Aspen Dental

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Aspen Dental
Industry Corporate Dentistry
Dental Support Organization
Founded Syracuse, New York, New York, U.S. (1964)
Founder Robert Fontana CEO
Headquarters DeWitt, New York
Area served
United States
Services Manages branded Dental practices
Website aspendental.com

Aspen Dental Management, Inc. (ADMI) is a dental support organization (DSO)— a dental practice management corporation that provides business support and administrative services[1] to contracted dental practices using the Aspen Dental brand.[2][3][4] By 2016 Aspen Dental offered services in 33 states with 550 franchised dental facilities that serve over 15,000 patients a day.[4] Its headquarters is in DeWitt, New York, East Syracuse.[1] In the United States corporate dentistry or corporate dental practices such as Aspen's represents 30–40% of all dental practices.[5] The United States Senate Committee on Finance, the Pennsylvania Attorney General's office, Frontline in partnership with the Center for Public Integrity and the New York Times — among others — questioned Aspen's business model. Concerns included Aspen Dental's alleged targeting of older, low-income earners with unnecessary and costly services—offering them a finance program without fully disclosing the terms.[6][7][8][9] In 2015 the private equity firm, American Securities led Aspen's recapitalization in partnership with Ares Management, Leonard Green & Partners and the existing management team.[10]

History[edit]

ADMI's predecessor was founded in 1981 and supported dental practices in Upstate New York when Upstate Dental merged its lab services with centralized management services to become Upstate Dental Management, LLC. It was a founding member of the Association of Dental Support Organizations (ADSO).[11] The original company began in 1964 in Syracuse, New York, as a dental lab called Upstate Dental.

In 1997, an investor acquired Upstate Family Denture Services, Inc., Upstate Denture Labs, Inc. and East Coast Dental Management, Inc. In 1998, Upstate Dental and East Coast Dental merged; the merged company was renamed Aspen Dental Management, Inc.[12]

In 1998 Robert Fontana founded Aspen Dental Management, Inc. (ADMI), as a dental practice management company.[8] Fontana had completed business school in 1991 and worked at Upstate Dental in Syracuse, New York for a few years.[13] After predecessor company Upstate Dental merged with East Coast Dental in December 1997, the resulting firm was launched as Aspen Dental Management, Inc. in 1998.[14]

There were more than fifty Aspen Dental offices within five years of ADMI's establishment. In 1998, there were 13 offices, and by April 2007 there were 106 branded practices in Arizona, Connecticut, Indiana, Maine, Massachusetts, New Hampshire, New York, Ohio, Pennsylvania, and Rhode Island.[15]

In 2010 Leonard Green & Partners purchased Aspen Dental from Ares Management for about $500 million.[16] By August 2010 private equity firms already owned Forba and Bright Now and were bidding on Aspen Dental and Kool Smiles - the two largest national chains of dental offices in the United States.[17] According to the American Dentists Association, dentistry is one of healthcare's "last bastion of fee-based services" making it attractive to private equity firms. Healthcare reform in 2010 was not cutting into reimbursement for dentists whereas it was for medical doctors. Dental offices sell for lower valuations and a reliable cash flow so money can be borrowed against them. Financial consultant Tom Climo cautioned that private equity firms boost profits by pressuring dentists to work longer which could lead to a deterioration in service.[18]

Client-base[edit]

Aspen Dental in Selinsgrove, Pa

Aspen's services are aimed at individuals who do not have an established dental routine or regular dental provider.[19] In 2012, Fontana described a typical Aspen Dental patient as middle-aged and possibly struggling to afford their day-to-day expenses, or someone who sees dental work as "discretionary" and therefore may have an emergency dental issue arise. According to Fontana, Aspen's locations and marketing are aimed at providing services to those individuals.[13]

Operations[edit]

Aspen Dental in Natick, Massachusetts

The company operates in more than 33 states. Each office is staffed for general dental care.[20][21][22]

The company is owned by Leonard Green & Partners, a private equity firm[23] specializing in leveraged buyout transactions, particularly of middle market companies. In 2015 as Moody's was placing Aspen's ratings under review,[24] an affiliate of American Securities—a private equity firm led the recapitalization of Aspen Dental Management Inc. in partnership with existing owners Ares Management, Leonard Green & Partners and the existing management team.[10]

Controversies[edit]

In June 2015 New York Attorney General Eric T. Schneiderman announced a settlement[25] with Aspen Dental Management Inc. in which all of Aspen's New York offices must comply to stringent new business practices prohibiting interference in dentists' clinical decision-making. The American Dental Association and the New York State Dental Association voiced their approval. The Attorney General's investigation was the result of hundreds of consumer complaints over a decade about experiences at Aspen's New York offices. Aspen's was "deeply disappointed with the characterization" of the corporation.[1]

"Agreement requires Aspen Dental Management to pay $450,000 in civil penalties after AG Investigation found The Dental Management Company was engaged in the unauthorized practice of dentistry and dental hygiene... agreement stops illegal fee splitting between Aspen Dental and Dental Practices; Requires Aspen Dental Management to be clear it is not a provider of dental care."

— Office of New York Attorney General Eric T. Schneiderman June 18, 2015

In their 2013 report entitled "Joint Staff Report on the Corporate Practice of Dentistry in the Medicaid Program," Senators Chuck Grassley and Max Baucus investigated corporate dentistry with a focus on Aspen Dental, Church Street Health Management (CSHM) - Small Smiles, NCDR, LLC - Kool Smiles, ReachOut and Heartland Dental Care.[9]

In October 2012, a class-action lawsuit accused the company of illegally owning dental practices and of deceiving patients. The lawsuit said that the company operating in violation of laws in 22 states which allow only dentists to own a dental practice. The company responded that the accusations were "entirely without merit.”[23]

In a PBS June 2012 series entitled Dollars and Dentists[8] produced by Frontline in partnership with the Center for Public Integrity described Aspen Dental's business model as one which makes dental work immediately accessible to low-income patients by providing interest free credit. However their indepth investigation revealed that patients were "being overcharged or given unnecessary treatments."[26][27]

In October 2010, after a probe of complaints regarding its discount services and finance programs, the company entered into an assurance of voluntary compliance with the Pennsylvania Attorney General's office, without admitting wrongdoing. It agreed to pay $125,000 to reimburse customers of the company and $50,000 for consumer protection probes. Complaints involved services provided before May 28, 2009.[7][28]

See also[edit]

References[edit]

  1. ^ a b c Soderlund, Kelly (June 19, 2015), New York attorney general takes action against Aspen Dental, New York: American_Dental_Association, retrieved October 1, 2016 
  2. ^ Noles, Corey (May 19, 2015). "Aspen Dental says 'open wide' to Missouri". St. Louis Business Journal. Retrieved January 27, 2016. 
  3. ^ "About". Aspen Dental Management, Inc. Retrieved January 25, 2016. 
  4. ^ a b Kulsrud, Zachary (April 7, 2016), 15,000 patients a day: Exclusive interview with Bob Fontana, CEO of Aspen Dental Management Inc., Tulsa, Oklahoma: Dentistry IQ, retrieved October 1, 2016 
  5. ^ "Economic Realities of Practice", Canadian Dental Association, retrieved October 1, 2016 
  6. ^ Silver-Greenberg, Jessica (October 14, 2013), A Vulnerable Age: Patients Mired in Costly Credit From Doctors, New York Times, retrieved October 1, 2016 
  7. ^ a b Matt Miller (October 14, 2010). "Aspen Dental pays $175,000 to settle customer complaints". PennLive.Com. Retrieved February 8, 2012. pact stems from a state probe of more than 50 consumer complaints 
  8. ^ a b c Heath, David; Rosenbaum, Jill (June 26, 2012), Dollars and Dentists, retrieved October 1, 2016 
  9. ^ a b Baucus, Max; Grassley, Chuck (June 2013). Joint Staff Report on the Corporate Practice of Dentistry in the Medicaid Program (PDF) (Report). United States Senate Committee on Finance. p. 1500. Retrieved October 1, 2016. 
  10. ^ a b "American Securities Leads Recapitalization of Aspen Dental", Wall Street Journal, March 24, 2015, retrieved October 1, 2016 
  11. ^ "About ADSO". Association of Dental Support Organizations. Archived from the original on April 3, 2016. Retrieved March 26, 2016. 
  12. ^ Aspen Dental Timeline Archived September 16, 2009, at the Wayback Machine.
  13. ^ a b Breslow, Jason M. (June 26, 2012). "Aspen Dental CEO Bob Fontana: "We're Big Advocates for the Patient"". PBS. Retrieved January 26, 2016. 
  14. ^ Kevin Tampone (September 7, 2007). "Aspen plans rapid expansion". The Business Journal - Central New York. Retrieved April 27, 2016. 
  15. ^ Kist, Stephanie (April 19, 2007). "Aspen Dental opens Fairlawn office". Leader Online. Retrieved February 24, 2016. 
  16. ^ Beltran, Luisa (August 18, 2010), Leonard Green Sinks Teeth into Aspen Dental, PE Hub Network, retrieved October 1, 2016 
  17. ^ Kosman, Josh (August 27, 2010), Private-equity firms sink teeth into dentistry, New York Post 
  18. ^ "P.E. Firms Open Wide for Dental Chains", New York Times, Dealbook, August 27, 2010, retrieved October 1, 2016 
  19. ^ Claire Duffett (December 16, 2005). "Aspen Dental building new headquarters". The Business Journal - Central New York. p. 3. Retrieved April 27, 2016. 
  20. ^ Aspen Dental Office Locations Archived September 22, 2009, at the Wayback Machine.
  21. ^ Press release, "Aspen Dental plans continued expansion in 2009", January 2009
  22. ^ New office opening announcement, Newark Advocate, August 29, 2009
  23. ^ a b Heath, David, (October 19, 2012), Aspen Dental Facing Class-Action Lawsuit, Frontline & Center for Public Integrity, PBS 
  24. ^ Moody's places Aspen Dental's ratings under review for downgrade
  25. ^ "A.G. Schneiderman Announces Settlement With Aspen Dental Management That Bars Company From Making Decisions About Patient Care In New York Clinics", New York State Attorney General, New York, June 18, 2015, retrieved November 9, 2016 
  26. ^ Heath, David; Rosenbaum, Jill (June 26, 2012), Patients, Pressure and Profits at Aspen Dental, Frontline, retrieved October 1, 2016 
  27. ^ Heath, David; Rosenbaum, Jill (June 26, 2012), Dollars and Dentists: Corporate dental chains see big profits in adults who can't afford care: How low-income adults get locked into debt for dental treatment, Center for Public Integrity, retrieved October 1, 2016 
  28. ^ "Attorney General Corbett announces $175,000 consumer settlement with Aspen Dental" (Press release). Pennsylvania Attorney General. October 13, 2010. Retrieved February 8, 2012. 

External links[edit]