Research Problem

Although the door for learned professionals to advertise opened in the 1970s, the debate over the involvement of unlicensed persons and corporations is ongoing and critically related by the thread of neoliberal logic. In clinics, conferences, and courtrooms across the country, the growth of corporately managed dentistry/dental medicine is currently being discussed and debated. Nearly 10% of dental practices are currently owned by private equity firms, a reality that would have been unconscionable fifty years ago. The trend has raised ethical questions about the nature of dental medicine and the implications of delivering treatment in various models. There are several key events in courts and legislatures across the country which demonstrate divergent approaches in the discourse, ranging from asserting professional values to shifting the boundaries of professional values and practice.

For the sake of clarity, the framing terms of the paper should be laid out carefully. Neoliberalism is an idealistic way of imagining the world whose roots are in both economics and philosophy but extend far beyond the economic realm. Taking the emphasis on maximizing individual freedoms to its logical endpoint, this school of thought seeks to foster competitive speculative environments that are free — in theory — from any state-based interventions. Thought it may appear differently across geographies, it always maintains certain general characteristics, such as an emphasis on individual innovation and open markets as the keys to a better world.Reference Peck ¹

The distinction between neoliberalism and neo-liberalization helps to differentiate between general patterns and particular localized processes. Neoliber-alization refers to the process of practically attempting to shape an environment according to a predetermined “neoliberal” ideal. This process usually involves negotiating with local cultural and political forces to either dismantle or to construct the backdrop in the image of this ideal. These negotiating processes result in hybrid systems in which aspects of an ideal may be described but often are meshed with state interventions that either support or oppose its idealistic aims. This is applicable to the dental context in as far as the dental profession is situated in a North American neoliberal milieu.

Since a central question of this paper is to attempt to understand the peculiarity of the configuration of discourse occurring at this moment in history, the connection of this neoliberal milieu to the deregulatory outcomes of the discourse are important categories of analysis. Within studies on neoliberalism, attention has been given to processes of deregulation, especially within the roll-back phase of the project. ² Deregulation, as the prefix “de” suggests, is a negating and reversing process of regulation. The “regulation” in the term refers to the limits, guidelines, laws, and attempts of governing authorities to limit the activities and practices of businesses in protecting the interests of either other businesses, consumers, and/or the environment. As far as it is directed toward ensuring that structures of state authority take a hands-off approach, this may entail dissolving bodies with oversight who observe commercial life or this can involve striking down legislation that specifies rules. While proponents see it as a means to liberate entrepreneurs and businesses to achieve their full potential, critics regard it as a means of facilitating speculation and fraud by repealing protective measures.

Questions

What was the original rationale for the ethical standard that held Painless Parker to account in the 1930s? What has driven changes in ethics of the dental profession previously, and what shapes the prioritization of its values today? Did the neoliberal policies of the 1970s and 1980s influence the changing attitudes toward advertising generally, and by extension advertising within dentistry? What are the primary drivers for the advent of corporate dentistry and what logic sustains its progress?

What facilitates the commodification of dentistry, and is it external or internal to the practice of dentistry? How does neoliberalism exert itself on professions? On future professionals?

The paper begins with an analysis of Painless Parker’s trial in 1932, examining the charges against him (advertising and hiring unlicensed persons as managers) and the poetics of this ethico-legal discourse. Next, we will turn our attention to the 1970s and the debates in court that reversed the taboo on advertising professional services within the legal realm and how it eventually enveloped medicine and dentistry. The thread of Painless Parker’s posthumous mock trial in 1979 links these processes to the current debate over the involvement of unlicensed corporate management in dental practices.

Literature: Logic of Deregulation

The articles below relate to the “common sense” logic of deregulation how it comes to be formed, and what constitutes its formation.Reference Jones ³ Vinay Kamat, in “Fast, cheap, and out of control? Speculations and ethical concerns in the conduct of outsourced clinical trials in India” questions the ways in which the rationality for welcoming clinical trials by foreign pharmaceuticals is constructed.Reference Kamat ⁴ He finds that it relates to both a reliance on speculation, sacrifice, and deregulation. The Indian government has introduced key legislative measures to foster an environment that creates the “necessary conditions.” This undoing of legal checks instituted at an earlier time is motivated by a relentless hope that the financial returns will be disproportionately great. Just as in other neoliberal projects, a vision of future gains justifies sacrificial elements in the present. Kamat, in his interviews with key stakeholders, shares how the desire to “bring something good to the society” is a key intention of many. Under the guise of greater goods, deregulation is understood to be a natural process to clear away the obstacles of success.

Exploring the flattening of ethics into a market analysis, Bernard D’Mello in “Transnational Pharmaceutical Corporations and Neo-Liberal Business Ethics in India” turns to the issue of pharmaceutical corporations coming in India to test their products on people and pay less for clinical trials.Reference D’Mello ⁵ He is interested in the reception of this move and how it has been processed in ethical and logistical terms. Ethics is an optics through which valuation takes place. The author argues that the hegemony of neoliberal economics has replaced a diverse set of valuation methods with only a numeric-based market lens. By pointing to potential casualties of this one-dimensionality, he justifies his claim that the pervasive power inherent in market rationality can easily overwhelm and render checks in the system — like ethics committees — into meaningless rubber stamps. D’Mello also emphasizes the role of promotion and advertising when profitability becomes a fundamental and singular value. This in turn drives up research and development budgets in ways that are ultimately shouldered by patients.

Of the attempts to connect neoliberalism to healthcare, the archival study “Neoliberal pharmaceutical science and the Chicago School of Economics” by Edward Nik-Kah goes beyond a theoretical approach and establishes direct involvement of the neoliberal theorists in shaping pharmaceutical policy and science.Reference Nik-Khah ⁶ It establishes the possibility within other healthcare fields of direct involvement of the Chicago School of Economics. Nik-Kah’s exposits how through a highly influential conference at University of Chicago, there were deliberate efforts to shape the rationality for pushing back against regulations in the law. These regulations — known as the 1962 Kefauver-Harris amendments — that restricted advertisements and established standards for clinical trials were put in place in the wake of the thalidomide debacle in the 1950s. The dismantling of these protections is part of the process of roll-back which is characteristic of the 1970s. This body of material evidence grants another layer of credibility to the effort of removing the veil covering the encroachment of neoliberal rationalities on the healthcare field.

David Sturgeon’s “The business of the NHS: The rise and rise of consumer culture and commodification in the provision of healthcare services” provides a window into the ways an entrepreneurial consumer culture from without and a competitive privatized system from within have changed the NHS.Reference Sturgeon ⁷ Sturgeon critiques the increasingly common sense notion that patients are consumers by pointing out that healthcare is a necessity of a different order. The “necessity” of consumption is a key factor of why it is an attractive investment for market-oriented entities. Sturgeon connects the narrative of market reforms in the NHS to the broader policies initiated under the Thatcher government in the 1980s.

Literature: De-Professionalization

The formation of personhood in the context of professionalization is a carefully tuned process. As the initiate is trained in a set of skills society has entrusted their profession to serve society with, they are also socialized into the new group and quickly realize that violations of trust because of an individual affect the collective — their colleagues.

Starting with the educational process, little has been written about the influence of the healthcare industry in molding medical or dental students at their incipient stage. Kelly Holloway’s “Uneasy subjects: Medical students’ conflicts over the pharmaceutical industry” examines the reactions and attitudes of student toward the ever-presence of the pharmaceutical industry in their training process, from the preclinical years into residency.Reference Holloway ⁸ Her objective is to critique the normalcy of the industry’s presence from the innocent free lunches to the sponsored continuing education programs in later years. Support from the industry makes up more than half the funding for continuing medical education.Reference Podolsky and Greene ⁹

Their continued presence compromises the extent of critical evaluation. Beyond the goal of capturing future business from practitioners, the pharmaceutical industry’s increasing presence at educational institutions can also be rationalized as filling the void in funding left by retreating government funding for research.Reference Polster ¹⁰

Juan Irigoyen writing on the “The Restructuring of Medical Profession” tracks organizational structural changes in the profession that he describes as the rise of a “techno-productive model.”Reference Irigoyen ¹¹ The most significant manifestation is the sudden prominence given to management. This new governmentality, according to Irigoyen’s narrative, is a threat to professionalization, and is directly responsible for the “proletarianization” of the profession. ¹²

Another study that looks at the medical profession with a keen eye to the results of consumerism is that of Stefan Timmermans and Hyeyoung Oh. In “Continued Social Transformation of the Medical Profession,” they begin by contrasting the pursuits of businessmen with those of physicians.Reference Timmermans and Oh ¹³ The former’s training emphasized self-interest while the latter’s training stressed reasonable altruism and prioritization of the patient over finanical remuneration.Reference Parsons ¹⁴ The trust afforded to the healthcare professions fulfilling a unique niche of healing in society was re-conceptualized as a protected market ripe for investment. While the business side encouraged physicians to spend more money, government regulators were concerned about rising costs and suggested rationing and capitation schemes. With “no downside risk” and adequate pressure over time, the rising tide of investment and government intervention may have had a hand in the decline in professional autonomy noted by sociologists. These social scientists noticed three trends in medicine: “proletarianization (the idea that people move from self-employment to wage labor), de-professionalization (the loss of professional characteristics such as autonomous decision-making), and corporatization.” ¹⁵

Studies have used neoliberalism as an analytic lens to uncover and reveal the inner workings of hitherto regimes of common sense. Within the healthcare field, most of the literature has focused on the pharmaceutical industry and the healthcare system on a macroscopic level. What is still neglected are studies that shed light on neoliberalism’s influence on the (deformation of professions and the mechanisms that facilitate that process.

This project will hopefully find congruencies between rationalizing trends in neoliberalizing processes, such as roll back and roll out, and accelerating changes in the dental profession, both institutionally and ethically, over the last half century. This will further the project of identifying just how far neoliberalism has encroached into non-economic domains and has crafted a logic in which ethical judgements of the past are hindrances to the future. If the link between the loosening of regulations on advertising turns out to actually be a precursor to the relaxation of regulations on corporate practice ownership, then future studies of neoliberalism and healthcare may benefit from long durée studies that offer perspective on the gradual pace of the roll back.

Part 1: Establishment of Professional Norms

The emergence of the dental profession is in many ways a reaction to what preceded it and what existed alongside it for several decades. Early 19th century Boston hosted dental parlors where prices for procedures were advertised in fanciful ways, no differently from stores selling jewelry. To expose the “arts of quackery” and commodification in dentistry, by 1839, dentists banded together and formed the first professional school and, a year later, the first professional society — the American Society of Dental Surgeons. These professional formations, as well as other legal initiatives in state legislatures, were intent upon protecting the public from “ignorant pretenders.”Reference Christen ¹⁶ Soon after the American Medical Association published the first code of ethics in 1847, dentists in their professional society founded in 1859 — the National Delegated Association (predecessor of the American Dental Association) followed suit and published the first dental code of ethics in 1866.

These codes of ethics written by and for the medical and dental communities capture the ethical blind spots and concerns of issues they respectively agreed were critical to their professionalization. The 1866 foundational dental code of ethics plainly stated, “it is unprofessional to resort to public advertising, such as cards, hand-bills, posters, or signs calling attention to peculiar styles of work, prices for services, or to claim superiority over neighboring practitioners.” ¹⁷ In 1868, the Dental Society of New York explicitly prohibited advertising in order “to preserve good feeling and learning among its members.”Reference Gies ¹⁸

The original AMA code in 1847 formulated for the first time the prohibition against corporations practicing or influencing the practice of medicine.” This appears in later editions in 1912 and 1922 where it was deemed “unprofessional” for health care providers to treat patients under a corporation. The reason cited is due to the fact

These efforts to articulate an ethical code and a basis for licensure and credentialing would culminate in their approval as law through dental practice acts. The connection between the codes of ethics and legal limits is made clear in the case of Semler v. Oregon

Dental Examiners. While the judges admit that the statutes of other states have no “direct bearing” on the case, one cannot be unmindful that legislation “is an adoption of the rules of ethics of the American Dental Association.” ²⁰

The earliest dental practice act appears in Alabama in 1841. ²¹ Nearly three decades later in 1868, Kentucky, New York, and Ohio eventually established dental practice acts which not only established boards of examiners but also bestowed them with the sole prerogative to issue licenses. ²² Certain aspects of the ethical codes were written into law like the prohibition of advertising. In 1935, Assembly bill 990 legally entrenched the ethical standard. These laws remained in place. In fact, in 1942, in Valentine v. Christensen, the first amendment did not protect commercial speech which served no public purpose. ²³

As described earlier in the introduction, Painless Parker’s story is useful for helping us to understand the ways in which the ethical and legal codes were interpreted and applied under the legal system’s gavel. When Parker started out in Brooklyn, he hired William Beebe, who had worked in the Big Top of PT Barnum’s circus for 45 years, and gave him Barnum’s autobiography to read. ²⁴ Beebe told him, “If you used circus methods, you’d soon be a millionaire.” ²⁵ Parker’s chain of dental clinics became notorious for his alliterative over-the-top signage with slogans like, “Pause, People, Painless Parker is Pronounced a Paragon!” ²⁶

His methods of advertising and expanding network of dental clinics earned him the ire of the dental community and several lawsuits. On December 7, 1929, the Board of Dental Examiners handed down a five year suspension of his dental license for advertising and the unlicensed practice of dentistry. This case was brought in 1932 before the California Supreme Court, which upheld the Board’s judgment with only one dissenting opinion. He was “suspended for unprofessional conduct in aiding and abetting an unlicensed person (a corporation) to practice dentistry in violation of a statute stipulating that any person is practicing dentistry “who manages or conducts as manager, proprietor, conductor, lessor, or otherwise a place where dental operations are performed.” ²⁷ This judgement is based on the premise that the “business end” of the practice was inseparable from the actual application of the professional skill.” ²⁸ According to their argument, how could a corporation be allowed to do something indirectly which is clearly not allowed directly — treat patients? Referencing the corporate practice of medicine doctrine, the judge underlined the real possibility for “a secondary and divided loyalty to the patient.” ²⁹ This would open the door to unprofessional and unethical outcomes such that neither the owner nor the employee dentist could be held responsible. The judge wrote:

The issue over the possibility of separating dentistry from business was not clearcut for all the judges. Langdon, the dissenting opinion, believed it was unconstitutional for the state to “regulate business as business.” ³¹ However, one fact remained: that a “corporation may not engage in the practice of the law, medicine, or dentistry is a settled question in this state.” ³² The court clearly pointed out that its decision went beyond considering only public health; it also sought to preserve “public morals,” a broader base away from the one-way “access to care” rhetoric seen in current-day cases of the same type. Instead, there is deference shown to the ethical standards in the dental profession and their origin in “experience” and “investigation and research,” to the extent that they have become laws in “many of the countries of the civilized world.” ³³

Just as the case in California sets a precedent for the inseparability of business and clinical care, another lawsuit of Parker in Colorado’s Supreme Court on March 4, 1929 established that a corporation is not eligible for a license since it cannot take exams or have a diploma. ³⁴ Parker countered this claim of ineligibility by pointing out that it was precisely this impossibility of obtaining a license that made it possible for a corporation to engage in the practice of dentistry.

Part 2 - Disrupture #1:Deprofessionalization through Advertising

The prohibiting language of the Code of Ethics relaxed gradually with subsequent revisions. By 1899, dentists were permitted to use their names outside their practices though the size and nature of the sign were taken into account. Even as late as 1976, the revised code stated that advertising “lowers public esteem for the profession” and an “announcement could only be sent to other professionals or to patients of record.” ³⁵ However, the 1970s serve as a critical turning point not just for dentistry, but for its sister professions, law and medicine. In 1977, an Arizona-based law firm was reprimanded by the State Bar for a marketing plan it had developed. John R Bates & Van O’steen v State Bar of Arizona went all the way to the Supreme Court where a slim majority ruled in favor of the former based on the first and fourteenth amendments. Whereas previous courts had ruled that commercial speech was no tprotected by the first amendment, the court in 1977 came to a new conclusion and judged that the unethi-cality of advertising held by the legal profession were unconstitutional restraints on trade.

By bringing the analogy of the learned professions with commerce to its fullest extent, the legal profession, along with the medical and dental professions, were now considered trades subject to the Federal Trade Commission (FTC). ³⁶ This effective demotion changed the terms of the debate. What previously was the domain of a learned profession now became subject to the legal provisions specific to trade and commerce. Two years later, on April 12, 1979, after the FTC charged the American Dental Association and four dental state societies for contravening anti-trust law, the commission settled with the ADA outside of court. They felt that ethical dentists, not the force of the dental board, were the ones responsible for regulating their colleagues. In the wake of this decision, the ethics codes were re-written to reflect the new reality, the new common sense.

However, there were still restrictions on price advertising which were put in place to control the 19th century dental parlor craze. This prohibition too would be overturned in 1999 by the US Supreme Court with the condition that the price was “exact and easily verifiable.” ³⁷

Part 3 - Disrupture #2: Deregulation

Similar to the case of John R. Bates & Van O’steen v. State Bar of Arizona, there were other cases in the 1970s which affirmed the court’s position that antitrust laws applied to the professional domains. In Goldfarb v. Virginia State Bar, the Supreme Court terminated the legal profession’s exemption — and by extension other professions’ exemption — from antitrust laws.Reference Huberfeld ³⁸

In the same manner the ADA was approached by the FTC, the AMA was approached by the same agency due to anti-competitive language in its Principles of Medical Ethics as of the most recent revision in 1971. ³⁹ In 1979, the AMA modified its language in the code of ethics to soften its previously aggressive regulatory stance, and it serves as an important reference in the interpretation and application of law. ⁴⁰

However, this was not the expected outcome given the range of cases upholding the precedent of the learned professions’ autonomy. In 1963, the court in Garvai v. Board of Chiropractic Examiners held that it was impossible to separate the business side from the clinical side. ⁴¹ The case of Painless Parker was cited by a Colorado court in 2000 when two physicians were charged in addition to the professional corporation. In trying to determine if the corporation could be considered responsible, the court cited the precedent for the legislature — and not the professional board — to “lawfully designate by statute those who may practice the healing arts.” ⁴² For our purposes, this is important because the jurisdiction established by Parker’s case — which prevented a corporation from practicing dentistry — is used ironically to justify the legislature’s right to approve a corporation’s ability to practice.

On the other hand, in the same year in California, as a sign of continuity, the precedent of Painless Parker was cited in the case Steinsmith v. Medical Board involving a licensed physician who worked in a clinic owned by non-licensed physicians. Steinsmith tried to argue, like Painless Parker, that the owners were solely involved with the business-related aspect of the clinic. However, the court plainly stated that this line of reasoning was rejected in 1932 in Painless Parker v. Board of Dental Examiners and could be just as easily applied in medicine as in dentistry. ⁴³

A key factor in the establishment of the dental profession had been the erection of a state-sponsored dental board by dental practice acts. This board historically defined the licensing requirements and had jurisdiction over professionals in cases of misconduct. Just as the professional societies had been forced by external circumstances to revise ethics codes, professional boards are currently undergoing a new shaping process. After the Board of Examiners in North Carolina threatened non-dentists who were providing teeth whitening services, the case with the Federal Trade Commission went to the Supreme Court. The issues addressed in the case ranged from determining the limits of a dental practice to the fundamental issue of defining the extent of the authority of the board, which claimed state-action immunity. The court ruled against the dental board using the same anti-trust rationale used in the 1970s to open the doors for advertising. This rationale was spelled out clearly in the court records. Far from perceiving the board as being representative of a profession, the court determined that the individuals making up the board were “market participants” and therefore could be self-interested. ⁴⁴ The profession became a trade in 1979, and professionals became market participants in 2013. Therefore, this reconceptualization opened the door to applying the norms of commerce.

These processes of deregulation are driven by a market logic, one that commodifies a domain previously impervious by the regulatory framework laid down by professional societies beginning in the middle of the 19th century. While the aforementioned case involved the deregulation of a peripheral dental service, the rise of the dental corporation has resurrected the central issue of distinguishing healthcare as a profession and as a business. While the 19th century and early 20th century debates over this distinction resulted in license suspensions and closures, the current debate has shifted the terrain to one of accommodation and adjusted regulations.

The term “corporate dentistry” refers to a relatively recent arrangement of interests between a dental practice and a corporate management company, also called a dental management organization (DMO). Compromising approximately 10% of the dental services market, DMOs are business structures largely owned by private equity firms. ⁴⁵ They seek to absorb all of the extra-clinical tasks and accompanying costs, from advertising to materials, and allow the dentist to concentrate his or her focus on treating patients. For new dentists graduating with significant debt, a job at a DMO comes with a number of appealing benefits. Dentists as employees can expect to gain exposure to management, further continuing education, and benefit from flexibility in scheduling. ⁴⁶ The DMO’s control over the business operation, however, and how that affects clinical decision-making and patient treatment continues to come under legal and ethical scrutiny.

The past two decades have witnessed positive changes in access and availability of care, revealing an upward trend in treating more children. While only 21% of children in 1993 reported visiting a dentist in the preceding year, upwards of 40% in 2010 were seen and/or treated by a dentist at least once that year. ⁴⁷ During the same time period between 1990 and 2010, Medicaid dental expenditures soared from $756.1 million to $7.4 billion. ⁴⁸ At least 21% of the increase in treatment of children has been attributed to the parallel rise of corporate dental chains.Reference Winegarden and Arduin ⁴⁹ The Children’s Dental Health Project pointed out that the rise of DMO-affiliated practices contributed substantially to the rise in care, while private and safety net providers contributed only modestly. ⁵⁰

According to the American College of Dentists, handbook on ethics, the “chief motive [of a dentist is] to benefit mankind, with the dentist’s financial rewards secondary.” ⁵¹ In other words, the mandate is to serve others above self. Compare this to the intent and mission of the private equity firm, Friedman Fleischer and Low, which owns Kool Smiles: to produce “attractive returns for our investors.” ⁵² In this firm’s case, this translates toinvesting in products that enhance cash flow, leading to its investments in Tempur-Pedic, Church’s Chicken, and Speedy Day.

The difference between selling dentistry and other items — memory foam pillows, chicken wings, and payday loans — is the asymmetry of information about the service between the provider and the consumer. A patient wholly relies on the judgment of the clinician for their product, a transaction based on complete trust and respect. Aspen Dental’s CEO Fontana described the motives behind the generous equity pouring into dentistry by saying that private-equity firms want out of a business after about five years, and the key to a big payoff is growth. For a company owned by outside investors and stockholders, there is immense pressure placed on achieving short-term quarterly earnings.

In 2015, the Attorney General of New York filed a case against Aspen Dental, accusing the corporate dental chain of violating the state’s ban on the corporate practice of medicine. However, the case was settled out of court by imposing a civil penalty of $450,000 and laying down guidelines to achieve a separation between the clinical and the business sides. For the first time since the rise of the DMO/DSO industry, a state agency — and not a dental board, a dentist, or patient — filed a lawsuit with the intent of enforcing the ban on the corporate practice of medicine in a way that “ensures that New Yorkers receive quality dental care.” ⁵³ The lawsuit identified a number of key problematic practices, including the fact that Aspen Dental Management controlled all the financial accounts and took a pre-determined percentage of each dental clinic’s gross profits. This incentive structure amounts to fee-splitting between a licensed professional and an unlicensed business entity and allows the business entity — with significant decision-making capacity — to benefit directly in proportion to the amount of procedures completed. Although Aspen Dental Management was able to produce licensed dentists as owners on paper evidence showed that, it exerted significant effort to pressure dentists and dental hygien-ists in their clinical work. The lawsuit cites a specific example of how the corporation would communicate directly with clinicians:

This coercive language suggests to clinicians that there is a goal to meet and ways to fill the discrepancy between the current practice production and the expected practice production. The management company developed a scheduling system that would prioritize lucrative procedures, like crowns and bridges, and limit other more common procedures, like fillings, to only two per day. ⁵⁵ The settlement demanded that the agreements between the management corporation and the licensed dentists (serving as owners) stipulate that clinic staff could only communicate with the latter.

Much of the recent ethical polemics revolve around the imposition of quotas, with many former employees of corporate-affiliated practices describing production schemes tied to quotas. In smaller practices, there are also target production numbers; however, the practitioner/owner’s self-imposed target is conditioned directly by his or her clinical practice. However, in supersized corporate-managed or -owned practices, the clinical and business extensions do not directly inform one another.

It is true that DMOs have sought to infuse their corporate ethic with the professional ethic of service, as challenging as it may seem. However, due to lenient oversight and weaknesses in the model, there is much room for compromising that relationship between the doctor and patient. For example, a state audit found that, between 2007 and 2011, upwards of 90% of Medicaid claims for orthodontic treatment were invalid in a chain of All Smiles orthodontic practices in Texas. The company was previously owned by a dentist but bought over in 2010 by Valor, a private equity firm, who set up a holdings company in Delaware to make the purchase.Reference Moriarty and Quintana ⁵⁶ In her testimony before Congress, the lead auditor Christine Ellis, also an orthodontist, proclaimed:

In this case, what is surprising is that the fraud preceded the arrival of the private equity firm. It demonstrates that there is a need to identify weaknesses within the corporate model, dentist-owned or not, and to design ways to prevent profit-making motives from affecting treatment delivery. In Michigan and California, a number ofdentists grouped together to take their management company, American Dental Partners, to court.Reference Freedberg ⁵⁸ A New York based private equity firm JLL Partners bought American Dental, a DMO managing 280 dental clinics in 21 states, for $390 million. The court case revolves around the DMOs’ control of materials and equipment. The dentists allege that the company “refused to replace defective anesthesia equipment, used bill-collection policies that led to ‘refusal of dental services to patients’ and failed to maintain proper staffing levels.” As a result, patients were rushed and left unattended, revealing how operations management upstream can directly and indirectly interfere with the quality of patient care. ⁵⁹ These are two examples amongst many which have shed light on the various relationships involved between the government, management companies, dentists, and patients. This web of connections depends on trust and integrity to function, values which have been called into question with recent revelations.

The current private practice of dentistry takes place in three settings: solo practice, group practice, and corporate practice. Often, corporate practice takes the outward form of the solo and group practice, differing only in ownership and operational methods. Ownership of a practice has significant implications for how a practice is run, which is why legislation is in place to define it. In most states, legislation historically prohibited the ban on non-dentist owned practices for the sake of upholding the independence of the doctor-patient relationship. It sought to prevent corporate business policy or unlicensed persons from interfering in diagnostic and treatment decisions.Reference Moriarty and Siegel ⁶⁰ However, as managed care took off as a cost-containing trend in the eighties and nineties, there was a lobbying push within the medical community to legally permit a professional corporate entity (Professional Limited Liability Corp. PLLC) for the sake of tax privileges. It is challenging to speak legally on behalf of all state codes, but it is safe to share that about twenty-five states in addition to the District of Columbia restrict the ownership of this professional entity to a license-bearing individual. ⁶¹ In order to circumvent these legal technicalities, an investment structure was designed through which dental practices are technically owned by dentists but controlled in every other respect by dental management companies from the outside. These dentists are practically “ghost owners” since their ownership is nominal and does not extend completely to the supervision of clinical operations and patient care. ⁶²

The question of ownership is the basis of the current investigation by Senator Grassley, prompted by reports of abuse, and current class-action cases against the major dental management companies. Theoretically, the government could shut down private equity firm-owned companies involved in the practice of dentistry in a number of states. In order to qualify as a PLLC, the registration and certification process requires a dentist to be an applicant. For a modest monthly stipend, a young dentist may falsely certify that they are the owner. ⁶³ This is the fundamental challenge of the new status quo where the spirit of the law has been reinterpreted. The agreements of the corporation with dentists are often referred to by lawyers scripting the contracts as sham ownerships.

While the question of ownership might be a clear roadblock in states whose legal codes expressly prohibit non-dentist owned practices, the corporate model’s benefits in expanding care have pressured legislators to modify the code.

Corporate dentistry has focused on expanding into areas not cared for by dentists currently, mostly due to the limited acceptance of public insurance. In states like North Carolina, this expanded access to care was a key argument in favor of professionalizing the corporate dental delivery model as opposed to eliminating it. The lobbying face of corporate dentistry in North Carolina was in fact called the “Alliance for Access to Dental Care.”

In Kansas, until recently, the law very clearly stipulated that only a dentist could own and operate a dental clinic. As the state began to realize the limits on access to dental care, legislation regarding both the ownership of dental practices and auxiliary workforce capabilities was liberalized and enhanced. On August 28, 2012, Comfort Dental, a subsidiary brand of the dental conglomerate Interdent, opened its first dental practice in Kansas.Reference Sherry ⁶⁴ Many states are either not enforcing the laws or re-interpreting the meaning and intent of the law to the benefit of the DMO industry.Reference Fox ⁶⁵

The underlying purpose of the ownership laws was to ensure the clinician’s independent clinical decision-making for the ultimate benefit of the patient. However, due to the mutability of legislation, the debate over the rise in DMOs is ignoring the original intent of the law and shifting to accommodating its delivery of treatment in accordance with the ethics of the profession. Though the issue is being framed as an access to care issue, it is easy to lose sight of the purpose of the legal provisions in place and appreciate the very real concerns at the time of their enactment.