Many executives agree that DSOs will need to focus on building strong teams, being strategic with growth and investing in new services in order to finish the year successfully.
Some of the top challenges facing DSOs and MSOs this year include inflation, staffing shortages and increased competition. These obstacles have led DSOs to come up with new strategies or double down on effective strategies to maintain stability and ensure growth.
Mark Censoprano, Co-CEO of Hackensack, N.J.-based Max Surgical Specialty Management, told Becker's that being overleveraged has led some companies to run into trouble.
"Some tremors have gone through the industry about some of the ways these DSOs have built themselves, and that causes some concerns among the doctors and some concerns among the practice owners and surgeons," he said. "I think some folks might have made some missteps, and whether it's that they grew too quick or they didn't have the right financial structure when they were putting these deals together, you have to be very careful that the organization you're building to support the surgeons truly has their best interest always in mind. If you always have their best interest in mind, you can navigate some of these waters and not get yourself into that kind of trouble."
Dan Burke, chief enterprise strategy officer Henderson, Nev.-based PDS Health, echoed Mr. Censoprano's statements, adding that high interest rates have added pressure to over-leveraged DSOs.
"DSOs need to be the best choice for clinicians. When they are clinician-focused, DSOs are able to recruit, onboard and retain the best clinicians. As we know, the patients are coming, and they will continue to come to the dental office for their oral healthcare needs. To build a long-term sustainable business, DSOs must continuously improve on their offerings for dentists and other clinicians," Mr. Burke told Becker's.
Stephanie Townsend, Heartland Dental's senior vice president of operations, said the top challenges for DSOs this year are cybersecurity, the labor market, technology integration and industry competition.
Ms. Townsend said the key to DSOs' success this year will be simplifying their approach and aligning strategies with their goals. Success will also require investing in retention and education for staff members and mentoring programs for doctor partners. DSOs can also expand hygiene services to bring in more patients.