Most States wisely mandate that a dental office must be owned by a dentist. Large group practices, aka “corporate dentistry,” aka “franchise dentistry,” will play by these rules by promoting promising associates into ownership roles. The growth of corporate practices is so great that there are numerous instances of dentists owning two to or three practices only a few years after graduating dental school.
But are they actually owners? I’ve sat through a few presentations made by corporate recruiters and by corporate owner dentists and I’m not so sure I would call them true owners. Sure, we know that dentists give up autonomy on the business side of the practice; that’s part of the allure of corporate dentistry. The company takes care of the practice management so dentists can focus on dentistry. The dentist does not have complete freedom to purchase equipment, hire and fire staff, etc. One could argue that if you don’t have control of the business side of a business then you aren’t a true owner. But beyond that philosophical debate I think there are some concrete, tell-tale signs that corporate dentists owners are not real owners.
(1) They can be fired
If there’s someone above you that has the power to terminate your job, then you are not the boss. If the corporate admins up the food chain decide that an owner is not performing to their standards, they can fire that owner. In my humble opinion, that means that owner isn’t an owner. They are an employee with benefits.
(2) When they retire, they don’t have much to sell
When I retire from my office, I will sell the practice to another dentist. I sell physical things like equipment, measurable things like accounts receivable, and even immaterial things like goodwill. That’s a gross simplification, of course, but my point is I sell the various things I own. It’s different in corporate dentistry. The details of retirement differ between the corporations, but they are most certainly not similar to what is in store for me. I’ve been lead to believe that the better deals include buying out the shares of the retiring dentist. That’s nice, but they still don’t get to sell the equipment and other aspects of the business. They don’t get to sell them because they never owned them.
So I think that large group practices have found a way to call their employees “owners” to meet State regulations even though the dentists aren’t true owners.