Orthodontist Paul Helpard was concerned about how corporate ownership in his sector would affect patient care. He decided to do something about it starting his own consolidator.Eduardo Lima/The Globe and Mail
For years, Paul Helpard was content to run the clinic on Vancouver Island where he practised orthodontics, a specialty of dentistry that focuses on diagnosing and treating the misalignment of teeth.
Owner-operators like him were the way dentists had traditionally worked. But that was beginning to change. Large companies backed by private equity were starting to buy up dental practices across the country, including in Dr. Helpard’s town of Courtenay, B.C.
He had some concerns with the trend, such as whether corporate ownership would put profit ahead of patient care. But rather than fret about the future of his profession, Dr. Helpard decided he was going to do something about it: He would start his own consolidator, and do it in a way that addressed the problems he had with the corporate ownership model.
“My concern was that if there wasn’t a solution created from within the specialty, meaning orthodontics, then the solution would be imposed on us by outside investors,” he said.
As corporate ownership of health care practices has gained steam in North America, the debate has often been polarized between large companies backed by international private-equity funds on the one hand, and small businesses owned and operated by professionals on the other.
Corus Orthodontists, the company founded by Dr. Helpard, says it offers a third way: a network of clinics with many of the benefits of large corporations, but fully owned and operated by the health care professionals who work for it.
Various factors have made the business side of running a health clinic increasingly challenging in recent years, which has fuelled consolidation. Those factors include the emergence of expensive new technologies, staff shortages and extra demands driven by the pandemic.
Dr. Helpard began by researching the history and structure of corporate-owned practices, which are referred to in the industry as dental-service organizations (DSOs) or orthodontic-service organizations (OSOs).
He also looked outside dentistry and met with Alan Ulsifer, a Calgary optometrist who founded the FYidoctors chain of eye-care clinics in 2008, which is majority owned by optometrists. Dr. Ulsifer agreed to help and ended up serving as the founding board chair of Dr. Helpard’s company.
In 2019, Dr. Helpard and 17 other dentists pooled their resources to get bank financing and launched Corus Orthodontists. Over the past three years, the company has expanded to include 86 dentists working in 55 practices in Canada and the United States.
The role that orthodontists serve in Corus is very different from other health care chains.
Most corporate consolidators are majority owned by private-equity firms or international parent companies such as veterinary chain VCA Canada, which is owned by confectionary giant Mars Inc. The companies may have an advisory council on which medical professionals sit, and there may be a chief medical officer who is a licensed professional, but the company’s management is usually made up of executives without clinical backgrounds and medical professionals are, for the most part, just employees.
Many provinces and states have restrictions on corporate ownership, and the companies get around this by designating an employee who is a medical professional as the one responsible for patient records at dozens or even hundreds of locations.
At Corus, nearly all of its shares are divided among the orthodontists who work in its clinics. (Less than 2 per cent of shares are given to other members of the company’s management who are not orthodontists, the company says.) And each orthodontist is personally responsible for the patient records at their clinic through individual professional corporations.
That unique approach has helped Corus to attract partners in the United States, even though that country has far more corporations competing to recruit orthodontists.
Alex Waldman, an orthodontist in Beverly Hills, Calif., who joined Corus in December of 2020, said he has run his own practice for more than 15 years and resisted joining other organizations because he did not want a top-down approach where someone who is not a doctor might put pressure on his clinical decisions.
“Your commitment to the quality of care, to the patients, is the same the day after you join Corus as the day before,” Dr. Waldman said.
But, Dr. Helpard acknowledges, while the goal is always to keep the company majority owned by orthodontists, there may come a day in which it has to sell a small stake to raise funds.
In that, Corus would also be following FYidoctors. In early 2020, FYidoctors sold a minority stake to L Catterton, a U.S. private-equity fund with investments in consumer brands that include Peloton, and which also owns more than a third of Canadian dental consolidator Dentalcorp.
Dr. Ulsifer said he is proud of how far FYidoctors went on its own and it was a difficult decision to seek outside investment. But, he said, the company, which also manufactures its own lenses, was having trouble paying for upgrades to its clinics’ technology without access to more capital.
“We basically built the business on a line of credit from the bank,” Dr. Ulsifer said. “There’s limits to how far you can go and what you can do with your business when you’re restricted in that cash flow.”
Still, those who have joined Corus say they hope the company will be a positive example for other health fields that are seeing rising corporate consolidation.
“It’s always going to be majority orthodontist owned,” said Mary Cooke, an orthodontist from Napa, Calif., who joined in 2022. “It’s not going to be someone [who] all they want to do is make a profit. It’s got to be about how are we going to take care of our patients, how are we going to take care of our team members … And how are we going to protect the profession.”
Chris Hannay