Do DSO's Deliver?

In recent years, corporate dental groups have become increasingly active buyers in many markets. It is easy to see why the offers attract attention. They are polished. They highlight large purchase prices. They market themselves as simple solutions with strong support systems. For many dentists, the idea of cashing out and continuing to work for a few years sounds appealing.

However, the headline number in a DSO offer rarely reflects the actual earnings you take home over time. It is important to understand how these deals are structured.

Most DSO deals include a mix of cash, earn outs, and equity in the parent company. The cash portion is usually much smaller than the number presented in the initial discussion. The earn out portion is tied to maintaining production levels for several years after the sale. If production drops or if you choose to work fewer days, your earn out drops with it.

Equity components are often the most misunderstood. DSOs typically issue equity in a larger management company rather than in your own location. This means you do not control performance and you cannot influence enterprise level decisions. If the parent company does not grow or reposition successfully, this equity may not deliver meaningful returns.

Another major factor is the change in compensation after the sale. When you sell to a DSO, you usually shift from owner income to associate income. This is often a significant reduction. Even with incentives and bonuses, most dentists earn less than they did when they controlled their own schedules, fees, and operational priorities.

There is also a cultural shift. DSOs prioritize efficiency and standardized systems. Some dentists appreciate this structure. Others find it restrictive and stressful, especially as they approach retirement and hope to slow down.

Selling to a DSO is not always a bad choice, but it is often misunderstood. Dentists should evaluate the entire financial picture, not just the headline price. In many cases, a private buyer or strategic partner can produce a cleaner, faster, and ultimately more profitable outcome with fewer strings attached.