The Group Dentistry Now Show: The Voice Of The DSO Industry – Episode 28

Two technology experts, David Danielson of Henry Schein One & Tom Barberio, CIO of Thinc Forward & Eastern Dental, join the show to discuss DSO technologies in 2020. We discuss how technology was leveraged during the shutdowns, how it was utilized during the reopening process, and how it is being used now.  The group discusses technology challenges and how to position your DSO to fully recover from the economic impact of the pandemic. We highlight what is the most important data for your DSO right now and what new technologies are on the horizon for dental practices and DSOs. If you want to understand data driven decision making and all things technology, this podcast is for you!

Our podcast series brings you dental support and emerging dental group practice analysis, conversation, trends, news and events. Listen to leaders in the DSO and emerging dental group space talk about their challenges, successes, and the future of group dentistry.

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FULL TRANSCRIPT

Speaker 1:

Welcome to the Group Dentistry Now Show, the voice of the DSO industry. Kim Larson and Bill Neumann talk to industry leaders about their challenges, successes, and the future of Group Dentistry. Visit groupdentistrynow.com for more DSO analysis, news and events. Looking for a job or have a job to fill, visitjoindso.com. We hope you enjoy today’s show.

Bill Neumann:

And I’d like to welcome everyone to the Group Dentistry Now Show. I’m Bill Neumann. And in this episode of Group Dentistry Now we’re going to be talking all things’ technology in the DSO space. So we have two technology experts that are well known and have been in the industry for quite a while and actually outside the industry in technology. So we have Tom Barberio. And Tom, he’s the CIO of Thinc Forward. So Tom welcome.

Tom Barberio:

Thank you, Bill. Pleasure.

Bill Neumann:

And then we also have Dave Danielson, and he is the senior product manager at Henry Schein One. So Dave, welcome.

David Danielson:

Thank you. Welcome. I’m glad to be here.

Bill Neumann:

Yep. Thanks both of you guys for being here. I’ll give some introductions, give you a little bit of their background, and they can talk a little bit about their organizations that they work for and represent. So let’s focus on Tom first. So Tom is the CIO of Thinc Forward, and Thinc Forward works with many DSOs in the industry. And Tom can get into that a little bit more. One of them in particular is Eastern Dental. He’ll talk a little bit about that organization and their geography and how large they are and some of the other groups that they work with.

Bill Neumann:

So Tom has 18 years experience in delivering technology solutions in a variety of industries. So not just dental. Dental is one of them, but medical financial services, pharmaceuticals and IT consulting, broad industry experience in many different size organizations from Fortune 500 all the way down to Fortune 100 companies. His dental experience is really interesting and vast. So system design and integration, DSO build-outs, DSO M&A, Denovo build-outs, IT and executive leadership, digital radiography integration, and IT process and change management. Tom has a BS and a master’s degree in computer science and info technology.

Bill Neumann:

So let’s talk a little bit about Dave’s background. So Dave again is the senior product manager at Henry Schein One. He has 20 years experience in software and technology. He’s worked for companies like Simon-Tech Corporation, Panasonic North America Control4 really to improve products and services that drive amazing results. He again is a senior product manager for Henry Schein One specifically for Dentrix Enterprise, passionate about improving dental group practices, velocity and growth and effectiveness. Dave’s education includes a master’s in business administration from Brigham Young University and undergrad at Utah Valley University.

Bill Neumann:

What a mouthful, both of you both vast experience. So I’m really, again, happy to have you here. I think our listeners are really going to get quite a bit out of this. So why don’t we start with Tom. Tom, tell us a little bit about the organizations that you work for.

Tom Barberio:

Yeah, absolutely. Thanks Bill. So what we primarily do is we provide a pretty large suite of technology services from everything in the executive consulting space, CIO outsource consulting space all the way down through integration services down to the help desk level. Primarily, we work with a lot of large size and midsize DSOs. That’s kind of a little bit of a relative term nowadays. Midsize DSOs can range from five upwards of 65 to 100 locations. And then we have larger DSOs that have several hundred locations. And we’ve done a lot of integration, consulting services, getting them really into the current century and making a change. DSOs have done a lot of technology upgrades and changes in the last three to five years. And the landscape’s a lot different than it was. And now we’ll talk more about that later, but it’s always evolving.

Bill Neumann:

Yeah, I’m sure during this COVID crisis, the pandemic with shutting practices down and then reopening them and in different stages and possibly if you’re over different States that process, which we’ll talk a lot about. Well, thanks Tom for the background. We mentioned one of the DSO that you work with is Eastern Dental.

Tom Barberio:

Correct. Yes. Eastern Dental is a fairly large multifaceted DSO practice, primarily East coast based in the state of New Jersey, but they’re more new larger size DSOs, some very large practices that are running specialties as well as managed care and other services out of that.

Bill Neumann:

Great. Okay, Dave, you’re you’re up. So let’s talk a little bit about Henry Schein One. I think just about everybody probably listening or watching this podcast knows Henry Schein. Let’s talk a little bit about Henry Schein One and what Henry Schein One offers.

David Danielson:

Perfect. So really briefly, when we start thinking about Henry Schein One, we’re really a part of a joint venture between Henry Schein and Internet Brands. So we’re bringing a whole set of technology capabilities together from those two bigger parent companies. Obviously we have a very strong footprint in practice management with brands like Dentrix and things like that. We also have a lot of experience and exposure with our PRM type products, Patient Relationship Management, of which we have a variety of providers of those types of capabilities as well. And so a lot of the process of that integration work is something that’s top of mind for us. We want to simplify the integration challenges.

David Danielson:

Tom and I, we sit on some boards together really talking about the challenges that face DSOs around just integrating technology. And so part of this joint venture is to start solving that problem. We’re a global company. We have footprints all over the world. And so we continue to grow and expand. We have our eyes set on being the largest dental technology provider in the world and will continue to go down that road. So this is a really, really great time to be focused in on that space. And so we were really, really excited to see what we can do to really help practices out.

Bill Neumann:

Great. Thanks for the background, Dave. And I think that’s something we’re going to talk about in this podcast because technology is pretty vast, right? I mean, in tech, what does that even mean? Its different things to different people. But let’s talk a little bit about technology and how it relates to COVID. So I kind of wanted to focus on the … back in mid March when practices started to close down or just remain open for essential dental care. Let’s start with Tom. How did you as a CIO really deal with that situation, and how did you leverage technology? And you can use the Eastern as an example, and then certainly some of the other organizations that you work with as well.

Tom Barberio:

Yeah, absolutely. I’ll say this. It caught everybody by surprise, right. I remember kind of sitting in late January, early February it was kind of … COVID was a thing, an international audience here was a lot more prevalent, not so much in the States. And it was like, okay, I don’t think we’ll really get to that point, but come March we saw a pretty rapid decline pretty quickly when the state started having these stay at home orders and shut downs. The very first thing that we actually saw happen, which was very interesting is because there was a lot of guidance coming out from local dental boards as well as the ADA and things like that, trying what to do. So the initial reaction was there was a lot of panic, right? A lot of my clients, they didn’t know what to do. It was, well, are people going to come? What are we going to do?

Tom Barberio:

So on the technology side of it, what we actually did, we were utilizing technology to really look at what did we see as a decline of what was happening. We started running analytics and metrics after the first week of March into the second week of March to see really what was the patient no-show rate and cancellation rate. And then basically what that allowed the operations folks to do was to really take a look and say, okay, here’s where the trends are going. And then by the time the shutdown orders really kind of came into effect, which was really the middle of the month, they had some good solid data to really make some of those decisions.

Tom Barberio:

And we really were using data analytics to drive those decisions, to decide when you’re in a multi group practice, right, it’s a little different than when you’re a solo dentist. A solo dentist, if they shut their doors, it’s their entire revenue stream. In a group practice DSO, you have a little bit of flexibility where you could say, okay, I may have multiple practices in the same geographic area. So instead of having three or four or five of them open, maybe I’ll go down to one or two. And that was really what was done in the really early on of really running that data to see where were the patients comfortable coming in, and where could you realign them so you could kind of shrink the footprint temporarily. And that was really what we started doing in March until really through May and into the beginning parts of June, but March is where that really started.

Bill Neumann:

Yeah. And you were able to do that. And so did that also help as far as how many people you actually even scheduled from an HR standpoint, what dentists were [crosstalk 00:10:23]?

Tom Barberio:

Actually, it was staffing levels, right? So basically in a pretty large distributed scale, what we tend to see is, this was before some of the government furloughs and loans and stuff like that came out, we really just had to look at what was the patient volume versus what was the chair capacity, and what could we do with how many people, right. And then it really became a big math equation for X amount of people that had to kind of stay employed and stay on the books on a regular basis, how much patient volume were we able to accommodate versus how much you couldn’t. And then that was a very ebb and flow type of … it was very variable. It was something that that data had to be looked at pretty much almost on a daily basis for a while, and then more on a weekly basis to make those types of executive decisions from a financial perspective.

Bill Neumann:

Really interesting. Dave, so as far as what Tom was dealing with, I mean, what were you seeing across all of your client base? I’m sure it varied state to state, but I mean, is that similar? I mean, was there anything that stood out? And then how did Henry Schein One and really working with Dentrix Enterprise, how were you able to kind of assist these DSOs? Because really it’s thrown around a lot, right, unprecedented, but it really was. Nobody’s ever experienced this before. So how were you able to take maybe even measure data that you really never looked at before or had to look at before? Talk a little bit about that.

David Danielson:

Yeah. So one of the things that was a huge advantage is that we have such a broad variety of portfolios that we were able to tap into data to help customers make decisions as well. And I wouldn’t say that we were driving the same types of analytics, although they were pulling it out of our systems in a lot of scenarios as Tom can attest. But I think what really became interesting is after the supposed two week vacation that people thought they were going to get, that just never stopped coming, people started getting a lot more serious about trying to figure out what the new paradigm was going to look like. And I think one of the primary concerns as they started swinging back open was really around patient communication and the importance of getting people back in the door and comfortable and identifying the ADA best practices, and how are you going to implement those. And there are a lot of behind the scenes conversations between all levels of expertise.

David Danielson:

Some of the client base for Dentrix Enterprise is a little unique, because although we support a large number of DSOs, we also support a large number of health centers. And so the health centers, they saw a very different behavior during COVID because almost all of their patients are emergency patients. I mean, there’s a lot of different things happening there. And so we ended up seeing a lot of maturity in the health center space around documentation because they know that at some point in the future, they’re going to want to know we lost these patients due to COVID. And we want to come back and report on that later, either for future grants or future protections or funding or any of those other things.

David Danielson:

So we started seeing people really start to mature the way that they wanted to track and manage how they’re breaking appointments, what was happening with those appointments, what was the impact from a financial and from a velocity standpoint. And so those are some of those kind of bigger areas where I thought was super telling was … and I really tip my hat to a lot of our customers because they really went to work and they came up with really great conclusions. And I’d sit on a call with somebody who’s on the East coast and jump off that call and jump on with somebody who’s on the West coast, and they’re all coming to the same conclusions almost independent of each other. And I almost wish there was more conversation at a community level.

David Danielson:

That was one thing that was a huge takeaway for me was, we weren’t set up to talk to each other from a practice to practice. Now, if you have a relationship, they were calling each other, but I mean, I’m still having people that are operationally focused reaching out saying, how are you handling this? How are you saying no to patients with COVID symptoms? And so there’s a lot of new, what I would call the new norms, right? The new operating procedures that people are still navigating. And they have best practices, but I think it’s still becoming a little bit sharper as people are realizing, Hey, I need to get back to a new norm. And this new level of performance is different than it was pre-COVID. And so we’re still looking at optimizing in those categories.

Tom Barberio:

I was going to say something. I want to tack on to what David said. He hit the nail on the head, what we really saw, and I know we were focusing more at the beginning of COVID, but as COVID kind of wound down, and I don’t want to use that word lightly because I know we’re seeing some flare ups in some areas again recently, the process changed. It’s a very different process of just from an intake process of how you’re processing a patient coming in that door as we sit here in the middle of July versus what was going on in January or February. Right. A lot of my clients really got to the days of where you don’t have 30 or 40 people or 10 people sitting in the waiting room anymore. Right. They’re waiting out in their cars and they really had to utilize technology, may it be through, as David mentioned, the practice outreach and the tools.

Tom Barberio:

There’s various tools that are out there to do that via the text messaging or things like that to say, Hey, I’m ready to check in now and come in. One of the biggest things, actually, that was interesting, and then David probably can attest to this, one of the number one requests I had from all my clients pre-COVID was, we want to go to more online check-in and kiosk-based checking models in a lot of dental practices. Now, everyone’s taking the kiosks out. Every day we’re getting work orders of, put a plastic bag around that and take that out. And everybody wants to be able to do automatic check-in and things on personal devices to keep it on low touch. So really the process has just dramatically changed. And usually in this space, that’s stuff that you see over a period of years, and we saw this happen over a period of weeks to be quite frank.

Bill Neumann:

Really interesting. So that leads to the question you had started to answer it already, Tom, but as far as reopening, so mostly all the practices, if not all the practices in the country have reopened to some degree and hopefully most of them are completely reopened. And California is shutting some things down, although dentistry doesn’t sound like one of them yet, which is good, just great to hear. But tell me a little bit about reopening process, and I think a lot of it has to do with scheduling. So you have a bunch of patients that for a month and a half, two months we’re on the books to come in for recall, all of a sudden they’re canceled. So how did you handle that, Tom?

Tom Barberio:

Yeah, that was an interesting topic, right. I saw this actually, and believe it or not, this was a little different depending on the region of where you live. Right. I would say the Northeast handled this a little bit different than the South and the middle part of the country, because what we saw is we kind of saw staggered opening times that was going around similar to how we saw staggered close times. I think the commonality though is what we saw is that basically in a multifaceted practice, the number one thing that did not happen during COVID was what they would call non-elective and hygiene type procedures. Those were pretty much universally shut down throughout the country and most of the area from what we saw. So we were seeing the more routine and emergency dental procedures.

Tom Barberio:

And even though a lot of the practices were still open for emergency care during COVID, there was months of backlog from that kind of two and a half months’ shutdown. So during the reopening process, it really was again using data to say, okay, what type of appointments need to be rescheduled? And what has to come in first, second and third, and how much chair time can be allocated to it.

Tom Barberio:

The other thing too, which was a real struggle in the dental industry, some of my colleagues on the medical side and stuff this was a little easier is, dental was never used to acquiring PPE. This was something that was a shock to the system. So that actually was a factoring into the reopening of saying how much PPE could a practice or a group get. And then how could they stagger that to be able to do certain types of procedures and kind of all had to kind of be melted together. And I don’t think anyone had a perfect science of it. It was really kind of a day-by-day, week-by-week figuring out what works best depending on the region.

Bill Neumann:

Yeah. Great point on the PPE and it’s still, I mean, to be determined, right. I think the masks seem to be less of a shortage. I’ve heard some rumors on gloves, and then of course there’s aerosol management, which isn’t PPE, but it’s something that maybe wasn’t quite as top of mind as it is now. So all those types of things are really interesting. Dave, let’s talk a little bit about, again, reopening. Let’s focus on that. So we talked about technology and how it helped assist with closing and then handling emergency only. But what did you see as far as … was scheduling a big deal? Was that a primary focus when you reopened or what types of technologies were used and did that vary geographically? Because it sounds like with Tom, it certainly did.

David Danielson:

Yeah. I would say scheduling was probably one of the biggest drivers of just trying to figure out how to get an appointment book back on track. Right. And I think for a lot of … it was that challenge of finding people that were willing to come back in combined with the backlog. So you’ve got a pent up demand of people that all want to come back, but some of them are not quite ready because they wanted to be warmed up to coming back in, meaning, are you following best practices? Are you using good safe procedures? And some of those things. And I think it took some time for people to kind of build up that confidence again. And I would say nationally, I think the confidence is pretty good because we’re starting to see more solidified numbers across the board. Right.

David Danielson:

But I would say people respect dentists as being medical provider and having deep expertise. And it was one of those areas where you’re trusting them to make good decisions on your behalf, and it’s that trade off between private public, where you’re going out. Some people hadn’t left their homes for weeks, and now you’re thinking, Oh, my first place I’m going to go to is the dentist. So I think there’s some trepidation with that on top of it. So I think those were, from a technological standpoint, what was really challenging. And I find this for a lot of the practices we talked to, it was knowing which of the patients to get queued up and which ones not. And I think it was really hard fought battle for a lot of practices trying to get that sorted out.

David Danielson:

It was a lot of phone time for a lot of the practices I’ve talked to. They did a lot of … they ran their emails and their text messages, but at the end of the day the ones that were filling their books fastest were the ones also picking up the phone and helping people feel comfortable with getting back in. So it was a really multifaceted strategy to make those decisions. And I think that that’s one of those areas where from a technological standpoint we learned a lot of lessons as a technology creator. We looked at that and we thought, wow, we need to do a better job in some of these categories because being able to pivot and change things on the fly was really challenging.

David Danielson:

And even right now we’re seeing customers, they’re challenged with still juggling around their appointment book schedules. How often is this operatory going to be open? Are we going to be open for 10 hours today? Are we going to be open for 12 hours today? Are we going to be open for six? And I think there’s some debate about what the right balance is and how many providers do you want in a single operatory. And so you’re starting to see people really shift those loads around to get back to normal capacity levels. And there’s a lot of creativity right now from a scheduling standpoint. I think it’s still ongoing. I think that will be for the next couple of months.

Bill Neumann:

Yeah. This ties in. You’re talking about making patients feel comfortable to come in, but what about … and were groups leveraging technology for this? Because I talked to a lot of groups, the issue wasn’t just patients, it was also employees. How comfortable did they feel coming in? So you may have had the patient buy in, but some of the employees weren’t comfortable for whatever reason from a safety standpoint, or maybe they were making more money on unemployment, so they weren’t coming in. So was there employee communication issues or was that something that was helpful in leveraging technology that way?

David Danielson:

That was really unique across the relationships between providers and their staff or the DSOs and their staff. And it was really interesting because I talked to some that they basically said, Hey, come back. And everybody came back. And then I talked to others that was like, you’re coming back or you’re not coming back. So it was a little bit more of the ultimatum. We’ve got to get back to work. And so it’s very interesting you bring that up, because from a global national perspective, it really came back to having great relationships. And I think that dentistry is built on great relationships. It’s the relationship between the staff and the patients and the provider and the patients and the provider and their staff. And I think those are something that when you look at that in the big picture I don’t think we could measure that as much as we’re seeing now, where people … that was dictating how fast people were coming back. And I think it’s a very interesting kind of a sign around how important good relationships can be in a business context.

Bill Neumann:

Yep. It was just very interesting to your point. It probably had a lot to do with culture of the DSO or the group relationships, but communication as well.

Tom Barberio:

The region [crosstalk 00:25:56] depended on where you live. It dependent on where you live, because you had different States were a little bit more liberal on people coming back with regulations and stuff. So there was definitely a lot of regionalization to that going on.

Bill Neumann:

Yep. That makes a ton of sense. I know that there’s some DSOs I talked to that still are short staffed because people haven’t come back for a variety of reasons. So let’s talk a little bit about, so do you think and again, we talked a little bit about this, but I’m going back to Tom, challenges during reopening. I mean, what have you seen? And again, maybe we put this more on a technology … I mean, we’re not going to take technology out of it, but what are the biggest challenges you’re seeing now? Today, if you had to say, Hey, these are the couple of things we’re still struggling with at the DSO as I work with, what would you say those would be?

Tom Barberio:

I think the biggest thing out of the ones that I work with, that’s kind of been uniform across the board in addition to the scheduling, like we had talked about, I think is really for them trying to keep a cadence going of forecasting. I think that goes for forecasting, not only from the scheduling side and the financial side of the house, but also what their spend is. We’re seeing a lot of ups and downs because there’s supply changes and things like that too. But I think their biggest challenge is really understanding, okay, we might be okay for this week or this month, but how fast is the ramp going to be? Because at least in the bulk of my clients, and Dave may have a different perspective, I don’t think anybody could say they’re at 100% pre-COVID level.

Tom Barberio:

Maybe in the medical space and the ones that are more health clinics, that might be the case, because they actually are probably above 100% of the pre-COVID levels in that public health sector, but in the private side of the house and in the DSO side of the house, nobody’s at 100%. Right. So I think that the big question everybody has is, okay, how long is it going to take to get from 70% or 80% back to 95 or 100? And what does that new 100 really look like? Because I think there’s some question out there of, is the new normal, the same 100% of what it was in the past normal? Because there’s economics to that, not only from a financial perspective, just difference in sterilization techniques. And an example in the state of New Jersey they have limited the amount of time that you have to have between patients in the operatories for aerosols to dissipate and things like that. So that’s having an impact on overall timeframe.

Tom Barberio:

So I think the big question and the big struggle everybody’s asking now is, yes, things will return to normal and people and staff will come back, but what does that ramp look like? Because right now it’s kind of a paper exercise, but there’s no tried and trued method. And I think that’s the number one angst. If I were to ask any of the CEOs or any of the executives of the larger DSOs, they’re like, I just can’t tell you how quick the ramps going to be because it’s very fluid.

Bill Neumann:

Really interesting. Yeah. So what does 100% really mean? What does it look like? Is it different procedure mix? What are our margins look like? Is it more patients? It’s-

Tom Barberio:

Or is it more patients? Is it less patients? How does it all tie together? And I think that’s what everybody’s trying to understand.

David Danielson:

And I would agree with that, Tom, almost 100%. I mean, for me the more structured and more organized, the faster they got to a certain level, but when I talk to different practices and I ask them, where are you guys at from a claims’ volume, from a production perspective? The ones that I’m talking to they’re hitting that kind of low 90s mark, and that kind of feels like their new norm for a while. And when we’re talking about it, we’re thinking maybe into December, we might be at that stage where that’s kind of the new norm until things really change for the environment. And so I’m kind of seeing, if you’re a best of breed DSO, and you want to know how you’re benchmarking, now, depending on state and depending on region, you guys know that it’s very different, but consistently the ones that I felt like are doing the best they’re in that low 90s production rate compared to what they were before.

David Danielson:

And so you’ve got to think about, well, what do we want to do? How do we want to make up that difference? Or do we? Do we want to have a change in staff strategy? Do we want to have a change in provider strategy? Do we want to have longer operatory hours to kind of get those … how do we want to leverage those investment assets that we have? Those are the types of conversations that I’m hearing more and more on, do we want an additional provider and then do evening work to get to those numbers. Right. And so it’s starting to be those types of trade offs. I think people are trying to figure out, but yeah, when I look across the sea of practices that I’ve talked to and interviewed, I would agree with Tom.

David Danielson:

I mean, they’re ramping, they hit that 70, 80 mark, and then they really start to plateau up in those low 90s. And those are the best ones. I mean, that’s where we’re kind of seeing it. So if I was out there, if I was a DSO and I had questions about … if I’m not hitting that, then I’m going to start asking myself some hard questions about, what are we doing and what do we need to do to get to those levels. But that kind of feels like the new norm at least for the next few months as people are kind of sorting that out.

Bill Neumann:

So that’s the benchmark. Well, let’s talk a little bit about, I’ll throw this at you again, Dave. So this is, as far as DSOs versus solos do you feel, and then Tom, you can answer this as well, I mean, do you think the DSOs are positioned better to recover more quickly, whatever that means, quickly? I kind of look at the solos and I kind of think of, what kind of infrastructure do they really have, if any? What are your thoughts on that? I mean, do DSOs have an advantage? I mean, are they going to recover more quickly? Are solos maybe going to struggle a little bit more and maybe will that add to, if so, will that add to maybe the acceleration of the consolidation in the industry?

David Danielson:

Ooh, that’s a loaded set of questions all combined together. Let me tackle a couple of them.

Bill Neumann:

I asked you the of tough ones.

David Danielson:

The first one was, do I think that DSO does have an advantage? In this context they absolutely have an advantage. I mean, they have better visibility into what they’re doing on match. They have better visibility into what they’re doing on performance metrics across locations. They know which locations were going to be stronger than others, which ones I reopen faster than others. If you’re a solo practice, you kind of get what you’ve got and you turn it on and you hope for the best. But where I feel like for a lot of the DSOs, they could ramp very strategically back up and going after the lifeblood locations that were just higher performing brings them to a different level of profitability right out of the gate.

David Danielson:

So I think there’s some definite advantages in some of the data and analytics that they’ve put in place. Not that solo practices don’t do any analytics, but I do find that a lot of the more sophisticated DSOs, they spend a lot more time looking at that slicing and dicing their data to make good decisions there. As far as, where do I think it goes? Do I think it’s going to accelerate the consolidation? I think people are going to pause and take a look, because what we were doing for valuations of practices before is not going to be the same going forward. It’s a lot harder to decide if that’s a good practice or a bad practice, because you might be in a more risky environment. And I was talking to an organization the other day, they just acquired a practice from another DSO, and part of their rationale was it was easier for them to support it because it was closer to their region where they have a core infrastructure to support it.

David Danielson:

So the regional DSOs I think are going to do better because they know their States, their infrastructure, their limitations better. Some of the national ones, I don’t know how they’re going to see it because we’re just not seeing the same type of M&A activity that we saw pre-COVID. Lots of talks, I’m not seeing a lot of trigger polling. And so I think that’s going to be something that we’re going to have to determine. I mean, there are those advantages that come from bigger organizations. They tend to weather storms a little bit better. And so you just start to see some of those, I don’t know, tailwinds kind of pushing that way, but as of right now, nobody’s getting out and nobody’s shutting down. And then we’re hoping people keep that way. We want to keep everybody employed and going. And I think that’s going to be something that we’ll just start to see over the next few months if M&A starts really kind of ramping back up.

Bill Neumann:

Well, Tom, I’ll let you answer that question as well as just as far as, do you think DSOs are positioned better? But then, I’ll add this to it. What data are you looking at right now as a CIO? Because really, if we figure DSOs may recover more quickly, if that’s the theory, is it because they have access to data that maybe is out there, but the solos just aren’t analyzing, right? They just don’t have the bandwidth to do it, or they don’t have a CIO that knows what to look at.

Tom Barberio:

It’s a little different. Right. And I think I’d answer the question maybe a little bit differently than David did because I’m actually pretty involved in the M&A market. What we’re actually seeing now in kind of post-COVID is, we’re seeing a lot of a downturn of, I’ll say, the aggressive DSOs that we’re kind of the ultra non-conservative ones that were in a buy, buy, buy mode that you saw before that. That’s definitely slowed down. But what we’re seeing now is a ton of debt consolidation. And it’s an interesting topic because I work very closely with a lot of vendors and firms that do a lot of debt consolidation and debt reconstruction. One of the big things is, you kind of have three different models in the DSO space, right?

Tom Barberio:

You’ve got your private equity backed DSOs, you’ve got your private backed DSOs, which is just private money, and then you got your solo guys who what you kill, they own it all. So depending on where you fell in that timeline, and it kind of goes to your question of looking at the data, everyone was impacted differently. Some of your solo guys and people who have private money may have qualified for PPP money from the government during the shutdown. So they weathered the storm a little bit better on the financial side. Some of your mid size and larger DSOs that were private equity backed may not have qualified for those loans. So they were burning through cash at a much more rapid pace during the shutdown.

Tom Barberio:

So what we’re seeing now is, we haven’t seen anybody completely fall, but we’ve seen a lot of divestitures where certain groups may have split into multiple groups and things like that in order to offload some of that debt load. And where we kind of look at the data points of this it really comes down to looking at … it goes back to ramp, right? I think that it really looks at what type of procedures, how many procedures, and quality of care, because everyone’s taking a real good look at quality of care and trying to overlay that data of what those numbers look like is really, really driving that. And unfortunately some of the bigger guys are actually struggling a little bit more with that because they have a little bit more debt that they’ve got to distribute around versus some of the smaller guys might be a little bit more nimble and be able to do that. So it’s kind of a mixed bag, what you’re seeing out there right now.

Bill Neumann:

Okay. It’s interesting. I mean, I guess, we’ll find out more as we get towards the end of the year. Right? How things progress as far as who survives and who doesn’t or who thrives, I should say, and who doesn’t. All right. So we’re going to get away from COVID. Okay. So no more COVID talk, but let’s talk a little bit about something exciting. So what type of new technologies are on the horizon? I’ll throw this at Dave first, and then Tom can finish up, but what are you guys developing at Henry Schein One? What are you excited about? We hear a lot about AI, if you want to talk about that, but just in general what’s going on that you guys are like, Hey, this is going to be something that’s going to be a game changer, is going to help out. Again, nothing COVID related.

David Danielson:

Yeah. Yeah. I think there’s definitely a spring-boarded interest in capabilities around no touch environments. Tom alluded to this earlier. What once was a kiosk driven concept is now becoming a virtual waiting room type of a concept. I think we’re going to continue to see innovation all the way through that patient experience. I think we’re going to go … I think we’ll continue to innovate and see changes that are … I think it’s going to be low touch to no touch types of scenarios or touch your own device type of scenarios. I think we’re going to continue to see evolution in that front at least for the foreseeable future. There’s a lot of interest in AI technology. I’m glad you hit that one. Right now, one of the challenges is that AI is expensive to develop, and it’s a challenging balancing act of figuring out what types of AI are going to create the most value for practices.

David Danielson:

My argument right now is that I forecast a lot more automation. I think a lot more rules based decision making is on its way. I think that we’re going to see a lot of offloading of human decisions to machine decisions, and then go back and kind of review and say, Hey, was that the right choice, kind of in a more of a spot checking type of environment. I think that we’ll see more interaction technology. I continue to see that happening right now. One of the things I think that we’ll see over the next calendar year is, there’s going to be a movement towards shrinking the amount of time that it takes providers to put data into the system. I think that you’ll continue to see more headway in voice input or smarter ways of inputting data from the chart into the software.

David Danielson:

I think there’s going to be a lot of innovation in those types of categories because that provider time is going to become much … it was important before, it’s gold now. And I think that’s going to be one of those areas where people are really going to have to focus in on. We want to minimize the amount of time that we’re touching software in general. So I think you’ll continue to see a lot of areas in those categories where we’re really starting to push that automation area. And I think those are going to be some big wins particularly for DSOs as they scale, the better the automation, the more profitable they become. And I think that’s going to be a big push for them.

Bill Neumann:

Great. Thanks, Dave. Tom, last word on this. What are you excited about from a technology perspective?

Tom Barberio:

Yeah, I think what excites me the most is I think we’re finally going to see some process flow changes, right? Dental historically has always been a little late to the game with technology adoption. And I’ll phrase that with, you look at the evolution of practice management systems versus where the EMR bubble was. Medical always went first, right? They were behind financial services and other industries, and then dental would kind of always be in the rear. What I think we’re starting to see now is that the processes have to change. And I think that dental is uniquely positioned to actually do that a little bit quicker, because at the end of the day, the type of procedures that you’re doing in dental are not necessarily changing, but you have to work a little bit smarter, a little bit more efficiently and with less.

Tom Barberio:

So things that used to be kind of dragging people by the hair of, Hey Mr. Provider, I used to do this this way for 20 years, and now trying to get them to change that, has always been a struggle. That’s always been a struggle at a CIO role to get operational change. And I think what we’re seeing now is operational change is a must. And I think that they’re willing to embrace the technology to help accelerate that at a much more rapid pace than they were years ago. And not even talking about COVID, just in general, we’re kind of seeing a paradgm shift in the industry that they’re realizing that to be more efficient you have to embrace that. And I think we’re going to see a lot of work flow management tools that are really going to help kind of take of some of that decision making authority and make it a little bit more automated going forward to make peoples lives easier.

Bill Neumann:

Great. Well, that’s good news, and certainly exciting. I would just love to see more dentists embrace online scheduling. I mean, we haven’t even gotten there yet, but this is good. Listen guys, thanks again for joining us today. Dave, thank you, from Henry Schein One. Tom, thank you, Thinc Forward. The audience, I think, will get a lot out of this, and I can’t wait to have you both back on when COVID’s over, and we’re pass the new normal and back to normal.

Tom Barberio:

Sounds good. Thank you Bill. Pleasure.

David Danielson:

Sounds good.

Bill Neumann:

Thanks again guys. Until next time, I’m Bill Neumann, Group Dentistry Now.

 

 

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