updated its rule concerning exposure in 2021, reducing the acceptable exposure limit to 0.2 micrograms per cubic meter of air averaged over eight hours. Exposure above this limit triggers a requirement for the employer to institute a workplace health monitoring program, provide PPE (including respiratory equipment), and institute employee training programs.5 In light of this, the American Dental Association (ADA) suggests, where possible, use of alloys that do not contain beryllium in dental prostheses.4 B. Mercury. As is well known, mercury has long been used in dental amalgam. Currently, the OSHA exposure is limited to an average over an eight-hour workday of 0.1 milligram per cubic meter of air.6 OSHA requires that the employer measure this exposure to ensure compliance. In its guide to mercury handling in the dental office, the ADA recommends dentists “use only precapsulated amalgam alloys. The ADA recommends against the use of bulk alloy and bulk elemental mercury, also referred to as liquid or raw mercury, in the dental office.”7 C. Nitrous Oxide. Nitrous oxide is not regulated by OSHA as a hazardous chemical. Instead, employee safety in the presence of nitrous oxide is covered by section five of the OSHA “General Duty Clause,” which states: “Each employer shall furnish to each of his employees employment and a place of employment which are free from recognized hazards that are causing or are likely to cause death or serious physical harm to his employees.”8 The risks of nitrous oxide to employees include impaired fertility and miscarriages. OSHA has issued guidelines on waste anesthetic gases that include nitrous oxide. These guidelines require air sampling and scavenging systems to reduce the risks of employee exposure to waste nitrous oxide.9

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Ionizing Radiation Standard OSHA standard 29 CFR 1910.1096 applies to facilities that have a radiography machine and requires the following: • Restricted areas to limit employee exposure.

• Employees working in restricted areas must wear personal radiation monitors.

• Rooms and equipment may need to be labeled and equipped with caution signs.10,11 OSHA on PPE PPE and its cost became a particularly hot issue during the height of the COVID-19 pandemic. It is important to remember, however, that the OSHA regulation concerning PPE remained the same before and after the height of COVID-19. Critically, where there is risk of occupational exposure to bodily fluids or harmful substances, employers must supply — without cost to the employee — appropriate “gloves, gowns, laboratory coats, face shields or masks and eye protection, and mouthpieces, resuscitation bags, pocket masks, or other ventilation devices.”12 PPE is only considered “appropriate” if “it does not permit blood or other potentially infectious materials to pass through to or reach the employee’s work clothes, street clothes, undergarments, skin, eyes, mouth, or other mucous membranes under normal conditions of use and for the duration of time which the protective equipment will be used.”12 OSHA also requires the employer to clean, launder, and dispose of PPE at no cost to the employee.12 This does not include uncontaminated scrubs, which OSHA has determined are classified as street clothes.

OSHA Penalties Citations for violation of OSHA regulations will generally be issued during or soon after the inspection. However, the proposed penalty will be determined after considerations of: • the size of the business of the employer being charged, • the gravity of the violation, • the good faith of the employer, and • the history of previous violations.13 That said, as of 2023, fines issued by OSHA can be between $11,162 and $156,259 per violation. Failure to remediate the

violation or to pay the original penalty can result in an additional penalty of $15,625 per day. The penalty for a repeated violation can be $156,259.13 In short, OSHA citations can be expensive.

Dentists should always keep in mind that state dental boards and state OSHA agencies also regulate and may also carry great risk to dentists and their practices, as well as to their employees. Given the many triggers of an OSHA inspection discussed in part one of this two-part column, dentists would be wise to remain educated about OSHA’s regulation of bloodborne pathogens, infection control and employee exposure to other occupational hazards. F Note: Part one of this column appears in the September 2023 AGD Impact.

J. Kathleen Marcus, Esq., is Director, Legal, at Nurse-Family Partnership, a national nonprofit dedicated to maternal and child health. She has been a regulatory lawyer concentrating in healthcare for 35 years. To comment on this article, email impact@agd.org.

References

1. “Infection Prevention Checklist for Dental Settings: Basic Expectations for Safe Care.” Centers for Disease Control and Prevention, March 2016, cdc.gov/oralhealth/infectioncontrol/ pdf/DentalEditable_TAG508.pdf.

2. “Standard Number 1910.1200: Hazard Communication.” OSHA, osha.gov/laws-regs/ regulations/standardnumber/1910/1910.1200.

3. “OSHA Brief: Hazard Communication Standard: Safety Data Sheets.” OSHA, osha.gov/sites/ default/files/publications/OSHA3514.pdf.

4. ADA Council on Scientific Affairs. “Proper Use of Beryllium-Containing Alloys.” The Journal of the American Dental Association, vol. 134, no. 4, April 2003, pp. 476-478.

5. “OSHA Factsheet: Protecting Workers from Exposure to Beryllium and Beryllium Compounds: Final Rule Overview.” OSHA, osha.gov/sites/default/files/publications/ OSHA3821.pdf.

6. “Mercury.” OSHA, osha.gov/mercury/standards.

7. ADA Council on Scientific Affairs. “Dental Mercury Hygiene Recommendations.” The Journal of the American Dental Association, vol. 134, no. 11, Nov. 2003, pp. 1498-1499.

8. Ferguson, Alan. “OSHA’s General Duty Clause,” Safety and Health Magazine, safetyand healthmagazine.com/articles/19258-oshas-general-duty-clause.

9. “Anesthetic Gases: Guidelines for Workplace Exposures.” OSHA, osha.gov/ waste-anesthetic-gases/workplace-exposures-guidelines.

10. “Standard Number 1910.1096: Ionizing Radiation.” OSHA, osha.gov/laws-regs/ regulations/standardnumber/1910/1910.1096.

11. “Medical & Dental Offices: A Guide to Compliance with OSHA Standards.” OSHA, 2004, osha.gov/sites/default/files/publications/osha3187.pdf.

12. “Standard Number 1910.1030: Bloodborne Pathogens.” OSHA, osha.gov/laws-regs/ regulations/standardnumber/1910/1910.1030.

13. “Standard Number 1903.15: Proposed Penalties.” OSHA, osha.gov/laws-regs/regulations/ standardnumber/1903/1903.15.

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Wellness

A Prescription for the Wellness of the Profession

By Eric S. Studley, DDS, and Ivy D. Peltz, DDS, MSEd, PhD, MAGD

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ver the past seven years, we have written articles for AGD Impact to provide individual dentists with concepts and methods to improve their own professional wellness. In this article, we would like to focus on what can be done to enhance the wellness of the dental profession.

Our profession is built on autonomy. We are a self-governing community. The requirements for licensure are dictated and enforced by our peers within the dental community and dental organizations, not by local, state or federal laws. Despite the occasional headline-grabbing dentist-gone-awry, dentistry consistently has been considered one of the professional groups most trusted by the public. However, some issues have arisen that have the potential to undermine the autonomy of the profession and the trust of the public.

When it comes to the wellness of the dental profession, rather than watchful waiting, we would like to recommend some proactive interventions: peace, love and understanding.

Peace The dental community has yet to provide a solution to the problem of lack of access to care in parts of the country. The rapid growth and expansion of dental services organizations (DSOs) has created uncertainty within the profession. For some, the corporate structure affords financial stability, which allows many new dentists to start paying down massive student loans, without the responsibilities of ownership. The DSO business model allows these companies to offer services to patients who might not be able to afford dental care otherwise. To others, some DSOs are invading the market with the intended goal of maximizing profits ahead of appropriate and positive patient outcomes. Furthermore, recent legislation has attempted to introduce dental therapists to underserved areas, often with a scope of practice that allows them to perform irreversible treatments without direct supervision of a dentist. At this point, DSOs and dental therapists are growing parts of the dental community, and we suggest that the profession unites and develops innovative solutions of its own to the niches these outside forces are attempting to fill.

Without creative solutions from within the profession, pressures may be exerted from outside — in the form of DSOs and dental therapists — leading to a loss of autonomy.

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Love Since the pandemic, dental practices have been disrupted by personnel shortages. For example, the existing shortage of dental hygienists has left many dentists feeling frantic enough to consider enticing hygienists from other practices or changing licensure reciprocity agreements between states. However, these solutions simply rob Peter to pay Paul and do nothing to foster professional relationships among colleagues. Instead, we must cultivate the staff that we need. For an immediate staffing shortage, consider hiring a new dentist to perform hygiene visits. As a bonus — in addition to covering hygiene, your new hire will be able to cover emergencies.

If the relationship works out and is cultivated properly, perhaps by the time you find a new hygienist, you will also have an associate.

Once you have the employees you need, make sure to retain them by frequently demonstrating how valued they are.

During the pandemic, baby boomers left the profession in droves.

Not only were practices sold, but dental schools also lost seasoned faculty members. In general, practitioners at the height of practice do not have time to donate to teaching. However, to make up for the egress of many dentists over 65 during the COVID-19 pandemic, mid-career practitioners with clinical experience can help to fill the void. Similarly, since the pandemic, mentoring has become more important than ever. If becoming faculty at a dental school is not a possibility, consider mentoring a new graduate or a dental student.

You may help your new colleague learn more and acclimate to the profession, and, as such, you will be helping to self-govern. To retain the trust of the public that we serve, the dental profession must enforce stringent academic and self-governing criteria.

Understanding As humans become increasingly dependent on computers for business and personal interactions, interpersonal communication skills suffer. While computers have become a necessary part of dental practice, patients must be your focus, both figuratively and literally.

For patients to develop trust, they need to feel seen and understood.

Artificial intelligence continues to dominate the news. As scientists, we applaud the innovations. As humans, we fear the consequences. Mainly, we fear that as computers do more of our thinking for us, we will lose the skills of critical thinking and evidence-based decision-making, both of which are required to deliver optimal patient care. Without those skills, we are mere operators rather than dental professionals.

If the dental profession is to stay well, we must come up with a healthy treatment plan. We need to be rigorous in our academic and professional self-governance. We need to respect contributions made by others. We need to teach. Most of all, we need to continue to learn.

This is our final article for AGD Impact. We are passing the baton. It has been our honor to share our thoughts with you. We wish you wellness. F Eric S. Studley, DDS, is the president and CEO of Eric S. Studley & Associates, an insurance brokerage company specializing in the insurance and financial needs of dentists.

Ivy D. Peltz, DDS, MSEd, PhD, MAGD, is retired from private practice in New York City.

They are both retired from academic positions at the New York University College of Dentistry. Together, they co-founded Doccupations, the dental career services component of Eric S. Studley & Associates. To comment on this article, email impact@agd.org.

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Financial Management

Finding the Truth in the Controversial Employee Retention Tax Credit

By Wesley W. Lyon II, CPA, CFP

D

espite persistent warnings from the IRS about fraudulent Employee Retention Tax Credit (ERC) claims, promoters of the ERC continue to make promises of payments reaching $28,000 per employee for qualifying small businesses. With constant marketing and communications from these promoters, many dentists have been left wondering why their certified public accountant (CPA) hasn’t helped them claim these tremendous tax benefits.

The answer is easy for CPAs: They are bound by a code of professional ethics and can’t claim tax benefits unless they are likely to prevail if audited. The promoters, on the other hand, have no code of ethics or worry of backlash. By the time the IRS comes to audit, many will have moved on to their next venture. In the short term, they are looking to cash in by taking large commissions from filing ERC claims, sometimes reaching up to 30% of the credits claimed.

Understanding the ERC The ERC was passed in March 2020 as part of the CARES Act. The credit was intended to compensate small businesses that were impacted by COVID-19 disruptions or mandatory shutdowns. The original cost of the credit was expected to be around $85 billion.

Since then, the IRS has identified more than 11,000 suspicious tax returns claiming more than $2 trillion in credits. That means the amount of suspicious claims the IRS has received is over 23 times the total expected cost of valid claims.

To qualify for the ERC, you must meet one of these criteria: 1. Your practice endured a full or partial suspension of operations due to COVID-19-related governmental orders and kept employees on the payroll during the time of shutdown.

2. Practice collections declined by 50% or more in any quarter of 2020 as compared to the same quarter of 2019 or by 20% or more in the first, second or third quarters of 2021 relative to 2019.

3. Your practice qualifies as a recovery startup business (new practice).

Most dental practices that qualify either kept their staff members on payroll during an official government shutdown or had a collections drop of 50% or more in the second quarter of 2020 relative to 2019. If this is the case, or if you meet any of the other criteria, contact your CPA immediately in order to file a timely claim for the ERC.

Fraudulent Claims Unfortunately for taxpayers, many promoters have made claims that any COVID-19-related disruption justifies the tax credit. The IRS has made its stance clear: There must be a governmental order that required a full or partial shutdown of practice operations in order to claim the credit. Without a copy of the governmental order in hand, it is best not to attempt a claim. Additionally, if you claim the credit, your CPA must amend your practice tax return for the same year. Many CPAs have pushed back on their clients if they don’t believe an ERC claim to be accurate, insisting they use a different CPA for their amended returns.

What’s Next?

The IRS is ramping up its audit efforts for what may be one of the largest audits in history. Armed with billions in additional funding, the Criminal Investigation Division of the IRS is reassigning staff to identify promoters making these claims.

On Sept. 14, 2023, the IRS issued a moratorium on processing of new claims of the ERC through the end of the year in order to protect small business owners from unscrupulous actors. The IRS is continuing to process previously filed claims but will be applying more scrutiny to each claim, extending the review process from 90 to 180 days. It may also request further information from suspicious claims.

The IRS went a step further in October, establishing a withdrawal process for taxpayers who filed claims due to pressure from ERC mills. Any taxpayers who have not yet received their payment, or have received their payment but have not deposited or cashed the check, can follow the IRS guidelines to voluntarily withdraw their claim. For those who have received and deposited the funds already, the IRS is preparing to release further guidance to assist in returning the credit without penalty or threat of audit if you believe you no longer qualify.

Next Steps If you qualify for the credit, I recommend immediately contacting your CPA, as the deadline to file an amended return is approaching. As a bonus, your CPA is unlikely to charge a commission, since commissions and contingent fees are prohibited by the IRS with very few exceptions. If you have already filed a legitimate claim, be sure to have proper documentation showing the calculation of the credit and qualifying reason.

For those dentists who have filed a claim they no longer believe they are qualified for, contact your CPA immediately in order to remedy the situation according to IRS guidelines. Erroneous tax credits claimed could lead to penalties amounting to 25% of the erroneous refund plus interest (in addition to the full amount of the credit). Taking advantage of IRS relief for fraudulent claims could save you thousands. F Note: This article was authored Nov. 2, 2023, and verified as accurate as of then. It is recommended that you discuss with your CPA regarding any available updates before taking action.

Wesley W. Lyon II, CPA, CFP, is president and CEO of McGill and Lyon Dental Advisors.

For more information on his firm’s comprehensive tax and business planning services for dentists and specialists, contact Janet Blair at 877.306.9780, or email consulting@ mcgillhillgroup.com. To comment on this article, email impact@agd.org.

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Practice Management

Do You Have Holes in Your Schedule?

By Roger P. Levin, DDS

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he single most important system in practice management is the scheduling system. In almost every business, time management controls all other systems. This means that if you get the schedule right for your practice, all other systems will benefit. If you don’t get it right, then other systems will not be able to reach their full potentials.

In slower economies, no-shows and last-minute cancellations often increase. In fact, we are currently receiving reports from some practices that increasing no-shows and last-minute cancellations are beginning to cause concern. Regardless of the economy, having a plan to fill holes and maximize scheduling opportunities are still excellent ideas.

Increasing Production with the Scheduling System The scheduling system has many components. It begins by designing a mathematical template that becomes the ideal schedule for the practice day to day. This is the starting point, and I encourage every dentist to analyze their current schedule and design blocks for distinct types of procedures to ensure that days are steady and opportunities for patient care and practice production are maximized. However, anyone’s perfectly mappedout schedule can be blown up by no-shows and last-minute cancellations, so filling holes — whether it is in advance or at the last minute — is essential.

Empty chair time is referred to in economics as a nonrecoverable resource. This simply means that once it is gone, you can never get it back — unlike a product that does not sell today but can be sold tomorrow. Based on my company’s data and other analyses, I believe that the average practice will lose approximately two years of empty chair time over a 36-year career.

When you think about time that was never scheduled, no-shows, last-minute cancellations and other scheduling mix-ups, this statistic makes sense.

One of the keys to success, and an important part of the scheduling system, requires a culture change. I encourage any practice to have an immediate priority shift when there is an opening in the schedule. (A priority shift is simply stopping whatever you feel the current priority is and shifting to a new one.) In this case, the priority should become filling that open time. Although it is not always possible, the culture should be for scheduling coordinators to immediately focus on filling any

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opening in the schedule, because that unfilled opening will never be available again.

My first recommendation to fill holes is to have what we refer to as “go-to” strategies. Remember, as soon as an opening occurs in the schedule, the front desk staff should immediately shift to filling in that time. They should have a set of strategies ready to go so they can immediately act. Team members should not have to stop and wonder what to do, ask a doctor or office manager, or wait too long to be proactive about filling the time.

Here are some examples of go-to strategies to consider: 1. Emergencies. Emergencies are unpredictable and often resented by the front desk staff as they can cause chaos in the schedule. However, emergencies do have a significant positive attribute, which is that they have an extremely high case acceptance rate. My observation over the years is that most emergency patients will accept treatment, especially if it is offered the same day. The front desk staff should be ready to match emergencies with open time so that a simple diagnosis can be made and treatment can be started or even completed that day.

2. The patient checklist. Practices always have patients who want to come in sooner, but conflicts in either the practice’s or the patient’s schedule don’t allow it. These patients can be contacted when openings occur and may be appreciative of the opportunity to schedule sooner, as they would have preferred. This can occur both for holes in the schedule that open on a given day as well as a few days out. Many businesses tell you that they will contact you if an opening occurs, but they never actually reach out or have any way to follow through with customers who wanted earlier times. Don’t be that type of business.

3. Same-day treatment. Same-day treatment offers practices an excellent opportunity to fill holes. Each day, patients come to the office who need more treatment than originally anticipated. They would find it very convenient to stay in the practice to have that treatment performed. New patients in particular often present with simple needs that can be taken care of in the same day. Patients often appreciate and want the

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opportunity to have treatment finished so they do not have to come back.

4. Hygiene patients. Every day, hygiene patients have dental treatment identified during their appointments. In most cases, these patients are brought back for an additional visit based on the way most schedules are designed. However, when there are holes in the schedule, hygiene patients can be offered the opportunity to also have treatment that day, and hygienists should be aware of what openings are available. Not having to come back for another appointment can be an incredibly positive motivator.

5. Older patients. Moving older patients’ appointments further ahead in the schedule is a solid strategy to fill holes. Many older patients have flexibility in their schedules. If they receive a call from the practice in the morning that there is an opening that afternoon, often they may be able to accommodate it.

fill the holes in your schedule. Keep in mind that scripting should always include benefit statements and be positive. One positive motivational aspect of scripting to fill holes is not to say that you had a cancellation, but to say, “We had a change in our schedule.”

Summary The scheduling system is a critical system in dentistry. It largely controls the overall level of practice production. If you want to increase production and maximize your practice’s potential, having strategies to fill holes is essential. The front desk staff should view any openings in the schedule as critical and shift priorities to filling them. The above strategies can help you fill more holes, have more production and maintain the success of your practice. F Roger P. Levin, DDS, is the founder and CEO of Levin Group, a dental management consulting firm. To receive his Practice Production Tip of the Day, visit levingroup.com. To comment on this article, email impact@agd.org.

6. Simple scripting. I always advocate having simple scripting for all routine conversations. This is essential when trying to

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Member Spotlight

First-Gen Dental Student Brooklyn Janes Takes Over Student Perspectives Column

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very couple of years, AGD Impact Student Perspectives columnists graduate, and new authors take their place. Our new columnist, Brooklyn Janes, may be new to writing for AGD Impact, but she isn’t new to AGD, and she also isn’t new to dentistry. Janes started in the dental profession as a hygienist, and she currently serves as president of the Roseman University College of Dental Medicine AGD student chapter.

Look for her first Student Perspectives column in 2024.

AGD Impact: Why did you decide to become a dentist? What was the pathway like from undergrad studies to beginning dental school?

Janes: As a first-generation college graduate, I never envisioned dental school in my future. Achieving my Bachelor of Science in dental hygiene initially appeared to be an impossible feat, as I was the first person in my family to pursue higher education. Nevertheless, I succeeded and developed a deep passion for all aspects of dentistry. After I began working full time as a dental hygienist, I reached a point in my career where I felt the desire to expand my skills and broaden my scope of practice. Graduate school became a more attainable goal at this stage in my life, as I had gained confidence and experience while working in the field.

I continued working as a dental hygienist while simultaneously taking prerequisite courses and preparing for the DAT (Dental Admission Test) 12

to qualify for dental school.

Although my path to dental school was somewhat unconventional, I have no regrets.

Everyone has a unique journey.

While it may have taken me a bit longer to reach this point, my clinical experience as a dental hygienist has propelled me ahead.

Why did you choose Roseman University?

I had the fortunate opportunity to attend several predental events hosted by Roseman University before the COVID-19 pandemic. These experiences allowed me to visit the campus, learn about the school’s core values and assess whether they aligned with my own. I realized that every dental school has a unique personality, and I knew that — based on my learning style — I would do well here.

Various factors come into play when selecting the right dental school. Roseman University not only felt like an excellent fit for me personally, but it also made logistical sense in other ways.

My husband also received acceptance into Roseman’s dental program, making it a practical choice for us to be together and stay close to our family here in Utah. While applying to dental school as a married couple may have seemed statistically improbable, it was a risk worth taking. Roseman has truly become our home.

When did you first join AGD, and what do you like about your AGD student chapter?

In my second year of dental

Janes and her husband, Kade. Photo credit: Coco Berryessa.

school, I had the honor of being elected the CE PACE chair for the AGD Roseman student chapter. During my tenure in this role, I organized several lunch-and-learn sessions by inviting dental professionals to share their expertise on specific topics. I thoroughly enjoyed these opportunities and felt that I was able to help students gain insights from different perspectives, furthering their education in a unique way. Currently, as a third-year student, I proudly serve as the president of the student chapter.

I am a strong advocate for lifelong learning. Regardless of how simple a concept may appear, there are always additional layers to add to your dental foundation. This is why I am passionate about being a part of the AGD student chapter at Roseman. It provides us with numerous learning opportunities that build upon our foundations. However, the most rewarding aspect of

involvement is the chance to collaborate with faculty advisers and fellow members of the organization. Working as a team and witnessing how each member’s strengths complement one another is a privilege that has greatly enriched my dental school experience.

What are some of your plans for your career after dental school?

After dental school, my plan is to start practicing and work toward achieving my AGD Fellowship. I believe that general dentistry aligns well with my interests and goals.

Pursuing Fellowship will not only keep me motivated, but it will also inspire me to continually progress in the field. I’m enthusiastic about the opportunities that AGD provides, and I look forward to it.

I envision incorporating elements from my dental hygiene background into my practice, with a focus on

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“ The Janeses and their dog, Kora “Baby Bear.” Photo credit: Grace King Photography.

patient education, prevention and comprehensive care. Additionally, I aim to explore more artistic aspects of dentistry, such as cosmetic dentistry. There is still much more to learn, and, at times, it can seem overwhelming.

However, it’s reassuring to know that I can rely on AGD as a valuable resource and support system for pursuing my creative interests.

What have been some of your favorite moments, lessons or treatment cases so far in school?

One of Roseman University’s remarkable strengths is its unwavering commitment to research. As aspiring general dentists, staying current with research and evidence-based

dentistry is vital to creating beneficial and comprehensive treatment plans for our patients. Engaging in research, collecting data, crafting abstracts and articles, and learning from dedicated mentors turned out to be a journey of self-discovery and reflection.

I found myself immersed in a world I had never imagined I could be a part of, and, to my surprise, I thoroughly enjoyed every minute of it. Throughout the research process, I acquired valuable skills in research methodology, critical thinking, creative writing, public speaking and teamwork, all while having the privilege of being mentored by incredible professors.

One standout moment in my dental school journey was the opportunity my husband

and I had earlier this year to present our research at the 2023 American Association for Dental, Oral, and Craniofacial Research conference in Portland, Oregon. This experience was significant to me because, prior to this, I had never envisioned myself presenting in such a formal setting. Public speaking and research involvement weren’t areas in which I felt entirely comfortable. However, this particular moment allowed me to conquer my fear of public speaking while gaining a profound appreciation for evidence-based dentistry. I am grateful for my newfound belief that research is not only attainable, but is also necessary and can be genuinely enjoyable. F

There is still much more to learn, and, at times, it can seem overwhelming.

However, it’s reassuring to know that I can rely on AGD as a valuable resource and support system for pursuing my creative interests.

”

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PRIVATE EQUITY AND DENTISTRY

By Carrie Pallardy

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onsolidation is driving changes in practice model patterns in dentistry. Private equity is a quiet but significant force behind the trend.

Private equity investment involves buying stakes in private companies. Typically, private equity dollars come from institutional investors, such as pensions, insurance companies and high-net-worth individuals.1 These dollars are placed in a fund and managed by a private equity firm. These firms have found ways to invest in the broader healthcare industry, and they are actively exploring ways to buy into general and specialty dental practices.

Private equity firms can offer dentists a lucrative way to sell their practices and ease the administrative burden that often comes with ownership.

While those benefits are attractive, private equity is also the subject of fierce criticism; opponents of private equity investment argue that these firms put profit before patients.

What does private equity investment mean for dentists who are looking to sell a practice or buy a practice? Does the consolidation happening in the field herald the end of solo and small group practices? How does private equity investment affect patient care?

Answering these questions isn’t always easy.

Data on private equity investment is not abundant.

Below, dentists, researchers and consultants weigh in to shed light on current private equity activity in dentistry and how it could have a hand in shaping the future of the profession.

Consolidation in Dentistry Dental services organizations (DSOs) are the instrument private equity uses to invest in dentistry. “I would call consolidation within dentistry and private equity involvement in dentistry synonymous,” said Kyle Francis, MBA, founder and president of Professional Transition Strategies, which provides solutions for buying and selling dental practices.

In 2013, the AGD Practice Models Task Force published a report on the corporate practice of dentistry.2 Corporate dentistry is a broad term that refers to various practice models that separate

management services from clinical activities. The report identified three main models. The first is a DSO with internal management and dentist-owners as the sole shareholders. The second is a dental management services model (DMSO) without outside equity ownership. In this model, the practice is owned by individuals, dentists and nondentists, and the practice has a business services agreement with an outside third party. The third model is a DMSO with outside equity ownership.

A lot has changed in the years since that report was published. The number of dentists affiliated with DSOs steadily increased, according to data from the American Dental Association’s Health Policy Institute (HPI). In 2017, 8.8% of dentists were affiliated with DSOs. Two years later, that number crept up to 10.4%. In 2022, 13% of dentists were affiliated with a DSO.3 A decreasing percentage of dentists in solo practice is a parallel trend. In 2017, 51.7% of dentists were solo practitioners. In 2021, the percentage dipped below half to 46.2%, according to HPI data.4 That data also shows that younger dentists starting out in their careers are more likely to gravitate to large group practices or DSOs. Consolidation in dentistry is mirrored in other sectors, like healthcare. Today, health systems comprise hundreds of locations, including major hospitals, outpatient centers and physician practices.

“If you look at hospital systems and a lot of medicine, they went through their own consolidation curve. And their consolidation curve went from private equity to public markets and then into the nonprofit space. Can we see something like that in dentistry? I think the answer is ‘probably,’” said Francis.

He predicts that dentistry will eventually become 60%–70% consolidated and hover around that point, a percentage typical of other industries.

Private Equity Investment Why is dentistry attractive to private equity firms?

Dentistry has proven to be resilient during times of

“I would call consolidation within dentistry and private equity involvement in dentistry synonymous.”

— Kyle Francis, MBA, founder and president of Professional Transition Strategies

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“At the end of the day, I think it was a better fit for me to sell to someone whom I could help mentor and then stay on as a part owner at first.”

— Craig S. Armstrong, DDS, MAGD

economic downturns. “You saw that during the 2008 financial crisis.

You saw that during the COVID-19 pandemic and the shutdowns,” said Francis. That resiliency — paired with the scale that large DSOs can build — represents a profitable opportunity for private equity firms.

On the provider side, private equity dollars offer an opportunity for a profitable sale of a practice and the opportunity to offload the administrative aspect of running a practice.

“There’s an amplified rate at which you see these deals happen because there’s motivators on both sides,” said Robert Aprill, a managing director at Physician Growth Partners, a firm that represents physician groups in transactions with private equity.

Margaret Scarlett, DMD, owner of Scarlett Consulting International, has dug into the private equity investment trend in dentistry. By leveraging Crunchbase (crunchbase.com), a platform that provides data on public and private companies and other private resources in the investment world, she has determined there are approximately 70 private equity firms investing in the dental space. Private equity firms are investing in dental practices as well as ancillary companies.

“For example, VideaHealth has had a seed round of funding from Innospark Ventures and investments from Zetta Venture Partners, Spark Capital and Pillar VC,” said Scarlett. 5 VideaHealth is a dental AI platform for DSOs and dental practices.

Private equity firms can structure investment in dental practices in a number of ways. A private-equity-backed DSO may buy 100% of a practice. The selling dentist may opt to take the proceeds of that sale in cash and retire, or the selling dentist may stay on as an employee. In some models, selling dentists take cash and an ownership stake in the purchasing DSO. “It’s compelling because you have a liquidity event; you have some cash to capitalize on the practice you’ve built, but you also now have personal ownership in a much larger organization that can provide meaningful return on that investment over time,” explained Aprill.

Scarlett has also observed debt emerging as an option for financing dental practice acquisitions.

Private equity firms can acquire dental practices via leveraged buyouts, which involve a combination of debt and equity financing.

The upfront cost is low, and the cash flow of the practice will be used to pay the cost of the acquisition.6 Private equity firms are actively investing in both general and specialty dental practices. Right now, the appetite for specialty 16

practices, such as orthodontics, endodontics and pediatric dentistry, may be slightly higher. “Specialty dental practices are definitely in higher demand from consolidators because they haven’t seen the same multidecade consolidation as general dentistry,” Aprill observed.

Branding tends to stand out as a differentiator between private equity investment in general and specialty practices. In general dentistry, DSOs — with and without private equity backing — often have national branding. In contrast, specialty practices often retain local branding. But Aprill is starting to see more interest in local branding across the board.

“You’re starting to see groups rely on and keep local brands intact even after a transaction as a way to keep that bridge to the community in place instead of shifting to a national brand. And that applies to general dentistry in some cases, but certainly with specialties,” he said.

Francis considers the increased attention on specialty dental practices to be a microtrend, a part of the larger trend of continued private equity interest in dentistry as a whole. That overall interest could mean the advent of more multispecialty platforms.

“You’re starting to see some of the larger general dentistry platforms partner with oral surgeons, endodontists and other specialists whom they can refer out to,” said Aprill.

Dental Practice Values Dentistry is in the midst of a consolidation wave. So, what does that mean for practice values? The term “equity arbitrage” is related to how much a practice is worth in the present and how much it could be worth after its sale.7 In many cases, private-equity DSOs can offer more money for a practice than an individual buyer.

If a practice becomes part of a DSO, it has access to that platform’s buying power and economies of scale. That potential elevates the value of the practice.

Craig S. Armstrong, DDS, MAGD, a member of the 2013 AGD Practice Models Task Force, offers an example of a practice in Texas.

The practice had three owners, one of whom wanted to sell their stake. Initially, the overall value of the practice was $6 million, but the owners decided to explore a potential sale to a private-equitybacked DSO. They received multiple offers.

“That $6 million valuation now became $14 million. So, when those partners divvied up the sale proceeds three ways, they got a bigger piece of the pie than they would have if they just sold it with

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the valuation that they were looking at prior to involving private equity,” Armstrong explained.

How do private equity firms arrive at a number like that? It boils down to EBITDA: earnings before interest, taxes, depreciation and amortization. Once EBITDA is determined, interested buyers may make an offer based on a multiple of that EBITDA, but that number is not set in stone.

“Reasonable people can disagree on exactly what EBITDA may be for a certain practice, so you can play with the number, and you can also play with multiples [of that number],” Francis explained.

Desirable acquisition targets can become subject to bidding wars.

Francis shared the example of a practice in Oregon. Initially, DSOs made offers in the $2.5 to $2.6 million range. Francis and his team worked with the practice and determined its EBITDA to be around $700,000, instead of the originally calculated $400,000.

“We put them in a really competitive situation so they would be able to put their best foot forward from a valuation perspective, and it turns out the same group that had offered something around the $2.5 million range ended up making an offer about seven times the $700,000 EBITDA,” he said.

Aprill also illustrated how private equity bids on practices.

“If we’re representing a practice and we calculate a $2 million EBITDA, and we have a private equity group that bids eight times the EBITDA, that would be a $16 million enterprise value. The practice would be worth $16 million.”

With practice values skyrocketing like this, what does it mean for dentists who want to buy a practice or a practice stake? The competition is a lot harder, and the opportunities are fewer.

“The chances that an individual can compete on the same level as a group or as a private-equity-backed institution are essentially zero,” said Francis. “They just can’t compete from a dollars-andcents standpoint.”

That doesn’t necessarily mean a selling dentist will go with a private equity transaction every time. Armstrong went all the way up to the letter of intent (LOI) process with a DSO, but, ultimately, he decided to sell his practice to an individual dentist.

The DSO wanted Armstrong to take an equity stake, and it wanted him to upgrade all of the practice’s computers prior to selling. Instead of moving forward with that transaction, he opted to sell to another dentist whom he had been tracking since her first year in dental school. When it came to negotiating a price, it was potentially less than he would have gotten from the DSO, but the

terms were a better fit for him. Armstrong sold half of his practice and worked with the buying dentist for a few years as part owner.

“At the end of the day, I think it was a better fit for me to sell to someone whom I could help mentor and then stay on as a part owner at first,” he said.

Two-and-a-half years later, he sold the second half of his practice to this young dentist. He still works at the practice as an employee dentist today.

Other dentists may never execute a private equity transaction because they do not like the model. Myron J. Bromberg, DDS, a member of the 2013 AGD Practice Models Task Force, is among those dentists.

“I have been practicing for almost 60 years. I have no thoughts of retiring. I would not be interested in selling my practice to a private equity firm because I just don’t like the concept,” he said.

Younger dentists who want to be practice owners may need to look for these kinds of opportunities or consider different paths, particularly as they manage the significant burden of student debt.

Scarlett points to possibilities in more rural areas. “I still believe that there are lots of opportunities. It might take a little longer to find them,” she said.

Aprill noted that many DSOs are offering ways for younger dentists to become stakeholders. “These private-equity-backed platforms have mechanisms to get ownership in the hands of younger dentists, oftentimes free or for very minimal cost, that I would argue are significantly more valuable than owning a singledoctor practice,” he said.

Some DSOs offer employee dentists the ability to work for a set period and then open a practice under the DSO’s umbrella. Community Dental Partners, for example, offers an ownership track.8

Patient Care While private equity investment makes a compelling financial argument, there is another hotly debated issue: patient care. Does private equity come at the cost of quality? Laura Katz Olson, PhD, a distinguished professor of political science at Lehigh University, argues that the answer is unequivocally yes. Katz Olson is the author of “Ethically Challenged: Private Equity Storms US Health Care.” In the book, she explores how private equity is impacting cost and quality in healthcare.

“One of the things that private equity likes to do in order to create value is get a platform of very well-functioning dentist offices, for

“I think it is really telling that private equity firms have fought hard to preserve the opaqueness of the industry. I think transparency is going to be key to really understanding the impact on patients and clinicians.”

— Eileen O’Grady, healthcare director at the Private Equity Stakeholder Project

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“In some DSOs, the clinical director sets the standard, putting the patient first. But, in others, when you walk in, the goal that day is to do $7,000 to $8,000, up to $12,000 in productivity.”

— Margaret Scarlett, DMD, owner of Scarlett Consulting International

example, and then put add-ons to increase the value, and every time they add something, it increases the value exponentially. So, the goal is to make local, regional and national monopolies,” she said.

Cost efficiencies are one of the arguments for these sprawling platforms. Consolidation should make healthcare cost less, right? Katz Olson says that’s not the case. “The evidence suggests that when private equity takes over, the costs are higher,” she said.

A study published in BMJ in 2023 reviewed 55 previous research studies on private equity in healthcare.9 The study authors identified 12 studies that measured costs to patients or payers. Nine demonstrated increased costs, while three found no differences. None of the studies demonstrated a relationship between private equity and lower costs for patients or payers. All 12 studies showed at least moderate risk of bias in their results; one showed serious risk of bias, and one showed critical risk of bias.

The primary goal of private equity firms is to earn a profit for investors. Many stakeholders are concerned that this objective directly clashes with clinical autonomy and quality patient care.

Eileen O’Grady is healthcare director at the Private Equity Stakeholder Project (PESP), a nonprofit that researches and reports on private equity investment in multiple sectors. She authored a 2021 report on private equity in dentistry.10 At the time of that report, 27 of the top 30 DSOs were owned by private equity.

O’Grady emphasized how difficult it is to get a handle on private equity penetration in dentistry. “I think that’s partly because private equity is very, very opaque, and ownership/management of dental practices is similarly opaque,” she said.

Getting empirical data on what private equity means for patient care in dentistry isn’t easy, but researchers are looking. The 2023 BMJ study identified eight studies that included health outcomes in relation to private equity. Three studies found harmful impacts, two found beneficial impacts, and three were neutral. The study authors noted some of the studies had a risk of bias, making it difficult to draw a definitive conclusion.9 O’Grady pointed out that there are examples “in which privateequity-owned DSOs have appeared to prioritize profit-seeking behaviors at the expense of patient care.”

In 2018, dental management company Benevis and its affiliated Kool Smiles dental clinics settled false claims allegations with the Department of Justice for $23.9 million.11 Between January 2009 and December 2011, Benevis and Kool Smiles clinics performed unnecessary procedures, including root canals on babies, and billed for 18

treatments that were never performed, according to the allegations.

Benevis has been owned by several private equity firms, including Friedman Fleischer & Lowe (FFL), according to the PESP report.10 In 2023, Aspen Dental reached a settlement agreement with the Massachusetts Attorney General’s Office regarding claims of deceptive advertising.12 The attorney general’s lawsuit claimed that Aspen Dental tricked consumers into buying products and services and sent consumers bills for services it advertised as free. Under the settlement, Aspen Dental agreed to pay $3.5 million, $750,000 of which would be returned to patients. Aspen Dental is owned

by Leonard Green & Partners, Ares Management, and American Securities, according to the PESP report.10 In 2020, USA Today published an investigation that examined North American Dental Group and complaints that the pressure to hit revenue targets led to overtreatment of patients.13 This DSO is owned by Jacobs Holding, according to the PESP report.10 Are these examples outliers or emblematic of how private equity operates? Over the course of her career, Scarlett has worked for a number of DSOs, and she still practices as a locum tenens dentist.

Overall, she has had positive experiences. DSOs tend to have efficient business practices — such as digitization and well-established workflow protocols — and the latest clinical technology, she said. But she has also had some negative experiences.

“In some DSOs, the clinical director sets the standard, putting the patient first. But, in others, when you walk in, the goal that day is to do $7,000 to $8,000, up to $12,000 in productivity,” she said.

She pushed back and questioned patient treatment plans when that line between the bottom line and clinical operations became blurred.

Will all dentists push back? What does it mean for patients if they don’t? In some cases, it means patients receive — and have to pay for — unnecessary care.

Bromberg has seen many patients come to his practice from private-equity-backed DSOs for second opinions. “Based on the patients that I have seen, they are overtreated,” he said. “They’re given high estimates where I wouldn’t even think of doing certain procedures.”

For Bromberg, the lesson is simple. “When the focus of a dental practice is the bottom line and not patient treatment and patient care, patient treatment and patient care suffer.”

Both Francis and Aprill acknowledged that private equity investment does not always result in good outcomes for clinicians and patients.

“If you look at the groups that entered the market in the first 10 years, it was the Wild West. They looked at doctors as

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“The chances that an individual can compete on the same level as a group or as a private-equity-backed institution are essentially zero.”

— Kyle Francis, MBA, founder and president of Professional Transition Strategies

commodities,” said Aprill. “That’s not how you protect patient care, so the newer models that you’re seeing over the last five or so years continue to have physician and doctor ownership.”

Early in his career, Francis worked with practices that were sold to a private-equity-backed DSO in Texas and had a horrible experience. The doctors and staff were unhappy, and so was the DSO. He initially resolved to only work on deals involving individuals but changed his mind over the years.

“I think the DSOs that are backed by private equity are very similar to dentists in total. I think there are good DSOs, and I think there are bad ones. I think there are good clinicians, and I also think there are bad clinicians out there,” he said.

Private equity investment, for good or ill, is continuing in dentistry, but it is still a relatively nascent trend. Shedding light on its overall, long-term impact and determining if the anecdotal concerns of patient quotas and unnecessary treatments are aberration or pattern will require ongoing and rigorous research.

“We researchers are just beginning to wrap our heads around what this looks like and how we measure the impact,” said O’Grady.

Private Equity Oversight DSOs have been met with regulatory scrutiny, as described in the cases of Aspen Dental, Benevis and North American Dental Group, but how much oversight is there regarding private equity investment in dentistry?

Right now, rules and regulations exist at the state level governing how DSO ownership can be structured. For example, North Carolina allows management agreements with DSOs, but it requires that licensed dentists oversee all clinical operations.14 “Most states do have laws in effect that private equity ownership or investment in these models need to abide by, but, as you might

“I think if you’re looking to sell your practice, you’ve never had more options.”

— Robert Aprill, managing director at Physician Growth Partners

imagine, creative workarounds have been found,” said Armstrong. He also observed that enforcement action varies depending on the state.

Private equity’s activity in healthcare has not gone unnoticed at the federal level. In August 2023, The Wall Street Journal reported on efforts by Democratic lawmakers to require private equity ownership disclosure in the healthcare space.15 For example, the Healthcare Price Transparency Act included a provision requiring healthcare companies to disclose that kind of ownership. But the Republicans of the Ways and Means Committee made a number of changes, including the removal of that provision, according to The Wall Street Journal.

The report also notes that private equity groups have lobbied against transparency requirements.

“I think it is really telling that private equity firms have fought hard to preserve the opaqueness of the industry,” O’Grady said. “I think transparency is going to be key to really understanding the impact on patients and clinicians.”

The Future of Private Equity Investment While more regulation could impact how private equity can participate in the healthcare space, it will likely be slow to emerge. In the meantime, what can dentists expect?

First, private equity investment and the resultant consolidation are likely to continue. Looking at other industries, the consolidation curve follows a pattern. A fragmented market will become more and more consolidated until that activity plateaus, leaving a few leading players with the lion’s share of the market.16 Dentistry is still relatively fragmented, with 36% of dentists practicing solo in a single location and 40% practicing in one location with more than one dentist.4 The exact number of private-equity-backed DSOs is not easy to calculate, but the space is crowded. Aprill anticipates that private equity firms will begin transacting with one another. “I think the next wave of what you’re going to see is some consolidation amongst the platforms,” he said. As those transactions take place, there will be fewer DSOs, inching toward a final stage where a few dominant players run the show.

Inevitably, there will come a point when private equity investment and consolidation slows. No market is completely consolidated, but there is a question of how sustainable the private equity model will be in the long run. “What is going to happen besides bankruptcies?” said Katz Olson. “You can’t have 20 private-equity-leveraged buyouts of the same company.” agd.org/impact

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Private equity portfolio companies are expected to hit a 13-year high in bankruptcy filings in 2023, on track for 108 total by the end of the year, according to S&P Global Market Intelligence. The report notes that healthcare is one of the two highest risk sectors.17 Dentists who are looking to sell and dentists who are looking to buy cannot predict the future. They can only act within the landscape at the time. For buyers, acquiring a practice may prove challenging, as DSOs have the resources to scoop up distressed assets that may be more affordable and to bid many times the EBITDA of a desirable practice.

“If I look at dentists who are looking to buy, I would be focused on practices that are doing $500,000–$800,000 in revenue. There are a lot of good buys there, and then you can grow something,” said Francis.

“I think if you’re looking to sell your practice, you’ve never had more options,” said Aprill. Private equity firms likely account for many of these options, and dentists have reason to consider whether it is the right choice for them and their patients.

Performing due diligence on the buyer can help you understand how your practice will change or not change once private equity takes a stake. Ask about clinical autonomy. Ask about any red flags, such as regulatory action taken against the company. Perhaps most importantly, talk to other dentists who work for the private-equitybacked DSO. Francis recommended several questions to ask. “Talk about the good, the bad and the ugly. What was hard? What was not so great?

Did they follow through with what they said they were going to do?

Did they live up to their promises?” F Carrie Pallardy is a freelance writer and editor based in Chicago. To comment on this article, email impact@agd.org.

References

1. “Private Equity Investments.” CFA Institute, cfainstitute.org/en/membership/professionaldevelopment/refresher-readings/private-equity-investments. Accessed 8 Sept. 2023.

2. “Investigative Report on the Corporate Practice of Dentistry.” Academy of General Dentistry, 2013, agd.org/docs/default-source/advocacy-papers/agd-white-paper-investigate-reporton-corporate-dentistry.pdf?sfvrsn=c0d75b1_2.

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3. Ganski, Kelly. “More Dentists Affiliating with DSOs.” American Dental Association, 1 June 2023, adanews.ada.org/ada-news/2023/june/more-dentists-affiliating-with-dsos/.

4. Vujicic, Marko. “The Evolving Dental Practice Model.” Health Policy Institute, American Dental Association, ada.org/-/media/project/ada-organization/ada/ada-org/files/resources/ research/hpi/hpi_evolving_dental_practice_model_2022.pdf. Accessed 8 Sept. 2023.

5. “VideaHealth - Funding, Financials, Valuation & Investors.” Crunchbase, crunchbase.com/ organization/videahealth/company_financials. Accessed 8 Sept. 2023.

6. “A Guide to Acquisition Finance.” Samera, samera.co.uk/learning-center/guideacquisition-finance-for-dentists/#What_is_a_leveraged_buy-out. Accessed 9 Oct. 2023.

7. “Is the Window Closing on Dental Practice Equity Arbitrage?” Professional Transition Strategies, 31 Jan. 2023, professionaltransition.com/is-the-window-closing-on-dental-practiceequity-arbitrage/.

8. “DSOs Support the Pathway to Dental Practice Ownership.” Community Dental Partners, communitydentalpartners.com/articles/dental-practice-ownership-dsos/. 29 May 2023.

9. Borsa, Alexander, et al. “Evaluating Trends in Private Equity Ownership and Impacts on Health Outcomes, Costs, and Quality: Systematic Review.” BMJ, 2023, doi.org/10.1136/ bmj-2023-075244.

10. O’Grady, Eileen. “Deceptive Marketing, Medicaid Fraud, and Unnecessary Root Canals on Babies: Private Equity Drills into the Dental Care Industry.” Private Equity Stakeholder Project, July 2021, pestakeholder.org/wp-content/uploads/2021/08/PESP_DSO_July2021. pdf.

11. “Dental Management Company Benevis and Its Affiliated Kool Smiles Dental Clinics to Pay $23.9 Million to Settle False Claims Act Allegations Relating to Medically Unnecessary Pediatric Dental Services.” Office of Public Affairs, U.S. Department of Justice, 10 Jan. 2018, justice.gov/opa/pr/dental-management-company-benevis-and-its-affiliated-kool-smiles -dental-clinics-pay-239.

12. “Attorney General’s Office Reaches $3.5 Million Settlement With Aspen Dental Over Claims of Deceptive Advertising.” Mass.gov, Office of the Attorney General, 5 Jan. 2023, mass.gov/ news/attorney-generals-office-reaches-35-million-settlement-with-aspen-dental-overclaims-of-deceptive-advertising.

13. Heath, David, et al. “Dentists Under Pressure to Drill ‘Healthy’ Teeth for Profit, Former Insiders Allege.” USA Today, 19 March 2020, usatoday.com/in-depth/news/investigations /2020/03/19/dental-chain-private-equity-drills-healthy-teeth-profit/4536783002/.

14. “North Carolina Dental Board Disciplines DSO-Affiliated Dentist for Failure to Adequately Supervise Practices.” JD Supra, 16 June 2022, jdsupra.com/legalnews/north-carolinadental-board-disciplines-6846303/.

15. Cumming, Chris. “Efforts to Spotlight Private Equity’s Healthcare Stakes Struggle for Traction.” The Wall Street Journal, 6 Aug. 2023, wsj.com/articles/efforts-to-spotlight-privateequitys-healthcare-stakes-struggle-for-traction-2e2001f2.

16. Deans, Graeme, et al. “The Consolidation Curve.” Harvard Business Review, Dec. 2002, hbr.org/2002/12/the-consolidation-curve.

17. Hammad Asif, Muhammad, et al. “Bankruptcies Among Private Equity Portfolio Companies on Track for 13-Year High.” S&P Global Market Intelligence, 4 Aug. 2023, spglobal.com/ marketintelligence/en/news-insights/latest-news-headlines/bankruptcies-among-privateequity-portfolio-companies-on-track-for-13-year-high-76865450.

AGD Impact | December 2023

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11/15/23 9:30 AM

Dr. Merlin P. Ohmer Steps in as AGD President

By Caitlin Davis

On Nov. 12, 2023, Merlin P. Ohmer, DDS, MAGD, took the reins of the AGD presidency during the annual meeting of its House of Delegates.

Having served two years in the presidential line as president-elect and vice president, Ohmer is now in a position to continue the work he’s been a part of as well as put his own plans into motion.

A

longtime member of AGD, newly minted President Merlin P. Ohmer, DDS, MAGD, credits much of the success of his career to the organization. “AGD has been instrumental in developing both my clinical skills and knowledge and has allowed me professional growth, development and success,” Ohmer said. “AGD has been there for me at all stages of my career. I found pursuing Fellowship and Mastership to be challenges, and attaining them made me a better dentist.”

Ohmer’s commitment to exemplifying AGD’s mission of continuing education (CE) for dentists doesn’t stop at his own professional development. His AGD leadership journey began in education, first as a member of the Self-Instruction Committee — which writes CE exercises for General Dentistry articles, enabling members

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to receive CE credit — and was followed by an appointment to the Fellowship Exam Committee in 2017.

“There have been so many memories at different stages of my AGD life, but having the ability to give back and help other general dentists succeed in their educational journeys was extremely rewarding — and also a learning experience for myself,” Ohmer said. “I then got involved in leadership at the constituency, regional and national levels. The reward is giving back and helping others succeed.”

Ohmer served as a board member, continuing education director, vice president and president of the Florida AGD. He served as Region 20 regional director for one year and as a trustee for Region 20 in 2020 until his election as AGD vice president in 2021. He was also selected for the Governmental Evaluation and Reform Committee in

2019, where he and other committee members analyzed AGD’s governance structure and suggested reforms to increase efficiency and nimbleness across all governance areas in AGD. Ohmer has several plans in mind for his tenure as AGD president. “There are so many items in my mind, but I do realize that 12 months is a very short period of time,” he said. “The high points are to increase the value of AGD membership for our current and future members. If there is value, dentists will join. Another item is to increase international membership. Many of the articles in General Dentistry are from dentists outside of the United States and Canada. If we find value in their research, why can’t these same dentists be members? We need to look for pathways to increase our members. Lastly, governance reform is paramount to our future success. AGD cannot continue

AGD Impact | December 2023

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to run as we did 10, 20 and 30 years ago.

Thoughts, ideas and solutions are only a call or a click away. We need to be nimbler and more responsive to our members’ needs.”

In addition to idealistic plans for the future, each incoming president must also be aware of the challenges currently facing the organization and have a plan for how to address those obstacles. Ohmer plans to heavily leverage his previous experience working in education leadership as well as governance reform to do just that.

“As previously stated, we need to increase our responsiveness to current issues and do it more efficiently,” Ohmer said. “The CE landscape has morphed and changed, especially since the COVID-19 pandemic. AGD needs to provide education in the formats and on the topics that our members demand. Additionally, our membership is aging, and we must ensure we provide value-added propositions to attract newer general dentists.”

Ohmer has plenty of ideas for how to grow value for current and future members. “We should grow our Premium Plus membership, possibly through added benefits for the post-Fellowship member.

Our Membership Council is currently looking at ways to accomplish this,” he said. “We need to continue our progress to develop microeducation opportunities to meet the needs of our members. Many do not have the desire to sit through a 60- or 120-minute webinar. We need to develop 15- to 30-minute snippets of online CE offerings to attract this market. AGD also needs to continue its rollout of a Business of Dentistry program. Dental students get a great scientific and technical education in school, but the curriculum has very few business courses to facilitate their success in practice.

AGD can help fill this education gap.”

Ohmer graduated in 1975 from Nicholls State University in his hometown of Thibodaux, Louisiana, with a Bachelor

of Science in Chemistry. He earned a Doctor of Dental Surgery in 1979 from the Louisiana State University School of Dentistry while in the U.S. Army Reserve.

He then spent three years on active duty in the U.S. Army, stationed at Hunter Army Airfield in Savannah, Georgia. After release from active duty in 1982, he served in the Louisiana National Guard as a major and practiced in Baton Rouge, Louisiana, until 1989, when he returned to active duty in the U.S. Navy Dental Corps as a lieutenant commander. He retired as a captain in 2016 after 30 years of active military service. He then opened a solo practice in St. Augustine, Florida, where he practiced until 2022.

Ohmer will serve as president until Nov. 24, 2024. To contact him with questions, comments, ideas or concerns, email president@agd.org. F Caitlin Davis is associate editor of AGD Impact. To comment on this article, email impact@agd.org.

agd.org/impact

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11/15/23 9:30 AM

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