Hello. This is Ariana Portelatin with the Becker's
Dental and DSO review podcast. I'm thrilled to
be joined today by Stan Kinder, the president
and founder at Everything DSO.
Stan, thank you so much for being here
today. Sure. Well, thanks for having me. I
appreciate it. Yeah. Definitely.
To start us off, can you introduce yourself
for our listeners and tell us a little
bit about your background? Yeah. Sure. Absolutely.
I've been a health care guy my entire
career.
I started working
with the dental profession as far back as
the early 80s. I actually
started
a practice from scratch
in partnership with the dentist,
had an indirect ownership interest in the practice
through a small management company.
We grew it to three practices
and I went on from there
to
basically
do
management consulting,
traditional brokerage, dentist to dentist transactions.
And I spent about fifteen years
working for several different DSOs and senior executive
roles
doing
M and A business development.
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?
Sure. Well, I think,
one of the big ones in the DSO
space,
specifically
has been,
initially,
as the DSO phenomenon began to grow and
expand
fairly rapidly,
the primary driver was the ability for
the institutional investors to take advantage of the
arbitrage.
So essentially,
by practice is low, aggregate them
under the umbrella of a DSO
and then look to
recapitalize
either to a larger private equity fund or
a strategic buyer.
And that led to
a tremendous amount of institutional
investor interest
and rapid growth of the DSO phenomenon.
And then over the last couple of years,
as
the cost of capital
increased with the rapid
escalation in the interest rates,
the DSO industry kind of began to change
from
focusing almost exclusively
on
the acquisition
arbitrage
inside of the ledger and moved more to
towards
operational performance and being able to drive
same store growth and performance at the individual
practice level.
Great. Yeah. Super interesting thoughts that you shared
there. Thank you so much for those. I'm
also curious. What are you most excited about
when it comes to dentistry right now? And
is there anything that makes you nervous about
dentistry?
I I think,
the the exciting thing is,
on the technology side,
the ability
of artificial intelligence to bring efficiencies,
both kind of the back office business side
of the practice
as well as in terms of
how practices
communicate
and interact with patients
as well
as
even into the clinical area in terms of
diagnostic capabilities. And I think we're only in
the very early
stages of
that evolution.
I also think there's it's going to be
interesting to see how
the DSO
market kind of evolves
over time.
One is
everybody I think is anticipating interest rates are
going to come down
and to
see how that
influences things.
There have been a couple of failed recapitalization
efforts
from some fairly large sized DSOs.
And it'll be interesting to see how that
changes going forward.
Yes. Yes. Super interesting. Do you have any
insights you could share us to what might
have led to those field efforts?
I think,
a couple of things. I think that
they weren't
performing as well
on the operational side
and so on delivering the kind of same
store growth rates that
they were interested in. Also,
the recapitalizations
have slowed
across private equity,
independent of industry sector.
Private equity historically
deleverages
their equity investments
with debt
and
obviously that's gotten a lot more expensive
over the last couple of years. And so
that's sort of
changed
their economic model.
And I think
there's also a little bit of anxiety
around
where the broader army is going,
the uncertainty around tariffs,
whether or not there is a pending recession
on how that might
affect the dental consumer.
So there's a lot of things
at play. Also,
as I'm sure you're probably aware and most
listeners will be, there's been a little bit
of a labor crisis
in the profession
over the last it won't really seem to
depend on it.
I saw a statistic recently that said that
close to 70% of practices
are actively recruiting for a hygienist.
And
there's no doubt that hygiene departments
are a significant
driver,
the ability of
general practices to be successful.
Yeah. Yeah. All of those points make a
lot of sense for for what you were
talking about. It it'll be interesting to see
how things continue to play out in the
DSO field with the economy and the labor
shortages and such. So, yeah, we'll definitely be
keeping an eye on that for sure.
Last question here for you. What will the
most effective health care leaders need to be
successful in the next two to three years?
I think one is how to
integrate and leverage pathology,
because I think as I said, I think
we're in the early stages of that, and
I think there's
really almost any lending opportunities
to create
improvement.
The other thing is I think that
there certainly has been a generalized
trend in the DSO
industry to move towards
a more
dentist friendly business models.
And
I think that that's
the right way to go because ultimately
the individual dentists
at the chair are the engine that drives
the entire business.
And
successful DSOs need to find a way
to
support
and develop
their provider, Tedra.
All right. That is all I have for
you today, Stan. Thank you so much for
joining us today. Been a pleasure speaking with
you, and I'm looking forward to connecting with
you again in the future. Sure. Thank you
so much. I appreciate you having me. Yeah.
Enjoy the rest of your day. Bye bye.