1 00:00:05,235 --> 00:00:07,285 - This is the Becker's Healthcare Podcast, created 2 00:00:07,285 --> 00:00:08,445 by the team of Becker's Healthcare, 3 00:00:08,605 --> 00:00:10,325 a multimedia company devoted to the people 4 00:00:10,345 --> 00:00:11,645 who power us healthcare. 5 00:00:11,915 --> 00:00:14,765 Four new 15 minute episodes are released daily containing 6 00:00:14,925 --> 00:00:16,685 industry news analysis and thought leadership. 7 00:00:16,685 --> 00:00:19,605 From powerful healthcare decision makers Support our show 8 00:00:19,705 --> 00:00:22,525 by leaving it a five star rating and review on Apple Podcast 9 00:00:22,745 --> 00:00:24,005 or other platforms you use. 10 00:00:24,155 --> 00:00:26,005 It's a chance to tell us what you like about the show 11 00:00:26,025 --> 00:00:27,245 and act on your feedback. 12 00:00:27,245 --> 00:00:29,205 Thanks for listening. Now here's the episode. 13 00:00:30,475 --> 00:00:32,805 - This is Riz Hatt with the Becker Dental Castillo. 14 00:00:32,825 --> 00:00:35,205 So podcast, I'm thrilled to be joined today 15 00:00:35,425 --> 00:00:39,285 by Jeffrey Thoms, CEO of Grand Dental Group. 16 00:00:39,835 --> 00:00:41,565 Jeff, thank you so much for being here today. 17 00:00:42,095 --> 00:00:45,635 - Thank you, RIS. - So could you start off 18 00:00:45,635 --> 00:00:47,355 by telling us a bit about your background? 19 00:00:48,225 --> 00:00:52,755 - Sure. Um, I got into dentistry almost 20 years ago. 20 00:00:53,055 --> 00:00:56,035 Uh, kind of, you know, a funny story. 21 00:00:56,275 --> 00:01:00,275 I was a, a school teacher, uh, one of my, uh, best friends 22 00:01:00,335 --> 00:01:02,715 and fishing buddies, uh, was in dental school. 23 00:01:03,455 --> 00:01:06,635 And, uh, he, uh, knew I had a marketing background 24 00:01:06,655 --> 00:01:08,715 and he asked me to help him in the summertime. 25 00:01:08,855 --> 00:01:12,675 And over the, you know, weekends with, uh, uh, the practice, 26 00:01:12,675 --> 00:01:15,795 he had joined a very small $700,000 practice. 27 00:01:16,055 --> 00:01:17,795 And, you know, of course I said yes. 28 00:01:17,975 --> 00:01:21,075 And, you know, for the next two years I was, you know, 29 00:01:21,075 --> 00:01:23,515 helping on Tuesday nights and, and weekends 30 00:01:23,575 --> 00:01:27,355 and, um, really saw a lot of things going on in the business 31 00:01:27,355 --> 00:01:28,715 that were beyond marketing. 32 00:01:28,715 --> 00:01:31,235 They were more, um, managerial things. 33 00:01:31,255 --> 00:01:33,795 So I started expanding the level of help. 34 00:01:33,935 --> 00:01:35,875 And, you know, one thing led to another 35 00:01:35,895 --> 00:01:38,675 and the, the two docs asked me to join them. 36 00:01:39,615 --> 00:01:42,595 And, uh, I did, uh, that was Tidewater Dental. 37 00:01:42,975 --> 00:01:46,355 Uh, over the, the following, uh, 38 00:01:46,935 --> 00:01:48,115 decade I would say. 39 00:01:48,335 --> 00:01:52,315 We went from about $700,000 a year in revenue 40 00:01:53,375 --> 00:01:57,075 to, uh, about $13 million in revenue. 41 00:01:57,895 --> 00:02:02,595 Um, and then eventually, uh, we joined another larger group 42 00:02:03,215 --> 00:02:05,995 and, uh, we became their Mid-Atlantic arm. 43 00:02:05,995 --> 00:02:09,955 They were in the northeast and, uh, continued to grow, uh, 44 00:02:09,955 --> 00:02:12,155 adding de Novos and so on and so forth. 45 00:02:12,615 --> 00:02:16,435 And then, uh, eventually that sold again, I, I moved out 46 00:02:16,435 --> 00:02:19,795 to Chicago to join Grant Dental, who I'd known for, uh, 47 00:02:19,825 --> 00:02:22,595 over 15 years and really liked their model 48 00:02:22,855 --> 00:02:24,035 and what they were trying to do. 49 00:02:24,255 --> 00:02:25,255 And here I am. 50 00:02:26,565 --> 00:02:28,495 - Fantastic. Sounds like you have a lot 51 00:02:28,495 --> 00:02:29,615 of great experience there. 52 00:02:31,585 --> 00:02:33,425 - I, I think so. I hope so. . 53 00:02:34,845 --> 00:02:36,465 - So my first question for you is, 54 00:02:36,855 --> 00:02:38,345 what are the biggest issues you're 55 00:02:38,345 --> 00:02:39,545 following in dental today? 56 00:02:41,445 --> 00:02:45,065 - You know, Riz, it's, it's been the same story 57 00:02:45,285 --> 00:02:46,865 for about a year now. 58 00:02:47,125 --> 00:02:49,145 Uh, maybe a little bit longer, maybe two years. 59 00:02:49,845 --> 00:02:52,865 And its overhead, uh, since Covid. 60 00:02:53,525 --> 00:02:58,345 Um, it seems that there's been a real shift in, uh, 61 00:02:58,745 --> 00:03:01,635 employee retention and employee cost. 62 00:03:02,035 --> 00:03:05,915 I think the national average is about a 30% increase in 63 00:03:06,155 --> 00:03:09,755 employee costs, uh, which has affected us as well. 64 00:03:10,035 --> 00:03:12,675 I think we may not be as affected as some other groups 65 00:03:12,675 --> 00:03:15,235 because of the way we compensate our hygienists. 66 00:03:15,235 --> 00:03:16,355 They are like our doctors, 67 00:03:16,385 --> 00:03:18,555 they're compensated on their collections, 68 00:03:19,215 --> 00:03:22,235 but overall, employee costs have really hit the bottom line, 69 00:03:22,655 --> 00:03:23,795 uh, our profit margin. 70 00:03:24,015 --> 00:03:27,155 And then, uh, I guess the other element 71 00:03:27,415 --> 00:03:29,715 to overhead is the cost 72 00:03:29,775 --> 00:03:32,035 of doing business in terms of supplies. 73 00:03:32,295 --> 00:03:36,595 And, uh, a lot of our third party, uh, vendors who just, 74 00:03:36,695 --> 00:03:38,835 it just seems like there's so many now in order 75 00:03:38,835 --> 00:03:41,795 to make a dental office function at a high level 76 00:03:42,025 --> 00:03:44,675 that it just really affects, uh, cost. 77 00:03:45,135 --> 00:03:47,315 So that would probably be the main one. 78 00:03:47,425 --> 00:03:49,875 Another one would be employee work ethic. 79 00:03:50,435 --> 00:03:52,515 I also feel post covid, ID um, 80 00:03:53,215 --> 00:03:57,955 the seriousness at which many employees take their jobs. 81 00:03:58,175 --> 00:04:02,155 And this is pretty much excluding hygienists and doctors. 82 00:04:02,815 --> 00:04:06,635 Uh, but in general, your, your front desk employees, 83 00:04:06,635 --> 00:04:11,595 your dental assistants, uh, people at that level seem 84 00:04:11,595 --> 00:04:14,195 to, you know, not feel 85 00:04:14,305 --> 00:04:16,475 that reliability is extremely important. 86 00:04:16,655 --> 00:04:19,435 And of course, I'm speaking broadly, this is not everybody. 87 00:04:19,975 --> 00:04:21,995 Um, they take off a lot. 88 00:04:22,415 --> 00:04:27,195 Uh, they're not as concerned about meeting, um, their goals 89 00:04:27,335 --> 00:04:28,595 or even their responsibilities, 90 00:04:28,735 --> 00:04:30,435 and it's, it's just an uphill battle. 91 00:04:31,095 --> 00:04:33,635 And then I think the third one is, uh, 92 00:04:33,635 --> 00:04:35,035 insurance reimbursements. 93 00:04:35,455 --> 00:04:36,795 All these costs have gone up, 94 00:04:37,335 --> 00:04:41,235 but yet over the past couple decades, insurance has not 95 00:04:41,935 --> 00:04:46,355 one raised their, their, their annual allowance per patient. 96 00:04:47,135 --> 00:04:50,675 And, um, the, the insurance reimbursements are not 97 00:04:50,915 --> 00:04:53,035 where they should be when you consider inflation 98 00:04:53,175 --> 00:04:54,515 and the cost of doing dentistry. 99 00:04:57,605 --> 00:04:59,925 - Interesting. Can you talk a little bit about 100 00:05:00,275 --> 00:05:03,645 what Grand Dental Group is doing to mitigate overhead costs 101 00:05:03,985 --> 00:05:06,365 and to kind of, you know, help out with that issue? 102 00:05:06,955 --> 00:05:10,685 - Sure. Um, so in our budgetary sessions, 103 00:05:11,305 --> 00:05:15,085 we really dissect every line item to see 104 00:05:15,085 --> 00:05:18,005 where we can save money without compromising care 105 00:05:18,305 --> 00:05:19,565 or even experience. 106 00:05:20,265 --> 00:05:23,845 Um, so we may change platforms with a third party. 107 00:05:24,305 --> 00:05:27,105 We may look at, um, not really 108 00:05:27,105 --> 00:05:28,585 where we're buying our supplies, 109 00:05:28,585 --> 00:05:30,105 but what supplies we're buying. 110 00:05:30,325 --> 00:05:34,745 As long as the quality is the same, if, if it's a, a product 111 00:05:34,775 --> 00:05:35,905 that can save us time 112 00:05:35,965 --> 00:05:38,825 or money, um, we might switch to said product. 113 00:05:39,605 --> 00:05:44,105 Um, and then in terms of getting more out of our employees, 114 00:05:44,105 --> 00:05:48,825 we're looking at creative ways to incentivize our employees 115 00:05:49,125 --> 00:05:52,825 for, uh, being here, being on time, 116 00:05:53,115 --> 00:05:54,185 being consistent. 117 00:05:54,685 --> 00:05:58,365 And, uh, we've also put in an educational platform like an 118 00:05:58,445 --> 00:06:00,685 OMS system so that we can, uh, 119 00:06:00,945 --> 00:06:04,725 not only show each employee group what our expectations are 120 00:06:04,725 --> 00:06:07,845 of them in a given day, week, month, et cetera, 121 00:06:08,305 --> 00:06:11,135 but also, uh, train them 122 00:06:11,155 --> 00:06:14,135 and track them so that we have accountability and, 123 00:06:14,135 --> 00:06:15,855 and that's a work in progress, of course. 124 00:06:18,385 --> 00:06:21,535 - Great, thank you. My next question for you is, 125 00:06:22,325 --> 00:06:23,935 what are you most excited about 126 00:06:24,155 --> 00:06:26,495 and what makes you nervous when it comes to dentistry? 127 00:06:28,095 --> 00:06:30,015 - I have the same answer for both Riz. 128 00:06:30,725 --> 00:06:34,135 What I'm most excited about is that we have been able 129 00:06:34,135 --> 00:06:38,215 to grow to the size that we are, and we continue to grow. 130 00:06:38,415 --> 00:06:41,935 I think we're gonna be up 10% at the close of this year, um, 131 00:06:42,165 --> 00:06:43,335 without private equity. 132 00:06:43,995 --> 00:06:47,735 So we are not a big DSO, we are nine locations, 133 00:06:48,115 --> 00:06:51,455 but we are, uh, doing about $30 million in collections. 134 00:06:52,435 --> 00:06:56,335 And we've been able to continue our steady growth, 135 00:06:56,585 --> 00:06:58,415 never having a, you know, a down year 136 00:06:58,515 --> 00:07:01,975 or even really a bad year, um, without private equity. 137 00:07:02,915 --> 00:07:05,855 But that's also my biggest, uh, fear. 138 00:07:05,925 --> 00:07:08,735 What makes me most nervous is that at, at some point, 139 00:07:09,195 --> 00:07:12,855 the traditional banks do dry up in terms 140 00:07:12,875 --> 00:07:13,975 of your debt service. 141 00:07:14,755 --> 00:07:18,735 And if we see a really good practice that we wanna acquire, 142 00:07:18,835 --> 00:07:20,975 but it's, it's larger than a certain size, 143 00:07:21,555 --> 00:07:25,655 we may not be able to get the bank funding without, um, 144 00:07:26,115 --> 00:07:27,655 either private equity or of, 145 00:07:27,715 --> 00:07:32,455 or some other form of, of, uh, of third party financing. 146 00:07:32,875 --> 00:07:34,255 Um, it hasn't happened yet, 147 00:07:34,675 --> 00:07:37,095 and we hope that, you know, our banks 148 00:07:37,435 --> 00:07:41,905 or our bank will continue to be, um, thoughtful, 149 00:07:42,365 --> 00:07:44,745 uh, about lending to us since we are showing good 150 00:07:44,745 --> 00:07:46,305 returns on an annual basis. 151 00:07:46,525 --> 00:07:48,545 But there is always that fear that, that 152 00:07:48,615 --> 00:07:50,225 that will not continue. 153 00:07:52,565 --> 00:07:56,005 - Interesting. Thank you. Do you see private equity becoming 154 00:07:56,085 --> 00:07:58,485 a bigger force in dentistry over the next few years? 155 00:07:59,515 --> 00:08:02,995 - I do. Um, my understanding of private equity 156 00:08:03,015 --> 00:08:05,955 and having, uh, you know, limited experience with it, 157 00:08:05,955 --> 00:08:08,235 but definitely experience with it, uh, a few times, 158 00:08:08,975 --> 00:08:10,635 um, times. 159 00:08:10,635 --> 00:08:14,675 Um, private equity likes businesses that have consistency 160 00:08:15,615 --> 00:08:18,315 in repeat business, like dentistry has hygiene 161 00:08:18,495 --> 00:08:20,955 and hygiene is something that generally is twice a year, 162 00:08:21,325 --> 00:08:23,795 which means there's a certain level of guaranteed, 163 00:08:24,655 --> 00:08:26,235 uh, flow and revenue. 164 00:08:27,055 --> 00:08:30,795 Um, and with the right levers being pulled, 165 00:08:31,175 --> 00:08:33,155 it can be increased or improved upon, 166 00:08:34,015 --> 00:08:36,475 and so it becomes attractive for private equity. 167 00:08:36,815 --> 00:08:40,875 The, the hvac uh, industry has become big with, uh, 168 00:08:41,025 --> 00:08:44,595 private equity because HVAC companies have started doing 169 00:08:44,595 --> 00:08:45,995 their spring tuneup 170 00:08:45,995 --> 00:08:47,595 and their fall tuneups, 171 00:08:47,765 --> 00:08:49,595 which is like a hygiene check pretty much. 172 00:08:50,135 --> 00:08:52,715 So that's made them attractive. 173 00:08:53,295 --> 00:08:54,515 Um, uh, 174 00:08:54,515 --> 00:08:57,685 revenue cycle management is huge in private equity now 175 00:08:57,685 --> 00:08:59,645 because we're always gonna have people 176 00:09:00,025 --> 00:09:01,405 who aren't paying their bills. 177 00:09:01,905 --> 00:09:03,605 So they know that there's a constant 178 00:09:03,605 --> 00:09:05,645 and continuous opportunity there. 179 00:09:06,065 --> 00:09:10,125 And as long as dentistry keeps its model of having hygiene, 180 00:09:10,785 --> 00:09:15,085 um, uh, being a routine process, 181 00:09:15,605 --> 00:09:18,005 I think private equity will stay involved until, 182 00:09:18,415 --> 00:09:21,645 until it's saturated, meaning there's, you know, 183 00:09:21,675 --> 00:09:24,725 it's like the, uh, pharmacy industry when there's only three 184 00:09:25,255 --> 00:09:28,965 major pharmacies out there, there's not much left to 185 00:09:29,955 --> 00:09:33,805 pull in and make money on, then the interest falls off. 186 00:09:33,905 --> 00:09:36,365 So when, when dentistry reaches a point, 187 00:09:36,625 --> 00:09:40,725 and I have no idea when that'll be 10, 15 years, where 90% 188 00:09:40,725 --> 00:09:43,605 of dental groups are associated with A DSO 189 00:09:43,945 --> 00:09:47,285 and the smaller DSOs are eaten up by the bigger DSOs, um, 190 00:09:47,475 --> 00:09:49,325 then the interest will, will taper off. 191 00:09:51,655 --> 00:09:52,945 - Very interesting. Thanks. 192 00:09:54,485 --> 00:09:57,055 What will the most effective healthcare leaders need 193 00:09:57,055 --> 00:09:59,095 to be successful in the next two to three years? 194 00:10:00,955 --> 00:10:02,575 - That's a great question. Um, 195 00:10:03,755 --> 00:10:06,465 definitely thoughtfulness, creativity. 196 00:10:07,145 --> 00:10:11,265 I think in, in American culture, iq, 197 00:10:11,935 --> 00:10:16,785 intelligent quotient has been a really big leader in 198 00:10:17,615 --> 00:10:19,985 what it takes to be a good business person. 199 00:10:20,285 --> 00:10:24,425 And I think, uh, post covid, 200 00:10:25,155 --> 00:10:27,545 we're looking more at EQ and aq, 201 00:10:27,965 --> 00:10:30,185 and for anyone that doesn't know what those are, 202 00:10:30,725 --> 00:10:34,145 EQ is emotional quotient, and AQ is adversity quotient. 203 00:10:34,325 --> 00:10:36,825 So being able to 204 00:10:38,345 --> 00:10:40,755 make decisions, um, 205 00:10:42,045 --> 00:10:44,585 in a thoughtful way that 206 00:10:45,115 --> 00:10:48,625 keeps your employees feeling safe, 207 00:10:49,495 --> 00:10:51,425 comfortable rewarded, 208 00:10:52,245 --> 00:10:55,865 and doing so while in the face of adversity 209 00:10:56,725 --> 00:11:00,225 and having quick creative ability 210 00:11:01,005 --> 00:11:05,705 to pivot is gonna be more important than just being a smart 211 00:11:06,995 --> 00:11:10,255 and perhaps wealthy person or group. 212 00:11:11,085 --> 00:11:14,575 It's gonna be more about the hu the human interaction 213 00:11:15,235 --> 00:11:18,415 and how we maintain our relationships. 214 00:11:19,295 --> 00:11:20,895 Turnover, whether it be by dentist 215 00:11:21,155 --> 00:11:25,695 or any other employee group, is probably the most dangerous 216 00:11:28,365 --> 00:11:31,145 and destructive force in dentistry 217 00:11:31,735 --> 00:11:35,705 because it, it causes turnover of patients as they see, 218 00:11:36,565 --> 00:11:40,585 um, the, the business is not running well. 219 00:11:40,695 --> 00:11:42,185 They can sense it, they can sense 220 00:11:42,185 --> 00:11:43,385 when a dentist doesn't care. 221 00:11:43,385 --> 00:11:44,545 They can sense when a, 222 00:11:44,705 --> 00:11:46,865 a hygienist is only there for a paycheck. 223 00:11:46,865 --> 00:11:49,825 They can sense when a front desk person 224 00:11:49,885 --> 00:11:54,645 or an assistant is not, um, happy, uh, or, 225 00:11:55,025 --> 00:11:59,125 or dedicated, uh, to what they're doing. 226 00:12:01,945 --> 00:12:04,625 - Interesting. And do you have any tips for people out there 227 00:12:04,685 --> 00:12:07,425 who may be experiencing a similar situation on how 228 00:12:07,425 --> 00:12:08,825 to keep those employees engaged? 229 00:12:10,435 --> 00:12:12,015 - Uh, get to know your employees? 230 00:12:12,295 --> 00:12:17,115 I think, I think every employee deserves the right 231 00:12:17,135 --> 00:12:22,015 to share not only their, their level of 232 00:12:22,575 --> 00:12:23,615 satisfaction and happiness 233 00:12:23,615 --> 00:12:24,975 with the job they're currently in, 234 00:12:25,275 --> 00:12:27,255 but they deserve the right 235 00:12:27,595 --> 00:12:29,855 to share their goals and where they wanna be. 236 00:12:30,515 --> 00:12:35,375 And we owe it to them to consider them as, 237 00:12:35,955 --> 00:12:38,575 uh, promotion opportunities come about 238 00:12:38,635 --> 00:12:39,815 to consider them first, 239 00:12:40,235 --> 00:12:43,895 but in order to do that, we have to also create a clear path 240 00:12:43,895 --> 00:12:45,815 of expectation of them so that they know 241 00:12:46,435 --> 00:12:47,535 why they weren't chosen 242 00:12:47,835 --> 00:12:51,775 or why they were chosen for an increase or a promotion. 243 00:12:52,275 --> 00:12:54,575 We need to really be transparent. 244 00:12:57,545 --> 00:12:58,875 - Well, thank you so much, Jeff. 245 00:12:59,015 --> 00:13:00,435 Uh, those are some great insights 246 00:13:00,435 --> 00:13:01,595 that you shared with us today. 247 00:13:01,915 --> 00:13:03,875 I look forward to connecting with you again in the future. 248 00:13:04,375 --> 00:13:05,835 - Thanks, Riz. It's my pleasure. 249 00:13:06,705 --> 00:13:09,115 - It's so important for leaders at the top of organizations 250 00:13:09,115 --> 00:13:11,915 to keep learning, stay sharp, grow their networks, 251 00:13:12,305 --> 00:13:14,755 help our audience better do this in a more simplified, 252 00:13:14,755 --> 00:13:16,435 personalized, and meaningful way. 253 00:13:16,995 --> 00:13:19,475 Becker's Healthcare has launched my bhc, 254 00:13:19,945 --> 00:13:21,955 it's your trusted Becker's healthcare experience 255 00:13:21,955 --> 00:13:23,715 and more with content, connections, 256 00:13:23,715 --> 00:13:25,155 events and learning opportunities. 257 00:13:25,785 --> 00:13:26,875 Join the community free 258 00:13:26,875 --> 00:13:31,835 of charge@www.my dot becker's hospital review.com 259 00:13:31,935 --> 00:13:32,755 and we'll see you there.