100+ Dentists Are Suing a DSO. Will Yours Be Next?

The case of Edmund Eaves et al. v. ZAHN Parent, LLC is going to set a precedent for everyone affiliated with a dental service organization. It will also prove just how vital it is for DSOs to efficiently manage their data.

A Group Dentistry Now article published on July 27, 2023 revealed that over 100 dentists have taken legal action against ZAHN Parent, LLC, an affiliate of North American Dental Group (NADG).?

The dentists had sold their practices to NADG and received shares in ZAHN ownership as part of their compensation. Naturally, these dentists had a vested interest in seeing their equity in the company grow. Just like the many other dentists who sell to DSOs, these dentists expected that their investment would help fund their financial and retirement goals.?

Many of these dentists, however, later started to question whether decisions being made at the highest levels of the organization were negatively impacting the value of their equity in the company.

When the dentists sought to obtain more information from NADG, they were denied.

Fearing retaliatory action that threatens their careers and investments, these dentists have secured legal representation to help them achieve their demands for the release of data and documents related to recent transactions that may have compromised their equity interests and retirement planning.

What Does This Case Mean for Dentists and DSOs?

The outcome of this case is still pending.?

At this point, you could argue that both sides have a valid point:

• NADG management has the authority to make some decisions for the company that the network’s dentists have little say in.

• On the other hand, the dentists have thrown their lot in with the DSO and deserve transparency into the performance of their investment.

Whichever way this turns out, the unfortunate fact is that someone is probably going to get burned.?

If the ruling ultimately falls in favor of the DSO, the dentists who sued the organization could face negative consequences, such as financial loss. If the dentists win, however, the NADG name could be irrevocably tarnished by the charges leveled against the organization, negatively impacting the company’s growth and hiring and acquisition prospects.?

This case is of significant interest to both DSOs and to dentists who are contemplating the sale of their practices to larger group practices or DSOs.?

How did this sticky situation develop?

The Data Problem in DSOs

The case of Edmund Eaves et al. v. ZAHN Parent, LLC is almost certainly going to set a precedent in regards to the ownership of company data and who has access to it. That’s what the debate at hand is really all about.

Did a data leak allow some dentists to become privy to information that they were not actually entitled to?

Is NADG not doing their due diligence in making pertinent company data available to those who are legally entitled to it?

Again, the remaining pieces of this puzzle are forthcoming.

But we can already take away one lesson from this case: DSOs can minimize the risk of litigation by maintaining better control over their data.

Complex entities like dental service organizations have an immense amount of data to manage—patient health data, customer and market data, production numbers, clinician performance data and company data, to name just a few.?

A centralized, organized and secure data management system can help DSOs to avoid the leaks and communication hiccups that lead to unpleasant outcomes like litigation, bad press and unhappy dentists.

(Side note: I have to mention here that this is a perfect case-in-point of the many things wrong with the management and delivery of dental care today. Check out my latest book, Dental Disorder, to learn more.)

The Enterprise-Level Solution to the Data Problem

Did you know that the solution to DSOs’ data management issue exists right now?

The first platform of its kind, Toothapps is a secure, centralized and organized enterprise-level data management solution that makes it easier for DSOs to keep data out of the hands of those who are not entitled to it and to share it with those who DO need it, be they shareholders, care providers or patients.?

Toothapps does far more than simply store and organize data; it also has the capability to aggregate and analyze the data to supply insights that can inform major decisions.

Imagine having greater insight into factors like…

• Practice value
• Practice profitability
• Growth opportunities
• Case acceptance rates
• Net new patients
• Communications
• Scheduling

…all while being able to control who in your organization can access that data.

Imagine what you could achieve by leveraging those insights.

Imagine how this could protect your organization from legal trouble by ensuring that key information is shared only with those who are entitled to it.

Perhaps if North American Dental Group already had something like Toothapps, they wouldn’t be in the situation they find themselves in today.

But it’s not too late for other group practices and DSOs to take action.

Visit Toothapps.com to learn about the other amazing things this platform can do and how it can improve the way data is managed and utilized in your organization.