The DSO field could see massive changes with the use of AI next year, one CEO predicts.
Faraz Edalatpajouh, DDS, is the CEO of Clark St. Dental Partners, a California-based DSO with six locations supporting general dentistry and pediatric dentistry. He recently spoke with Becker’s to discuss his company’s mission and other issues facing the dental industry.
Note: Responses were lightly edited for clarity and length.
Question: Can you tell me more about your operational model and overall mission?
Dr. Faraz Edalatpajouh: We don’t operate in the nicest areas. We’re sort of in underserved areas, not just socioeconomically, but more so in terms of geographic location. We have two in the Antelope Valley. We are also really focusing on the Inland Empire right now. That’s where all of our expansion is. I think that’s where the population is moving. We’re a pretty standard DSO model, where we have an operating company and the subsidiary companies afterwards.
Much of our focus goes toward patient interaction. We recently invested pretty heavily in our call center, where everything is onshore, everything is in America. We want to make sure when we go into a market, we’re bringing in jobs as well. We like to provide work for the markets we serve.
Q: With your DSO operating mostly in underserved markets, what are your thoughts on the current challenges facing Medicaid funding and fluoride use?
FE: In terms of Medicaid or Medi-Cal in California, I think July 1, 2026, is the date everyone has circled in their calendar. Everyone’s sort of freaking out about it. I think if we’re going to be true to our mission statement, us in terms of practitioners and in terms of healthcare providers, it shouldn’t really affect how we operate. We still want to move forward with best practices for the patient. We still want to put the same investments that we have been in tech and in AI and patient outreach and patient experience. These things have a way of working themselves out. I think this country has done a really good job of taking care of its people in terms of healthcare … I think it’s [about] working hand in glove with elected officials for them to know what the actual problems are and what their constituents are seeing day to day. That’s what I think effectuates change.
In September, we were keeping an eye on the ball. We’re working with our patients to develop either in-house plans or compliant plans to make sure they know that they still have a place to get these uncovered benefits, like crowns or whatever was being covered for them in the past. We want to make sure they still know that they have access to it.
Q: How does Clark Street differ from other competitors in the DSO field right now?
FE: We are very much employee and manager centric. I don’t think I know more than the people who work with us. We have amazing people who have been in DSOs forever. I graduated residency in 2018. Some of the people we have working with us were exiting companies in 2018 and have been doing this for much longer, so I’m not necessarily here to reinvent the wheel for them. There are things I’m passionate about that I think we can bring value and effectuate change in the industry with.
I think marketing is very valuable. I think for the longest time, DSOs have been a little bit averse to digital marketing and spending capital on [things like] Facebook and Instagram. One thing we’re doubling down on is making sure our presence is just as much on ChatGPT, where if you were to Google, “Who’s the best orthodontist in Palmdale, California?,” you want to rank there. You want to be where the online traffic is. I think the online traffic is heading toward AI and Gemini, Grok and ChatGPT. A lot of the outreach tools we use have AI embedded in them. We use a product called Patient Prism, which allows us to know [with] a patient interaction, how did it go? What can we improve? Was the full spectrum of offers there? That way we know our patients are getting the maximum value from interacting with us.
Q: How does your DSO approach organic and inorganic growth?
FE: I wish the practice acquisition world was a little easier. For obvious reasons, people don’t sell good offices, right? One thing we’ve been successful with is we’ve managed to get into an office that was underperforming, look under the hood, and within six to eight months, sort of figure out and work out the kinks for that office and get it to a place where we can be proud of it.
My only concern with acquisitions is just that it’s a very slow growth model. Honestly, even now with de novos, it’s a little bit difficult because every strip center has a dental office in there, and we’re in strip centers where there’s another dentist in there … There is a little bit of a negotiation on the lease side. “Hey, you’re going to have to let go of your exclusivity, but as a result, you’re going to have a pediatric operator in the same center as you who invests a lot of, not just capital, but brain power and operational know-how to make this shopping center really busy.” If mom needs Invisalign or a root canal, our providers aren’t going to do it for you. We’d be happy to refer across the strip center as opposed to, “Hey, why don’t you go to other entities that might not operate as high of a clinical level as you would.” I don’t like referring to other national DSOs because I don’t think the patient care is there, but if I know you from the strip center and we have a working relationship because of the lease negotiation, I’m more than happy to refer to you.
Q: What are your predictions for the DSO field in 2026?
FE: I think we are headed toward a lot of change in the industry. There’s going to be a shake-up. People who have two hands on the steering wheel are the people who are going to do the best. As an operator and an employer of 100 people, it’s a lot of responsibility for us, and it’s incumbent on us to make sure we are able to move with the times, make sure that no one legislative issue, especially one as transparent and as obvious as these Medicaid cuts, is going to really affect our core business and our revenue model. I don’t know where other people are, but I don’t plan on cutting jobs. I think we’re only going to grow in 2026. If we can get to double digit offices in 2026, I think that should be a goal we should set. As long as we have all our people rolling in the right direction, which we hope we do, there’s no reason why we can’t accomplish that.
I think we’re on the other side of this inflation thing. I’m hoping to see better reimbursement rates from the [insurers.] Thank God they’re having those conversations. This is my biggest soapbox that I get into with older doctors: Their gripes are always the same gripes. Insurances don’t pay enough. Patients aren’t thankful enough, so on and so forth. I think they may have made some hay because insurers are willing to talk about reimbursement a little bit more. You can negotiate your fee schedule a little bit better. I think this Medicaid thing is going to factor in. The people who take Medicaid just to add a payer type are the ones who are probably going to have a little bit more figuring out to do. The people who take Medicaid and read the bulletin and work hand in glove with Medicaid, and really work to understand it and understand that they’re providing a service for a [section] of the population that not only the government has deemed needs support here, but also that rely on this. Their rug is sort of getting pulled from under them. These are people who want dentistry. If you can carve out a way to get [them] access, it’s a win-win. It’s a win-win for the state, because the state gets their population taken care of. It’s a win-win for the patient because they get their needs met, and then it’s a win-win for us who have Medicaid as part of a payer mix.
Q: Can you elaborate on what kind of “shake-up” DSOs could see next year?
FE: Everyone always talks about AI, [like,] “Oh, AI is going to change the world,” and I’ve seen it at least at the call center level or the management level. There is an AI tool for everything that exists … I think every aspect of at least the DSO side, you can outsource to AI within the next five years, which a little bit scary, honestly, because again, I love the fact that I can open this door and talk to my CBO, open that door and talk to my call center, and I genuinely have a relationship with these people. So, I’m concerned about what’s going to happen to other DSOs that are maybe a little bit more cutthroat, who might actually cut headcount. We have no intention of doing that.
On the clinical side, obviously, there’s Pearl and Overjet, and we just brought in Overjet not too long ago. I haven’t diagnosed a filling in a very long time as an orthodontist, but it’s cool to open up a panel and then on the right side of it, there’s a list of what it’s diagnosed. I think that’s going to streamline diagnosis for providers. I think it’s also going to allow for DSOs to have a little bit more transparency and have a peek under the hood of, how well do my providers diagnose? Are they missing things the patient’s going to suffer from with under diagnosis? There’s also the conversation of utilization rate. You don’t want to be doing a crown if it can be a filling. You want to stay within some semblance of conservative dentistry.
