The Good, the Bad, and the Evil - The Inside Story on DSOs

[0:00] You are listening to the Dental Practice Owner's Podcast brought to you by Prosperident. From our unique perspective as dentistry's embezzlement experts, Prosperident's team can bring you the information that is important to practice owners. The Dental Practice Owner's Podcast brings you strategies, tools and tips that you can use and dentistry's thought leaders as guests. So sit back, relax and listen to Prosperident's Amber Weber, Wendy Askins, and David Harris.

[0:31] Talk about the issues that matter to you.

[0:41] Well, this is such an exciting webinar that we're hosting tonight, especially before the holidays. So I've been in dentistry for over 22 years and there's been so many things change in those 22 years. But as dentistry has grown and changed, we all know this really interesting title called the DSO. And so we brought an expert here because it's so interesting the stuff that you hear now in dentistry about these changes that have started to occur in the last few decades.

[1:12] So we want you, the audience, to have all your questions answered in our special presentation tonight. The good, the bad, and the evil, what you don't know about DSOs. Now, tonight it's going to be just like we've always done. Our length of our webinar is going to be a little over an hour. Now, we want you guys to stay tuned because at the end, you will get to have special questions answered live with our witness.

[1:41] So we stay for the entire time. But if you can't, as always, we usually record these sessions and you'll be able to see it later on and share all this wonderful information about those DSOs. As always, we have continuing education credit that you will be provided with. So please sit back, enjoy this wonderful information that is really approaching all of us in dentistry and stay tuned so we can answer your your questions that are just eating at you.

[2:14] Our next webinar is going to be January the 26th, and it is my extreme honor to be able at that time to introduce you to my friend and former client, Dr. David Hughes. This was a three hundred and seventy five thousand dollar theft over a four year time period. And the employee not only did she use three different methodologies is what we always say here on our webinars. And when we're talking to our clients and there's a minimum of three theft methodologies,

[2:54] but this employee actually targeted the top three financial foundations of David's business. It is a fascinating story that will be told by a wonderful man, an excellent clinician. So we invite you to join us on January 26th, where you'll get to meet Dr. David Hughes through the webinar. You'll get to hear his story and you'll also get to learn from him. Wendy, I can't wait for that.

[3:24] Yeah, I'm really excited. I know you live through this. And I think, you know, your perspective and David's are going to be absolutely fabulous. Yeah. But for right now, I want to introduce a friend of mine and a very special guest, our guest presenter tonight, Emmett Scott.

[3:45] I've known Emmett for, I don't know, I don't know. Six or seven years probably. We first met when we were presenting in the same room at the same conference one after the other. So I got to hear his and he got to hear mine. And he instantly struck me as a guy that I would like to know better. And since then, I've watched him really rise to be a huge force in the DSO world.

[4:16] Emmett is the CEO of Community Dental Partners, which is a Texas based. And I think Emmett, you said the other day 90 offices now are what you support. Yeah, 70 70. That's right. 70 offices. Okay.

[4:28] I was getting a little ahead of myself. So he first of all, he's the CEO of a DSO. But it goes a little bit further. He's very involved in the DSO community. He's the president of the Association of Dental Support Organization. He's also very involved with the DSO secrets podcast and Facebook group.

[4:47] And there are probably some, some things I'm missing in terms of your, your list of DSO accomplishments, but I really think of Emmett as Mr. DSO. And this is the elephant in the room. I mean, all of our audience know that the DSOs are growing quickly, that they're gobbling up practices.

[5:04] And I think every practicing dentist Emmett, at some point has to say, you know, is, is, is working with a DSO for me. So at that point, I'll be quiet and let you talk and take it away. Well, thank you so much. And if it's okay, I'll, I'll share here. I really appreciate being on, you know, with someone who graduated

[5:26] in accounting and at BYU, I really appreciate the integrity that you all are bringing to the industry. And I think at the end of the day, you're bringing a lot of support to the industry. So I won't go as far as saying you're a DSO, but you're at least bringing a level of support for this industry. I think that for me to share, somebody's going to have to stop sharing.

[5:49] So not sure. But it's saying I whoever has got my beautiful picture. Okay, perfect. Perfect. So I thought what would be most helpful is walking through this title, good, bad and evil of DSOs, because I think we make the best decisions

[6:12] when we have the right information. And so if I can be as transparent as possible around what I believe DSOs are philosophically and even what happens at their entity structure, then with those Lego pieces, people can build out what they want to. And I'll tell you right now, I see at times people will come up with things like a DLO or a DPO or, you know, they'll try to come up with almost

[6:39] like a new spin on the concept. And frankly, I think the word supports a great one. I think some misconceptions have happened, but at the end of the day, what I really want for those listening and watching is to build a great organization for themselves to have the biggest impact. And again, if they understand the details of how the mechanics work,

[6:59] then they can make sure that they do that the right way. As mentioned, I do have a DSO that I'm partners in, give a little bit of background, my best friend from the age of two as a dentist. And he called me 13 years ago or so and said, I want to open a practice. I want some help.

[7:19] I want to automate as many of the back office type procedures as possible. We built this beautiful practice. He really wanted to serve kids. It was built as a storybook. Kids are called back as Prince or Princess. They get gold coins along the way.

[7:34] At the end, they get crowned for their bravery and dentistry. They get a balloon. They get a sticker. Mom gets a sticker. They get to spend their money. You know, we ask them, do you have any money?

[7:42] They have their gold coins. And really what we're trying to do is connect oral healthcare to something that's fun. Because as we all know, getting a root canal is not fun. So if we can start to correlate those things at a young age, and that first three weeks,

[7:58] we had a thousand first visit patients come in, which anyone in this industry knows that's a lot. And so we said, wow, we should probably build another one of these. We didn't know what a DSO was, but I was just helping my buddy out.

[8:10] And so at the lowest level of definition, maybe that's what I think a DSO is, is helping your buddy out. And we ended up having more practices. And then I started hearing about this thing called DSO. And I said to Chad, I said, are we doing something evil?

[8:23] I'm hearing about these DSOs. Are we doing something evil? I think we're trying to have an impact. I think I'm trying to help you. But is there something going on here? I started the podcast, DSO Secrets,

[8:32] to kind of start sharing what we were doing and to hear feedback and to try to, you know, net out what's really going down. And what I found, I'm excited to share with you around these entrepreneurs and the impact they were having.

[8:47] I ended up partnering with the Dentist Entrepreneur Organization, which really helps dentists, whether it's one practice or 50 practice, to be a better entrepreneur and a better executive. I'll talk a little bit about that.

[9:00] And then right as COVID was hitting July of 2020, the organization asked me to be president of ADSO. So at this point, I have seen small practices, big practices, multi-billion dollar groups, et cetera. And I say all of that not for bragging rights, but to say I've had my finger in a lot of pies.

[9:20] I'd also say don't help your buddy out. You'll really end up in his industry. But I have my finger in a lot of pies and I've been able to see how this is done at all different levels. And so that's what I really hope to share

[9:31] with all of you today. So you have those pieces. So here's a couple of things we're going to hit. I'm going to share what I believe is the true origin story of DSOs, how to identify some of the good, bad, and evil.

[9:42] I'm going to make that really simple for you to kind of take home and be able to use. And then key principles, if you're like, Hey, I want to build a DSO, but I want to do it the right way. And what I believe is kind of right-way principles.

[9:55] And then, you know, where to start in building your own or maybe just choosing, maybe some of you are thinking about partnering with one, et cetera. How would you net some of those things out? So I think we've got to start with what most people believe has how DSOs start.

[10:14] In that is private equity firms had a bunch of money. They really liked dentistry. And they decided that they were going to take over it. They were going to make dentist puppets and control them with these large sums of money. And those with the gold makes the rules.

[10:29] And so they started buying dentists up and, you know, they're evil basically. And they're controlling clinical care and all of these things. The problem I have with that story is it requires a couple of big assumptions that I just don't buy into. And I now have enough data point to know that it's true.

[10:48] Number one is you have to believe that dentists are really stupid. Lack all integrity and, you know, don't learn from their mistakes kind of thing. And that they're kind of willing to just do whatever for a quick hit of dollars. And then they're willing to be puppets to other people.

[11:08] The dentists I've met are not that way. They're very thoughtful. They're very detail oriented. They look over things. It's not that they're a master on every contract and so forth, but you're not going to have a thousand dentists working in

[11:22] a DSO organization and all of them be idiots. Okay. So that assumption just, it doesn't play out. Capitalism is too strong. Number two, in like 48 states, only dentists can actually own the practice.

[11:37] So if you believe the gold makes the rules, the one who is controlling all the revenue that is coming in is the dentist, right? Because the insurance companies, all the payments are running through those practices. And those have to be owned by clinicians.

[11:55] And so, you know, you can say, oh, well, they contracted in this way. Now, at the end of the day, the dentists are in control and are in power. And so if you start to, one thing I'd say is if you believe that dentists are being controlled,

[12:11] I call those dental control organizations, DCOs. And we can talk a little bit about where that could happen. But those should be wiped off the face of the earth. And I'll tell you how to do that. But I think it's already happened because anytime a non-dentist has decided to try to control a dentist,

[12:29] they can pull a couple of levers. One is they quit. You know, there is no like servitude where they have to stay at an organization. I don't care what a contract is. You just stop working, you know.

[12:40] And so anyone who's tried that methodology, those DSOs, DCOs just like went away and they blew up and they're gone. Or the dentist takes the practice back. He just says, hey, I'm breaking this contract with the DSO and I'm taking the practice back.

[12:56] And I've seen that happen as well. So I don't believe that these really exist to the extent people think. And so, you know, I think understanding what a true DSO is. Here's what I think has really happened.

[13:08] And I have the data here to prove it is that entrepreneur dentists like my friend, Dr. Chad Evans, wanted to have more impact as they were having success. They wanted to serve more patients. They wanted to open in a second location. They wanted to create passive income for themselves

[13:29] because they didn't see themselves at the chair their whole life. They saw themselves as maybe mentoring other dentists. And anytime you start to have more people, as everyone knows here, it gets kind of crazy. Like you need more help, right?

[13:43] You need help around IT. You need help around HR. You need help around compliance. You need help around finance, all of these things. And so you start bringing in people who are experts in that.

[13:54] And as Chad will say, while I was going through years and years of dental school, some poor guy was studying accounting, you know, and somebody else was studying marketing and so forth. So if I really want to have impact on a community, why wouldn't I take those best people surround

[14:10] myself with them and then start building out an organization simply to support me as the clinician. And I think the name dental support organization really hits on what you're trying to achieve there. Now, where does private equity come in? Anyone who's borrowed money from, let's call our traditional

[14:27] Bank of America, Wells Fargo, et cetera, knows that at least in the early years, they were very open to like, Hey, you just got out of school and you want to open a practice. No problem. Here's some money. Let's get going. Which is kind of crazy to me, but it was working just fine. When dentists got to their second or third practice though,

[14:49] something would shift for them because it went from kind of owner finance banking into corporate banking. In other words, instead of them underwriting and saying, Hey, can this dentist like pay back this loan just by his income? He's working as a dentist or does he actually have to have an organization that can support this loan?

[15:10] We're giving them it changed where it went in the bank and corporate banking said, Yeah, there's no way we're giving this dentist a loan to open up four, five, six, 10 locations. And so private equity said, we'll give you the money. As that said, we'll give you the money.

[15:26] So there was non-banking solutions these dentists tried to started using, trying to solve their bigger vision, which was to have more impact. And that is the only way private equity gets into the space because dentists control every part of this process. I guess if I can jump in for a second,

[15:47] what had occurred to me till you said this is if I'm a dentist and I'm trying to choose between two DSOs and one is sort of very financially oriented and doesn't seem to respect me as a clinician. And the other one says, you come here and be a clinician and we'll just take all these other burdens off your

[16:04] shoulders. I know where I'm going and you just made that very clear. And you see it right now because as dentists have gotten better at opening practices and they've gotten DSO support. And so we'll say as there's bigger and bigger and more DSOs,

[16:20] guess who the customer of a DSO is? The dentist, right? The patient is actually the customer of our customer. The reason we do marketing, the reason we bring in the patient is because our customer, the dentist wants to have more patients, right?

[16:38] So at the end of the day, if you're judging between different DSOs, it's actually really easy to just be as selfish as possible. You know, you just say, who is going to provide me the best type of support? Now that support might look like, hey, I really want to

[16:54] learn how to do implants. Hey, I really want to be an underserved community. Hey, I really want to be in the small town, but I want to be able to make a lot of money and I don't want to have to deal with X, Y and Z. So as you design kind of your life goals, you're

[17:06] actually designing what kind of support, what kind of DSO you want to be a part of. And you can start using that really as kind of the resume checkoff box of what you're looking for. Now, here's something I'd say for those practice owners who have one associate.

[17:23] You're a DSO. Okay. Now you might not have the LLC structure, you might not, but I can promise you, if I went to your associate and said, hey, did you join with Dr. So-and-so because you were really excited about

[17:36] doing payroll on Friday, they would say, no, no, no, I was expecting him to do. Oh, you joined because you wanted to figure out where the router needed to go and work with the IT guy. No, no, no, I was hoping he would take care of that or she would take care of that.

[17:50] Oh, you wanted to do HR and you wanted to hire people and deal with the front desk issues. No, I was hoping, you know, so every associate really is thinking about the practice they're in as a dental support organization. They're going to provide me some clinical

[18:04] mentoring, but they're going to take all of the back office business stuff off of me. Otherwise, if I had to manage all of that, why wouldn't I just own my own practice, right? So again, I think the reason that is so important is because if you're hiring an associate today

[18:19] and you're not thinking about them as being a DSO yourself, you're probably not providing them the support they're thinking about that the relationship should have. Now you might also say, yeah, but that it's hoping to have equity someday.

[18:37] And so it's different. No, there's DSOs now where the associate can have equity, can grow into equity, can have equity at the DSO level, can have it at the practice level. So again, good old capitalism as it starts

[18:49] saying, what does my customer want? Starts designing this. And I'll tell you at the end of the day, the dentists are winning. They're getting the big sign on bonuses. They're getting the compensation.

[19:01] And frankly, they're doing less than they would have if they were just a business owner by themselves. They're getting equity positions and everything else. So as you look at a single dentist wanting to

[19:17] support more patients and then bringing together the different parts and services that start to come from that at the grassroots, that is what a DSO is all under one umbrella. So yeah, as I said, the truth is you

[19:35] become a DSO, at least philosophically you should be if you're planning on holding on to that associate. Occasionally, and I'm sure David, you see this too, where a dentist says, man, you just can't find a good associate this

[19:47] day, these days. I would say, yeah, you're just not a good DSO. Your associate chose not to work with you anymore or you're not sure how to mentor them or you're not sure how to

[19:58] build and grow them. Let's be honest, bringing an associate right out of school or even one that has other habits, skill sets, modalities is not easy work to just integrate them in.

[20:08] And this is where DSOs have gotten very good, frankly. Again, I don't think thousands of dentists have been duped. I think that they are following where the biggest opportunities are for them and

[20:19] their personal development. So this is what DSOs actually do really well. They are increasing the autonomy of the associate. Now, I can tell you, David, you probably

[20:31] haven't heard that before. I'm going to go work for a DSO because I want more autonomy. But at a very psychological level, let me ask you this. As a patient, if you knew a dentist

[20:43] was working on you, thinking about IT marketing strategies and the fight that's happening in the front desk, do they have full autonomy or are they thinking about a lot of other things that I actually wish they were

[20:56] just focused on the clinical procedure they're doing? My argument would be that in the best case DSO scenario, that dentist is walking in and all they need to focus on is the patient.

[21:09] They're actually expecting the DSO to do the marketing, to do all the HR issues, to do the IT, to make sure the equipment is working. And I'm not saying that they all do it perfectly, et cetera.

[21:21] I'm just saying it's better than you having to worry about that all the time yourself. I never pick a dentist because they're a good business person. The dentist I choose to go to

[21:32] clinically is great. And that's why I go there. It's just not a factor in my choice. So I guess, yeah, I agree with you. Yeah, we want great dentists because they're great dentists.

[21:46] Can we tackle the elephant in the room? Because I think a lot of what a lot of dentists perceive about a DSO is that it's more or less the antichrist and they're going to sell their soul

[21:58] to the devil and whatever other religious incarnations I can come up with. And they're going to lose their clinical autonomy and there's going to be a non-clinician office manager

[22:09] somewhere telling them out of practice. I think that's the fear that every dentist has about throwing their hat in the DSO ring. And I know you see that a little bit about that.

[22:20] I think that's the fear that every dentist has about throwing their hat in the DSO ring. Well, again, what I don't like about that is the assumption has to be that the clinician has no backbone

[22:32] and no free agency to make life choices. I haven't found a scenario where a dentist is padlocked to the chair unable to leave.

[22:42] And I've heard people say, well, some of these contracts are some, yeah, at the end of the day, they're not going to leave. Now, here's what I have seen David and I think this is

[22:54] important to call out is sometimes there are bad associate dentists. They're just not good. And when I say they're not good, it's not just that their clinical

[23:06] skills aren't good. They're not good at taking feedback from a mentor. So let me ask you if an associate dentist is getting feedback from another clinician

[23:17] who's been doing it, you know, surprise, surprise, they're a little prideful and so forth. Do they tend to go to their buddies and say, you know what? I'm just not a humble person.

[23:29] I don't take feedback well. I had several patients come in and complain. They tried to mentor me, but I gave them the stiff arm because, you know, I'm a jerk, frankly. Or do they say the DSO

[23:41] was trying to control me? Like, which is the easier way with the research I've done and looking at different organizations where we do have to be careful is actually doctor owners.

[23:53] Doctor owners feel very comfortable going into a clinician. And I'm not sure that they shouldn't, by the way. But they feel fine going into a clinician and saying,

[24:05] hey, your work is crappy. We need to upgrade you. I need to get you CEs. You need to do better. You need to be careful on these patients. You know, I know, especially with children,

[24:17] like they have timers. There's only so much time we've got here. You can't take two hours. This isn't dental school. What some dentists will then say is, oh, the DSO is trying to control me.

[24:29] Now, what's weird about that is, no, you've got a dentist mentoring you, but does that dentist own the DSO? Yes. So are we playing with semantics a little bit here? Yeah, we're playing with semantics.

[24:41] And I would love if others have different scenarios that they've personally had that they could point to. But again, most of them would have to assume that the clinician

[24:53] just has no backbone or no ability to make their own choice. And I would say there's enough choices out there that anyone that's, any DSO or any, frankly, practice that's doing a bad job

[25:05] taking care of the doctors, making them hit quotas and some of that stuff that I hear that their dentists just leave. I mean, I saw a dentist who built out seven locations,

[25:17] had 20 dentists in them, and in one month, that dentist lost 14 dentists. They all left. Why? Because he was a jerk and they hated working for him.

[25:29] And they didn't like how he talked to staff and so forth. And they all left. So I think those, you know, dentist owners either have to kind of change their tune

[25:41] to be better business owners or they end up going out of business. The free market is an ultimate great level, isn't it? It's very powerful. It's very powerful.

[25:53] I want to go a little bit into entity structure because I think this is helpful when you think about a single practice, you've got the revenue coming into, and I have a PLLC.

[26:05] It's a practice owned by a clinician. Now, I'm getting out of kind of the philosophy of a DSO into kind of legal structure that most people would think of as a DSO. When you have this DSO structure, you've brought in these non-dentist partners

[26:21] and you've put them in a separate LLC. And you want to be able to give them equity in that LLC because here's the problem, as you start to expand and you want to bring in really talented marketing people,

[26:33] like go work at Amazon or Facebook or other places, and so they're going to want some equity and an entity, but they can't have equity in a PLLC, only you as the dentist can control that, don't it?

[26:45] So by setting up this separate LLC, you're able to give them equity in that. Now, that LLC by itself has no real value. So what you do is you set up a management contract between the LLC

[26:57] and the practice and to the extent that the LLC is bringing value to the practice, you're able to move dollars up to that LLC and now it has value. So the money runs from

[27:09] insurance or whatever payer to the PLLC and then as management services are provided, it moves up to the LLC. So as I was talking

[27:21] about the person with the gold makes the rules here, you can see that all of that revenue is coming through the dentist who is deciding, yes, I'm getting support and I'm moving that money

[27:33] or that net income up to the LLC for the management services provided. Now, in almost every scenario, the dentist who owns the practice is also going to have equity in the LLC.

[27:45] If they're the founding dentist, they're going to have the majority of the equity in the LLC. But something magical happens because free market system if I own a practice and I want to sell it to another dentist, that's fine

[27:57] and we've done that for years and years. But that dentist can only get so much money and you're really kind of selling them your job. You know, it's just a single practice and so forth. If I've set up multiple practices, if I'm mentoring

[28:09] dentists, if I've built out a team, well, now I've got an organization that's having much bigger impact. I've got passive income. And if I'm moving that passive income into an LLC structure, now we start

[28:21] talking about multiples of EBITDA. We start talking about a value that is much greater. And so this is what got interesting for entrepreneur dentist is because

[28:33] something's magical happens when you actually build out an organization, right? The dentist are able to manage the clinical side and allow the rest to run smoothly without their oversight.

[28:45] And owners are able to get more equity value because they've moved the economics to the LLC. So if I was using kind of round numbers, I know most dentists would say I sold my practice for 60, 70,

[28:57] 80% of revenue, 100% of revenue. If you think of it as more net income, we use EBITDA. They really sold it for, let's say, 2, 3, 4 times EBITDA. And now with this structure

[29:09] as you grow, you might be at 8, 10, 12 times of EBITDA. So imagine your practices all of a sudden being worth 6 times, right? And why is that? Because you built an organization

[29:21] that's having impact on the community. You're not just an individual dentist, almost like a franchise who has a job and you're selling your job to somebody else. And this has really started entrepreneur dentist

[29:33] to start thinking about this. Wait, if I could build out a support structure, my life got easier. I got out of the chair. I could jump into this chair if I wanted to, but I had this whole back office system and my whole

[29:45] organization was worth 600%, you know, 600% more, times more. Yeah, let me figure that out, right? And so when you say, man, DSOs are growing. Yeah, because dentists are really smart.

[29:57] See, that's the difference between I think the two philosophies is do we believe dentists are dumb and they're all getting duped? Or do we think they're really smart and they're following the economics

[30:09] and the impact that they could have on the community? And I believe and I have seen that dentists are really smart and what they're doing is really powerful and it's allowing other dentists

[30:21] and it's allowing patients to get served. It's allowing other dentists to grow and develop and it's allowing patients to get served in ways that they never would have otherwise. Because the other thing you get when you start

[30:33] building out these economics is you can start making investments into technology that you simply couldn't do as the single practice. You can go into communities that you couldn't do as a single practice. You can service

[30:45] Medicaid patients in a way you couldn't as a single practice. The expansion of care has grown because of the DSO market. The innovation has grown because of this DSO philosophy.

[30:57] Well, not just even that. I go back maybe 25 years and 25 years ago it was very difficult to find a good associate position.

[31:09] There was just a real lack of opportunity for people graduating from dental school. And they ended up in sort of second tier positions. They got

[31:21] roped into buying because it was a seller's market as far as associates go and the doctors own practices said the only way I'm going to talk to you is if you agree to buy my practice in three years.

[31:33] One thing that I've noticed that the DSO world has done is that now you graduate from dental school you have a lot of different opportunities. I saw bonuses 20,000,

[31:47] 50,000. Hey, we have a program at Community Dental Partners where we help pay off the student loans. In order to get that before you usually need to go work

[31:59] for $80,000 and some reservation or some other kind of component DSOs are now innovating past that where with our organization you could make $400,000

[32:11] to get student loan payoffs. Things like that are possible because you're getting division of labor you're getting great patient access you're getting all this technology and you got clinicians now getting a lot of CE

[32:23] very quickly. What's the hardest part of running the DSO? I had a entrepreneur friend who said Emmett if we could get rid of the customers and employees business

[32:35] would be really easy. The hardest part is always people. Right? When I talk to dentists who aren't scaling and growing a lot of it frankly is just

[32:47] man this people is really complex and I can tell you that DSOs are not immune to this. Figuring out how to lead and develop people is still the hardest part. If a DSO is failing

[32:59] it could be that there's some evil leader out there or it could be that they're simply trying to figure out how to be better leaders among people and that's something I think we all should be supportive of and figure out

[33:11] how to develop these out more and more. I mentioned that I was going to help you identify whether a DSO is good, bad or evil. I think I've given you the baseline here

[33:23] dental support organization. Good. I talked to a DSO and it says Emmett here's how we're going to support you as a clinician

[33:35] and I look at that and I go that's a long list, I like it and I've got the CE credits and we've got this team, etc. Now the reason why the origin story is so important

[33:47] is if you're going into it with confidence and saying I am going to demand support you're going to end up with a better DSO. If you go into it saying I've got to protect my autonomy

[33:59] and I think these guys are evil every time they say we're going to do marketing I've got to do the marketing I've got to control the IT you're just going to have the wrong mindset around this but if you're like

[34:11] I'm my own person yes I want that support because I want greater autonomy to develop in my clinical skills that's really how you identify the best DSOs

[34:23] they've created standardization around certain things they're focused the ideal DSO is really focused on the patient type they want to serve I'm very concerned around

[34:35] DSOs who are trying to be everything to all people because I don't know if I've got patients doing pediatric all the way to geriatric am I really going to be able to support around that

[34:47] there's a reason why a restaurant specializes on a certain set of food etc and when we talk about dentistry we do a little bit of a disservice because the reality is there's all these different patient types

[34:59] that are very different and need different procedures modalities, technologies care, support and frankly the assistants need different training if they're doing dentures

[35:11] or they're sedating children so all of those things I think you want to look for a DSO who knows who they are and how they're supporting the marketplace I think as the list starts getting

[35:23] shorter and you start hearing things like yeah we're not you get to do that this used to be something that I think people were kind of excited

[35:35] about but what I'm hearing more and more as dentists are realizing that it's actually limiting their clinical autonomy because they're having to to manage more

[35:47] they're also not getting the CE credits and the support that they were looking for I think you want to be careful if you find a lot of arrogance amongst the clinical leadership

[35:59] I wouldn't worry as much if there's arrogance around the CFO or the marketing etc. though I look for good culture within any company

[36:11] but who's that clinical director who's really driving this and that kind of leads me to what I think is somewhat evil and that is when they say you know what you can just do whatever you want

[36:23] and the reason I'm most concerned about this is because it's shorthand for we're not providing you any support at all and the only reason I call it evil is because it feels deceptive

[36:35] and that's what I think is evil I think if someone just came out and said hey what we're doing is really trying to roll up some practices together and hoping we can trick the private equity firms into giving us a high multiple

[36:47] but we're really not giving you any additional support or help I think that would be a little more honest so when I see kind of that roll up and sometimes it's dentist frankly we're just going to buy a bunch

[36:59] of practices and everybody gets their own autonomy to do whatever you want it's fine but that's just like a group of practices with a bunch of autonomy doing whatever they want that's not a dental support organization

[37:11] I don't hear a marketing strategy for how we're going to expand patient care I don't hear a mentoring strategy for how we're going to take care of clinicians I don't hear standardization around technology

[37:23] to make sure that that's going to be I don't hear a cultural mantra that says here's how we're going to have people behave and work well together the other extreme

[37:35] of course is hey there's only one way to do things around here and if you don't do them then you're out I think that one's easier to identify I think people are more sensitive to that

[37:47] whatever you want I think that's tricky and I don't think people have identified that as a non DSO but I think as time plays out I'm hearing more and more dentists go man I kind of joined for like support

[37:59] and I'm not getting any so as you think about building your DSO I'm going to give you really simple principles here but a lot of dentists miss this and then they have to go back and and figure it out

[38:11] you picked up on one that I'm very passionate about you need to establish what kind of patients you want to serve and what kind of procedures you believe are acceptable for serving those patients you actually want to design a box

[38:23] that you're going to train your clinicians into and I'm talking about the clinical directors I'm not talking about the CFO and the marketing team I'm talking you as the dentist owners who do you want to serve and one of the things I do hear from

[38:35] dentists is I'll say hey what kind of patients are you taking care of and they say oh we're bread and butter dentistry okay that's not the patient that's not the avatar that you're really focused on I think when you start saying

[38:47] we're helping women between these age groups on these procedure types who feel insecure about these things who have you know kids at home who want to do this now you start to kind of narrow and now

[38:59] this is called niching from a business perspective and everyone gets nervous about that because then they say well now Frank's not going to come in no Frank will come in but you've got to get very clear on who you want to serve design your practice around that design

[39:11] your staff around that all of us can feel when a business has really set itself up to take care of us well and guess what you buy the right technology because you know what procedures you're going to do you train your staff

[39:23] better because you know what kind of patients and procedures you're going to do so that would be principle number one for building a great DSO and I know it's tough to really get focused like that but that's that's the critical then

[39:35] start thinking about okay when I hire these associates what support am I telling them that we're going to provide make a list of those and think about the simple stuff like yeah you won't have to fix a computer

[39:47] and you're not going to have to deal with this and so forth that's really again it's a dental support organization so think about those components and then start thinking about where do I want to go from here in providing

[39:59] and building out that organization now at DEO at the dentist entrepreneur organization we have the DEO map and we say you grow from a practice to a business to an organization

[40:11] right and what you're looking for is okay I want more time or I want to have more impact or I just want more profitability or passive income now why is there this big slinky here

[40:23] because really what I see is growth is I get my marketing set up I get my accounting set up I get my compliance right you know revenue cycle management etc

[40:35] HR and then I come around and I go man I really need to upgrade my marketing again and then I get my accounting a little bit better and then I got to get my compliance even better and as you grow you're just going to constantly

[40:47] be upgrading along the way kind of moving up this slinky here where should you start now people always ask me how should I who should I hire first that's probably the number one

[41:01] question who should I hire first and my little trick that I've used as an entrepreneur and business owner is follow your anxieties now the reason this works is because you're the most valuable leader

[41:13] in your organization and to the extent that you hire individuals to solve for your anxieties you free yourself up to be a better leader to design out the vision and to make the right

[41:25] next decision so if I have anxiety that people are stealing from me I need to solve that right if I have concerns around my accounting controls I need to solve that because opening seven new locations

[41:37] is not going to solve for the fact that I have bad accounting controls right or if my marketing I'm concerned about I need to solve for that first and then from there I'll just follow my next anxiety

[41:49] now if you don't love that we do have something a little more sophisticated at DEO it's called the DEO map as I mentioned it's actually a dental operating system for teams and it helps them

[42:01] dentists like specifics they like checklists they like to follow you know and so do teams frankly so this gives the ten foundational elements to building out your dental organization it's got a curriculum that teaches

[42:13] each of the different teams or departments on really how to thrive and you get a scoreboard early on so you can measure your progress along the way and just continue to move up so

[42:25] here's another tool that we can give everyone ultimately David what I want to see as dentists entrepreneur dentists continue to have the right resources to have the impact on the community

[42:37] in America the largest childhood disease is still oral health care disease right so we have so much opportunity I've heard dentists be concerned early

[42:49] on about DSOs and I have two things that they should know number one no patient knows what a DSO is and that's where capitalism starts is the patient coming in what the

[43:01] patient knows is how they felt so if you if you're building a DSO don't get overly sophisticated establish first that you have this amazing experience for the patient and if you're a

[43:13] single practice and you don't want anything to do with opening new locations or hiring associates you're going to be just fine if you just take care of patients so I that I would say you know is

[43:25] is critical if anyone has any questions you know around DEO I thought I'd put this up QR code Darren's great to talk you know just as a throwaway here

[43:37] but with that I'll open it up to any questions around DSOs David that you or others might have or other things that that you've heard curious your thoughts as I walk through this

[43:49] you know if another dentist was sitting here what they might push back on yeah well again I'll I'll say what I said before I think to a lot of dentists this amounts to selling their soul to the devil

[44:01] and I really wanted people to have another perspective and and again you've been a tremendous spokesman for the other side of the story here and I guess

[44:13] what I'd say to the audience is it's kind of like restaurants I mean there was a time when there was no such thing as a chain restaurant and every restaurant was individually owned and operated and each owner of a restaurant

[44:25] had to deal with a whole bunch of problems and then chain restaurants came along and they took people and and and and they they helped them deal with some of their problems so they could focus on other ones

[44:37] to me there's a place for both you know and if you're going out for dinner tonight you can decide do I want to go to a chain do I want to go to you know and non-affiliated restaurant the fact that chain restaurants came along

[44:49] didn't didn't wipe the others out there's there's a place for both and I guess what I'd say in dentistry is probably there are a place for dentists who want to own a practice and have no entrepreneurial

[45:01] ambitions beyond that and there's also a place for dentists who want to plug into something bigger yeah I think that's well assessed and again kind of coming back the patients don't know and I think

[45:13] your restaurant analogy is a great one you know for me at the end of the day when I go out I want to have good food and good service you know and if the if the chain has established

[45:25] itself is doing that then I'm going there and if they haven't then they go away so that's right I mean you're what you're ultimately giving with restaurants or DSOs is you're giving patients

[45:37] or customers choices and you also pointed out something else that I don't want the audience to miss a lot of DSOs will be able to go in and deal with otherwise

[45:49] unservice components of the population I mean I know DSOs for example I'm it will only deal with Medicaid patients and I don't think as a private practitioner you could do that and survive

[46:01] yeah we have a lot of practices we support who do Medicaid and I can tell you that the amount of compliance support that it requires for those dentists to feel safe

[46:13] about servicing that population is intense I mean billers don't make billing mistakes when you're on Medicaid they do fraud waste and abuse with the state or government right and so how critical

[46:25] it is to have those audited those patients frankly would not get the services from dentists because if I was a dentist that's too scary my license is at risk if I don't have a massive organization supporting

[46:37] that and ensuring that and I can see it then I'm probably I'll just go over here and do implants and have a good life so those patients are absolutely getting service because DSOs are willing

[46:49] to do the heavy regulatory lift for doctors yeah absolutely we had Dr. Roy Shelburne as a guest a little while ago and I suspect

[47:01] you know who Roy is but he was a solo practitioner and he got in trouble over dealing with Medicaid patients and documentation and things like that and

[47:13] you know if you asked Roy with the benefit of hindsight in the two years you spent in prison would you like to have had more support in that area I don't think he would have said no

[47:25] it's tricky too because PPO insurance requirements are not that intense and as soon as you take that first Medicaid patient you're dancing with the devil

[47:37] it's a totally different level so it's interesting you bring this up David because when I've looked at DSOs the ones that are supporting Medicaid practices are some of the best

[47:49] and that's kind of out of necessity those who are servicing PPO can kind of drop down on some of their compliance requirements and frankly fee for service you know some of them don't even use

[48:01] practice management software but it's just you know cash pay right or it's credit card pay so when you think about going into these different organizations looking at that

[48:13] support piece and what's going to be there or if you're thinking about taking care of different patient types if you're going to step over into Medicaid you're going to need to build a much more robust DSO

[48:25] than if you're doing fee for service yeah okay I have any questions from our question and answer button

[48:37] okay so I'm just going to rapid fire like two of them and it's kind of comments from the very beginning of your message

[48:49] so Sean asked if the dentist is truly the customer of the DSO why sell the practice it seems counter-intuitive that's number one and then the other one is

[49:01] can you go back and make the correlation between a DSO and an owner dentist versus an owner dentist

[49:13] and an associate dentist sure okay let me take those on so the first question was why would a dentist ever sell well it says

[49:27] dentist is truly the customer of the DSO why sell the practice sorry let me give a little background because I know the questioner he's a good friend of mine

[49:39] he's Sean Pierce he's a lawyer and practice management consultant so frame it in those terms and I think what he's struggling to reconcile is kind of the

[49:51] doctor selling to the DSO and then the doctor becoming the DSO's customer okay great well so it's real interesting so now that I know this is an attorney I'll maybe

[50:03] get a little more specific when we say the dentist sold to the DSO that's technically not true except in like a couple states where like a PLC can actually be owned by non-dentists

[50:15] what really happens is what's called an asset purchase agreement and so the LLC will buy assets of the practice but what they're really buying is the opportunity to have

[50:27] the practice as the customer and to provide them support what's really fascinating about this whole thing is the DSO is able to connect itself to the practice

[50:39] and generate profit only to the extent that they actually take care of the practice keep associates there bring patients in the door etc I mean it's truly like capitalism

[50:51] at its heart there has to be real value there so the DSO is paying for the practice at a certain multiple and then by providing these services

[51:03] that multiple increases dramatically for the other LLC and that is called arbitrage so I'm buying something for four times the dentist is thrilled I might even have the dentist if they want to roll into

[51:15] the DSO at which point now that's worth 12 times because I've got this organizational structure and the support and so forth that allows private equity to help invest

[51:27] that's in between someone who understands the technical got that someone who doesn't you know maybe we need to draw some pictures there but that's kind of the magic that happens the dentist is

[51:39] not an idiot they're like I can sell to a another dentist hope that you know one they can't pay as much to hope that they can like take care of these patients I have to mentor them etc

[51:51] they get the money and then how do I like get out and retire versus a DSO who says hey we've got a whole system for your retirement I've got associates and I'm going to get them trained up and you're going to get five times the

[52:03] value you're going to get selling to another dentist directly that's where dentists are brilliant and they're going yeah I like this DSO thing and then DSOs are competing oh well they're offering you that well we'll provide you better support

[52:15] and we'll allow you to leave in two years instead of three years and like the dentist are winning on this you know and everybody's got to figure out just how to you know take care of dentists even more so that's that I think is a pretty good answer

[52:27] on that first one okay the second one was um the second one was um making the correlation

[52:39] between got it yes I remember now we're an underdentist and associate yeah so I think when people think about a DSO they think about a bunch of locations they think about maybe

[52:51] LLC structure they think of Heartland and Aspen and PDS and the multi-billion dollar groups right and so they go wait what's that got to do with me and my associate and my argument is

[53:03] philosophically let's not think about entity structure at a philosophical level those associates that work with all those big groups and your associate that works with you

[53:15] have the exact same expectation and the expectation is they're going to show up someone's going to take care of billing someone's going to take care of HR someone's going to take care of IT

[53:27] and they're going to be a clinician and if you're having a hard time hiring associates because they're going to work for another DSO or because they're going to work for a DSO it's because they're providing better support than you're providing

[53:39] so it's smart to start thinking about yourself it's like if I want to hire an associate what am I offering them other than like a job and by doing that

[53:51] by using the DSO mindset by even doing the interview and saying hey are you willing to learn these procedures I'll be willing to provide you these CEs hey just so you know we do the marketing for your patients here

[54:03] by starting to think that way you're going to get better associates options to choose from okay I have a question from one of our audience members

[54:17] if the DSO model continues to grow over the next 5 or 10 years do you foresee the associate fees paid to dentists say 40% of collections less lab fees

[54:29] declining or stabilizing to a more fixed fee structure similar to other professional services such as lawyers engineers etc that's a good question

[54:41] right now I can tell you right now the DSO model is benefiting dentists fee structure because if they're truly our customer

[54:53] let me here's another point that I don't think I called out when people are scared about DSOs and I mentioned one point which was the patient doesn't actually know what a DSO is so don't be too scared

[55:05] open your practice and do great care patient won't know 50% of Americans don't go to the dentist okay in other industries they call that penetration rate

[55:17] what is our penetration rate I think we're actually at 40% but I'm giving us a little bit of credit so let's say at 50% that means that if we got everyone in America to go to the dentist

[55:29] we would double the entire industry we don't have enough dentists we definitely don't have enough hygienists and we don't have enough staff what's happening with DSOs is they're getting better

[55:41] at a part that dentists were terrible at and that is marketing and they're getting better at building out practices that are beautiful and they're getting better at getting the right billboards

[55:53] and doing the right social media and all of those pieces and I'm not saying individual dentists aren't doing that and guess what they're getting access to a bunch of patients what's their biggest problem now

[56:05] they need dentists to service those patients right exactly they need hygienists they need so what they're trying to figure out is well could I pay them more money could I provide them more support

[56:17] what do I need right now what do I need to do to attract these dentists and dentists are starting to make choices like well I only want to live in these cities and I only want to work this many days can you make it a shift work

[56:29] like DSOs are having to figure out for dentists that are showing up and saying I'm willing to work Monday Wednesday Friday you know I'm a mom I've got kids and Tuesday Thursdays I need off DSOs are like okay

[56:41] so can I find the other person who only wants to work Tuesday Thursdays right so those kind of things are benefiting dentists I think at the end of the day dentists are going to win in compensation and free time

[56:53] and the best dentists right if all of us just focus on the best dentists are really going to win because DSOs are going to need them to mentor to lead to train they're going to give them equity

[57:05] again these are clinical owners of these practices that need smart people like them to help expand and grow yeah it really is a dentist market right now

[57:19] and what I see happening in the marketplace is a lot of consolidation right now in other words the guy who owns 20 practices is being bought by the entity that owns

[57:31] 100 I'm seeing a lot of that there was a time when most of the transactions were probably individual dental owners affiliating with the DSO now you've got

[57:43] groups and you've got bigger fish swallowing the minnows kind of well what's happening too is those DSOs at locations life got really complex with COVID

[57:55] and everything else they need now a bigger staff to help them recruiting is harder than it's ever been maybe at 20 locations you don't have dedicated recruiting team you were just kind of doing that part on your own

[58:07] so again there's kind of layers to DSOs and those two are better and bigger and got better experts on certain things better taking care of docs you know they're kind of saying hey

[58:19] do you want me to help you small DSO you know and there's some great financial benefit to those dentists owners I have a comment and then a question I

[58:31] absolutely loved the evil slide because I know especially in the work that we do having gone through thousands

[58:43] of dental databases looking at transactions I loved the point that you made where you're basically saying don't be better at

[58:55] opening a practice then you aren't running it because I hear doctors talk about that a lot it's like a dream to have you know a multi-location

[59:07] practice and they're so excited and they judiciously open the practice and then once patients start coming in it's like the wheels fall off

[59:19] because they don't have the support to run that particular practice correctly okay so that's my one comment my question is good and this is an excellent question okay the last major economic

[59:31] recession in North America was around seven eight and nine how do you see the impact of an upcoming recession affecting the overall dental industry based on your prior

[59:43] due to previous downturns yeah great question so what's really interesting is dentistry is kind of always prided itself on being recession proof and I think that that's still true

[59:55] I think some things that dentists have not been good at is the market started two things that affected the dental industry that they did not respond to they thought it was DSOs and they thought it was

[1:00:07] recession and I think it was something totally different in this little thing called the internet comes out 1995 and in 2007 you have an iPhone and you start moving

[1:00:19] towards social media and what that did is it weaponized our wants it weaponized them with new marketing capability to be able to say you don't need to worry about going to the dentist

[1:00:31] you need to finish this candy crush game that's what you need to do right and dentists were flat footed and didn't know how to respond to that they didn't have the marketing to overcome that and they saw a decrease in patient flow as we got very

[1:00:43] distracted in not taking care of our oral health I think we're much better at that now so that's good we're starting to fight back the again if half of the marketplace isn't even coming to you you don't have a problem with

[1:00:55] competitors other than other industries who got them distracted saying that this is more important number two I think we've gotten really bad at providing good financing

[1:01:07] solutions this iPhone that I have does not cost me $1200 it cost me $39 a month but dentists have been slow to move to that economic

[1:01:19] reality that people live month to month now there is a ton a ton in the last couple years of creative solutions beyond care credit that is providing financing solutions to your patients

[1:01:31] and I would say you better have it you better be patient are not they just burn through all their savings four trillion dollars was in savings after covid because we all got a

[1:01:43] bunch of money 1.2 trillion was in savings at the beginning of this year we're pretty good spenders 600 billion in savings last month so

[1:01:55] we don't have savings credit card is skyrocketing like crazy so you better have financing solutions now having said that if I think you have good marketing you got good financing solutions I don't

[1:02:07] think you need to worry about a recession I think what we are worried about we were not prepared for is inflation the inflationary impact is crushing us right now I know

[1:02:19] they want to say that inflation is like 8% no way it's not 8% if someone moved from $10 an hour to $13 an hour that's 30% you know so whatever your math is it has

[1:02:31] crushed the margins and you know my son who works at Home Depot like every two months the whole company has gotten a dollar raise this year he does not deserve it by the way but he continues to get them

[1:02:43] and they just move up the wood price and they just move up the price for screws and lights and everything else they screw us so to speak they screw us yeah exactly we can't do that

[1:02:55] if we're taking PPO, Medicaid insurance and so forth we're not feeling but our labor costs are moving up our supply costs our ability to build I don't have a great answer for that

[1:03:07] other than what just passed in Massachusetts which on ballot number two insurance companies now have to pay 83% of revenue out to providers

[1:03:19] and we were fighting so much internally as an industry and this is what I'm so proud about with ADSO and ADA awesome is that we

[1:03:31] we're now focused on we've got to get aligned with the payers because they've just been taking advantage like how do you cut rates during COVID how do you not pay dentists for PPE

[1:03:43] I mean that just that feels evil I need to put that on my evil slide so we've got to work with payers to say hey listen you know like we're doctors we're trying to take care of patients here

[1:03:55] and you're still collecting premium even when they weren't going to that's got to get solved and we've got to move revenue up I'm much more nervous about that and that's what I'm focused on with ADA and ADSO

[1:04:07] and it's going awesome as seen in Massachusetts I mean the cynic would say that a lot of DSOs have been financed with low interest rate money and you know part of what contributed

[1:04:20] to the big expansion was that money for the past 15 years has been almost free to borrow and clearly that's changing so I wonder how increased finance

[1:04:32] and cost is going to affect DSOs it could bankrupt some you know I mean that's probably true I mean you just saw Amazon's laying off 10,000 people

[1:04:44] we could get into macroeconomics but the government really screws entrepreneurs frankly when they put in $10 trillion in debt they put in $10 trillion

[1:04:56] entrepreneurs and you do it through low financing in other ways entrepreneurs ride those waves I don't think entrepreneurs are idiots but when the government turns around

[1:05:08] and then turns that all off it does screw with what's going on and so I don't think you know Amazon and Facebook and Google all became idiots overnight but they're having to adjust

[1:05:20] that might happen to DSOs too they'll get reformatted patients will still get taken care of and they'll get restructured and it'll move on but yeah that's probably on a different philosophy of boom and bust cycles

[1:05:32] of how the Fed you know handles things I think most DSOs are going to be fine you know they weren't overly leveraged but that could be an issue and that could be an issue for just

[1:05:44] your individual dentist too it's going to be an issue for all of us I would keep your debt low I would not be heavily expanding right now I would let things settle it's hard to expand right now anyway

[1:05:56] because dentist have not paid student loan debts for three years we don't think about that but dentists who've been out of school for a long time haven't actually

[1:06:08] ever paid a student loan debt you know for the last few years so that's going to start in January it'll be interesting to see if that increases the dentist's desire to work more because one of the things we've seen

[1:06:20] is the dentist workforce is really lowered in some of their productivity and I'm just speaking globally not anybody individually we're also going to have to figure out we now have 60%

[1:06:32] of women graduating as dentists like this has been a huge shift women have a lot of other responsibilities and we know through data that women are about 80% productive

[1:06:44] in dentistry what I mean by that is because of these other responsibilities they're not 100% in on a global basis and so we're going to have to figure that out with shift work

[1:06:56] and everything else to take care of patients it's going to get complex yeah well that kind of helps lead into the question I have from one of our audience members

[1:07:08] so the question is help me understand the DSO Aspen they're on the trading stock market and it seems like there's pressure of working in such a DSO like stockholders

[1:07:20] and they provide returns on investment and they provide wonderful incentives for the owner and associates who perform a certain expectation does this not change the philosophy

[1:07:32] of office or patient centered care to revenue so with everything you were just talking about where things might get difficult does that change to different DSO models like that structure

[1:07:44] great so Aspen isn't public there is a Canadian group that is public but the American DSOs I don't think we have any major ones that are public not that they won't be I think the question is still valid

[1:07:56] you know it's really interesting because the dentist is the customer so they're not wrong in the fact that shareholders always want to have as most profit as possible

[1:08:08] but having said that I can't grab David by the collar and drag him into Home Depot and say listen I need profit buy wood now

[1:08:20] and I can't do that to dentists either and if I do I will change the culture so much I'll lose all my dentists so one of the things I know

[1:08:32] those major DSOs do who have large investments I know that everybody knows the only reason we've gotten to this point is because dentists feel safe to work here and they have autonomy

[1:08:44] to do the work that they want to do and investors have to be comfortable with that you know but you're not this isn't a sales force you know if I'm Tesla

[1:08:56] or whatever I can go out to my sales force and say we got to get deliveries at this much and you got to work this much and we got to get this done and you know people can opt in and out of that too but with

[1:09:08] clinicians you can't do that they'll just quit I'll be honest we have so much data even with our own dentists when they pay off their student loans their care per visit drops

[1:09:20] by 10% I can tell so we can all ask if that's ethical or not but I just know the data is whatever was a filling yesterday is not a filling after I pay off my student loans

[1:09:32] I don't have any flexibility my point in this dentists have flexibility to move care where they feel it's appropriate on that day no one is going to control them to do that

[1:09:44] you can influence by providing them better support better technology you know incentive but you're not going to make dentists do anything

[1:09:56] perfect and kind of an add on comment to that yes add to that is the manager sorry

[1:10:08] add to that is that the manager and no longer the dentist sits with a patient to convince them for more costly treatment often creating the perception of

[1:10:20] I guess just selling dentistry and so this is no longer on healthcare dentistry all right I'm going to play this out

[1:10:32] because I kind of understand let's say that you say hey dentist do you like selling care and they say no I really don't like selling care I like doing dentistry okay we're going to get a treatment coordinator in place

[1:10:44] and they're going to sell the care for you and dentists are like I really like that now we're going to imagine that that treatment coordinator gets some kind of bonus for selling care because the dentist wants them to sell the care right so they're like hey could we

[1:10:56] bonus them on selling care and that treatment coordinator goes crazy all right and they decide they're going to sell all the care and they're going to sell more care than the patient even needs

[1:11:08] and then the dentist says no I'm not doing that you know so I mean it doesn't really play out the way that people think and I can tell you this from experience that

[1:11:20] frankly sometimes dentists diagnose things a good treatment coordinator will sell it and then the dentist will say well I actually don't feel comfortable doing that procedure and guess what happens next

[1:11:32] the patient doesn't get the procedure and the treatment coordinator stops trying to sell things that the dentist won't do so again there's a weird assumption

[1:11:44] and I'm not quite sure where this comes from in the industry that dentists somehow can get controlled and I've just never met a dentist that I can come behind him grab his hands or her hands

[1:11:56] and start doing procedures and dentists are pretty confident, strong, smart people who care about their patients and when they don't feel comfortable doing something they don't do it you know along those same lines as well

[1:12:10] you know I do orthodontics so you know the orthodontic model for a new patient appointment which is where you're selling the treatment, you're doing the diagnosis and selling the treatment

[1:12:22] is that if you have a 30 to 45 minute new patient appointment for an orthodontic patient the doctor spends 7 minutes or less with the patient just going over

[1:12:34] diagnosis and doing an overview of the treatment it's the treatment coordinator that actually sits with the patient and does the details of the treatment, sets it up

[1:12:46] presents the fee, makes the payment plans and I did that for several years when I first got into orthodontics and I know it's true because I've seen it firsthand patients are more comfortable with that

[1:12:58] they're more comfortable with someone that they perceive to be equal stature with them than to sit down with someone like a dentist and then they close their lips and they don't talk

[1:13:10] anymore after that and then they leave with questions answered so exactly right and let's take it even further who developed a lot of those models it wasn't DSOs

[1:13:22] there's actually other dentists who said you know what I'm noticing I'm not selling as many cases as Wendy's selling and frankly I don't actually like talking to these patients as much as Wendy does and she's a lot better with them

[1:13:34] and so I'm going to start developing this model and guess what their practice took off and then guess what they started doing they went on the road and started sharing with everybody else how to optimize their practice and be better and etc

[1:13:46] so a lot of these models that we have that we use around treatment coordination were developed by brilliant dentists who did find out that when you're standing in a coat and you ask the mom

[1:13:58] so do you brush your kids teeth that somehow that really offends them and it's better off to have one of your team members say hey I want to show you something a lot of moms don't know this

[1:14:10] but here's a good way to brush their teeth we already know this but let me show you with Doc out of the room so things like that dentist developed over time this was not to control dentists it was actually to support them

[1:14:22] and dentists change that if they have a different personality or so forth all the time yep and can I add to that in my experience I've never been able to

[1:14:34] work with a dentist who I said you're going to do a crown on this tooth and ethically I mean dentists how you're trained and stuff there's a big compass there and you're not just going to

[1:14:46] dive in and do treatment on a tooth if you don't think it's necessary even if I just went up and down how I thought they should do that I mean that's never have I seen that happen I'll tell you a bigger problem I see

[1:14:58] is clinicians not getting the support that they need as an associate to do the full amount of care that they need I see that as a much bigger problem I see dentists not getting the training and the dental schools that they're paying

[1:15:10] a half a million dollars for so that they can come out prepared to take care of patients like we have a lot more and AI by the way we've got cool AI software

[1:15:22] coming out around x-rays and insurance companies were thrilled oh my gosh we're going to catch all these dentists for all their over treatment guess what insurance companies are not as excited about AI because guess what it's finding out

[1:15:34] we're under treating patients the clinicians don't have all the capability they need in order to provide comprehensive care so this big fear that dentists we're going to over treat

[1:15:46] just isn't happening I'm not saying there's not some bad dentists out there there is but I'm saying as a whole we need to get better at care we need to get better at financing solutions

[1:15:58] we need to get better at marketing and you know that will raise the industry up yep perfect all right folks well we're getting

[1:16:10] to the witching hour here this hat is one of my new prized possessions it's that I happen to be speaking in Massachusetts last week after question 2 became

[1:16:22] on Massachusetts and the place I was speaking gave me one of those hats and said it's going to be a collector's item so I will hang on to it I will sit in a place of honor

[1:16:34] passed with 73% vote so yeah and for those of you who have been living under a rock for the past month or so question 2 in Massachusetts

[1:16:46] forces insurers to pay out 83% of what they take in in premiums and I don't think we've seen it yet but this is going to cause an earthquake in dentistry so

[1:16:58] that's what Emmett was referring to and prompted me to grab my vote yes on 2 hat so it's going to be a big deal but Emmett I want to thank you very much

[1:17:10] you gave exactly what I was hoping for tonight we got to see the other side of DSOs that I think a lot of dentists who aren't affiliated don't hear

[1:17:22] and I really appreciate you coming on thank you so much I love it and I hope what you feel from me is I have a lot of faith in this industry

[1:17:34] I have a lot of faith in dentists I think that they are brilliant and I think the impact they're having is absolutely incredible and if we can all get behind them and support them the way you all are

[1:17:46] so that they can do what they're best at it'll be great for the industry it'll be great for patients absolutely I mean you don't do what we do without having a love for dentists I sense that Emmett about you

[1:17:58] from the first time I met you I think our values are quite aligned there so I'd like to thank Emmett I'd like to thank my on camera colleagues Wendy and Amber

[1:18:10] and Sheila O'Driscoll who works off camera with us and sets a lot of this stuff up I'd like to thank them all and of course I'd like to thank the audience so we look forward to seeing you next on

[1:18:22] January 26th it'll be a great one I can't wait for Dr. David Hughes to tell his story and we will see you all then have a great night Bye

[1:18:54] If you have questions about this podcast if you would like to discuss your practice or there is a topic you would like to see in a future podcast we would love to hear from you Amber, Wendy and David will be back soon

[1:19:06] with another episode