Jonathon Kimes 5-13

Is Corporate Takeover Inevitable?

As a part of organized dentistry you often hear debates, and more often complaints, about the rise of corporate dentistry and the effect that the numerous Dental Support Organizations (DSOs) are having on association membership as well as the local economy.  Many private practice owners are worried about the increased competition that is also offering lower prices and more convenient hours.  Others simply turn a blind eye and assume that everything will be fine if they keep doing things the way they have always done them.  The DSO owned practice down the street won’t keep you from making a living, right?  But there’s a bigger picture: the world is officially ruled by mega corporations, and we haven’t been able, or willing, to do anything about it.

Almost every product or service that we use today is created by a small handful of all-powerful globalized powers.  Every day in the news we read of a merger, an acquisition, a buy-out.  Many of these huge companies have been around for as long as any of us have been alive, but it doesn’t seem like that long ago when the store we shopped in was owned by the owner and the products we purchased were made by the company on the label.  In its simplest form, the mom-and-pop shops just can’t compete with the major chains.  It’s like a perfect storm…as it grows stronger, it can feed itself even more, and can eventually destroy everything in its way.  As the major corporations get bigger, not only can they afford to just buy-out the competition, but they can afford to buy power in the government and influence the market.

Everything we consume: energy, money, food, drugs, internet, TV/radio…all controlled by global mega corporations.  Why?  Is there an economic benefit to these companies?  Do we all benefit from this, or just the CEOs?  Americans at least don’t seem to complain.  We shop on Amazon with our Bank of America credit card to purchase Johnson and Johnson products (all top 10 global companies).  Big corporations usually create more affordable and more obtainable products, and we like that.

It is certainly happening in our industry as well.  Remember some of the smaller companies and manufacturers that you have done business with in the past for dental products.  Now they are owned by Henry Schein or Patterson.  But what about our practices?  If you don’t already work for a corporation, many have been approached by a corporation about “selling out.”  Heartland Dental owns almost 1000 offices nationwide and doesn’t appear to be slowing down.  So what, if anything, can we do to keep the perfect storm from eating us alive?  Should we resist the change?  The major difference in corporate dentistry and corporate world economy is that we are not selling products, we are delivering our services and skills.  I am not sure that the same rules apply.  Is it possible to maintain a high level of autonomy and deliver exceptional care if you are answering to a global CEO?  Is it possible to do bad dentistry, deliver bad customer service, yet still have a booming private practice?  I assume the answer can only be a vague “maybe.”  And perhaps more importantly, will our patients continue to value the private practice experience or will they just accept that they can get reasonable care with extended hours at the chain practice down the road?  Many economists agree that mega corporations exist for one purpose, to make money.  The best way to make more money is to create for less, sell more, and pay fewer people to do it.  To me that means an inferior product, driven by volume, with poor customer service.  I don’t think that many of us would be willing to put our name on dentistry that follows that model.

I am certainly not advocating for either the fall of private practice or the fall of DSOs, but I do think that we must be very aware of the changing landscape of our profession.  Will private practice as we know it even exist in 50 years?  There are twelve question marks in this article, and I certainly don’t have the perfect answers to any of the twelve questions.  But I think that sums it up the best; questions about our profession loom on the horizon, and we had better be ready to answer.

By Jonathon R. Kimes, DDS

Editor, CADS