What to consider before joining a dental practice management company

January 27, 2018

By Adam Reisch, CPA, CFP®, CCA, CGMA

The appeal of joining a dental practice management company is strong for dentists who are looking to spend more time practicing and less time running a business. Dental practice management firms offer significant financial and personal benefits for a dentist whose goals and mission align with the organization. However, those who choose to remain independent often choose to do so for personal, financial and cultural reasons as well.

Consider numerous factors before joining a dental practice management company. Here are our top five to help guide your decision-making process and align with your ultimate goals.

Buying power

The current health care culture in America has allowed practices across all medical or related professions with significant buying power to rule the marketplace and insurance reimbursement rates. When a practice has a higher level of buying power because of their volume of services, they are able to negotiate higher insurance reimbursement rates and generally recover more of their service costs than practices who are set up to receive less. Dental practice management companies have a stronger buying power because of the volume of services conducted across all their member groups, which opens the door to higher reimbursement rates for their practitioners.

While this strong buying power is appealing to a dentist properly pricing services to align with various reimbursement rates is the first step to setting up a successful revenue structure for any practice. Knowing your market and buying power, as well as developing a strong understanding of the reimbursement rate structure, can go a long way in operating a financially successful independent dental practice.

Personal independence

Purchasing or opening your own independent dental practice is most appealing to practitioners who want to maintain a lifestyle that aligns with their personal and familial goals. Being part of a management group can provide personal independence in the form of freed-up time that would normally be spent on office work, bookkeeping, human resources and the like; however, it may also mean your work schedule is dictated by another party rather than your own personal preferences.

Dentists considering a management group often stumble at this personal roadblock because they prefer not to have their schedules dictated by a management firm. For those considering a management group, this may be one of the most difficult choices to make, and it should not be taken lightly as personal happiness is essential to success.

Financial independence

Beyond insurance reimbursement rates, tax rates and entity selection for a dental practice can go a long way in determining financial success for any type of practice. While recent tax reform stirred up the discussion on entity selection across many industries (S-corp vs C-corp), for those in professional and health care services, the qualified business income (QBI) deduction which was greatly improved for other industries, was not so with these industries. For those who choose to be part of a management group, entity selection becomes a non-issue as the organization dictates your revenue. However, for independent practices, entity selection can be a large factor in your income stream.

As an independent practitioner, having the ability to collaborate with your own financial advisors and develop tax strategies to suit your needs and goals is appealing for the dentist who desires control over his/her financial destiny. Feeling financially independent can be a strong motivator for those deciding between a management group and independence. Either way, a strong partnership between your accountant, financial advisor and legal team should be a priority.


Beyond financial and personal considerations, the culture a management group instills in a practice will significantly impact the environment of the practice. Dental management groups often have an established workplace and practice culture which they expect to be enforced, and the desire and ability to align with that culture must be taken seriously by the dentist owner.

Before joining a group, a dentist must consider their vision, mission and core values as an independent practitioner alongside the vision, mission and core values of the group. Do they align? Where do they conflict? What can you live with and without? Answering these questions truthfully and discussing and negotiating with a potential management group up front is necessary as culture, mission, vision and core values can positively or negatively impact workplace and career happiness.


In a competitive marketplace, dentists can feel overwhelmed and bogged down with the task of effectively growing their practice or establish their presence in a new market. A practice management firm can provide the marketing strategy needed to establish a new practice or grow an existing practice. Management groups provide the power of brand recognition to make a big impact in a region.

Dentists who are looking to establish or grow their practice will need to understand and acknowledge the energy, resources and time it takes to market effectively. Independent marketing can be successful if realistic expectations are set and the financial and time investments are properly channeled into growing a brand presence. A dentist considering a management company or independence should determine what commitments they are willing to make for their marketing strategy.

These five considerations scratch the surface of the choices and decisions dentists will need to make before maintaining independence or joining a management group. For assistance, consult your family, your mentors and your financial advisors to weigh the personal and financial considerations to make the decision that is right for you.

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