Why Richmond Dental and Medical Is the Perfect Fit for Dental Service Organizations

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Dental service organizations (DSOs) are on the rise. Currently, DSOs account for 25 percent of the dental market, and that number is expected to soar to 40 percent by 2022, according to Tusk’s Industry Trends in the Dental Market (end of 2016 report).

DSOs offer a distinct service model, along with their employment arrangement that’s becoming popular with young dentists who are taking on more debt after college and dental school,  thus delaying the purchase of a practice outright in the traditional owner-dentist framework.


Defining the DSO

While there are a few permutations, DSOs in general are management services entities that buy traditional dentist-owned practices and/or start their own de novo clinics. They typically have multiple locations and provide a host of contracted “back office” services to their branch clinics, including centralized human resources management, purchasing, billing, accounting and bookkeeping, marketing and public relations, and negotiation and maintenance of vendor agreements. In most DSO models, including traditional practices that evolve to create their own DSO entity rather than selling to an acquisitive DSO, they handle all non-patient-facing activities. And in many DSO models, dentists become employees rather than having an ownership stake.


Bulk Purchasing Drives Value with the Right Suppliers

Whether a DSO becomes a regional or national conglomerate of practices, an outgrowth of a traditional group practice, or a specialty marketing play, such as a chain of practices aimed at pediatric dentistry,  this model offers certain strategic advantages if executed correctly. The purpose of consolidation in any field is to optimize efficiencies; in the case of DSOs, that could mean cost controls in practice operations, maximizing employee productivity (such as targeted number of patients treated on a daily basis), or creating economies of scale for instrument and supply purchase.

While it would be easy, for example, to simply look at costs to purchase supplies, the best-run DSOs are able to see the up-front hard costs, the soft cost consequences of “going on the cheap,” and the long term return on investment of supply purchases. Put simply, DSOs should take a comprehensive approach to creating economies of scale and purchasing power with elite suppliers rather than lowest common denominator pricing strategies that could be undertaken in any model.


The Richmond Dental Difference for Dental Service Organizations

For multiple generations of dentists, the Richmond Dental and Medical name represents quality. That’s because we’ve been making some of the world’s finest dental products since 1895. And while our company isn’t known as a discount manufacturer, we are certainly regarded for multiple returns on investment for purchases made by our customers. This dynamic makes Richmond the perfect supplier of elite, high-performance dental supplies for DSOs.

Our products are known for their clinical performance; in fact, almost every year recently leading industry publications and product testing labs have recognized our products with multiple awards for elite design and performance.  Performance pays off over time. When DSOs are able to scale their purchasing with an elite supplier, they will see that while they may invest more on a per order basis, orders will be less in volume and/or frequency. The fact is that better products--especially those used in hygiene and procedures during examination and surgical settings--require fewer units to perform a particular job. Thus, each allotment lasts longer, for a lower cost in actual use. Less product waste also translates into faster treating time, allowing for greater efficiencies for the clinic.

Since we are vertically integrated with one of the world’s renowned suppliers of purified cotton, we can deliver elite performance at a more cost-effective price point to drive value for our customers. Purchasing USP, medical-grade cotton from regional farmers is sustainable and benefits many industry sectors.

Finally, many DSOs have another value driver that runs in their calculus alongside quality, upfront cost, cost-in-use, and long-term performance, and that’s the source of manufacture. At Richmond Dental, we proudly supply the industry with products made in the USA, including our manufacturing facility at our home in Charlotte, North Carolina. When DSOs see Made in USA on Richmond supplies, along with the compelling elements of our value proposition, the choice is clear. Richmond Dental and Medical is perfect for the new DSO revolution taking shape in the dental industry.