- Hi everyone, and thank you
for tuning into the Becker's Healthcare podcast series.
My name is Corrine Anos
and I am the Director of Marketing at Clear.
In today's episode, I'll be speaking with Dave Monaghan, CEO
and founder of Clear, as he peels back the layers
of dental patient behavior
and the impact on practice performance.
We'll discuss the potential pitfalls of failing
to maximize the value of your uninsured patients,
blindly participating in PPOs
and acquiring new locations without a focus
on same store growth.
Dave is also going to share a path for dental practices
and DSOs to amplify performance that's both data-driven
and patient-centric.
Now, before we get started, Dave, most listeners know you
as the CEO of Clear, so I'd like to take a moment
and have you share a bit about how you got here.
What was the professional path that you paved that led you
to become such an entrepreneur in the healthcare industry?
- Uh, thanks Grant.
Um, yeah, I guess going back,
I actually started in the engineering world,
so I actually have an engineering degree.
Um, I actually got an MBA as well.
So as I was doing engineering work at Northrop Grumman,
we were doing, uh, sensors
and, uh, avionic systems for fighter aircraft
and drones decided that that wasn't the path I wanted
to go down for the rest of my life.
And I branched out
and started heading down the business side of things.
And so I ended up getting a job at Microsoft, uh,
in, on their business side.
But what I had w was doing there was we were doing a lot
of partnering work
and a lot of, um,
I actually got into some healthcare work at the same time
and started to get a passion around sort of that combination
of health and tech.
Um, and I actually ended up leaving Microsoft a
after about eight years, and I became CEO of a small startup
and we were focused on creating fitness
and wearable devices.
Um, our claim to fame if, uh,
anybody's old enough in the audience is we created the Nike
Plus product that went into the shoe and tracked your runs
and recorded it
and sent it wirelessly into your iPod at the time, uh,
and eventually into the iPhone.
Uh, and we sold many, many millions of those devices.
Um, in parallel to that, we actually created a, uh,
another line of product that was our own
and branded under our own, uh, uh, company that we sold to,
fitness companies,
wellness companies, and healthcare companies.
And they would embed our sensors inside programs
for things like diabetes management, um,
for weight loss for general wellness.
And so we had about 60
or 70 healthcare providers building applications on top
of our device infrastructure and data infrastructure.
Um, that's when I really sort of got into the combination
of, uh, healthcare and technology.
We ended up exiting that company.
We, we ended up selling it in 2016.
Um, I ran into just totally on the side, just, uh,
a happenstance, ran in as somebody
who owned six dental practices and was also an investor.
And he and I started talking.
I had no idea about the dental space at the time,
and got very intrigued when he brought up that a lot
of his patients didn't come in very often
or not as often as they should,
and that insurers were very, very difficult to deal with.
And so that is what led me into dentistry.
- Sometimes they say it's all about the people, you know,
Dave, so it's good to have that network.
Can you tell me more about how the vision, specifically
of Building Clear came
to be then once you knew about Dental, knew you wanted
to dive into it, how did Clear come about?
And then were you expecting this massive positive impact
that it has had on the market so far?
- So when I ran into this investor
and owner of Six Dental Practices, I got intrigued
and we, we decided,
like I was planning actually taking some time off.
We decided, you know what, why don't he, he's like,
why don't you just come in, take a look at my practices,
take a look at some of the things we're doing
and determine if there's something
here you might wanna work on.
Right? And so it was just a broad sort of, Hey, why not?
Right? And so I actually spent six months,
I hired a market research firm.
I spent six months going
to his dental practices talking to the offices.
Plus I had a market research firm doing, uh,
broad market research and surveys nationally,
but also focus groups.
So we would bring dentists into a, uh, focus group
of like eight to 10 of them in a room together,
and we'd ask them questions.
Uh, we did the same things with patients
and we, we talked to both insured
and uninsured patients, two separate focus groups.
And what we're trying to do is understand is there anything
happening in the dental space that'd be
of interest from a technology perspective?
And what we end up realizing is exactly what, you know,
clear was sort of built around, which is
there was a big disconnect.
So patients wanted more dental care practices, wanted
to provide more dental care,
and at the same time, practices were dealing
with a horrible coverage model model called Dental insurance
and PPOs that they absolutely hated.
And the level of hate, I can't tell you how deep it was,
it was a passionate, deep hate to the core.
And I was shocked by that the level of passion
and, uh, hatred that came out.
So, so that was you.
So you asked me did I think it was gonna be like what I,
I should from all that work, what I decided was we needed
to create a subscription model that got rid
of the middle person, right?
And directly connected the patients to the practices
that would give the patients the coverage they were asking
for when we talked to 'em in these, uh, focus groups.
And would get rid of that, uh, person in
that middle band in the middle between the dentist
and the patient that the dentist wanted to get rid of.
So you asked me, sort of, would I,
did I think it was gonna be like a, you know, uh, take off
or be really popular?
I did, and I know that's a, uh, sort of,
some people would say, no, you didn't.
And I was like, actually I did.
And actually anybody who was doing the market research
with me will know the moment.
So there was a moment when we were doing a focus group with,
there was eight or nine dentists around the table talking
and that passion came out
and I, hatred came out for the shores.
And in focus groups you have a moderator
who sits in the middle and just asks questions
and keeps the conversation going
and digs as they hear things.
I actually was behind a mirror like watching and listening,
and I called a time out
'cause I heard the passion and everything.
I walked, I, I walked around into the room,
I told the moderator he could go
and I stepped in as the moderator.
And that day talking to those dentists,
I knew we were gonna have a product
that was gonna be successful.
'cause you could just hear it across the board.
Everybody agreed there was an issue
that needed to be solved.
- Sure, yeah. Wow, that's a great story.
So now Clear is working
with over 10,000 dentists across the United States,
and we're providing this coverage care in
the form of membership plans.
Can you talk about some of the research
and the data that you've collected to identify some
of the most common trends in patient behavior?
- Absolutely. So we, so as you said, we work with
thousands and thousands
of dentists over 10,000 at this point.
Um, and that goes all the way from the solo practice up
to large DSOs.
It crosses the whole spectrum.
Um, in about three years ago, we started integrating
with practice management systems.
So we could now pull the data from the practices on our
platform and start analyzing their data for them.
And that data, as everybody knows, there's a rich set
of data in there, both patient data and practice data.
And so what we wanted to see was we,
we didn't wanna just build clear
to build clear and sell software.
We wanted to build clear to, um,
basically have an impact on patient engagement
and practice performance.
That was the goal. Um,
and so we wanted to see are we having the effect?
And so we can pull all this data back, we start analyzing,
we analyze, analyze it right now at two levels,
patient behavior and what are the patients doing.
And then the second piece is we look, actually look at PPO
and dental insurance performance for the practice.
And how does that sort of behave or,
or perform for a practice?
So let me go back to patients for a second.
We, uh, will break patients down into their
uninsured patients who don't have clear,
don't have insurance, so they
just come in and they pay cash.
The second set of patients is insured patients.
So they have Delta Dental or MetLife or Aetna or whatever.
And then there's the clear patients
who have bought co coverage
or subscription through the clear platform.
And we look at visits, treatment, acceptance, production
and collections across those three cohorts of patients.
And what's incredible is the consistency
of this data is sort of insane.
It doesn't matter if the solo practice, the DSO practice,
it doesn't matter if it's in California
or if it's in Wisconsin or if it's in Florida.
The data is incredibly consistent.
And what it shows is, if a patient has coverage,
let me broadly define that as if they have insurance
or they have clear they're gonna come in two
to three times more often, they'll accept twice the amount
of of care, two to three times more care.
Uh, production's gonna be two to three times higher.
Like it's a given.
If they have coverage, they come in more often,
they accept a lot more treatment.
Uh, and by the way, that isn't just in dentistry,
that's in any model you ever wanna go look at.
If somebody's in a coverage, uh, model, subscription model,
membership model, they do on average over two times the
amount of, uh, activity that a non-subscriber does.
So anyway, insurance
and membership plans drive patients into the practice.
And then once you look at the data, okay, that's great
and that's, you know, a huge
difference from the uninsured patients.
But once you look at those patients between clear
and insured, what you see is
a practice will collect anywhere between 30
and 40% more revenue
with a clear patient over an insured patient.
Why is that? Except everybody knows the insurers keep a
large percentage, almost 40%
of what's paid into an insurance plan.
So Clear sort of creates the best of both worlds
where your patient comes in, they accept more treatment, uh,
they're more loyal to your practice, uh,
they pay their bills, the, the, uh,
the collection rate on our platforms over 99%.
Um, and so they just become the best patient possible
with coverage who comes in often, you know,
accepts treatment and pays versus an insured patient
that you have this huge discount on.
Uh, again, consistent practice of practice.
The other thing we do is we look at the PPOs themselves
and we compare how they different PPOs behave in a practice.
So you might have Delta Dental, MetLife, Aetna, and so on.
Um, and what you see there consistently,
amazingly consistently is the discounts offered under those
plans are anywhere between 30 and 40%.
And there's a line that practices cross where they start
to lose money under those plans.
What we're seeing is the line is about 30, 35%.
Once you're providing that deep of a discount off your UCR,
it gets very difficult to be a profitable practice.
That varies a little bit, but some of these PPOs are as low
as 40% collections on the UCR.
Um, so anyway, what we do actually use, we'll stack up the,
the PPOs next to each other and show the practice.
All right? This is a low producing PPO
that's offering a deep discount.
You should get out of network with that PPO, right?
You might have a high producer that is also low production,
that's harder to get away from that.
That's gonna take some time.
But you can actually start crafting a strategy for managing
and, uh, you know, your network of PPOs, which ones work,
which ones don't, how you manage
to, to get out of the network.
And by the way, the membership plan provides
that backstop for the patient.
As you get outta network, you can
offer the membership line to them.
- Yeah, yeah, that's great.
Very helpful to break it down too into those two categories.
So what is the cost
that a practice is gonna face if they do nothing,
meaning they're not working to optimize their PPO
participation strategy, they're not taking your
recommendations, they're not finding ways to kind
of maximize that value of their patient base.
- Yeah, so it's, uh, it's probably on a probably three
or four different, uh, sort
of whatever tangents on this one.
So one is if they're not managing their PPO network,
I guarantee you they're struggling
to run a profitable practice.
If they have 10 or 15 PPOs that they're in network with,
it's gonna be incredibly difficult to be profitable
and it's going go get worse.
And everybody knows that, right? Reimbursements never go up.
Cost of running a practice does go up constantly.
Constantly, right? And so what we're seeing for practices is
that point has been crossed
where if you're not managing your PPOs,
you you're gonna have serious
issues running a profitable practice.
I think that's the first, uh, sort of cost, uh,
a price a practice pays.
And some of your patients, I guarantee you,
because we see this in practice, we analyze,
you're paying basically the insurer to see their patients.
That's how, because you lose money on 'em.
So that's profitable practice is number one.
The second one is that this one's the,
I think actually I feel, uh, this one's more important, one
that I think people should internalize.
The patients you have that are uninsured
aren't getting the care they need.
So they're not covered, they avoid visits.
On average, these uninsured patients come
in once every two years.
They're not getting the preventative care they need.
They're not, you know, uh,
addressing caries and things like that.
So their health is suffering because of that.
So just being able to provide them some type
of coverage model, you know, they're gonna come in,
they're getting the care they need, uh,
and they'll be healthier.
So number two is the cost is not having
patients getting the care they need.
The third one is there's a big opportunity sitting in every
practice and it, it comes in two forms.
One form is the one I already mentioned,
which is the active uninsured patients coming in
but not coming in very often and providing them coverage.
They'll come in more often and get more treatment, right?
And dry production up and collections up.
So that's opportunity number one.
Typically in a practice on the average,
what we see is there's about 250 to 300 of those types
of patients per dentist.
In a practice like one dentist,
let's say it's 250 active uninsured,
two dentists, it's now 500.
You can double the production of those patients
by offering a membership plan.
So there's that opportunity in
that active uninsured patient base.
There's another bigger bucket of
what we call dormant patients.
So patients that have been in the practice
but haven't come back, let's say for 18 months,
those patients, a lot of them stay away
because they don't have coverage.
And so you have this big opportunity.
The average, by the way, of all the data we're provide
or pulling from the practice management system is there's
about 2000 dormant patients sitting in any practice
per dentist in the practice.
That's a huge opportunity against sitting right there.
So that third price you pay is this opportunity cost
of patients in your practice that you're not engaging.
Um, and the last one's more of an emotional one.
We hear over and over again from practices,
they feel like they're controlled by insurers.
They feel like a bit helpless,
they don't feel like they can actually move forward.
They don't know what to do about it.
It's a bad feeling, right? Mm-Hmm .
And so just taking a step,
let's say you have eight PPOs in your practice,
you don't know which one to sort of get out of network with.
You do this analysis, you find one
that's a very small percentage over your production
and you get out of network.
I guarantee you it creates this, you know, feeling
of I'm starting to get control
and I'm starting to feel good about things.
So anyway, that sort of feeling of helplessness
and lack of controls, I think the fourth cost.
- Yeah, I think that as we've seen,
and we've heard it from dentists
and practices just across the US right now, we know
that there's this greater focus on same store sales.
I mean, you kind of touched on it in the answer you just
gave, but how do you see
dental membership plans also flipping the script
for those practices with the growth at all cost mentality
and this providing a more sustainable model of success?
- Yeah, just following up on what I was just talking about.
So you have your active uninsured patients
and then you have your dormant patients, right?
So if you're gonna go out,
and that's huge opportunity, I'll get back
to a second from a cost perspective, so to, you know,
engaging those patients,
but typical practices will try
to go out and find new patients.
It's an incredibly difficult task.
So on average, depending on what study you look at,
there's all kinds of studies out there that say
that a new patient costs anywhere between 200,
$400 per patient to acquire a new patient
to walk into your door through
marketing efforts and all that good stuff.
So let's just average
of $300 cost me $300 to get a new patient.
The another stat is seven outta 10
of those patients will never come back .
Yikes. And so, yeah, exactly.
So you start doing the math, right?
And depending on how much that cost is per patient,
you're actually, a lot
of times it's an unprofitable patient, right?
From a cost of acquisition perspective
and how long they stay and the type
of treatment they get, uh, completed.
So it's a very difficult equation actually to figure out.
And it's even more difficult to figure out long-term
and sustainable model there.
Um, so that's by far the hardest, in my opinion, way
to drive, you know, growth in a practice it
and you should do it and no doubt about it,
but it shouldn't be your only mechanism.
The other mechanism should be exactly what I talked about,
better engagement and your active uninsured patients
and engagement of your dormant patients.
There's said, there's a lot of 'em in your practice.
So between those two buckets, you probably have 2300
to 2,500 patients that fall into that bucket.
Better yet, they've been to your practice, they know
who you are, they will react to a marketing message from you
and you have all their information.
So you don't have to, there's no cost
of acquisition for these patients.
If you set up a simple email campaign, right,
and it's done over a series of time,
you actually will start engaging these patients
and drive them into your practice
and that it's not gonna happen overnight, right?
So these dormant patients, let's say you have 2000 of them,
your goal might be, I'm gonna activate over the next two
years, let's say a hundred of these patients, right?
Or maybe 200. And so you have a sustained marketing campaign
that goes to those patients that, you know,
drives them back into your practice.
And the cost of that marketing is almost zero.
It not much Email campaigns are so inexpensive.
Um, and by the way, uh, we do some of this on our platform
where we actually do that for a practice
and we see the results.
We see an uptick of about 50%
of patients purchasing into a membership plan if you market
to that active uninsured patient base
and you market into that dormant patient base.
- Alright, so you're, you mentioned it,
but marketing is definitely a feature that Clear has kind
of sets us apart from other dental membership platforms.
But what else sets us apart
and how is clear measuring the success
of these membership plans that practices start to implement
and just their overall performance?
- So, um, we don't, we're not, I I don't, I don't like
to think of us as a software company.
I think I think of us as somebody who's gonna get results,
a results company in, in short.
And so we really focus
and really measure the impact we're having,
let me get that in a minute.
But we've developed a formula
and a process to get the results
that are really consistent practice of practice.
So where we start is with a consult,
uh, like a design consult.
So we will spend 45 minutes an hour with a practice prior
to doing anything where we'll talk
to 'em about their practice, we'll talk
to 'em about patients, we'll talk to 'em about their goals.
We'll talk to 'em about their PPOs and how they manage 'em,
and we'll try to understand sort
of what's the dynamics there
and how do we craft a membership plan that meets the needs
of the practice and their patients.
'cause you can't do one without the other.
Um, so we'll price it, we'll design it.
Uh, you might end up with, let's say three care plans,
like one for a child, one
for an adult, one for a perial patient.
You can end up with five if you have the older
adults and younger children.
Anyway, we, we craft it
and design it specifically for the practice.
The second thing we do is we,
we we're a partner in the implementation
and the support of your membership plan.
So we have an implementation process where part of
that is training your team.
It's getting you marketing materials, it's, you know,
teaching you how to promote it to your,
uh, to your patient base.
It's also having a support team who answers phone calls,
emails, texts, like, if you need support, we're here
and you have a human that you can talk to
who will solve your problems and address whatever you need.
So anyway, that support training sort
of partnership piece is critical.
That's the second step. The third step,
and that most people think I'd probably lead with this,
but this just the software.
The software automates things.
It makes it real easy to like add patients.
It provides you reports, it, uh, renewals are automatic,
compliance is built in, there's marketing material.
So the software platform is critical to the execution
and management of the, uh, membership plan.
As part of that, there's another area which is,
you mentioned it integration
with your practice management system.
And we pride ourselves on this side.
It's, uh, we got a very advanced, uh, solution here
that's way advanced,
more advanced than anything in the market.
Um, and we do things like automate your payment posting.
So let's say you have a thousand
patients paying monthly the subscription,
if you don't have an automated way
of posting those subscription payments into your practice
management system, somebody's entering a lot
of data on a monthly basis.
Um, so we developed a way to take those payments out
of our subscription platform
and move them into your practice management platform
automatically, it just happens and it shows up
and it's a record of it, uh,
being posted into your practice management system.
Uh, patient enrollment's another one where
give you a little bit of a pain.
If patients are constantly walking up to your front desk
during the day asking to be enrolled,
you gotta get their name, their address, their phone number,
right, their credit card, all that good stuff.
Um, it, it can be a little bit taxing and it's manual
and that front desk has other things they need to do.
So actually what we do when we integrate
with your practice management system is you just need
to pick a name off.
Uh, and when we pick that,
after you pick that name, we auto-fill all the fields we
need that are in your practice management system.
So it just streamlines
that it ma it makes it like a 22nd process
to add a patient at that front desk, uh, as needed.
So, and then we do other things like
I I mentioned marketing.
So we actually have the capability since we're integrated
to market to your patients
and we have campaigns you can run
to dormant patients, for example.
And we'll send a series of emails over in the course of time
where you might get a series of, let's say three
or four to start off and then one every quarter.
And you wanna constantly be touching that, uh,
dormant patient base and it will drive
those patients back to your practice.
So that comes like outta the box
with our integration and so on.
So all that stuff we know over the course of years,
the impact it has and we measure that impact again
by integrating practice management systems,
pulling the data, like I talked about, this is real data.
We have it for hundreds of practices.
Uh, and what it shows on average is
that when a patient goes from uninsured over to clear,
they come in twice as often, they accept 2.5 times more, uh,
treatment and they drive 2.7 times more revenue.
And one more stat, which we just started adding
because we started seeing it in data,
is they cancel 50% less appointments.
And so you have a more consistent
and loyal patient walking into your practice.
This is real data from the practices that use our platform
and it's their practice management data.
Uh, and so it's super solid.
Uh, and so I know it's a long answer,
but there, there's a lot of steps you need to go through
and you also need to measure in the right way to make sure
that you're being successful.
- Absolutely. I think the main takeaway for anyone
that's listening and as you went through
that is membership plans can have a huge impact
and play a huge role in patient
behavior and practice growth.
So for anyone looking for that same sort, growth,
a membership plan is a great solution.
Thank you Dave, so much
for spending time talking with me today.
And for anyone listening that wants to listen
to more podcasts, they can go
to the podcast page at becker's hospital review.com.
Thank you.