Hey there, dental professionals and industry enthusiasts.
Picture this. It's October, and you're in the
middle of one of the most transformative
experiences of your career. You're at the Becker's
Fall Future of Dentistry Roundtable in the vibrant
city of Chicago, fresh off an incredible 3
days at the Hyatt Regency. Imagine yourself inspired
and invigorated
after attending captivating keynote sessions by none other
than the legendary boxing world champion and CEO,
Lila Elite, and the extraordinary
professional basketball player, Caitlin Clark. See yourself engaged
in lively discussions,
exchanging ideas, and collecting a stack of business
cards from fellow dental experts and potential partners.
You've networked with over 350
attendees and learned from more than 80 speakers
who are at the forefront of dental innovation.
You sat in on educational sessions exploring topics
that elevate dental care as a critical element
of whole person health. You've witnessed firsthand how
digital technology is revolutionizing
patient outcomes
and how both large DSOs and independent practices
are flourishing. Get ready to transform your career
and don't miss out on this incredible
opportunity. The Becker's fall future of dentistry roundtable
is from October 30th to November 1, 2024.
Get registered by going to beckersdental.com
and clicking on the events page. Hello. This
is Arianna Portallatin with the Becker's Dental and
DSO Review podcast.
I'm thrilled to be joined today by Ryan
McCosslin, the founder and CEO of Tailwater Dental
Partners. Ryan, thank you so much for being
here today. It's good to be here.
Yeah. To start us off, can you introduce
yourself and tell us a little bit about
your background?
Sure.
I'm Ryan McCossland, founder and CEO of Tailwater
Dental Partners.
We're headquartered in Nashville, Tennessee,
and we're on a mission to create the
best careers in dentistry.
We still have a long way to go,
but I'm really proud of the foundation that
we've built.
We just got started in 2021.
Today, we're a group that supports 9 practices,
7 in Tennessee, 1 in Kentucky, 1 in
Missouri,
and we have big dreams to continue to
grow this thing the right way for the
long term.
Great. Thank you so much for that.
First question here. What are some of the
biggest issues that you're following in the dental
industry right now?
It's such an interesting time to be in
this industry.
Between 2,010 and 2020,
there was just this acceleration
of consolidation
driven by low interest rates
and models that began to get traction
that really made sense
for practice owners.
But since 2021
and COVID
and the emergence of higher interest rates, right,
some of that consolidation
has slowed
and been tempered.
I believe that's a temporary pause.
The consolidation
train might be slowing down temporarily,
but most of the people who are watching
this closely
recognize the macro trends
are still at play.
There's still, I don't know, Ariana, a 170,000
some odd dental practices in the United States,
and about 30% of them have joined a
group of some flavor.
Lots of smart people
sort of argue about
where we'll eventually land as an industry,
but the range is somewhere between 50 70%
of those practices ultimately are gonna be a
part of a group.
So over the next 10 to 20 years,
it's gonna be interesting to see how this
plays out.
So the challenges
are are,
today really
driven for, you know, groups, for for for
DSOs.
Some of that is just
the pressure from
higher interest rates than ever before because so
many of them are private equity backed and
supported by leverage. And so that creates weird
short term incentives to grow as much cash
flow as positive service to debt. And then
I know is is making some
executives who lead these things a little nervous,
especially if they're on a timeline where they
have to exit in the next 12 to
24 months.
So that's a real challenge of the conversation
that's happening.
For Tailwater, I'm really grateful that we have
no timeline
and no finish line.
We're not a private equity backed DSO that's
on,
you know,
a path to consolidate as much EBITDA possible
and then sell it.
We really are trying to build something the
right way for the long term,
and that allows us to make long term
investments that might not bear fruit in the
next 2 to 3 years, but ultimately will
be healthier for our practices and our dentists
and their teams in the long term.
Okay. Great.
And I'm curious. What are you most excited
about when it comes to dentistry right now,
and what makes you nervous?
I think the war for talent
is being waged
today,
you
know, at the local level,
and that's an opportunity
and a threat.
There are fewer hygienists than there were 5
years ago and fewer assistants and more options,
frankly, for folks who have explored opportunities outside
of dentistry.
And what that means is that you have
to be good.
You have to do right by your people.
And if you lose somebody, it's harder than
ever to replace them.
So I'm both excited by
and
respectful of
that dynamic.
The groups,
the practices,
the businesses
that that are able
to create
great careers for their people are gonna win.
And the ones that are sort of focused
on short term results
and see their people and their teams as,
sort of cogs and wheels
and replaceable,
I think are going to,
that that that it's a hard time,
the operating dental practices like a factory with
interchangeable parts.
Mhmm. More than ever, the practices that I
think are earning the trust of their communities
and their teams
are, well, they have souls.
Because when there's fewer,
I guess, great people out there who wanna
do this work than ever before and there's
still a lot of them out there. I
just mean because, you know, you you've heard
about this post COVID. These people sort of
a lot of people have left the industry.
So, anyway,
the ones that are able to attract and
retain the best people will win, and that's
exciting
and also something we need to take seriously.
Okay.
If you had to think about, the next
few years and what that could look like
as far as workforce
shortages, when do you think dental practices can
start seeing some relief on those?
Yeah. There's a nursing shortage.
20 years ago,
we ultimately found equilibrium
with that.
I suspect that we will find equilibrium again
in dentistry.
I can't predict when,
but I'm really proud that we have been
able to retain
so many of our team through all of
this.
I believe we've won some hearts and minds
and the trust of our people at Tailwater
by prioritizing people,
patients,
and profits
in that order.
I've always felt like if we take care
of our people the right way, they'll take
care of our patients.
And if we take care of our patients
with good systems,
we'll be profitable.
And that's easier said than done. Right? We
need to put our money where our mouth
is. But,
for now, we haven't felt the crunch
or the the the same pressure that comes
with revolving doors of team members that, some
of the practices are suffering from.
But I don't know when equilibrium will return
for the industry, Ariana.
It will eventually,
but we're not there yet.
Okay.
And thinking about health care leadership right now,
what will the most effective health care leaders
need to be successful in the next 2
to 3 years?
A a a few different things.
More than ever before,
these these these groups that have grown,
need
to to watch cash flow and be really
careful with their capital expenditures.
They need to make smart investments
and make sure they're getting returned on those
because there's less margin for air than there
was
10 years ago. Now the interest rates are
higher for any practice or group that
has some debt on their balance sheet.
So we need to be smarter than ever
before
about making the right kinds of investments and
equipment
and people.
And,
the second is
I'm new I'm relatively new to dentistry.
You know, 5, 6 years, I've been in
health care my whole career.
But 6 years ago, I didn't know what
a DSO was.
And then I went to for
the first time in 2021,
and I've I've really
come to love
this industry
and and what's happening in this industry. Because
I think the winners are really going to
win here,
based on the macro trends I already described
before.
But
in order
to execute on this opportunity,
I I think we need to continue to
see these businesses as very human driven businesses.
I think too often DSOs
make decisions based on spreadsheets,
and we measure everything too. But the ones
that are gonna win, I believe, are gonna
make decisions based on people and principles
supported by spreadsheets.
Because I get I'm keep going back to
this talent thing.
You can run a good business with good
systems, but if you don't have the right
people bringing them to life,
that's not gonna work.
So I think
leaders in this space need to think
long and hard about the investment they're making
and make sure they're getting a good return.
And they all seem to prioritize their people,
and and and recognize that this is a
very intimate industry.
There were people work elbow to elbow with
each other in operatories and practices,
and they're working on patients.
There's this guy,
Danny Meyer, who has
nothing to do with dentistry. Do you have
you heard of Danny Meyer, the founder of
Union Square Hospitality Group? No. I'm not familiar,
unfortunately.
So Danny Meyer is the first person
to ever win a James Beard award.
He wasn't a chef.
He's a restauranteur.
He wrote a book called Setting the Table.
And he also, by the way, went on
to found he was one of the founders
of Shake Shack.
So he's just doing just fine.
But Danny Meyer in this book setting the
table
talks about hospitality and what that means to
him and his group of restaurants, and it
really resonated with me. And I think there's
some corollaries or parallels with dentistry.
He says that hospitality is when people feel
like things are being done for them,
not to them.
And I think too often the patient experience
in dentistry is one where people are feel
like things are being done to them and
not for them. And if we can flip
that and once again make sure these practices
that we're supporting retain their souls
in the culture
and the things that make them special and
respect in their communities,
That that can go a long way towards
patient experience and making sure people feel like
things are being done for them and not
to them.
Yeah. Definitely. Great points made there and, particularly
interesting in, the points made about what dentistry
can learn from hospitality and, the takeaway there.
So thank you for, so much for that.
And, yeah, those were all my questions. So
thank you so much for joining us today,
Ryan. It's been a pleasure speaking with you,
and I really look forward to connecting with
you again in the future.
Ariana, thanks for your time. Glad to be
a guest. Talk to you next time.