Monday, October 08, 2012

Arthur Laffer’s study on Dental Service Organizations (DSO’s) is questioned

Dr. Biscupid
By Donna Domino, Features Editor

October 8, 2012 -- A new study conducted by a well-regarded economist but paid for by the dental chain Kool Smiles found that dental service organizations (DSOs) provide lower-cost treatment to underserved populations. The report also eschews criticisms about Medicaid fraud and unnecessary procedures that have been leveled against many DSOs. ellisquote

The report, released September 19, was compiled and written by Arthur Laffer, PhD, a former advisor for President Ronald Reagan who is known as the father of supply-side economics. The 17-page paper, "Dental Service Organizations: A Comparative Review," evaluated all Texas Medicaid data from fiscal year 2011, including 25.9 million procedures.

"DSOs are providing dental care to some of the poorest, most underserved segments of our society," Laffer wrote. "DSOs are not only providing much needed care, but they are providing that care expeditiously and relatively inexpensively when compared to non-DSO affiliated dentists."

DSOs have operated since the 1960s but have become much more prevalent since the late 1990s, he noted.

Full Article can be read here.

Frank Catalanotto, DMD, …said he also questions the report's integrity.

"Any time an organization is under investigation, you'd always look suspiciously that Kool Smiles has a self-serving motive in paying for studies like this," Dr. Catalanotto told "We have to assume the investigations are also valid and based on complaints and specific reasons. But in any organization you have to determine what's driving the organization. Is there a profit motive, and does that result in bad behavior?"…

Full Article can be read here.

Houston attorney Jim Moriarty, who is part of a whistle-blower case against Dallas-based All Smiles Dental Centers, agrees that DSOs violate state dental practice laws.

"The elephant in the room is what Kool Smiles and Small Smiles and the rest of the DSOs are doing is illegal," he told "No private equity firm spends a billion dollars buying a dental practice unless they get complete control over the business and complete control over the income stream. So Laffer's premise that the private equity firms that own most of them do not have control over the clinics is a lie, and he glosses over this."

Laffer did not respond to calls for comment.