Dentist Recruitment and Retention Effects Publically Traded DSO’s Performance

Birner Dental Management, a DSO that operates 69 dental offices under the brand name Perfect Teeth recently announced their 2016 3rd quarter results. One of the few US based dental service organizations that is publically traded, Birner is followed closely in the dental industry. Birner manages practices located in Colorado, New Mexico and Arizona, and their stock is traded on the OTCQX under the BDMS symbol.

Highlights of the results include a 4.4% revenue decrease to $15.2 million, while adjusted EBITDA decreased $483,000, or 59.0%, to $335,000 for the quarter ended September 30, 2016.  A substantial portion of the decline in revenue for the quarter and nine months ended September 30, 2016, was concentrated in one region within the company.  The company believes it is taking the necessary actions to correct the decline in revenue with new management for this region.  The company also believes that dentist transition partially contributed to the decrease in revenue.  The number of dentists affiliated with the company has declined from 110 on September 30, 2015 to 98 on September 30, 2016.  The company replaced its dentist recruiter in September 2016 in an effort to reverse the decline in the number of its affiliated dentists.  You can view an entire analysis of Birner Dental Management’s 2016 Q3 results HERE.

It is hard to accurately say if dentist and staff retention are becoming an increasing issue with DSOs and dental group practices as a whole, but one can gather by the above financial results that dentist and supporting staff satisfaction, retention and recruitment are extremely important to the bottom line.  At Group Dentistry Now we often speak with DSOs and dental group practices.  Recruitment, retention and staffing in general are top challenges and issues that dental service organizations and group practices are dealing with in 2016.  With the increase of private equity funding and creation of more dental support organizations and group practices, one can assume that staff retention and recruitment will only become more of an issue as DSO platforms grow and become more aggressive in support staff and dentist recruitment.

DSOs and group practices should have a solid recruitment and staffing plan in place.  Factors such as increased PE interest in the dental services sector, growth of dentist owned group practices, and growth of existing dental support organizations will only increase the competition for staff.  Many DSOs and dental group practices are providing career packages that include equity, student debt reduction, access to educational opportunities and clear paths to practice ownership and leadership opportunities.

Sources: Perfect Teeth, PR Newswire, OTC Markets

Beth Miller, Contributing Editor, GDN


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