Dan Hosler, founder and CEO of Allied OMS, spoke with Becker's on Nov. 17 to discuss how he plans to "democratize private equity" in dental.
Allied OMS is a dentist-owned, dentist-led and dentist-controlled private equity firm.
Editor's note: These responses were edited lightly for clarity and brevity.
Question: What role should private equity play in dentistry?
Dan Hosler: One of the ways that we've tried to define that is by making sure that there are a couple nonnegotiables, and clinical autonomy in the hands of the providers, to us, is a nonnegotiable. We want our doctors to always be in control of providing care to patients, full stop. Not every group is like that. Some people talk about it and maybe act differently. We lead with that to say, "We want you to be comfortable." The biggest question we get asked is, "What changes when I join a group? There's some things I don't want to change." So we really like to lead with that. Clinical autonomy is truly something that cannot change in these models.
From there, we really start a dialogue. What part of your business has become difficult and what are some ways that we might be able to help? We try to take a little bit more of a customized approach, because every practice is different. Our [dentists] like to practice in different ways. Some have a high touch, some have a different level of interaction with the patients. We don't want to mess that up because that is a decision that has sometimes been made by the generation of [dentists] that preceded the existing surgeons. So if you work in a 50-year-old practice, there's a lot of history. There's a lot of trust that gets built in the community. We don't want to break that trust that's been developed.
Q: What are some key things that make Allied OMS' Doctor Equity model different from traditional private equity?
DH: There's three core things that make us different. The first of which is we exist to share the knowledge of business and private equity with our [dentist] partners so that they can really unlock the potential from their practice. It's not just about economics, it's truly a more holistic approach. We're really democratizing private equity for our doctor partners. It's a really important thing and one of the real key reasons why we exist.
The second is greater transparency. I come from the world of traditional middle market private equity, and I don't always love the way that private equity would work with prospective partners. So one of the things that we've really gone out of our way to talk about is our four-step process. At any point in time, feel free to stop the process. This is not something we're going to try to push you into. We want you to know the full gamut of opportunity and options and then select what you think is going to be best for you. For the very first time we teach doctors about the profitability of their practice and how to analyze the actual valuation of the practice. That starts with transparency and it goes all the way through legal documentation literally up until the day that somebody officially joins us as a partner.
The third is true personal and professional growth. By sharing knowledge, benchmarking and best practices, we're bringing back the collaboration and collegiality that a lot of our [dentists] miss. I can't tell you how many times a 30- or 40-, or 50-, or 60-year-old [dentists] says, "You're reminding me of the fun I had when I was in residency." That's what we're trying to bring back. Running a business is lonely. It's hard. You don't know what the playbook looks like, you'd love to be able to talk to outside experts. So now that we have our ever-increasing network of [dentists], we use Slack. There's lots of collaboration that takes place digitally.