Graham Rosenberg and Dr. Andrew Meikle discuss organizational models emerging within Canada's dental industry with Dr. John O'Keefe

Posted Sep 24th, 2014 in the wire

New organizational models for dental care delivery

by JCDA Oasis | Sep 24, 2014 | CDA @ Work, Issues & People, Professional Issues

During the summer of 2014, Dr. John O’Keefe sent out a request for input about the new and emerging models for the organization of dental care delivery; also known as the corporatization of dentistry. The CDA has also initiated a corporatization task force with a view to gather information from different sources and inform Canadian dentists about the new organizational trends.

Dr. John O’Keefe submitted a series of questions to Dr. Andrew Meikle and to Graham Rosenberg at Dental Corporation of Canada. The following are unedited answers that were provided by Dental Corp.

Who is Dental Corporation of Canada (DCC)?

DCC was founded in September 2011 with the goal of revolutionizing the business of dentistry in Canada. The DCC mission is to be a world-class business Partner for dentists across Canada, bringing a new level of business sophistication and collaboration, and strategic resources to support dentists’ personal and professional growth ambitions. Dental Corporation is now the largest network of dental practitioners across the country with a practice community of more than 1,500 Canadians.

In three short years, Dental Corporation has exceeded its growth expectations, with now more than 90 locations and $200 million in revenues. We hope to continue on our path of growth and are committed to maintaining the fundamentals of our business model, value proposition and core values.

The Company partners with dentists across Canada to support their ongoing efforts to provide independent, high quality patient care. The DCC innovative business model provides its Dentist Partners with strategic expertise, tactical resources and access to investment capital to support their growth ambitions and success in the evolving dental industry. This unique business model alleviates the burden of administration, enabling Dentist Partners to retain their clinical autonomy and professional independence and focus on what they love best – providing quality, optimal patient care and services to Canadians.

How does the DCC business model operate?

The DCC business model brings a new level of business sophistication and collaboration, while delivering strategic resources to support dentists’ personal and professional growth ambitions. Dental Corporation facilitates collaboration among its like-minded practitioners and ongoing professional development. Partners collaborate with each another to ensure that their practices are delivering the very best patient-centric experiences to keep pace with the changing expectations of Canadians.

An important part of our model is that our Dentist Partner are shareholders in the overall DCC group. We are owned by our Dentist Partners; our Management Team; and our Private Equity Partners: Toronto-based private equity fund manager, Imperial Capital and one of the top pension plans in Canada, OP Trust Private Markets Group. Our model is to be a valuable resource to our Partners.

Our equity partners believe in our business model and the DCC value proposition to our Dentist Partners including providing them with clinical autonomy and professional independence because that contributes to our best-in-class patient care. Our equity partners have no input into how dental care and services are delivered. The expectation of our equity partners is that we continue to do what we have done so far, to achieve our success and reputation in Canada and that we remain true to our core values and beliefs.

What are some of the guiding principles of DCC?

As an organization, DCC pledges to:

  • Focus on the patient first – providing quality, optimal patient care is the primary focus of a dental practice
  • Defer to the clinician’s choice on how to practice dentistry and what is best for the patient. The clinician should always have the unimpeded choice on if, when and who to refer patients to specialists and/or other health practitioners
  • Respect the skill, dedication, art and science of dentistry
  • Freedom of choice on how to practice dentistry; treatment options; and referrals with no performance agenda
  • Freedom of choice regarding equipment, supplies, furnishings and all aspects of the practice environment
  • Be responsible to its Partners and their efforts to deliver optimal patient care
  • In addition to clinical independence, our Partners maintain their individual brand and community reputation
  • Recognize Partner practice autonomy – offer flexibility to adapt to the unique needs of the practitioner, service area and patient base
  • Work with its Partners to identify and recruit dental talent to support their growing practices
  • Facilitate professional development opportunities and provide a forum of ideas exchange on a collaborative level
  • Operate in the background – quietly and efficiently in support of its Partners
  • Not try to redefine health care but rather only support and enlarge the business opportunities for dentists without compromising the delivery of quality health and patient care
  • Be a good corporate citizen and support the community at large

Is there a typical office profile that is particularly attractive to DCC?

We are focused on leading, growth-oriented general and specialist dentists and their practices throughout Canada. Generally, our Partners operate larger than average practices with multiple dental practitioners on site.

Our Partners all have very strong clinical and business reputations among their peers, and strong relationships with their patients and local communities. All fiercely value their autonomy and consider DCC a valuable resource to their delivery of quality patient-centred care. They want to have more time to practice and interact with patients and spend less time on the back-end of their practice.

How do you typically approach a practice owner to gauge interest in joining DCC?

Generally, our network has grown organically through referral and positive word of mouth. Our good reputation is quickly spreading because of our unique model that values autonomy and quality patient-centric care. Our Partners are our best advocates and can personally attest to our commitment to delivering on our promises. DCC Co-founder Dr Andrew Meikle is well-known and respected within the profession. We are also very active at industry and college events.

What are the benefits of the DCC Model?

We are very transparent in what our model is and what DCC can offer. We welcome questions and want more dentists to better understand our unique model. Our model is designed for dentists who want to stay active in their practice. This isn’t a sale of a practice where a dentist is planning retirement; and our model is not about a dentist becoming an employee. This is a partnership. Dentists who join DCC in the prime of their profession can realize their personal and professional growth ambitions by:

  • Continuing to benefit from clinical autonomy and professional independence
  • Maintaining their brand positioning
  • Achieving more balance in their lives
  • Recognizing the full value of the business they have built
  • Identifying their own growth agenda
  • Sharing in the future growth of their practices’ profitability
  • Diversifying their assets through ongoing investments in their practice and Dental Corporation
  • Continuing to generate income from their production

While the financial benefits are healthy, it is not all about the money. There’s much more. Our Partners are motivated by the DCC model that preserves their autonomy and emphasises patient-centric care while allowing them to be part of something that is vibrant and drives growth.

Does an arrangement with DCC impede the clinical autonomy of a dentist in any way?

In no way whatsoever. In fact, DCC is committed to the professional, clinical and operational independence of its Partners. We firmly believe that a dentist should be free to practice freely and be bound only by his or her professional obligations.

Patient care and treatment remain the responsibility of the dentist. It’s what our Partners want and what we stand for. In fact, we go so far as to mandate autonomy in our contracts with our Partners.

Does DCC encourage patient-centred care in the offices they acquire?

Yes, complete independence for Partners to manage their patients’ quality care is fundamental to the DCC model. All of our Partners put their patients first. That is why we partner with them. The same quality dentistry that makes our Partners successful in the eyes of their peers and patient is what continues after they become part of DCC. Nothing changes, except decreased stress and time spent on back-office operations allowing dentists to do more of what they trained for: providing quality, optimal patient care and services to Canadians. Recently, we conducted an extensive research project to better understand the needs, wants and desires of Canadian dental consumers. Our findings show that 1 in 3 Canadians (32%) who only visit their dentist once a year, identify cost as the main barrier to recommended frequency, with an additional 28% noting insurance-related issues. More than 1 in 4 Canadians have switched dentists in the past 5 years, with almost 27% switching due to patient care related issues.

What practice management/administration services does DCC provide for dentists?

The core of what we do is provide our Partners and practices with world-class support and expertise through resources in the areas of business which many practices currently outsource to third party providers. This support generally centres around: maximizing efficiency in their practices; offering valuable resources for recruiting and developing talent; marketing; dental supply purchasing power; and practice administration.

We deliver this through the following teams:

  • Talent & Development: our Partners have access to our vast network of candidates that have been pre-screened based on our Partners unique criteria to ensure proper fit and skill set
  • Marketing Support: we offer our Partners marketing and advertising support to help increase new patient flow while communicating the value of their unique brand
  • Practice Operations: we have dedicated Practice Advisors to support our Partners and their growth ambitions which are all tailored to their unique needs
  • Financial Tools & Resources: we can give our Partners a clear picture of exactly how their practice is performing on a monthly basis. We also work with them to identify key areas of growth and to address any gaps

What type of arrangement could a new dental graduate have with DCC?

We believe the DCC model offers many advantages to new graduates. The economies of setting up a practice are now dramatically different from what they were a decade ago. Today, young graduates of dental school or residency programs have limited choices. Saddled with $200,000+ of educational debt and the cost of buying a solid practice between $800,000 and $1.4 million, joining a DCC practice is often the most stress-free and desirous alternative.

With a 3-year reciprocal agreement, new graduates can join a DCC Partner practice, with the following advantages:

  • Reduce or pay off student loans
  • Make guaranteed compensation in the first few years of practice while being mentored and trained on both the clinical and business side of dentistry without being under pressure to produc
  • A continuing education agenda which provides both clinical and practice management skills

After 3 years, there is also an opportunity to be vested in the profitability of the practice, in which they are working or become a Partner in another DCC practice.

What are the influences in the Canadian dental care market that have contributed to DCC’s success?

The opportunity for DCC is underpinned by a demographic and generational shift away from ownership to partnership opportunities, increased capital investment, and continued growth in the administrative requirements of practice offices and small business owners. Companies like DCC are a growing segment of the dental industry and can bring tremendous value to dentists and their patients.

What are the critical differences between the Canadian and US dental care markets?

The core differences are driven by the:

Structure of the industries

Influence of the ultimate payor of services (i.e.: insurance companies in Canada versus HMOs and PPOs in the U.S.)

Differences with regard for patient choice

Dentist’s ability to generate fees for service and freedom to practice dentistry without clinical interference

In the US, increased pressure on costs and marginalization of fee reimbursements by HMOs and PPOs have placed dentists under significantly more pressure than their Canadian counterparts to run profitable practices and potentially sacrificing quality of care.

The Canadian model is entirely different. Patients have complete freedom of choice as to which dentist they see. Dentists have complete choice over how much they charge for services (subject to appropriate patient disclosures and regulatory guidelines). Canadian dentists also maintain complete discretion as to which specialists or other health care practitioners to refer their patients.

What is your vision of DCC for 5 years from now?

Our ambition is to continue our path of growth and remain “on strategy” without compromise to our model. Within the Canadian dental sector, DCC will continue to be only a small part of total market share.

Do you see other private equity backed enterprises entering the Canadian dental market in the next 5 years?

We have watched significant change in the US. However, over the past 30 plus years DSOs still only represent around 15% of the market. In Canada, the four largest dental groups represent less than 2%. We believe that over the next 5 years DSO groups in Canada will expand their reach.

What will the Canadian dental care market look like in 5 years?

We believe the market will continue to grow at a modest rate. Variables such as the increasing cost of technology, equipment, labour and urban rental rates along with stringent regulatory compliance, overwhelming debt burdens coupled with the general stressors of a running a highly technical and specialized small business may result in far fewer graduates seeking ownership. Increased pressure will be placed on the solo practitioner and particularly that practitioner who does not offer a wide scope of dental services.

There will always be, a role for solo practitioners who provide top quality patient-centric care, however, we believe that more collaborative models and managed group practices may offer new advantages. This may range from small groups running 2 to 5 locations to larger groups running as many as 50 offices. We also envision very large singular “big box” practice locations emerging that could be 10,000 square feet in size with up to 100 staff and doctors.

How does DCC and its Partners demonstrate community involvement?

DCC and its Partners are committed to making an ongoing positive contribution to children and oral health in local communities. This is a major focus for us. For instance, in September 2014, DCC made an important contribution of $250,000 to Pediatric Dentistry at Canada’s leading children’s hospitals including at BC Children’s Hospital in Vancouver, Alberta Children’s Hospital in Calgary, The Hospital for Sick Children (SickKids) in Toronto, and the IWK Health Centre in Halifax. DCC also supports Make-A-Wish Canada, which grants wishes to children diagnosed with life-threatening illnesses; and has developed a unique, grassroots initiative called Give Back Smile Back, which involves Partners providing free oral hygiene and orthodontic care to those who do not have access to regular dental care. Being an active good corporate citizen is integral to DCC.

Have you any call to action for Canadian dental organizations?

We believe there are great benefits to enhancing the understanding of the new and more sophisticated Canadian DSO models. This knowledge will contribute to the dental profession at large. We strongly encourage the Universities that are training our future dentists, the various Dental Associations that represent the needs of the dentists from coast to coast, the Leaders and Influencers in our dental community who set the trends and the Regulator Colleges who protect the public to all collectively become more aware of the Canadian models that are being developed in this modern area.

This knowledge should be shared with Canadian dentists so that they, in turn, can truly understand the differences between the various business models emerging and more importantly, know which questions to ask. It is crucial for every dentist to be professionally comfortable in their work environment so that they can enjoy a satisfying and rewarding professional and personal life without compromise to their ideals, ambitions and ethics.

For more information, please contact:

Graham Rosenberg
Co-CEO & President

Dr Andrew Meikle

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