Three Models of Dental Service Organization (DSO): Ownership, Capital, and Future

Preface

Some Dental Service Organizations (DSOs) have accumulated heavy debt burdens during the acquisition frenzy of the high-interest-rate era and are undergoing a reshuffle; other DSOs, away from the noise, have reached today through entirely different paths—each carving out their own way, yet ultimately pointing to the same thing: making doctors the true owners.

At the recent annual conference of the American Association of Dental Group Practice (AADGP) held in Texas, the leaders of three DSOs, representing three completely different capital paths, made a rare joint appearance on stage, engaging in what industry insiders described as a "remarkably candid conversation."

The four guests on stage were: Bill Becknell, CEO of Mortenson Dental Partners, known for its Employee Stock Ownership Plan (ESOP); John McClure, co-founder of Aligned Dental Partners, which introduced minority equity private investment; and Pete Swenson, CEO of Park Dental Partners, Inc., along with Chief Clinical Officer Dr. Chris Steele, who together took the stage, continuing their routine of working side-by-side in daily operations. Park Dental Partners had just completed its Nasdaq IPO, becoming the only publicly listed group dental company in the US in recent years.

ESOP, minority equity private investment, public markets—three distinct capital logics, three organizations at different development stages and scales, yet surprising resonances emerged repeatedly in this dialogue: doctors must hold equity, management's role is to support rather than command, culture is a more scarce asset than capital, and growth must be sustainable, not speculative.

This was not a debate about "whose model is better." This was three organizations that have already validated their answers over time, sharing the real paths they have walked.

From the seven-year decision-making journey behind the IPO to the daily implementation of the ESOP's "co-owner" culture; from the negotiation logic of minority equity private investment to the framework for choosing between De Novo and acquisitions; from the real-world experience of implementing AI diagnostic tools to predictions about the industry's consolidation landscape five years from now—the following content will take you to the core of this conversation.

Here it is:

The Paths of Three DSOs – Where They Started, How They Got Here

Q1: How did each of your three DSOs get to where they are today? Could you briefly introduce yourselves?

Bill: I accumulated over twenty years of operational experience in the retail industry—starting with Procter & Gamble's direct-operated stores, rising to Director of Operations, and later going through another retail management journey. I finally entered the dental industry in 2014, joining Mortenson Dental Partners as CEO. Mortenson itself has a very deep history: it was founded by founder Jerry Morton in 1979, with the core belief of taking good care of patients, the community, and employees. From then on, his children began joining the practice, and later some classmates also joined. Through extensive industry networking and events—like occasions like today—they built relationships with more practice groups, and many practices chose to join. Today we have 156 practices across ten states, with annual revenue of approximately $300 million.

John: My entire career has been on the business side of the dental industry. After college, I joined a consulting firm called Lovin Group, staying for about nine years, focusing on practice management consulting, becoming very adept at identifying organic growth opportunities and operational inefficiencies in practices. In 2014, I left consulting, formed a large group with 13 practices in New York, complete with an oral surgery center handling a significant volume of oral surgery and periodontal cases. In 2016, we formally established Aligned Dental, initially operating as a consulting firm serving independent practices and emerging DSOs. Over the past decade, we have supported over 1,000 dental practice locations, providing strategic consulting and financing support. Simultaneously, we have been continuously acquiring practices, one to two per year. In 2023, we merged nine groups together to form today's Aligned Dental Partners, currently with 59 practice locations, aiming to reach 100 by the end of 2026.

Dr. Steele: I am the Chief Clinical Officer at Park Dental. I have been with this organization for over twenty years, starting as a frontline dentist and progressing to my current role. I still practice clinically several days a week. Park Dental has an extremely long history—it was co-founded in 1972 by Pete's father, Craig Swenson, and another dentist, Brian Murr. They initially covered emergencies for each other and helped out, later deciding to merge, becoming one of the earliest group practices in Minnesota and an early participant in the AAGP. Our specialty business has been developed for twenty-eight years, with specialty revenue accounting for about 25% of total revenue. I believe continuing to practice is a huge advantage; it allows me to tangibly feel the direction of the industry and the real impact of technological changes on clinical practice.

Pete: I am the CEO of Park Dental Partners, Inc. Our organization was founded by my father, and I grew up in this family business. Today's Park Dental has over 220 dentists and 87 practice locations, primarily densely concentrated in Minnesota and Wisconsin, with two recent new acquisitions just completed in Arizona. Dr. Steele and I work side-by-side every day; we are true partners—he manages clinical, I manage operations. This combination feels completely natural to us.

Q2: How did Mortenson's ESOP structure come about? Why was this path chosen initially?

Bill: Our ESOP was established in 2005, and we just celebrated its twentieth anniversary last year. Simply put, an ESOP is a trust-based retirement savings vehicle—the trust borrows money to buy a portion of the company's equity, the company makes ongoing contributions on behalf of employees, and these contributions are used to purchase company stock in the employees' names. As the company continues to grow and debt is repaid, the value accumulated in employees' accounts also grows. Today, the ESOP holds about one-third of Mortenson's equity, with the remaining two-thirds held by doctors. Under our S-corp structure, we currently have about 78 shareholder seats, with a cap of 100. We very much hope relevant legislation will adjust the cap to 250, allowing us to include more doctor shareholders. If anyone here has policy influence channels, we genuinely hope you can help advocate for this.

The most beautiful aspect of this structure is that employees truly care about the company's outcomes. We don't call them "employees"; we call them "co-owners." We conduct a comprehensive strategic planning cycle annually. The first step isn't an executive meeting; it's sending a questionnaire to all co-owners—what do you think we most need to improve? What would make your job easier? Their level of concern for the company is real and profound. This sense of ownership is the greatest asset the ESOP has brought us.

Q3: How did Aligned Dental Partners' "group of groups" model form?

John: The formation of our model was a very natural process. While doing consulting, we helped many groups reach a certain scale threshold—they had accumulated over five million dollars in debt, wanted to continue expanding, but didn't know the next step. Some consulting clients at this point asked: Can we join you instead of continuing to go it alone? That was the starting point for the 2023 merger—nine independent groups merging under one holding company. Our structure has a key difference from traditional DSOs: the equity of each group (we call them "divisions") remains at their respective holding company level, rather than being absorbed entirely into a single parent company. The nine divisions are integrated through a unified back-office platform but maintain independent M&A capabilities, continuing to acquire practices within their own markets. We measure the financial performance of each division, and during future liquidity events or refinancing, everyone participates in the distribution according to their respective weightings. The essence of this model is more entrepreneurial—each partner feels like they are running their own company while sharing the scale advantages of the entire platform.

Q4: Park Dental has been relatively low-key. Why did it suddenly appear in the public eye?

Pete: Over the past few decades, we have indeed been growing steadily in a quiet manner. We had no external investors, no exit pressure, and have always been an organization owned by doctors. But last December, we completed an IPO, listed on Nasdaq, becoming the only publicly listed group dental company in the US in recent years. This event suddenly brought us into the view of many more people. Before this, there had been several waves of dental management company IPOs in the US—the batch in the 1990s, backed by venture capital for national roll-ups, needed exits, and their endings weren't pretty.

We are fundamentally different from that era: we are not a tool for VC exit; we are a doctor-owned company choosing a financing tool to provide a capital pathway for future growth. From the outside, this move indeed sparked a lot of curiosity—peers are asking: Why did Park go public? Can doctors still be in charge after going public? Will the organization change? These are precisely the questions we want to address seriously next.

Capital Structures – IPO, Minority Private Equity, ESOP: What's the Logic Behind Each Path?

Q5: Why did Park Dental choose an IPO? How was this decision discussed?

Pete: Let me start with the overall decision-making context. This wasn't an overnight decision; we internally discussed it for five to seven years—that's the real timeframe. We spent a lot of time thinking about one question: How do we position this organization for the next fifty years? Not just for our generation's careers, but for the next batch of doctors graduating from dental school, who also need a good place to go. In this IPO, we only raised $20 million, which isn't a large amount in the financial markets. Our real purpose wasn't a one-time cash-out but to open a channel to the public capital markets, allowing us to use this tool to support growth for decades to come. After the IPO, doctors and core team members still hold approximately 85% of the company's equity.

Dr. Steele: Let me add something. The most important thing for us is: this wasn't a short-term decision. What we were truly asking was—how do we position this organization for the next fifty years? We feel we have a very good model that has been running successfully. In terms of how we care for patients and our emphasis on doctor leadership, we share many common values with the other two organizations on stage. After five, six, seven years of discussion, we finally said: This is our path.

Pete: Let me add our three core objectives for going public. First, to build a perpetual organization that can sustainably exist and provide a good environment for doctors and team members. Second, to unlock some shareholder value, but not at the cost of losing the doctor-centric position. Third, to protect and strengthen the culture we have deeply embedded for over fifty years. This is not an exit; it's a strategic positioning.

Q6: After the IPO, will doctors' Clinical Autonomy and governance voice be diluted?

Pete: This is the most concerning question and the one we spent the most effort designing for. We did one very important thing in the governance structure: we hardwired the doctors' voice into the company's bylaws. Doctors meeting specific criteria—including achieving our set standards for clinical care quality, holding a certain amount of Park Dental Partners, Inc. stock, etc.—this group of doctors, as a whole, has the right to nominate three members of our seven-person board of directors. Nasdaq requires listed companies to have a majority of independent directors. Three seats are the maximum space we could give to doctors within the compliance framework, and we maximized it.

Dr. Steele: I want to emphasize there are two tracks here. One is the governance track—doctors holding a certain value of shares have the right to vote for three board members, making doctors feel they are truly at the decision-making table. The other is the operational track—the concept Pete mentioned of "top-to-bottom connectivity," from Pete's level all the way down to the practice level, with doctors working closely with practice management. We have 160 doctors, and the vast majority are involved in operations in some form, not just seeing patients. So in our governance structure, doctors' influence is dual, both in governance and operations. And we set an important principle: doctors nominated to the board must still be practicing clinicians, not retired ones.

Q7: Public companies must disclose financial data quarterly. What additional pressure does this mean for a dental group?

Pete: This is indeed a very real constraint that comes with being public. We now have to disclose our operating conditions to the public every ninety days. All investors—including institutional investors—are continuously watching our numbers. During the roadshow, we set an expectation for the market: we anticipate 3% to 5% organic growth annually, with affiliations and acquisitions contributing another 3% to 5%, totaling approximately 7% to 10% revenue growth. We have achieved about 80% compound growth over the past 11 years, so we are making commitments based on our own validated historical performance, not empty promises.

But being public also has its language restrictions—I cannot casually make predictions about the future, must be very careful with wording in any public setting, and there are many specific numbers we cannot disclose informally. If anyone wants to understand Park's financial situation, you can directly look at our S-1 filing; it's a public document with very detailed disclosures, including many appendices. I also want to point out: the dental groups that went public in the 1990s were VC-backed, highly speculative roll-ups; we are completely the opposite—we have long-term validation, very predictable, stable cash flow. That's a fundamental difference.

Q8: Why did Aligned choose minority private equity, not majority equity or an IPO?

John: The timing of our decision was 2023, when the debt market was very bad, with extremely high interest rates. We were looking at both ends: one was pure debt financing, considering borrowing costs, interest burdens, and warrants attached by many lenders; the other was equity transactions. When we compared the capital costs of both, they fell into a similar range—but the equity path could provide some liquidity for the doctor partners within each group while also introducing a more scalable long-term debt structure. We chose "minority" over "majority" because we judged the business still had significant unfinished growth potential.

Selling control now would be discounting future value. We guaranteed a certain return to our private equity partner; their equity is structurally senior to ours, which was the condition for them accepting a minority position. Through this arrangement, while maintaining company control, we obtained the capital needed for growth and also provided some upfront liquidity returns to the doctors involved in the merger, truly aligning everyone's interests.

Q9: What exactly is an ESOP? What is the fundamental difference from a regular employee stock ownership plan?

Bill: An ESOP is a trust; it's a regulated retirement savings vehicle, but its uniqueness lies in the fact that it buys stock in its own company, not other securities in the market. The specific operation is: the trust borrows money externally to buy a portion of the company's equity; the company makes annual contributions to employees, and this money is used to purchase company stock in the employees' names. Over time, as debt is repaid and company value continues to grow, the equity value accumulated in employees' accounts also increases. Employees can withdraw this accumulated value after meeting certain tenure conditions; it's their real retirement security.

Our ESOP has a dedicated external trustee who holds one-third of the voting rights on behalf of the ESOP, commissions an independent third-party valuation of the company annually to set the stock price. Doctor shareholders outside the ESOP can buy and sell company stock on an internal market; the entire transaction occurs within the organization, not involving external markets. This structure is complex, requires ongoing management; it's not a machine you set up and it runs automatically. When we expand, we acquire more practices, the stock price rises, doctors are happy; we make S-corp distributions, doctors are even happier—that's the logic of how this flywheel turns.

Q10: From an external view, is ESOP management difficult? What are some challenges people easily underestimate?

Bill: I'll say it directly: it's not as difficult as being public, but it's not easy either. When many people learn about ESOPs, they tend to think it's a "set it and forget it" structure; in fact, it's the complete opposite. It has a lot of regulatory activity; you can't just leave it there. We do forecasting and calculations for the ESOP annually, just like we do business planning—how many people will we hire next year? How do we fund these contributions? These all need to be planned in advance. The trustee's role is also crucial; she's not just a signatory but a true external perspective participating in corporate governance. In many ways, she's like an external board member and another set of eyes on our business.

Additionally, as an S-corp, we are currently limited to 100 shareholder seats; we have about 78 seats used. We are very hopeful that relevant legislation will adjust this cap to 250, allowing us to bring more doctors into the shareholder ranks. Our doctors' passion for the company is truly the energy source for our future growth.

Growth Strategies – Where Capital Is Spent, Where Growth Comes From

Q11: What are your respective capital deployment priorities for 2026?

Bill: We think about capital deployment in three layers, internally called "Project Care 1.0, 2.0, 3.0." 1.0 is organic investment within practices, mainly equipment updates and technology investments. 2.0 is expansion of existing practices—knocking down walls, moving into adjacent spaces, expanding practice square footage, adding doctor chairs. 3.0 is acquisitions and affiliations. I deploy capital across these three channels simultaneously and have a relatively mature rhythm: newly acquired practices first enter the 1.0 organic growth system, and after stabilizing, proceed to 2.0 physical expansion, forming a cycle. Our organic growth over the past three years has been around 8% to 9%, achieved without large-scale acquisitions—very solid.

John: We plan to add at least 40 new practice locations in 2026, with capital deployment expected between $50 million and $75 million, possibly even higher, depending on integration progress. Our growth primarily comes through introducing new divisions—planning to add three to four new divisions this year, each potentially having five to fifteen practice locations. Simultaneously, each existing division is also advancing "tuck-in" acquisitions within its own market. The platform's growth is very decentralized, very organic, not reliant on a single central M&A team. We've also made significant investments in technology, integrating new AI tools, and substantial investments in doctor training—just two weeks ago, at a large practice in North Carolina, we brought 15 doctors together for specialized case acceptance rate training and clinical training.

Pete: Our top priority remains organic growth, something we've been doing for decades. At the same time, we are looking at specialty expansion opportunities; specialty business is already our traditional strength and will continue to be strengthened. In geographic expansion, Arizona is an important target for 2026; we just completed two new acquisitions there. We ultimately chose Arizona partly because the business environment there is very friendly. Regarding acquisitions, our selection criteria are like-minded doctors—when we look at a practice, we position ourselves as stewards, not asset strippers. Finding clinically like-minded doctors is crucial.

Q12: The term "organic growth" is now overused. In your context, what does it specifically mean?

Bill: Our understanding of organic growth is "uncovering unrealized business value within the four walls of existing practices." The core logic is not changing the basic form of the practice but improving output efficiency under existing conditions. It could be improving treatment acceptance rates, enhancing new patient intake, specialty integration, or a combination of all dimensions within the practice—anything done within these existing walls counts as organic growth.

Dr. Steele: Let me add a very specific example. We have an increasing proportion of female doctors, so the issue of maternity leave for young female doctors becomes a real organic growth topic—they may be out of the practice for three months or even longer, resulting in lost revenue during that period. A solution we are currently advancing is introducing a "floating doctor" mechanism, not fixed at one location but moving among various practices in the Twin Cities metro area to cover these gaps. Our density advantage in Minnesota makes this solution feasible. This is organic growth—not opening new locations but utilizing existing resources better.

Q13: After reaching nearly 10% market share in Minnesota, how does Park find new growth space?

Pete: This is a real challenge. In our core Minnesota market, we have a very dense presence in the Twin Cities metro area, approaching 10% market share. This means opportunities to continue acquiring existing practices in this region are becoming fewer—not nonexistent, but much scarcer than before.

We've chosen two paths to address this: first, expanding into new geographic markets. Arizona is our latest foothold, and opportunities for expansion through "De Novo" (new builds) will be more frequent in the future. Second, continuing to deepen within existing practices. Density in the Twin Cities region brings many synergies, including recruitment, scheduling, and specialty collaboration. We will continue to tap into this potential. When we acquire a practice in Minnesota, we can fully leverage existing brand trust and operational synergies, extend our own culture, and largely decide the timing ourselves—things harder to achieve with a De Novo model.

Q14: Between De Novo (new builds) and acquisitions, which do you each lean towards? What's the underlying decision logic?

Pete: Our past growth primarily came from expanding existing practices, supplemented by a certain number of De Novos. In Minnesota, density is already high, so De Novo opportunities are relatively limited. In Arizona, we anticipate using acquisitions as anchor points, then building De Novos around them, using local partners' market knowledge to compensate for our information gap as outsiders.

Bill: We tend to start by acquiring an existing practice, stabilizing it, then considering splitting or expanding it into two. We also do De Novos, but more selectively, usually only initiating them when we have a clear geographic strategy.

John: We focus on acquisitions; De Novos account for only about 3%. We occasionally do a special type of "De Novo"—"taking over a vacant practice," meaning a doctor passed away or moved, leaving behind a site and some ready conditions that can be directly taken over. In such cases, we can intervene at a very low cost. The core judgment criterion is: Can we generate cash flow quickly without investing large-scale renovation funds?

Q15: What's the hardest part about the De Novo model? How do you judge if a De Novo is worth doing?

John: The biggest challenge with De Novos isn't capital; it's the doctor. When you buy an existing practice, the doctor is already there, patients are already there; you have cash flow from day one. But if you start a new practice from scratch, you need to find a doctor, wait for the doctor to get up to speed, wait for reputation to build, wait for patients to accumulate—this process can be very long. If that doctor is a recent graduate still building clinical skills, the start-up speed is even slower.

The most successful De Novo models we've seen are usually two situations: one, the doctor has strong vertical skills and can attract patients themselves; two, the location is excellent, adjacent to high-traffic commercial areas, like next to a Chipotle or a large supermarket, where natural foot traffic can quickly fill the practice.

In financial logic, I often make this comparison: a De Novo starts from zero, requiring about $1 million in renovation and equipment, with zero cash flow on day one. With the same money, could I buy an already operating practice with $200,000 in free cash flow on day one? This contrast is a very straightforward value judgment framework I put on the table when evaluating every De Novo opportunity.

Q16: How does Aligned's "autonomous M&A by divisions" model work? Why was it designed this way?

John: Our nine divisions each have their own market, their own group of doctor partners, and their own growth rhythm. They have strong autonomous acquisition rights within their respective markets and can independently pursue so-called "tuck-in" acquisitions—acquiring smaller targets that highly complement existing practices.

At the headquarters level, we measure the financial performance of each division, and during liquidity events or refinancing, distribution is made according to each one's historical contribution. There's an important philosophy behind this design: these doctors from the nine groups rolled in significant equity because they believed in this structure, not because they were bought out at a high price.

They are still running their own businesses, with strong intrinsic motivation to grow their division because they directly share in the growth outcomes. During future refinancing or liquidity events, divisions will participate in distribution according to contribution, allowing participating doctors to receive liquidity returns, then continue into the next growth cycle. I'm also relatively geography-agnostic—I have an excellent operating partner in Montana who is extremely good at recruiting doctors; I'm very happy to invest there. What matters isn't where, but finding truly good clinicians and operators.

Doctor Culture & Governance – How to Make "Doctor-First" More Than a Slogan

Q17: What is the most fundamental commonality in the governance structures of the three DSOs?

John: Although our three capital structures are completely different, I think one thing is a very clear consensus: a DSO without doctor equity participation is unlikely to do well long-term. I can hardly find a successful DSO that doesn't offer equity participation to doctors, nor a successful DSO that doesn't prioritize doctor development and growth. If you get these two things right, then add differentiation on top—like going public, like regional density—that's when you become truly competitive.

Bill: Management's role is not to direct doctors on what to do but to support doctors' clinical work. Once this positioning is reversed, the entire organization's culture deteriorates. The three of us have differences in specific practices, but the underlying logic is consistent: patient first, doctor-led, management-supported.

Q18: In the ESOP model, is the feeling of "employees as co-owners" real or just superficial?

Bill: At Mortenson, this feeling is very real. We conduct a comprehensive strategic planning cycle annually. The first step isn't an executive closed-door meeting; it's sending a questionnaire to all co-owners—we don't call them employees—asking them: What do you think the company most needs to improve? What would make your job easier? Their feedback directly influences our priorities for the coming year. This sense of ownership is real because their economic interests are directly tied to the company's operating results.

When the company does well, the stock value in their accounts rises. When the company expands, new practices bring more contributions, and the overall pool grows. Our external trustee conducts an independent valuation annually, setting the internal stock price. Doctor shareholders can buy and sell on the internal market; this price is transparent to everyone. It's not a distant promise but a wealth accumulation process that can be seen and felt every year. That's the source of true engagement.

Q19: How does Aligned's dual-board system—doctor board and capital board—actually operate?

John: We indeed have two governance layers. The doctor board is responsible for all clinical-related decisions and governance, including approving new divisions joining the alliance—meaning if a new group wants to join Aligned, it must gain the doctor board's approval. They need to confirm if the new member aligns with the existing culture and operational standards. This mechanism allows doctors to truly participate in shaping the platform, not just be told "we acquired someone else."

On the capital side, since we guaranteed a certain return to our private equity partner, their equity is structurally senior. In exchange, we retained company control, holding a majority of seats on the majority shareholder board. These two systems manage their respective boundaries—clinical and culture belong to doctors; capital structure and finance belong to us. This division of labor works quite smoothly in practice. Both boards have doctor participation; they largely govern operational and clinical-level decisions. It's a good balance.

Q20: For DSOs considering introducing private equity, what are the key thresholds and considerations?

John: Private equity partners typically have a minimum investment size requirement, measured by operating cash flow. My personal experience is that you truly enter the view of most private equity firms when your operating cash flow approaches $10 million or has a clear, fast path to reach that scale. Of course, some are willing to engage below this threshold, but expectations will be different. After private equity comes in, their goal is to exit within three to five years, expecting an internal rate of return around 20%, or a threefold return on investment.

This means they are thinking about exit from the moment they enter. That's not a bad thing, but you need to be aware this timeline exists. They value not just your current scale but your expansion path—do you have a scalable platform? A differentiated model? A management team that can continue driving platform growth? If you have these ambitions, the most crucial thing is to position your business in a growth mode. It doesn't need to be fully realized today, but you need a scalable model, ideally a differentiated one. In any successful DSO, two things are essential: doctors having real equity, and management truly putting doctors first.

Technology Application – AI Diagnostics, Call Centers, RCM: What's Actually Working

Q21: You're all using AI-assisted diagnostic tools. What's the actual effect? What pitfalls have you encountered during implementation?

Bill: We started deploying Overjet AI about three years ago, but for the first period, it was in pilot status. We tested several different implementation methods, striving to find how to truly integrate it into the daily workflow of practices. This is a very critical point: the AI tool itself can be good, but if it doesn't fit into the doctor's work rhythm, it becomes an obstacle rather than an assistant. Doctors have their own rhythm; they need to move between different operatories, different chairs. If you don't get this right, it becomes a source of friction. We took time to get this part right—repeated testing and measurement. We are now rolling it out comprehensively, aiming to complete deployment in all general dentistry practices within Q1 to Q2, with pediatric following later. We see very diverse value because its meaning differs for different doctors and different practices.

Dr. Steele: We started systematically evaluating about three years ago, comparing three mainstream products at the time, including Overjet and Pearl, maintaining ongoing communication with all parties to understand the real direction of the technology. Our doctors started using it comprehensively about two years ago; it's now a fairly mature tool, with a continuous learning curve. It's not omnipotent; you need to constantly re-evaluate. It doesn't show perfect results, but it's a very good auxiliary tool.

Q22: Are the effectiveness and acceptance of AI diagnostic tools the same for doctors of different seniority levels?

Bill: The phenomenon we observe varies greatly among different doctors. Some young doctors fresh out of school absolutely love using it for confirmation. Some senior doctors feel they don't need it, but at the same time, it can help them notice things they hadn't before—"I didn't really notice this before; we need to discuss it." So it certainly helps doctors identify caries, discover more opportunities needing treatment, and also helps with patient treatment acceptance. Our patients trust their doctors, but they also like seeing the computer saying the same thing in the background.

Dr. Steele: Let me add a counterintuitive observation. You might think young doctors, with higher tech literacy, would accept it more easily. But actually: young "maverick" dentists sometimes say, "I don't need it; I just graduated, I can see everything." The reality is, it's a great tool for doctors and even dental hygienists, but it's not foolproof. For patients, it's a great "speaker"—they come in, see that red marking, and say, "Oh my, I have red there; that's not good." This visual persuasiveness is an unexpected gain, genuinely helping improve patient treatment acceptance rates.

Q23: Besides diagnostic AI, what other technologies are already or currently running within your organizations?

Dr. Steele: We have made some progress in two areas. One is AI-assisted periodontal charting—this is excellent for hygienists; they no longer need to call someone in to help record, very convenient. Another is the AI speech-to-text (scribe) component we are looking at—whether for caregivers or doctors, they can significantly reduce recording and typing work, reportedly saving each person an hour per day. This is a very cutting-edge direction; we're not there yet, but we are working towards it.

John: We are in an intensive investment period in technology, striving to make the platform more mature. We are integrating new AI tools while also refining revenue cycle-related processes. This is one of our key initiatives for 2026—to completely re-engineer the entire billing and collection journey from start to finish.

Bill: In RCM (Revenue Cycle Management), we use RPA (Robotic Process Automation) tools, replacing a lot of manual work in insurance processing, billing reconciliation, automatic denial handling, etc. When I joined Mortenson, there were dozens of people specifically handling insurance and collections. Today, the number of practices has tripled or quadrupled, but headcount growth in this area is far less than scale growth; automation deserves much credit. Additionally, we carefully examine workflows at each practice level, internally called "resource optimization," seeking appropriate solutions in shared services—I really wish I had a time machine to go five years into the future to see which tech solution truly worked and which vendor became the winner. But we can only carefully discern now, trying to be as thoughtful as possible.

Q24: There's an industry number—30% of incoming calls are missed. How do you address this problem?

John: That number is real. Missed calls are an obvious but often underestimated source of loss for dental practices. Our current approach is: after the second or third ring, calls automatically transfer to a call center, handled by human agents. We are testing further iterations, upgrading the call center to an AI version, letting AI directly handle appointments. It's still in beta testing. But there's a management risk to be wary of: if front desk staff know there's an AI backup, their motivation to answer may decrease; you're essentially paying twice for the same problem. So introducing such tools must be accompanied by workforce management adjustments; otherwise, you save on phone costs but incur slack labor costs.

Bill: We deployed an intelligent virtual assistant. When a call comes in and the practice cannot answer immediately, the AI virtual assistant answers, routes, and handles basic tasks like confirming appointments. We further have AI listen back to a certain number of calls and provide feedback, which adds AI capability at the call quality monitoring level as well.

Looking Ahead – What Will This Industry Look Like Five Years From Now?

**Q25: Looking five years

Pete：我们在路演时向市场承诺的增长区间是每年7%到10%，这是我们历史上已经验证过可以实现的节奏。在规模上，我们希望在未来五年内进入更多州，将亚利桑那州扩展成我们的第二个密度市场，同时继续在专科领域加强整合，并推进有机增长项目。对我们来说，IPO不是终点，而是一个工具，它打开了一个资本通道，让我们能在接下来几十年持续有序地成长.

John：我们的模式是大约每三十个月进行一次再融资，让现有医生合伙人获得流动性回报，然后继续下一个增长周期。我们计划把这个节奏持续下去，同时在每个division内部推动更快的并购扩张。在行业层面，我看到的是DSO之间会越来越多地整合合并，规模越来越集中；同时医生对持股和参与治理的兴趣也在明显上升——越来越多的医生不想做纯粹的薪资雇员，他们在问股权的问题，他们在评估一个组织是不是真的让医生参与治理.

Bill：我们有一个明确的五年目标：把现有业务规模翻倍。我们过去三年有机增长在8%到9%，并购也在持续推进，我们认为双倍是完全可以达到的目标。我们会继续在十个州内深耕，同时进行精选的跨州扩张，坚持用三层资本部署逻辑推动每一家诊所从稳定走向增长。能够参与这个组织真是一种荣幸，我们真的很期待继续和AAGP这样的组织合作，这里有很大的价值，能够成为这个使命的一部分，非常鼓舞人心.

Q26：从更宏观的行业视角来看，未来五年DSO格局会怎么演变？

John：我判断行业整合的速度会进一步加快。过去几年，我们看到了大量中小型DSO在高利率和运营压力下面临资本困境，一些走得激进的组织因为过度并购和过高的债务负担，正在重新洗牌。未来的赢家，一定是那些模型更可持续、文化更稳健、医生真正当主人的组织，而不是依靠财务工程堆起来的卷王。我也在看到一个越来越清晰的信号：医生们正在重新思考他们想要什么样的所有权结构，是做纯粹的受薪雇员，还是参与不同形式的股权——我们在努力顺应这个变化，这也是我们模式设计的核心.

Pete：我们这个圆桌今天的主题，归结起来其实就一句话：无论你怎么构建它，核心都是医生。支持医生，确保他们在组织的所有权中发挥真正的作用。我们见过一些DSO走了不一样的路，没有给医生提供真正的所有权，结果从来都不太好。这不是一句漂亮话，而是行业里一次次被验证的规律.