Hello everyone. This is Erica Spicer Mason,
writer and editor with Becker's Healthcare.
Thank you so much for tuning into the Becker's Healthcare podcast series.
Today I'm happy to be joined by Duff Bourassa,
the managing director of D S O M S O growth at E 78 Partners
who will discuss month-end close for DSOs,
how to leverage key KPIs to drive value,
as well as the importance of financial planning and analysis. Duff,
thank you so much for being here with us today.
Yes, thanks for having me. Excited to be a part of this. Oh.
We're thrilled to learn from you here. But before we get started,
I was wondering if you could just give our listeners a little bit of context,
maybe share a little bit about your professional background as well as E 78
partners.
Absolutely. You know, I, I kind of came to dental, uh, through a unique route.
So I was a insurance, uh, owner. I, uh, managed a,
an insurance agency and, and just had a lot of dental clients.
And so I was really kind of fascinated, uh, by that, uh,
by the industry as a whole. And so started to work with, uh,
private equity firms that were buying, uh, other dental practices,
and they allowed me to build out the risk management strategy for the insurance
program for these dentist groups. And so, as I got to learn and meet these,
these dentists, I started to see that, uh,
most of the time when they were partnering with the D S O, they didn't have, uh,
any representation. And, uh, you know,
I just thought that that was a good opportunity for me. And so I became a,
a dental broker, started doing sell side advisory work with these dentists, and,
uh, really just fell in love with the industry and saw how,
how profitable it was and, and just how it was just a good opportunity for,
for both the DSOs and for, for dentists and at a whole. So that,
that kind of led me, uh, to research DSOs as, as you're a sell side advisor,
you wanna make sure you provide the best partner, uh, for the dentist. And so I,
I spent, uh, years researching, uh,
every D S O I could find to learn how they partnered,
what they were looking for, uh, and ultimately, you know,
wanted to feel confident that I was providing, you know, the right service, uh,
to my clients. And so along the way, uh,
I ran across a group called E 78 partners,
and really was intrigued by what they were doing and how they were helping, uh,
the industry as a whole grow. And so that, uh,
that kind of led me to E 78 and into the position I'm at, uh, today. And so,
just a quick blurb about E 78, you know, uh,
we are a consulting and advisory firm. Uh,
we provide accounting and technology services to middle market companies.
Our FI founders actually came from private equity. So they were, uh,
acquire acquiring founder-led companies,
and they found that most of the companies they were buying really lacked the
true accounting and finance function,
and they rarely were investing in technology. And so as they started E 78,
the, they really wanted to bring sort of the sophistication of a fortune,
fortune 500 level accounting, finance,
and technology team down to the middle markets, uh,
so that they can better drive those smaller companies. And so, you know,
that makes a lot of sense from a dentist standpoint,
because dentists go to school to learn how to work in the mouth.
They don't really know how to run a business from a finance standpoint.
And so our goal is to really educate them and, and give them those resources.
Oh, thanks so much duff for that overview. That's really helpful. And I mean,
it sounds like you must know this industry inside and out coming from, you know,
having your own insurance agency with dental clients to where you are now with E
78. Um, sounds like you have,
I'm sure you have a lot of great insights to give us here as we're talking about
finances in general. So to get us started,
just especially based on all experience you have in the industry,
I'm wondering if you can share with us your high level assessment of how the
business of dentistry has really evolved recently,
especially considering what we're seeing with widespread consolidation and
changes in patient experiences.
How has that really changed the business operations for DSOs?
Sure. Yeah. So I,
I tend to look at the business of dentistry in sort of four distinct buckets.
So we've got operations, we've got finance, we've got HR and marketing.
And so from an operation standpoint, you know,
technology has been the biggest driving factor, uh, of change, uh,
in how dentistry works today. Patients now bed days, they,
they want all of their interactions via their phone. You know,
they don't wanna talk to anybody anymore.
So they wanna be able to set an appointment on their phone,
they want to fill out all the forms, they wanna see their e o B on the phone,
they wanna be able to pay by their phone.
So all that intake has drastically changed. There's, you know,
you don't just go and show up in an office and schedule an appointment anymore.
It's all done remotely. And so as, as you move to the chair, you know,
there's been this sort of shift to what we call emotional dentistry. So,
you know, we can now create a virtual smile on the screen,
and I can physically see what my smile would look like if my teeth were wider,
uh, if I got a gap fixed, or if I had a crooked tooth, you know,
I can physically see what's it gonna look like if they fix it. Um,
and so as I'm sitting in the chair, that greatly increases the case acceptance,
right?
I'm much more likely to do that if I can physic physically see the effects of
that. And so that, that technology, um, has drastically changed,
uh, a lot for, for the groups that are, that are implemented.
And the same thing goes with, with laser dentistry. You know, we can now do, uh,
some cavity and gum repairs with lasers, so no more drilling, uh,
so less, less pain, um, you know, you don't hear the drill anymore.
So those are all positive things that, uh,
leads just a better patient experience.
And those are the things that we are seeing that really help groups grow.
So from an operation standpoint, I would say technology is really the main, uh,
change there. On the finance side, you know,
historically we had local servers, paper charts,
and if you wanted to get any work done, you had to physically go to the office.
Well, now everything's moved to the cloud,
so I can literally manage 10 stores from one location,
or I can do it all from home. Um, so being able to track my revenue trends,
my supply variances, whatever KPIs are important to my group,
I can do that all now remotely. And it's all automated. And so really the,
the biggest evolution there is just that ability to take things from a local
machine and put it up in the cloud. Everything's so much more scalable, uh,
and I can do so much more from, from home or from, uh, from wherever I want to.
So from a finance standpoint, that's a huge changer. And then in hr,
really, uh, turnover has been the biggest change, right? So post covid,
they say 10% of hygiene is just never came back.
And so how do you keep the staff that you have and how do you not have to
break the bank to get quality people?
And so really groups that can create that culture, uh, and,
and find ways to touch, touch in with their people and keep them motivated,
keep them involved in the, in the office, uh, those are the groups that are,
that are doing well because, uh, I don't see that changing anytime soon.
You know, the hygiene, uh, schools keep saying that enrollment's up,
which is great. But, uh, we,
we still don't see a huge influx and in every group I talk to struggles to,
to find staff. So really just the ability to keep people on an HR standpoint,
uh, is, was one of the biggest change. And then last piece is marketing.
Really main evolution here is just how everything's gone digital. So,
you know, historically it was print media and mailers,
and then we kind of transitioned into SS e o and,
and trying to be found easily online.
And now it's much more proactive.
So there's groups out there that are scraping all the data and all the searches
we do on our computers and on our phones,
and they can literally target people with our ads. And so if I, uh,
if I see someone in my neighborhood that's searched teeth whitening, well,
I can put an ad on their Facebook feed for I'm offering free whitening with,
with the cleaning. And those, those companies out there exist, and it's amazing,
and you've probably seen it in your own life.
You talk about something or you search something, and next thing you know,
it's in your Facebook feed. So that's a huge switch from a marketing standpoint.
You've gotta be proactive, uh, in that, that phase. So, you know,
those are the trends we're really seeing. Um, you know,
dentistry is still as popular and as profitable as ever, but it is becoming, uh,
increasingly competitive, uh, across those phases.
Absolutely. And thanks Duff for the way that you outlined that.
I really appreciated it. And, you know,
it sounds like with these shifts and changes in technology,
digital tools, and then, you know,
you mentioned from a finance perspective really managing a lot of those
processes on the cloud at the same time,
managing turnover from an HR standpoint,
it's a really dynamic environment. So it seems like in this kind of environment,
it would be important for DSOs to really ace the fundamentals when it comes to
financial operations.
So can you share some common operational challenges that tend to hinder
dental organizations' financial performance,
and what can organizations do here to overcome those challenges?
Absolutely. So, you know,
integration is what really comes to mind when I think about the operational
challenges. You know, most DSOs are growing via acquisition.
And so when they do that, they're, you know, essentially, um,
everyone's fighting for all these good practices. And so you've gotta have, uh,
you gotta have an integration plan as to how we're gonna bring, uh, these,
these practices on. And, you know, when DSOs, they,
they wanna promise the world, they, they offer,
but when they talk to doctors or, Hey,
we're gonna give you as much autonomy as possible.
And from a clinical standpoint, that makes absolute sense.
But from an operational standpoint, you, you've got to,
you've gotta take some of that autonomy away because we need everyone to operate
in a similar fashion when it comes to the back office. Uh,
because the reality is, is most dentists are, are poor at budgeting and finance.
You know, they don't do a 13 week cashflow report.
They look at their p and l statements at the end of the year when they,
their tax, their C P A files their taxes.
So they really lack the key metrics that are gonna allow them to grow.
They don't have access to it.
So the quicker we can get those offices onboard with what our
operating processes are, right, how we onboard new patients,
what data we enter into the p m s tool, how we verify insurance,
all of those things that we do on the front end really have a,
a ripple effect downstream into how we build out our reports and how we measure
the performance of our offices offices.
So the quicker we can integrate these acquisitions into the fold, uh,
the better we're gonna see a, a return there.
And so the first thing I think of is just from an operations standpoint,
is just integration.
Like we've gotta have a solid process into how we integrate those,
those offices. And then, you know, another common challenge right now is,
is the revenue cycle management. Uh, R C M is, is is a real hot topic in,
in the D S O world, because most groups struggle to do it well. Um, you know,
we see a lot of companies that use Excel spreadsheets.
They'll download data out of their p m s tool, they'll put 'em into Excel,
they make a, a lot of manual manipulation,
and then they upload it into their accounting system.
It is a very manually intensive process. It's, it's horribly inefficient,
and it, it adds to how long it takes for us to collect money.
And so when you're, when you think about that process, and now we're also,
we're trying to grow and acquire. So we go out, we get five more offices,
so now we've got five more offices sending us an Excel spreadsheet and just
trying to manage that. It, it's not, it's not, uh,
it's not feasible for most groups.
And so it's important to use technology where you can,
but it's also important to have a a an R C M process that you can utilize across
all locations, because if one office does it differently,
it throws off the entire report for everybody.
So really understanding R C M and having a process in place, that's a,
a huge hurdle, uh, and something that we see a lot of groups struggle with.
And then lastly, uh, the practice management software tool, uh,
is also, uh, a common pain point. You know, we talk about autonomy again,
you know, a lot of DSOs don't wanna make their offices change. And so they,
you know,
we see some DSOs that have eight to 10 different practice management tools.
And so it's,
it's very challenging to support all of those different tools to try to get
accurate data, uh, and timely reporting.
And so we really recommend you gotta consolidate, get everyone onto one tool.
But even then, once you get everyone on one tool,
how staffs use the tool can vary very greatly.
So you've gotta have a common practice, uh,
for how everyone's going to use the tool, how we're gonna set up customers,
what data are we collecting, uh,
what codes are we gonna use to correlate with the appropriate procedures.
So all of the reporting issues that we hear DSOs complaint about usually
stem from not using the p m s tool correctly.
So it's important to get everyone consolidated on onto one tool,
and then it's important to use that tool effectively. And then, you know,
creating that standardized process, uh, so that we can get to the valuable data.
So yeah, integration, R C M P M S tool, those are, those are things that,
that most groups are struggling with. Uh, and they're, they're key, uh,
if you truly want to grow in this environment.
Absolutely. And it sounds like they're key also to, um,
ensuring payments are collected in a timely way.
I think you had mentioned that earlier, so, seems like Absolutely. Yeah.
So considering those three areas, you know, having an integration plan,
revenue cycle management, the p m ss, um,
are there any specific stories or maybe even case studies that come to mind that
highlight an organization that did really well or improved one of those areas?
Uh, maybe one of your partners at E 78 had some remarkable outcomes.
Yeah, so we actually just, uh,
a couple of months ago released a case study on one of our clients, US Endo. Uh,
they have recently rebranded their specialized dental partners now, uh, but to,
uh, they were, we were with them from the very beginning.
So they knew they wanted to start an national D S O that focused specifically on
endodontics. And so they had a very aggressive growth strategy.
They wanted to grow specifically via acquisition. And so when they contacted us,
they had one practice under, uh, L O I and as a company,
they had no infrastructure built yet to support their growth strategy.
So they basically came to us and asked to partner with us.
And so we became their back office team and their integration team.
So started by creating a framework, uh,
that would be scalable and provide flexibility when they integrate these
practices. And so that included the, their e r p selection, uh,
designing the tech stack to support the growth strategy,
and then standing up an HR team to manage the people,
the payroll and the benefits. So we were there, uh, you know, from day one, uh,
and helped them grow from one location to 400 plus. So it's an interesting read.
I would encourage, uh, listeners to go check it out. Um, because it, it's,
it talks a lot about some of the, the pain points that happen along the way.
And so, you know, for us, we love to be there in the beginning, uh,
because it's easier to build from scratch than it is to change mid-course.
But we also have a lot of clients that have gotten to 40 or 50 locations,
and they've kind of become stuck, right? They fully,
they haven't fully integrated all of their offices. So, you know,
they could be struggling to close the books on time, uh,
month in might be taking too long, uh, because they have multiple data systems,
they can't get accurate reporting, uh, or maybe, uh,
because of there's so many manual processes,
their back office staff has grown so large and it's killing their profitability.
So those are all common issues that we see. And so for those groups, you know,
we've had success, uh,
doing what we call a current state assessment where we go in and evaluate their
people, evaluate the processes, and we evaluate the technology.
And so from there,
we can kind of create a gap analysis and just understand what's the root cause
of the problem, uh,
and then ultimately identify what changes they need to make to be more
efficient. And so those are, uh, that's,
those are the kind of the two areas that we focus on.
We'd love to be there day one, uh,
but if you're a little bit further on down the road,
we can certainly come in and support you and meet you where you are.
Yeah, that's great to know, Duff, I appreciate that.
And pretty remarkable having us Endo grow from one to
400 plus practices and Yeah.
Yeah. And I'll tell you, the, the great thing about it is, is it,
it's not always rosy. So we learned a lot of problems along the way mm-hmm.
. And so the good thing is, is,
is we can tell you what pitfalls to avoid, uh,
because you can't grow that big that fast without having some challenges.
And so, you know, we embrace those challenges head on.
We've learned a lot from 'em. Uh, and, and we,
we can't wait to share those best practices with, with others.
Fantastic. Well, thank you so much. And, um,
perhaps in the description for this podcast episode,
we could potentially link the case study, or at least route listeners that way.
Um, but before we hop off, you've shared so many great insights.
Is there anything else that you'd like to share with listeners before we close
here?
You know, I, one of the common question I get from, from DSOs is,
is they wanna learn about what they should be thinking about what they should be
doing, but they don't wanna go to a website and,
and have to fill out a form and, and get called by by salespeople. Uh,
and so there is a group, uh, that I'm a part of, it's called, uh,
dental Vendor Industry Network. Uh, initials are D V I N.
And ultimately it's a website where, uh, people that are in the industry, uh,
can post information about what they do, who they support,
and DSOs can go there without the fear of being pitched to.
So it allows them to, to see what's going on in the industry,
to see who some of the vendors are that are supporting, uh, the industry.
And it's really designed to be a, a collective, uh, environment, uh,
so that everyone is helping everyone out. And so I would encourage,
if you're a D S O and, and you're struggling in some aspect of your business,
go check out the D V I N website and, and see, uh, who,
who works in that area and, and what vendors are there.
You can research and learn about them. And then if it makes sense, you,
you control the reach out, you don't have to worry about being sold to. Uh,
I'd love to promote that because it's a,
it's a good group of people and everyone in there is in the dental industry,
has dental experience, and they're looking to help grow the industry as a whole.
That.
Sounds like a really great resource,
and I think our listeners will appreciate that, especially the, uh,
not having to fear getting pitched to, as you mentioned. Um, so Exactly. Yeah.
Thank you so much again, Duff,
I really appreciate the time that you took to be with us today and your
insights. Thank you again. Yeah.
Thank you for having me.
We'd also like to thank our podcast sponsor today, E 78 Partners.
You can tune into more podcasts from Becker's Healthcare by visiting our podcast
page at becker's hospital review.com.