Doctor Own Vs Doctor Led

As Alcan continues to grow, I’m seeing more and more groups, both new and existing, advertising that they are “doctor-owned.” Which makes a lot of sense from a business standpoint. There aren’t too many doctors that would sign up with a group that advertised itself as “investment banker-owned.” Unfortunately, as with most advertising, much equivocation takes place when it comes to the “doctor-owned” statement. It’s gotten to the point that I feel it would be beneficial for the market to get clarification on what “doctor-owned” really means.

Recently, and for reasons I won’t elaborate upon in this particular newsletter, Alex and I had the opportunity to learn all about the ice cream business. Although we focused mainly on the business side of things, when we got to the actual manufacture of the ice cream, I was intrigued. Not a single red-blooded American hasn’t asked themselves the question at some point: just what the hell is gelato and how is it different than ice cream? To find out, read to the end! (I hate myself for doing that, and acknowledge it was done purely out of irony).

This question led our ice cream mentor into a tirade about how there were ice cream shops selling ice cream labelled as American Gelato. Which is another way of saying ice cream. I also found another concept quite interesting. "Overrun" the total amount of air that is whipped into ice cream to make it lighter and fluffier. It’s also used by less premium ice creams to increase the volume of their ice cream, thereby improving profit margins. By law, a tub of ice cream can have up to 100% "overrun" meaning that the tub is ½ ice cream, ½ air. Pretty damned clever, if you ask me. Overrun

At this point you are probably waiting for the Alcan Ice Cream Cooperative sales pitch. What does ice cream have to do with the dental industry? I’ll tell you. If an ice cream store can market itself as American gelato without really being gelato, what’s to prevent a DSO from marketing itself as doctor-owned, when it really isn’t doctor-owned? Much like the tub of ice cream that is ½ air can still be called ice cream even alongside a rich, delicious, super premium ice cream, so too can a DSO market itself as doctor-owned, even though the total interest the doctors own is nowhere near enough to control the organization.

Solutions

I always tell my team not to bring me a problem without several possible solutions. So here are two solutions for this issue.

1. Lead a bloody, yearslong crusade that ultimately ends in the siege of whatever federal building is in charge of requiring DSOs to properly disclose what percentage of their ownership is non-clinician, only to find that DOGE shut that department down a long time ago.
2. Elucidate for the dental industry the difference between being doctor-owned and doctor-led.

Although option 1 provides a much higher chance of reaching Valhalla, option 2 seems more in line with the scope of this newsletter, so that’s the route I’ll take.

We’ve already discussed how easily the term doctor-owned is manipulated. Here’s an easy test that I propose to be able to claim that designation. Is the sum total of all outstanding voting shares of the entire organization owned by clinicians greater than 51%? If yes, you can call yourself a doctor-owned organization. If you ask a DSO this question, and they can’t or won’t produce an immediate answer, guess what? Investors own and control that company. The higher the % of equity owned by doctors, the better. Quick, ask me what percentage of Alcan, including all of its affiliates, is owned by doctors? It’s 100%. Pretty easy, right?

Not enough to be doctor lead

Here's where it gets more difficult. What’s to prevent a doctor from going full Anakin and turning to the dark side, leasing their name out to the highest bidder? This is where the doctor-led distinction comes into play. Who is driving the company, and in which direction? To me, it’s not enough to be doctor-owned, even by my own definition. To preserve the profession, an organization needs to be doctor-owned, doctor-led.

To be doctor-led means that the dentists at the top of the organization aren’t just involved in operating the company, they are guiding the industry. My inspiration for this particular newsletter is none other than my wife, Dr. Alex. From the day she stepped into dental school, she has been a part of the fabric of organized dentistry. Without going into all her accolades, I can confidently say that she has dedicated thousands of hours of her life to advocating for the children we serve and advancing the field of pediatric dentistry. Just yesterday she was at the state capitol testifying in front of the Senate for increased access to general anesthesia for high-risk patients. She doesn’t do this to benefit either our practices or Alcan financially. She does it because she believes that our industry needs leadership and guidance in order to remain independent and flourish for the next 100 years.

In Summary

The next time a DSO approaches you, ask about their clinical leadership. If I were a betting man, the organizations that are truly doctor-owned will be helmed by providers like Alex who dedicate themselves to their profession and to their community. If the organization is investor-owned, odds are the clinical leadership spends more time at conferences dedicated to increasing profit margins than they do advocating for their profession.

Oh, and to answer the gelato question – I honestly don’t remember. It was something about less milkfat and no hardening process blah blah blah. I just know that you shouldn’t trust anyone who tries to sell you American gelato.