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Hello. This is Cameron Cortejano with the Becker's
Dental and DSO review podcast.
I'm thrilled to be joined today by doctor
Jim Arnold, a former multipractice owner who sold
to a DSO,
helped grow a few DSOs,
has been a clinical VP for a large
DSO,
and has also been an educator, mentor, and
leader for most of his career.
Doctor Arnold, thank you so much for being
here today.
Hey. Thank you, Cameron. It's my pleasure. Thanks
so much for having me.
You know, just to kinda fill in a
little bit more about my background, I graduated
dental school in 96,
started my career as an associate in a
small town bread and butter practice for a
few years.
I I bought that practice and,
doubled it in the 1st year, 500,000
up to about a1000000,
with one doctor instead of 2.
We bought our second practice, I guess, a
couple years later,
grew that from 900,000 to 1,600,000
in the 1st year, and we started a
third practice,
and took it to 1,100,000
in the 1st year. So, you know, we've
got a lot of or I've got a
lot of experience, you know, in this space,
and we we really made all that growth
possible by kind of shifting our
mission and vision to that of a more
comprehensive,
high quality,
care model.
My team and I did, like, 3 or
400 hours of CE
for several years,
doing, you know, Pankey and Dawson and the
course COIST courses,
Hornbrook, Nash,
LDI for clinical.
And then on the practice management side, we
we really worked with a lot of communication
gurus and some consulting groups as well.
That led to some other opportunities as a
peer review chairman for my area,
clinical instructor for the Hornbrook group, and I
was a board member on several kind of
local, state, and national,
level groups.
And throughout that time, we had a lot
of balancing because we also had 4 kids.
My wife and I trained about 20 hours
a week for triathlon,
and,
we sold my practices
at 45,
retired from clinical dentistry at 50.
And,
since then, I've just been helping my PE
friends build the foundation for their 4th,
DSO, spent a year with a large DSO
as a clinical VP as you mentioned. And,
you know, now I'm just kind of evaluating
new opportunities.
The, you know, the industry is unbelievable. There's
so many great opportunities, and it's a really
exciting time to be be in it.
Thanks for that, introduction.
The first question is kinda
focused around what what are some of the
biggest issues,
that you are following and keeping up within
the dental industry,
in 2024?
You know, obviously, there's a ton of different
subjects to follow, but but for me, the
top 3 have really been,
recruitment and retention
of kind of great dentists and team members,
cultivating a positive culture,
and and really just the explosion in technology
over the past decade. Those are, I think,
for me, the biggest issues to kinda try
to stay on top of.
Yeah. You touched on,
the staffing and and retention and recruitment and
stuff.
That's been kind of an ongoing
issue in dentistry. Do you wanna dive a
little more deeply into that one?
Yeah. Of course. You know, I I mean,
obviously, that's always been a really important factor
whether you're a an individual practice or a
DSO with a 1000 practices,
but it seems like it's more critical now
than ever before.
I think,
during the pandemic, you know, we lost, I
believe, about 30% of hygienists
across the
industry and lost a lot of other team
members as well.
You know, so, obviously,
trying to fill those
voids is is a challenge, you know, with
so many auxiliaries leaving the profession. So, you
know, it's harder to find a great team
than I think ever before.
And, you know, because of that supply and
demand situation,
it's also raised salary significantly.
So,
you know, finding the right people and finding
the right balance is, I think, a big
challenge, especially for DSOs.
Yeah. Absolutely.
I feel like the,
the lack of hygienists and also dental assistants
has been a big problem for dental practices
and, like you said, also DSOs. It's not
just exclusive to 1 or the other.
Yep. Absolutely.
You know, and one of the things I
think that's, I mean, critically important when it
comes to recruiting and retention is just really
cultivating a positive culture, not only at the
practice level, but also at the DSL level.
You know, if you have a really positive
and supportive culture,
you know, you're more likely to bring the
right people,
kinda to the table and, you know, have
the right people to interview. You know, because
if you can
attract
and retain great people due to that awesome
reputation in the industry,
you you're in a position where you can
put put them
in a situation where they can really succeed,
feel
happy, and,
be more likely to stay
long term. So I think that culture piece
has become
the biggest priority for a lot of DSOs,
you know, because happy teams mean they're gonna
stay.
Teams that are happy and stay have happy
patients. Patients get better care, and the practice,
profitability
increases as well.
So that positive industry rep brings people in.
Having positive experience within the practice keeps them
there. And, you know, I think that's just
as important as salaries are in in a
lot of situations for a lot of the
the best people, in fact.
So, I mean, you and I both know
that losing great people
costs the practice and the company just
immeasurable,
immeasurably,
you know, when it comes to,
profitability
and EBITDA.
Yeah. Definitely.
And the 3rd issue you kind of touched
on was,
technology. Is it mostly
the new dental AI developments,
or
are there other,
tech updates and advancements that you're also kinda
following?
Yeah. You know, it seems to be exploding,
a rate kind of never seen before in
the industry, and a lot of that is
definitely driven by a AI tech.
The other big driver, I think, is is
just the need for a a seamless digital
workflow.
You know, digital workflow
for me really refers
to kind of the imaging,
the diagnostic help,
scanning, fabricating,
restorations.
And, you know, these things aren't optional anymore.
They're critically important because, you know, without that,
you can't ensure that you're upholding the upholding
the standard of care anymore. You can't ensure
that you're providing a great patient experience.
And and really, those are the things you
need
to satisfy
your your business objectives too.
You know, on the AI side of things,
I mean, everybody knows that there are a
lot of companies with, you know, software that
helps evaluate images, you know, within your practice
software.
You know, and that's improving diagnostic accuracy probably
by a good 10%,
maybe even 15 to 20%.
Because I think statistically speaking, it's been shown
that
clinicians, you know, whether it's because they're really
busy or because, you know, they're just maybe
there's eye strain, maybe it's the time of
day, but, you know, we tend to miss
10 to 20%
of conditions that we should catch on x
rays. So, you know, from a
AI standpoint,
you know, it's evaluating those images. It's bringing
our eyes to things that we might have
missed. So diagnostically,
it's
beneficial.
From a communication standpoint, it's huge because patients
are very visual. I mean, people are visual.
What do they say? A picture's worth a
1,000 words?
But when they can see these different conditions
being highlighted, you know, in with different colors
right there on image, you know, they understand
what's going on more clearly, and they're a
lot more likely to say yes to necessary
treatment. And then after all that, you know,
it improves communication with insurance companies because insurance
companies are gonna look at these, you know,
AI,
driven reports
and are and be a lot more likely
to cover the, you know, the necessary treatment.
Yeah. I think the
kinda increased adoption of all those kinda
programs, especially the detection AI ones, has definitely
been something that's been huge for dental,
this year so far.
Yeah. No question. You know, there's also AI
programming that evaluates,
all the office phone conversations
in real time. You know, it kind of
ensures that those calls will be handling being
handled,
kind of effectively.
And if there are things missing, it's used
as a coaching tool and an opportunity to
follow-up with those patients. So, you know, it
it's what's really incredible when it comes to
AI, I mean, it you know, as well
as I do that it is
just growing by leaps and bounds
exponentially
at a really fast pace. And, you know,
there's a lot of competition in that space,
and that competition is gonna ensure that, you
know, the the applications in dentistry are just
gonna keep getting better and better, and that's
really exciting.
Yeah. I definitely agree. I think it's just
gonna keep,
continuing to advance
and advance and advance at a very fast
and and exciting rate for for the dental
industry.
Yep. No doubt about it. And that that's
something that benefits, you know, the, the team,
the dentist, the patients,
and and ultimately, the practice. And, you know,
having all of your practice utilize this technology
means that,
the the DSO
itself is going to increase in value as
well.
For sure. Something that I'm curious
about is
what excites you the most when it comes
to dentistry today, and what are some things
that are making you a little nervous?
You know, that that's a really good question,
Cameron.
I I think how
how I look at it is those same
issues I mentioned previously
both excite me and make me nervous. You
know, it's kind of all about whether or
not groups effectively utilize the systems and strategies
that,
you know, to overcome some of the challenges
out there today. I think the best DSOs
and the best practices are gonna really harness
the power of great culture,
and new technology
so that they can, you know, not only
build a great team,
but also ensure quality of care and, you
know, profitability are are still maximized.
You know, I I think on the other
hand, the groups that don't prioritize
relationships with their team and patients,
you know, and build that positive culture, you
know, they they won't be able to retain
their most valuable resource, which is the the
people who make it all happen at the
practice level.
Those those groups are gonna really struggle to
grow,
profitability
while also providing great care. And if you're
not maximizing the potential
technology, you know, kind of on top of
that,
relationship,
piece,
then they're gonna struggle to attract new clinicians
who have gotten used to using a lot
of that technology in dental school or, you
know, out in private practice.
It's gonna be hard to provide the best
care, and it's gonna be hard to grow
revenue as effectively.
Yeah. I think it's one thing to, like,
have the technology
available, but it's a completely
separate thing to be able to implement it,
effectively
and and be able to use it effectively,
especially in, like, those huge, huge DSOs.
Yeah. Yeah. Absolutely. You kinda hit the nail
on the head. You know, it's not just
having the technologies.
It's really the implementation
and integration of those technologies.
And the bigger you are, I think, harder
it is to to really get,
buy in and compliance with all of your
offices and teams, you know? So I think
any practice
or, you know, large DSO has gotta have
a really solid plan in place,
to make sure that that initiative is carried
out effectively.
Definitely.
What do you think the most effective
qualities or characteristics
or things that health care leaders will will
need going forward in order to be successful,
in the next maybe 2 to 3 years
in the future?
Well, you know, I mean, you can go
back to those three things. You know, effectively
recruiting and retaining great teams,
you know, building great culture and, you know,
harnessing the
the power of, you know, digital workflows and
AI technology. Those are all, like, critical. They're
not optional anymore, like I said, but I
think something else that sometimes gets overlooked
is having the right mix of C suite
executives.
You know, some groups don't have any dentists,
in their C suite. And I think it's
a mistake, you know, having a dentist or
several dentists in your C suite who have
already successfully owned and operated multiple practices,
you know, then is to understand the operational
side, understand the clinical side, and and really
understand
what the,
what the teams need. You know, again, those
boots on the ground at the practice level,
if they're not performing,
you know, nothing happens. You know, a company
cannot grow if they're constantly,
you know, losing,
talented,
dentists and and team members. So having docs
in the c
suite who,
you know, understand what those needs are
and, you know, whose voices are heard
and, you know, are are able to collaborate
with the business executives.
That's, like, you know, critical.
On the other hand, you know, from a
business standpoint, and we talk about scaling
a company, you know, it's important to have
business ex executives who have already done that
with another large group or or even outside
of our industry.
So input from both parties
sometimes is lacking, I feel.
And, to really understand
the,
importance
at both the executive level
and
the practice level and to have both sides
kind of understand what the other is trying
to accomplish or what the other
side needs,
you know, you've gotta have that person or
those people who kind of understand both sides
of the equation.
When you break it down like that, it
it definitely makes sense.
You want the input from dentists that have
been there and done that,
for that clinical side. But when it comes
to scaling and growing, like you've mentioned, you
also want the business people who have been
there and done that.
So I think that mix Yeah. Is really
important.
Well, you know, and and
at the end of the day, you're not
gonna have a successful business unless you have,
you know, success at the clinical level. And
you're probably not going to have all the
resources and support you need from the clinical
level if you're also not successful
from a business standpoint.
So, you know, it the 2 really have
to go hand in hand At the clinical
level, you know, if if you don't understand,
you know, what the what the purpose of
some initiative is or what the executives are
thinking,
you know, as they're trying to, like, do
yet another new new thing, then, you know,
you're gonna get irritated, you know, and that
leads to attrition.
Seeing new team members every time a patient
comes in can lead to distrust and, you
know, lack of confidence.
And that's you know, those things are on
a spiral and lead to a decline in
patient care and profitability.
So, you know, mutual respect between the clinical
operational
and sort of financial
side
of a company
is, is really important. And having the skillsets
necessary
to
kind of lead to effective collaboration
is is really important.
You know,
at the end of the day, as a
company, you know, you wanna, you know, make
sure that your offices are providing great care.
But in so doing,
they've also got to be profitable,
you know, thus increasing the value
of the DSO and and increasing the multiple
that they can command,
at their next recap. So it really takes
a balancing of the business
and clinical side of things to to really
be the best that you can
be. Yeah. You touched on,
the patient, which, you know, patient care is
the building blocks of of everything when it's
a comes to a DSO.
I think a lot of times, we kinda
just focus on, like, the business side of
DSOs and dental groups.
And sometimes we overlook
kinda
just how important
providing topnotch patient care really is because
if you have
a 1,000 practices in your network, but they're
not able to provide the type of care
that a group that has 10 practices is
practices does then Yeah. You're gonna lose business
to the smaller DSO just because they they
provide more to the patient.
Yeah. You know, that that is so true,
Cameron. And, you know, if if you're so
focused on spreadsheet that you kind of forget
the human element and you forget
or kind of devalue
the relationship capital,
then, you know, again, you're just gonna go
down a bad path where, you know, you've
got unhappy team, unhappy docs. And, you know,
if they're not happy, patients aren't happy. If
they're not happy, they're probably gonna leave. And,
you know, I I mean, I've seen that
happen before. It's it's just,
so important to you. And I've also I've
heard,
you know, leaders use one of my least
favorite words
when it comes to, you know, appreciation of
of your human capital.
You know? Oh, sure. We can backfill that
position. No problem. You know, for for me,
it really minimizes the importance of of the
expertise,
you know, the relationships
within teams and with patients
and, and really the importance of continuity within
a practice,
You know, the the attrition
part of that equation, I think, is the
most costly
thing in an individual practice
or in a company,
especially now when it's so difficult to, you
know, replace,
you know, essential team members or doctors.
Absolutely.
Well, I wanna thank you for joining us
today, doctor Arnold. It's been a pleasure speaking
with you on these dental topics,
and I look forward to connecting again sometime
in the future.
If any of our listeners are interested in
contacting doctor Arnold
directly to to talk about
some of the things we discussed today, his
email address is doctorarnold@smilesbyarnold.com.
Thank you all for listening, and we'll see
you in the next one. Thanks, Cameron. Have
a good one.