The Group Dentistry Now Show: The Voice Of The DSO Industry – Episode 115

Hey, I’d like to welcome everybody back to the Group Dentistry Now Show. I’m Bill Neumann, and as always, thanks everybody for listening in on Apple, Spotify or Google, or you may be watching us on YouTube, so. However you consume the podcast, we certainly appreciate it. Without a great audience, we wouldn’t have great guests like the next guest that we have. Little bit of background, I’ve known this gentleman probably going on a decade. An interesting backstory, I worked for a company that was about 90% in the medical publishing space and we were looking to launch a group practice magazine, DSO. I don’t even think the DSO term existed back then it was so long ago. And one of the gentlemen at the company knew this individual and said, “You need to go talk to Philip Toh.” At the time when he was at Henry Schein and, “See what he thinks about things.”

So that’s how Phil and I first met. I went in to Melville and had a conversation with Phil. I think he had maybe recently moved from the medical side of Henry Schein to dental. I can’t remember the exact timing, but it was something like that, and then soon after Phil was gone to start a DSO. So I guess that solidified that we were onto something, the right thing. And I guess he thought it was a good thing too because he started his own. So just cool how that all worked out. But it’s great to reconnect with Phil Toh. He is the President and the Co-Founder of The Smilist. Phil, thanks for being on the Group Dentistry Now Show.

Thank you for having me. No, I think that’s a wonderful story and really a great backdrop to just the opportunity that was out there. And so I’ve been looking at the DSO space for a long time. I started at Schein in 2004 and was in the group that sold two groups. And I remember, wow, this is a interesting little spot in the dental industry because I’m like, oh, it’s a separate division from the regular Henry Schein Dental Division that just focused on large and institutional customers. And what shocked me was how really nobody wanted the business.

And so it was a great platform for me to learn so much about it and for us to connect and chat about it and ultimately starting The Smilist. Because at the time, and I don’t know what the numbers are today, it was estimated that Henry Schein had 85% market share for DSOs. And I think back then they were called DPMs, Dental Practice Manager. And just over the years just really saw it grow. I mean, I remember when I joined, it was I think about $150 million division just selling merchandise, so no equipment, no technology, no service. And I think we peaked at around like $750 million. Can you imagine? That’s a lot of gloves, a lot of impression material.

So really saw it grow in many parts of the country in Florida, in Texas, in California, and said, “You know what? I think there’s an opportunity here in the New York metro area.” And so that’s when some friends and I got together and said, “Let’s see if this has legs.” And that was when The Smilist was born.

What year was that?

2014.

2014. Wow. Okay, yeah, a while back for sure.

Yeah. So that was when it was such an interesting journey because when we first started, the DSOs were just not the norm here in the New York metro area. And so there were many, many meetings that we would take with doctors and they would be like, “Well, what’s a DSO?” Well, they either didn’t know what A DSO was or they would have a negative connotation of a DSO.

Right. That time, 2014, 2015, if they knew about them, it was pretty negative. Correct.

And so it was a recipe for a lot of interesting discussions. So as you can imagine, we started from scratch. And so we would go talk to doctors and say, “Oh, well we have this DSO. It’s called The Smilist. We’re going to do this and this.” And then they say, “Well, how many practices do you have?” “Zero.” You can imagine how that conversation went. And we just spent a lot of time really building relationships, educating the market about DSOs as well as ourselves. And then in February, 2014, we met a dentist that said, “You know what? I believe in you guys. I know you guys are a startup. I remember when I started the practice.” And really took a chance on us. And it’s been a great partnership with him. He ended up staying. He was at a stage he was thinking about retiring. And so we got him to sign an agreement to stay with us for two years, but he ended up staying with us for six.

Wow.

And I think that for me, given that was our first practice, was really validation that we were onto something and what we’ve been doing, we’ve been doing right. Because like you said, sometimes DSOs get a bad rap and I think there’s many good ones out there that are trying to do the right thing. And I mean through a partnership like a marriage, you have ups and downs. And we certainly had ups and downs with him. But at the end of the day, I say actions speak louder than words because he stayed four years more.

I mean, he was adamant. He was like, “I’m going to do two years and then I’m done. I’m retiring. I’m going to enjoy life. My kids live out West. I’m going to go out there.” And he stayed with us. And each year we would ask him, “Are you staying or are you going? Are you staying? Are you going?” And then he goes, “No,” he goes, “I’m staying.” And that trend has held true for many of our docs today. Many of them are well beyond their employment agreements and they’ve remained with us because they want to, not because they have to.

Maybe before we get any deeper into The Smilist, because I really want to dig deep into the organization, how did you get into dental or how did you start with Henry Schein? Tell us a little bit about that.

So that’s an interesting story. It was purely by chance. My background prior to Henry Schein, I was in entertainment technology, kind of venture capital. I come from the West coast. And honestly I felt a little bit burnt out from work and so I thought business school would be a good two year vacation for me. So I ended up going to business school in Philadelphia at Wharton in their healthcare program. And even at the time, I had aspirations to go back to California. So I’d done my internship at Amgen, a biotech company doing marketing. And unfortunately after that summer, I was like, you know what? This isn’t really what I want to do. And so I was a bit lost in my second year.

And so every day you have CEOs that come to campus. And many times I was just after class going home. And so that one particular day I said, you know what? I’m going to see who’s coming, attend the session and learn about new company because I need to find direction. And coincidentally that day was Stan Bergman that came from Henry Schein. And so I went there, listened to the presentation, and it sounded interesting. I mean for me, perhaps because of my entrepreneurial spirit, I had a hard time with a lot of the jobs out there that said, you’re going to graduate, you’re going to do this for two years and then we’re going to rotate you and then you’re going to do that for two years. And my big fear was, well if I don’t like what I got rotated into? Then I’m stuck and two years of my life will have burned away.

And so what I really liked about Schein was they said, “Come on board.” And I said, “What am I going to do?” They’re like, “We don’t know but we’re trying to bring on good people and we’ll figure it out.” And I love that entrepreneurialism. It’s not for everybody, but for me it was, hey, I get to make my own job. And so that’s when I had joined the Special Markets group. Back then it was called Corporate Accounts and I just loved it. I made my own job every one to two years, got to learn the business and got to learn dentistry. I was one of these, they would group us into this bucket of these MBA guys that would be within Schein.

But to this day I have a very humble approach to things. And so I knew what I didn’t know and just really soaked it in in terms of talking to people, understanding distribution, understanding products, understanding customers. So earlier you had mentioned we connected around the time when I had spent some time in our medical division. And the catalyst for that was Schein was afraid because as I mentioned earlier, nobody wanted to compete in the group space back then. And so Schein had a huge market space. And then around that time, Benco started coming in. Patterson started to think about it. And so what Schein didn’t want to do is to be commoditized and say, oh, you know, you just sell widgets. And so as long as I can get a widget for a nickel cheaper, then people were going to switch.

And so I came back into dental being a consultant. And so I started working with a lot of the large groups. Normally we would work with procurement, finance, and then I started making connections with their operations side, the marketing side, the HR side, their development side and said, “How can Schein be a partner to them?” And so that’s when Schein had tremendous amount of data, so work with a number of large DSOs to start thinking about what their expansion plans were. And so they had a certain way of how they thought about growing into new geographies. But we added additional information that said, “Okay, what is the competition?” We could tell what the growth of the dental market through the movement of supplies, just real basic and simple things like, hey, we’re selling a bunch of gloves and bibs and cups. That must mean that they’re a bunch of patients being seen. It’s a growing market. And so we helped identify some of those for them and then that became part of their process.

And so that’s where I got a lot of the insight. And so going back to your original question, how did I get into dental? I got into dental through Schein, but I got into DSOs by being in a specific area of Schein and really seeing that opportunity to do something. Because we saw, yes, we always hear about the big guys, but also had the opportunity to see a lot of small entrepreneurial dentists and business people that grew DSOs themselves. And so that sometimes they don’t get the same media coverage as some of the larger ones, but there are many out there.

And I especially think back then there was very little, I think, media coverage at all with DSOs because of some of the press that was out there was mostly negative. And so I think there was a strategy of laying low and just growing but not necessarily sharing it for fear that people would, oh they’re this, they’re bad and they’re bad. And I think that’s one reason why we saw the opportunity first with the medical publisher that I worked for and then moving on to group dentistry now. It’s like, well why don’t we talk about the good things that are going on? Because there are a lot of good things with DSOs.

And so I think now you’ll look at things totally different. We see a lot more press out there and yeah, it’s phenomenal to see the change and the perception and then all these entrepreneurial DSOs, the growth there. Well there are a lot probably back in your time when you started, I think there’s even more so now. So you found that first location, that doc that said two years, stayed on for six. Did you stay close to home, like Long Island? Is that where you started and where you knew?

Yeah, so there were a couple of things that we decided to do. And this is my learnings from seeing so many DSOs both in the US as well as internationally while I was at Schein, is we always wanted to have a geographically dense footprint. Because I did see a lot of DSOs where people, they like to thump their chest and they say, you know what? We’re in whatever, 10 states, and they have 20 locations, something like that. And I’m like, I just don’t really know how that’s scalable. And so our philosophy from the very beginning was hey, let’s have geographical density, and that allows us a couple of other things that are important to us. So one is the people. So we just saw, back then, a lot high turnover in DSOs and we’re like, this is very, very disruptive.

And so we’re like, well how are we going to have low turnover? We’re going to have low turnover because we’re going to have great people in a company that people actually want to work for. It’s not so difficult. You see it in practices all the time. Oh, we’ve had staff for 20, 30 years. And that was really our blueprint on this is what we’re going to do. And so we wanted to center it around people and relate it to people. It’s like the culture. And so if you have it all in a very tight-knit geography, then that allows us to do that. We can build that community that people, hey, I don’t just work in a practice, I’m part of something bigger. It’s a bigger organization. And so we put a lot of thought in terms of how do we connect people beyond the four walls that they work in and how do we connect people that are new to the organization as we continue to grow? We’re adding new people all the time.

So because we’re so centered around people, our selection process is actually, it’s this extended interview process. I mean even going back to that first practice, that dentist said, “Hey, I’m going to take a chance on you. I’m going to sell the practice to you guys,” because he liked us and we liked him. And so we were able to replicate that same philosophy through all our affiliations because we’re so people driven. And if you talk to our head of business development, you get that sense. And one of the things that he says that I love is that he says, “If you like one of us,” he goes, “You’re going to like all of us.” And time in time again I will repeat that statement and ask people who have partnered up with us and they say, ‘Yeah, no that’s true.” And he goes, “Oh, we always thought when we met Raj, he’s like a nice guy. But that was it. And then we met the next person and the next person and the next person. And everybody is just really nice, kind and respectful,” and they love that about us.

And so when people ask us, “Oh well what’s that that The Smilist is differentiator?” How are we different? I just like to say, “We’re the group that people if you’re like us, not everybody is like us, but if you’re like us, you’re going to fit in well.” And we like to showcase how we are by having everybody meet lots of people. So sometimes they’re not used to it. They’re like, “Whoa, why are we meeting so many people?” And we’re like, “This is as much you interviewing us as us interviewing you,” whether it’s like a doctor that we’re recruiting or a practice that we’re looking to partner with. And so those are the things that I think we’ve been able to differentiate ourselves is through our people and our culture. And it’s very cliche and very soft and not necessarily something you put in a spreadsheet. But all of us, we attribute that to our success over the last eight years.

So you start in New York with that first practice. Are all these practices that you have currently all affiliations, acquisitions? Do you do any de novos?

So early on we was experimenting. So yeah, as I said earlier, we’re an entrepreneurial bunch. So we’ve tried de novos, I believe we’ve opened six de novos in our life. And you know would say that those are green fields. We also have a bucket we call brown fields, where we’ve done some tuck-ins within de novos. But I would say where we are now as we’re focused on affiliations. We’re looking to partner up with other practices, large practices within our geographical area. So currently we’re in four states, New York, New Jersey, Pennsylvania, and Connecticut recently expanded into Connecticut.

I saw that. That was really recent.

Yeah, yeah. But as we think about expansion, it’s always very much about what is that adjacent space. So we’re not all of a sudden saying okay, we’re going to jump to Florida, because we’re heavily focused on how do we support the offices. So oftentimes we say, oh, the patients are our customers. But the patients not our customers, the practices are our customers. And so how do we support them? And so we always think can we get to them very quickly? Now this has expanded over time, but I would say any practice that we have, we can get to in let’s say two hours drive. So there’s not like, hey, I’m having a problem or multiple people have to get on a plane. I can’t get a flight until next week type of thing. It’s like if you need us there today, we’ll get there today. And so that’s like the level of service and the confidence that we want the offices to have in us to be able to support them in their time of need.

And you should be able to grow quite a bit with the population density in New York, Pennsylvania, Connecticut, New Jersey. So you’re not going to have to worry about driving much further than two hours for quite a while.

Yes. And that’s what we say. When you look at the overall population, I guess, using our geography to our advantage, when you look at New York metro, it represents probably 10% of or using it by based off population, it’s over 10% of the population. So there’s plenty of room for growth here. And unlike other parts of the country, DSO penetration is very small here. We estimate to be in the mid to low single digits just because there’s so many people here. And-

Why do you think that is? Is it just because of the population or is it because of the difficulty recruiting working in this? What’s the thought on that?

So this was something that we debated a lot when we started The Smilist. I can’t say we’ve come up with a definitive answer. And so we just said, “Hey, let’s not overthink it, let’s just do it [inaudible 00:22:58] what happens.

But I would say in my opinion, a lot of it is you would say, well why is Silicon Valley where it is, or Hollywood where it is, or the financial industry where it is? It’s based off of the roots, the roots of the entrepreneurs that started the first DSOs. And so when you look at many of the older DSOs, they started where that dentist happened to start practicing and had a vision for this larger company. And so I think as they’ve grown, maybe not so dissimilar to us, they were expanding into adjacent markets, but they started out in California or Texas or in Illinois or Washington. And so that’s how they grew, but there wasn’t really anybody here in the New York metro area.

So it lacked that, I don’t know, that snowball effect. I mean, I can certainly say that as we grew because there’s like no DSOs, it’s not so easy to hire and scale. So even something as simple as I had people say to me, “Oh, as you grow, you need to hire a regional manager.” Well how do you hire a regional manager in an area that has no DSOs where there was never a need for a regional manager? So we have done things where we’ve promoted from within, we’ve hired regional managers from out of the region that were interested in moving to the New York area. And so when you have all this friction in the marketplace, it’s not so easy to just sprout out of nowhere. And so even my silly conversation with dentists of like, oh, what’s a DSO? And then trying to convince you from a negative impression, it’s like hard work.

And so I think for let’s say the origins of DSO entrepreneurs just not being in the area, I think I know a lot of times when I look at our cost of labor rent, very different from other parts of the country, so it’s harder to make the economics work. And then some DSOs, they focus on underserved populations. Well New York metro is not an underserved. If you look at a dentist per capita, it’s probably the highest in the country. But rather than looking at that as a negative, we looked at it as a positive and said, hey, maybe we won’t have as hard time to find dentists as if I were in a rural suburb. And so I think those things contribute to why maybe it didn’t start. Maybe it was just a matter of time before somebody expanded into this region and built something substantial and our view as well, why not us? So that’s when we started.

So we talked about being in four states. How many practices do you currently have?

We have about 60.

60. But I remember a conversation you and I had previously that the practices, it’s not so much the practice count because you have a lot of large practices.

Yes. So it didn’t always start out that way, but our learnings was that having a bigger practice is better than having a smaller practice and having a larger location count. And so when we first started, we used to think a million dollar practice was a big practice. And we probably thought about it more from a dollar metric as opposed to a chair metric or maybe a patient metric. And so we were patting ourselves on the back when we grew practices to a million dollars. And then we realized, wait, wait, that’s actually not the ideal size, partially because we look at so many practices for affiliation. And that’s when we started learning, wow the economics and I would say the momentum of a practice is so different when it’s on a larger scale. And so now I would say our typical blueprint is a three to $5 million practice. So substantially higher than what we looked at before.

And so in order to get that high, we just need bigger practices. And so now I would say our typical practice is now let’s say 15 chairs to even 20 plus chairs. That allows us to our vision of a bit of this dental home where hey, we don’t want bounce a patient around where they go everywhere. We want it to be where they come here, they’re under supervision of their GP and we have specialists. And so we’re multi-specialty and they can get everything that they need there. So there’s the convenience of, I think, the confidence that the patient has in terms of being seen by a specialist that’s under the supervision of the GP, but also the administrative side of, hey, I don’t have to fill out all new paperwork, I don’t have to figure out what the directions and hours and book a different appointment. Just the patient experience is that much smoother.

So now we’ve evolved to be where, yeah, we don’t think about it as location count as opposed to how do we have a facility that can provide a broad range of services for the patient so that they don’t have to go anywhere else. And that’s very much I’ll say our business model is we’ll typically buy large practices. Some have specialty, some don’t have specialty, and our expertise is really growing the patient count as well as the additional services that practice would offer.

So I guess we could talk about this specific part for a long time. I’m just curious. So those are big practices, three to $5 million in 1520 chair count. When you discover these practices, I mean, are you looking for somebody that already has the chair count? Are you looking for the opportunity to maybe with expansion? I mean do you see, hey we’ve got great platform here where we can expand. Are you doing a lot of expansion within the practices once you acquire them or affiliate with them?

Yeah, we do actually. It’s interesting that you ask that question because this is something that we do track. And so when we look at our overall chair count across all our locations, over 30% of them have been added by us.

Wow. Okay.

So yeah, so when we talk to a practice, we look to see well what’s the potential of this practice with this doctor? And so that practice may have eight chairs and they say, “Oh well, the space next door is available,” or, “Hey, I was actually thinking about moving already.” These are great conversations to have because again, going back to the people and the culture, it’s like, hey, this dentist is like-minded. They like to grow. They are not ready to take their foot off the gas pedal. And so once we have that conversation, then it becomes a lot easier. Then we’re not forcing some sort of expansion or renovation onto that partner dentist.

Yeah, so it’s just part of our normal conversation. It’s like, okay, how do you think about growth? And so we think about growth in three key areas. One is provider, the second is the patient, and then the third one is the facility. So at any given time, any practice is going to need one or two of those things. And so the facility part is the one that has the longest lag time. Because the provider we can hire, the patients, we can spend some money on marketing and so forth to get them. But so when you look at any practice on the lens of these three things, you’re always going to say, “Okay, what are we starting to thinking about now?”

And so there are practices that we’re talking and partnering with, we haven’t even done the deal and we’re talking about expansion. Hey, can we expand? How do we want to expand? And actually just the other day, as I signed off on some plans where a practice that we bought about three months ago, we’ve taken some adjacent office space and we’re adding seven more ops to the practice. So no, a lot of times it’s quite rare for us to find a practice that already has all the chairs that we would want. But we are very good at now doing expansions.

So going back to your earlier question about de novos versus affiliations, expansions are a bit of a hybrid because we’re doing a lot of construction. And so that gives us an opportunity to, because we are largely branded, so we take a very bespoke approach in terms of when we convert the brand. But I would say, I don’t know, maybe half our offices have a similar look and feel. And that happens organically especially as we renovate an office, expand an office where it has that look. So you wouldn’t say every Starbucks look exactly the same, but there’s a certain feel to them no matter which one you go to in the world is our philosophy. So we find our way to get to the chair count that we like so that they have the space and the room to grow into them because we’re confident that we can get them to grow.

So our audience is made up of what I would call it’s a wide diverse array of people. So we’ve got on one end of the spectrum, I call them the DSO curious dentist. I might have one location and maybe I want to start my own group, maybe I want to sell or possibly work for someone. Then the other end of the spectrum are the larger DSOs. And then in the middle we have a lot of emerging groups, two, three, 10 locations. So I’d love to get from you, Phil, some lessons learned that maybe can help some people in the audience.

Yeah, so certainly especially on for the aspiring DSO dentist, we talk to many of them. And sometimes there is that location count syndrome, oh, I have to have lots of locations. And look, we don’t always do deals with them, but our advice to them is always build bigger. I mean, we’re drinking our own Kool-Aid. I’m not giving you advice that we’re not following ourselves. Is instead of saying, “Hey, I have two, four chair locations,” just to say, “I’m a multi-site DSO,” you’re better off having an eight chair location, even if it means moving out of the existing space. So I think that’s definitely one of the lessons learned.

Another one I would say is be true to yourself. Know what you are and what you’re not. So again, going back to your question on us being de novos versus affiliation, early on, I mean when we were small we were still trying to figure it out so we were doing a little bit of everything. But now I would say we’re very clear in terms of who we are, what we’re looking for. And when you’re clear on that, I believe you make much better decisions because things drop out much more easily. So early on we would say, I mentioned we do some tuck-ins. We don’t do tuck-ins anymore because we realize that okay, to tuck in a whatever, $400,000 practice, even though you might get it at a great multiple or a great price, is about just as much work as buying a $3 million practice. But I had to buy a bunch of those. I’ll buy eight of those to make up the one.

But before, when you looked at our lead list, there would just be so many. But now we focus. We focus on finding the right practices with the right people. And so instead of spreading ourselves thin, again, going back to how people and culture is so important to us, that adds extra hours that we have that we can spend with a $3 million practice and get to know them more, as opposed to being distracted on something else. Another lesson I would say is, for us anyway, we’re high adopters of technology. We’re always looking for ways in terms of how to make the offices better and running more efficiently. And philosophically how do we take activities out of the office so that the office can focus on the patients that are in the office. So we don’t want them to call insurance. We don’t want them focusing on a bunch of voicemails or confirming appointments because these are patients that are not in the office.

And so philosophically, again, knowing what we are, we’re very focused on being centralized and it’s not just being centralized for the sake of being centralized. We want to centralize so that we can provide services that are far in advanced than what they were previously doing. And so we’re always trying to look for new solutions out there to do something that can make the practice life easier. Now I think many of us, we’ve all seen demos and they all say, oh, it’s so wonderful. And they’re rarely exactly the way they demo it. And so I think our key expertise now is really learning how to implement things. You don’t normally think about things that way, but we think about it as how do we get good at trying new things? And we’re not going to be right on all of them. But if you have that culture of, hey, change is good, change will happen and it’s not linear, then I think you can accomplish a lot that otherwise you don’t see when you’re so afraid to try something.

So even going back to starting The Smilist, oh well why is it DSOs they have hundreds of locations, but why is it none of them are in New York metro area? We just want to instill that culture of no, well maybe we’ll never find out what the true answer is. I can’t read other people’s minds, but if we think it’s a good opportunity, we should go and pursue it. And that’s very much how we think about our business. And I see others when I talk to them, they try and be like, oh well so and so does it this way. I want to be them. And so and so does it, I want to be them. But it’s not their own identity. And it’s figuring out what’s true to yourself and making sure that you stay true to yourself and be disciplined about it. Because I find that we’ve been able to accelerate our growth much faster recently because we’ve been more disciplined about who we are.

So you mentioned technology. That’s one of those things that everybody’s focused on in the group practice space now is all these different whether it’s AI or everything’s AI, right, practice management software, even clinical technologies, cone beam, 3D printing, just a lot of really interesting things happening in the industry. And of course technology, the acceleration of technology I mean, whether it’s our daily lives or in dentistry, it can be overwhelming. So some of it I’m sure is you talked about that implementation of it, which can be a challenge. It sounds great and I’m sure it will work, but how can we get it to work for us and how can we get people that may not necessarily, even though change is good, it may be tough to get certain people to adopt. So what technologies are you have you run into that are interesting? And tell me about some that you’ve adopted that have worked out well.

Yeah, so we’ve toyed around with a bunch of different things. So I would say they’re all interesting and some more mature than others. So one of the, I’ll say the early things that we did, and again, this goes to learning to implement. So it wasn’t us trying to do these farfetched things initially. It’s how do we use technology but in things that are very familiar to us? And so the first thing that we did was implement procurement software. So these are things that, again, little things, how do we make it easier for the office? So as you can imagine across many offices, they’re dealing with many different vendors. And having come from a distributor myself, this was something that I had a lot of insight into. And so normally you have an office, hey, I have whatever, 10 different logins, so the 10 different vendors that I deal with and I log in.

And then it was very cumbersome, not just for the office but from a support organization where we say, Hey, guess what? We negotiate a better contract for this. Very difficult to switch because now I have to go train 60 offices, give them 60 new username and logins, and then tell them to go to this new vendor instead of their old vendor. And so by implementing procurement software, it wasn’t this heavy hand of you cannot order these and that’s how you save money. But just making it easier for them and showing them that there are options and trusting the office that they’ll make the right decisions, we saw massive savings in our dental supply costs, actually dental and office supply costs, and I mean in orders of magnitudes of millions of dollars. And so that was something that goes down this path of how do we create wins for the organization where they become more comfortable using technology?

Because we show them, oh, it’s so much easier now I don’t have to have all these different logins. Recently we switched office supply vendors and it was seamless for them. We went from one vendor to the other, but they didn’t have to have new user name logins and they still searched for things as they normally would search for, their Hewlett Packard like toner, and now it was just coming from a different vendor instead. So we started out with that and then we’ve also toyed around with areas where right now we have bots doing our insurance verification. So that was a big, big change for us because they have, going back to the whole implementation. So there’s different vendors out there that would do insurance verification, but for us we wanted to focus a lot on the workflow and more specifically how to not disrupt the existing workflow of an office. And so there are many companies that will say, “Okay, we do the insurance verification, but then you go to their portal and you get the information.”

We’re like, “No, no, no, that’s not how we want to do it.” I go, “I want you to do the verification and then update our practice management system so that you don’t ever leave the practice management system.” I told the vendor, I go, “I don’t ever want to look at your portal.” I go, “I just want the office to look at in the practice management system,” what was what you did. And so it’s really pushing forward because you have software vendors, SaaS vendors that say, “Oh, we do this, but then you have to do it differently.” As the company scales, that’s super difficult. Whether I use the example of username and login, that’s a simple thing. But now it’s like, oh, instead of doing this, do these five extra steps and we just didn’t want to do that. And so whenever we look at technology and implementation, we want it to be where how does it seamlessly flow into how an office is used to working?

So this has many implications well beyond just the software because if you know Bill, we hired you to join the office, you’re probably used to doing something that’s similar to what’s happening in the office now. But if I told you a completely different process, then that has a whole different ramifications for what HR and training needs to do for new hires. So we always want to keep things where we make you more efficient, but we’re not changing the workflow dramatically.

We’ve also put in technology for missed calls. I mean every whatever dental practice will say, oh, I have way more missed calls than I would like. But we’ve created an AI chat bot or we work with a vendor with the AI chat bot that connects to our practice management system. So when you call and we missed the call, we know, “Hey Bill, sorry we missed your call. How can I help you?” You might say, “I want to reschedule my appointment.” It knows, “Hey Bill, this is the appointment that we have for you. Is this the one you want to reschedule?” You say, “Yes,” and then goes, “Okay, let’s reschedule.” And you’re like, “Oh, I’m thinking about coming in next Thursday afternoon.” It understands that and will give you options for next Thursday afternoon. So again, that makes it simpler and what we find is that this bot is able to resolve over 60% of the inquiries.

Well that’s great.

So now imagine, normally what happens is now somebody is checking voicemail and then playing phone tag with you, but now we’re able to wipe 60% off and then now the office is focusing on the 40. But even on the 40, instead of listening to voicemail, it’s been transcribed for them, giving them context so that even when they do call you, they’re able to resolve it very quickly. And I don’t know, we’re evaluating right now some of the clinical AI options that are out there so we’ll see how that goes.

And I would say the last thing is people don’t think about this enough, but we have tremendous amount of data and it’s only as good as how clean it is. And so we spend a lot of time how do we keep it clean? How do we clean it up? And it always seems like we have some project going on how to clean up some aspect of our database because if we have clean data, then a lot of the automation and technology projects that we want to do become better. And so we have a vision where, how do you instill, let’s say, transparency in dentistry? Because it’s like, “Oh, I go to the dentist, I have no idea how much I’m going to pay.” Well if I can automate the insurance verification, I know what appointments you’re coming in for, I can calculate all of that and actually let you know before you come in. So we think that that’s very powerful in terms of this whole trend of consumerism of healthcare.

And then if you said, “Hey, I want to finance it,” you can finance it. You can book the appointment. You can pay. All of these things, they become where you can interact with us, not just through the phone or coming into the office, but we wanted to be able to contextually be able to present to you all the information you need to make the right decisions.

Makes sense. Yeah.

So we’re toying around with it some farther along than others, but maybe instead of thinking more specifically about any one technology, it’s more about how do we get good at implementing it? Because I think that’s the bigger challenge. I assume the stuff out there they work, but how do you actually make it work for you? Because every practice, every DSO is different.

Yeah. Great. Great point. As we start to wind things down here and try and tie everything up, I want to make sure I don’t forget to mention that we had an event, DSO Leadership Summit in October in Nashville, and Group Dentistry Now every year does the Emerging Groups to Watch awards. And so Phil wasn’t there, but most of the team was, and The Smilist won one of the Emerging Groups to Watch awards for 2022.

Thank you.

Great acceptance speech. And it was actually a great time to hand the award out and get to see, yeah, just The Smilist is actually be recognized by industry peers. It was pretty cool. So sorry you missed it, but it was at the Musicians Hall of Fame in Nashville. It was actually a pretty cool setting. I will drop a link in the show notes to the list of all the award winners, so you can find out a little bit more. Although Phil gave you a deep dive into The Smilist, but I did want to mention that The Smilist was an award winner this year in Nashville, so congratulations.

Thank you. No, sorry I missed the event, but I saw many photos and heard a lot about it and it was a great, great event. So it’s [inaudible 00:51:44].

Time. Yeah, for sure. Absolutely. So last question here, give us a picture. Let’s take a look at five years from now. What does The Smilist look like? What are your goals for the next five years?

So there are two things that I would say that we’re always focused on. The first is our reputation. So our aspirations are not to be whatever the biggest, but we want to be the best. And so for the ones that are familiar with the New York area, we say, “Hey, how can we be Hospital for Special Surgery?” How can we be like NYU or Northwell?” Or whatever, Mayo Clinic, Cleveland Clinic. So that’s what we want to be. We don’t need to be the biggest. And then the second piece is and how we believe we can achieve that is what we just talked about. How can we continue to adopt the latest and greatest developments of both administrative technology as well as clinical technology that allows us to deliver the best care? Because as you continue to scale, and this is why we look up to some of those organizations, is that it’s fine if I had one practice, I can really monitor all that goes on within that practice.

But when you have 60, a hundred, a thousand practices, that’s not so easy. So because we’ll say, “Hey, we’re going to get there someday, so what are the things that we need to get good at now so that we can achieve that vision?” And so five years from now or 10 years from now, we wanted to be aware, they’re like, oh yeah, The Smilist, I want to be a patient there or I want to work there, or I want to partner with The Smilist because there’s just such strong reputational value to our name. And that’s across all everything that we do. How do we carry ourselves and all the interactions? I love it when I hear some vendor that we speak with, they’re like, “Oh yeah, The Smilist is great,” and they recommend us. We’ve had attorneys recommend us to dentists and we’re like, wow, that’s great. We’re doing the right things.

And then the other part is really how are we recognized as a cutting edge DSO? When you go there, they’re pushing the envelope. They’re not just sitting in their seat and saying, oh well this is how we’ve done it the last 20, 30 years and it’s worked, so why change? Because we’re always looking to change even if something’s not broken because there’s an opportunity to do it better. And at the pace of innovation, I think this is very achievable in the next five, five to 10 years.

That’s great. Well, this has been a real pleasure, Phil. Way too long to get caught up with you and I’m glad the audience is able to get all this information. Last question for you, which is an easy one, if somebody in the audience wants to find out more about The Smilist, how do they do that?

They can reach me via email. It’s phil@thesmilist.com, and happy to hear from the audience

Okay.

And want to share our experiences and learnings so that we can help the overall industry.

That’s great. So again, that was Phil Toh. He’s the President and Co-Founder of The Smilist, and we’ll drop his email address and The Smilist website URL in the show notes. But really appreciate you taking time today, Phil. And yeah, this was a lot of fun. I learned a lot and maybe we can get you back on in a couple of years and see where things are and maybe not so much practice count, but what the organization looks like now.

Wonderful. Yeah, would love to.

Sounds good. So thank you Phil, and thanks everybody for watching and listening in today. Again, we appreciate you as an audience and we want to continue to bring great, great guests like Phil and great DSOs like The Smilist. So until next time, I am Bill Neumann and this is the Group Dentistry Now Show.