This is s Hatton with the Becker's Dental Pasta. So podcast,
I'm thrilled to be joined today by Elliot Zeal,
c e o of Select Dental Management. Elliot,
thank you so much for being here today.
Thanks for having me.
Could you introduce yourself and tell us a bit about your background?
Sure. Uh, my name's Elliot Zibell.
I'm the Chief Executive officer and co-founder of Select Dental Management.
I founded Select Dental with my, uh,
good friend who I've known since I was five years old, Dr. Jonathan Mason. And,
uh, we started the business out of, um, his experience, uh,
purchasing a practice, uh, growing it significantly, and also the challenges,
uh, that he had just managing the day-to-day administrative tasks. So, uh,
our goal when we started select was really to, um,
provide a differentiated alternative,
a a partnership model where we would really preserve that clinical autonomy,
which is really important to the, the high quality doctors that we support,
but also to, um, help those doctors really, uh, elevate their practices,
patient care, patient experience, et cetera, and to drive, uh,
long-term sustainable growth. So we launched the business in 2018.
Today we sit at, uh,
40 practices in eight states supporting about, uh, 150 doctors,
uh, 700 employees, and, uh, about, um, 200,000 patients.
Fantastic.
What a great opportunity to be able to start a business with your childhood
friend.
Yeah, no, it's, uh, . It's, uh, it, it it's funny that, uh,
when we see people that, uh, we grew up with and, and, uh, it's funny to,
to talk about how we're,
we're in business together now and it's worked out very well.
That's great. Thank you. My first question for you is,
what are the biggest issues you're following in dental today?
Yeah, I mean, I think when we talk about just the, the, the four wall, uh,
performance of practices, I think the,
the major thing I think we're all wrestling with is just the supply of
specialized labor, uh,
namely hygienists and inflation that we're seeing in, in labor costs.
And I think that's the main thing.
It's hard to find people and when you find them, um, you know, the,
I think the cost of labor, um, particularly in those specialized roles is,
you know, has, has inflated substantially, um, and just becomes continuing,
uh, to be a challenge to, to find, uh, the right people, uh,
and put them in the right seats. Uh, that's probably the biggest challenge that,
that we see at the moment. Uh, the second challenge is just, you know, I think,
uh, and it hasn't really manifested or hurt our business yet.
Maybe this is more of a, of a concern, but really the, the macro environment,
right? Um, you know, I think, uh, you know, certainly with interest rates, uh,
substantially higher inflation continuing to, um, increase,
uh, and now issues in the broader banking system, um, you know, I think, uh,
that's certainly something we're keeping our eye on. Again,
we have not seen that impact, um, you know, uh,
any discernible metrics that we track, like revenue per visit or,
um, cancellation rates, uh, et cetera. But, uh,
that is definitely something that we're keeping our eye on.
Interesting. And that sort of leads me to my next question,
which is what are you most excited about and what makes you nervous?
Yeah. Uh, from an excitement perspective, and we're excited, uh,
really about the, uh, organic growth opportunities that, that we are,
uh, capturing, uh, at scale in our practices and across our platform.
And I think a lot of those, uh, opportunities are,
are being created by leveraging technology and, and new technologies. And,
and I think it's, it's an exciting time to,
to see all the innovation happening in, in dentistry. Um, I think,
you know, not only are we seeing much better, um,
access to data and analytics via our own, uh,
proprietary data warehouse that we've, uh, created,
but we're also seeing the ability to take that data and not only just, you know,
um, push out scorecards,
but to actually drive automation of administrative tasks,
um, and, and to kind of free up our, uh,
team's capacity in the practices to really focus on the patients in front of
them. And so I think, uh, as we look out over the next, you know,
one to two years, we've got a pretty robust, uh, set of opportunities,
uh, to really drive, um, you know, improved care and experience and,
uh, you know, we feel pretty confident that we can, uh,
continue to grow our practices, uh, double digits organically on a,
on a same practice basis, which is our, our target over time. And, uh,
and something we, we've achieved over time and we are achieving, uh, y um,
year to date in 2023.
Thank you. And other, uh, any things there that make you nervous?
You know, ho honestly, uh, I mean, I think it's kind of a little bit, uh,
maybe linked to the, you know, the issues or, or the challenges of, you know,
labor supply and, and just general infl inflation macroeconomic environment.
But aside from, you know, those kind of external factors, I mean,
we feel very confident in our ability to,
to drive growth and improvement in, in our practices.
I think the only other thing, you know, we didn't mention as like an issue, um,
and I think this is not, uh, an issue for driving organic growth,
but I think will become and is becoming a challenge with driving acquisition
growth is clearly the, the cost of capital and,
and access the capital. Um, you know, I think that that at,
at the more institutional level have clearly, uh,
changed and cost of capital has gone up substantially and the amount of capital
folks can, can procure has also changed. Um,
and I think it'll be interesting to see how that really impacts multiples
for, um, you know,
kind of these tuck-in or kind of ones z two Z acquisitions that are the,
I think the, the primary drivers of consolidation in the industry. And, uh,
you know, I think there's, there's, um,
definitely some resetting that seems to be occurring and, and,
and that likely will continue to occur, you know,
over the near term as I think the, the,
the changes in capital availability and costs, you know,
trickle down through the m and a markets.
Thank you. My next question for you is,
what will the most effective healthcare leaders need to be successful in the
next two to three years?
I,
I think they're gonna need to have a real ability to drive organic
growth at scale, right? There's only two ways to grow, uh, a, a,
a dental group and one is through acquisitions. And, and I think, you know,
my perspective is that it's gonna be, you know, uh, harder to do and,
and probably less attractive than it was from a financial perspective. Um,
and then the second way is to drive organic growth. And I think, uh,
when we talk to other folks in the industry, um, you know, investors, et cetera,
I think there's certainly been a shift in more of a value placed on
ability to drive post affiliation, organic growth, um,
as being likely a major driver of overall platform
growth over the near and medium term. And I think,
I think people are starting to wake up and realize that the value of a,
of a dental group is not at all really driven by how quickly can you go acquire
things. You know, I think, uh,
it's really driven by how consistently can you,
uh, not only acquire, uh, or affiliate,
but how consistently can you drive, um, growth the right way?
How consistently can you drive best in class operating metrics like, um,
patient retention, doctor retention, team member retention, employee engagement,
patient satisfaction, um, in addition to organic growth, uh,
from a revenue and EBITDA perspective.
And so I think that those groups and those leaders that understand how to drive
that and can get the buy-in of their teams,
because I think the other challenge is, you know, it doesn't work to go and say,
Hey, we're gonna do this cuz it's gonna grow EBITDA or increase our margins.
Like there has to be, um, a tieback to your mission, vision,
and values so that people are really motivated by what you're trying to,
um, have them do. Because if they don't understand the why and why it's,
you know,
good for their patients and for their teams and for them and their practice, uh,
if they don't understand the how, if there's not accountability around it, um,
if there's not a scoreboard and you don't have the analytics platform to be able
to report on those things, then it's just really hard to drive, I think,
um, growth at scale and initiatives at scale. So to me, I think, you know,
the groups that get understand how to, I not only identify opportunities,
but really, uh,
drive buy-in and execution around them are gonna be the ones that really
differentiate, you know, over the, the near medium term.
And I think that will further solidify their value proposition in the
acquisition market, uh, you know, near term and over the long term as well.
Fantastic. Well, Elliot,
thank you so much for being here today and for your insights.
I look forward to connecting with you again in the future.
Great. Thanks for having me.