Private Equity Blues #1

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Yes, this is a dentist and not DPC, but it is relevant. And I do think this story is true because a similar situation happened to my daughter years ago.

Private equity rolls up as many dental practices as they can, and they degrade the quality while squeezing profit. A quick search says that about 25% of dental practices are owned by Dental Service Organizations (private equity backed).

How does this happen? Many dentists are tired and are retiring. They want to sell to some young go-getter, but they are hard to find. They wait. They try. They get frustrated. And then a private equity frontman comes knocking and makes a really nice offer. Boom. Done.

This will happen to DPC practices if people sell out to them. That is the recipe. I was lucky and found a great doc to buy my practice. Others are still trying to sell. We really need a way to convince these young doctors to buy from those who are retiring, as long as those DPC docs set a reasonable price. My deal included a small amount up front and then a price that would be paid out over five years. That way, the money was already coming in from patients, and my buyer wasn’t stressed about it.

Do NOT sell out to private equity. Please. They will bastardize the name Direct Primary Care and destroy the concept by forcing more patients to be seen by people who are not even physicians.

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About Douglas Farrago, MD

Dr. Farrago is a retired family physician based in Forest, Virginia. Since 2021, he has run DPCnews.com, a leading resource for the Direct Primary Care (DPC) movement. He is the author of three best-selling books on Direct Primary Care: The Official Guide to Starting Your Own Direct Primary Care Practice The Direct Primary Care Doctor’s Daily Motivational Journal Slowing the Churn in Direct Primary Care (While Also Keeping Your Sanity) In 2016, Dr. Farrago conceived the idea for the Direct Primary Care Alliance and co-founded the organization alongside other pioneering DPC physicians. He is widely recognized as a leading expert in the DPC model and frequently lectures to medical students, residents, and practicing physicians on how to successfully start and run their own DPC practices.Dr. Farrago sold his Direct Primary Care practice in October 2020 but continues to receive care there as a patient.