June 25, 2015
By: Michael W. Davis, DDS
Dr. Michael W. Davis maintains a private general practice in Santa Fe, NM. He chairs the Santa Fe District Dental Society Peer-Review Committee. Dr. Davis is active in dental care for disadvantaged citizens, and expert legal work. His publications and lectures are on ethical and whistleblower issues within the dental profession, as well as numbers of clinical research papers. He may be contacted at: MWDavisDDS@comcast.net 
Dr. Kevin Cain is an Assistant Professor of Management in the James M. Hull College of Business and guest lecturer in practice management in the College of Dental Medicine at Georgia Regents University. He teaches courses on strategy and entrepreneurship and does academic research in the fields of strategic management, organizational theory, and healthcare management. He also serves on a task force with the Georgia Dental Association and teaches continuing education courses focused on the business of dentistry. Additionally, he is a co-founder and board member of several companies serving the dental industry. He earned a PhD in Business Administration at the University of Georgia, an MBA from Wake Forest University and a BA in Economics from the University of North Carolina at Chapel Hill. He can be contacted at: kevin@kevinwcain.com.Introduction from Dr. Michael Davis-
Dr. Kevin Cain has an interesting and established history in study of the dental industry, and particularly dental service organizations (DSOs). He does research and has given lectures on the risks this business model presents against the public welfare and the integrity of the dental profession. Dr. Cain effectively counters the private equity spin of unlicensed corporate managers keeping at arm’s length from clinical decisions, within the doctor/patient relationship. He confronts DSO industry misrepresentations, of which there are many, head on.Interview
Dr. Davis: Dr. Cain, please relay the personal story of your mother, a practicing nurse, and the degradation of her once honored profession by corporate health care. How did that affect you personally and influence your fields of academic research?Dr. Cain: My mother has been a nurse within the same healthcare organization (and its predecessor hospitals) for 40 years. Since the late 1980s, she’s seen her role increasingly shift from being a caretaker to being part of a production line. The healthcare group she works for – mind you its a not-for-profit – sets performance benchmarks for pre- and post-operative care that her and her colleagues must meet. Additionally, her organization implemented EPIC Systems as its EMR provider last year and the time it takes to document patient care further decreases the quality of care she can provide patients.
She is no longer a happy nurse, and actually tried to dissuade my sister from majoring in nursing. At the center of her frustration with her company is its inability to treat patients as idiosyncratic. There are aspects of her job that, if not performed adequately, can jeopardize patient lives. However, her company pushes for efficiency and sets limits on the amount of time allocated for intake. When you generalize patients to the extent that her company has, and minimize the time nurses have to gather information about patients, it is inevitable that those nurses will miss something critical.
My mother’s frustrations with her organization have really shaped my perspective of the dental industry. She and many other healthcare professionals I have spoken with are disillusioned by the current state of their industry. The drive for growth and profitability in healthcare has superseded the drive for quality care, and I do not want to see the dental students I have the pleasure of interacting with here face the same disillusionment for their entire careers. It is imperative that the dental community protects the general dentist from becoming marginalized in the same manner as the primary care physician.
My research on the dental industry is driven, primarily, by the desire to help dentists remain clinically autonomous. In order for the dental profession to maintain its clinical autonomy, practitioners need to understand how institutional forces shape industries. In my field, we study institutional isomorphism – that organizations within an institutional environment look the same – because it helps explains how mimetic, coercive, and normative forces influence those organizations. There are currently no coercive (regulatory) forces preventing the DSO model from becoming the de facto dental model in the U.S., and there is very little normative pressure coming from private practice dentists to change that course.
With regards to mimetic forces, you have baby-boomers selling their practices to DSOs because a friend did and got more money than they would have in a private transition, and you have dental students – year after year – going to work for DSOs because they have been told that the high guaranteed salary is the quickest way to pay off student debt. Meanwhile, a few “business savvy” – or opportunistic – dentists are building their own DSOs and acquiring other practices because they see founders of the large DSOs driving twenty-five million dollar classic Ferraris and want in on that kind of wealth. These mimetic forces are shaping the industry, and the confluence of these forces is leading dentistry down a familiar path (i.e. optometry, pharmacy, primary care medicine).
Dr. Davis: We continually hear and read the misrepresentations from DSO private equity managers and their hired supporters that they keep at arm’s length from the practice of dentistry. Yet, we know they establish production quotas and bonuses upon employee dentists. Every doctor’s production metric is monitored on a daily basis. Each clinic’s bank account is swept clean, at least two to three times weekly. They determine clinic scheduling, staffing, as well as purchases for dental materials, dental laboratories, and dental equipment. State regulatory dental boards and even the Federal Trade Commission (FTC) seemingly have bought into these outlandish misrepresentations. (1) What private equity firm, whose sole responsibility is towards its shareholders and not patients, would not logically control every aspect of its business, inclusive of the practice of dentistry? (2) Why do we see so little regulatory enforcement for the unlicensed and unlawful practice of dentistry? Is it a matter of laziness, corruption, or some other factor?
Dr. Cain: The short answer is that private equity (PE) firms routinely leave control of their investments to the top management of those companies, but charge those managers with generating the best possible returns. The pressure of those expected financial returns can drive decision-making by managers of those companies, which is where you would see diffusion of pressure from top managers to the level of the organization at which revenues are generated. In the DSO model, that level is the dentist. To think that PE investments in the practice of dentistry, or the legal structure – where the DSO and the professional corporation that employs the dentists are connected only via a management service agreement (MSA) – keep DSO dentists immune to this pressure for financial returns is naïve. I would venture to guess that most dentists working for a DSO would tell you that they are not told to do certain procedures or pressured based on performance, but the psychology of seeing their production and their office’s production ranked against other associates and offices in the DSO probably provides enough of a catalyst to pressure driven, competitive individuals (generalizing here based on current crops of dental students) to alter treatment plans. That pressure might cause the best-intentioned dentists to compromise their training and ethics in order to climb rankings or achieve desired results (or bonuses). Because continuing education for DSO dentists is provided at corporate headquarters in some companies, treatment plans, labs, and materials used across the company probably begin looking very similar – and profitable – over time.
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