The Group Dentistry Now Show: The Voice Of The DSO Industry

This audio-only edition of DSO Declassified features Kim Larson, Founder & COO of Group Dentistry Now. Kim and Bill discuss:

The ADSO NextLevel meeting in Austin
2024 DSO events
M&A activity
Lingering DSO model resistance
Much more

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Full Transcript:

Bill Neumann:

Welcome everyone to the Group Dentistry Now show. This is DSO Declassified. Happy to be back in this format, we haven’t done this in a while. If you’re looking for the video, this is audio only. So, don’t look for the video. My name is Bill Neumann, and we have Kim Larson, the Founder and COO of Group Dentistry Now. Good to have you back on the show, Kim.

Kim Larson:

Happy to be here, Bill.

Bill Neumann:

That’s great. Well, let’s talk a little bit. We did this a couple of years back. We did a recap of a couple of shows that I think we had seen, been to. This is a question we get a lot, what shows in 2024 in this case, should you be looking to attend?

Kim Larson:

Okay. How about we start with ADSO Next Level? It was their inaugural event and we were happy to be there. I think a few years ago, maybe three, four years ago, they had something called Partnering for Growth. So, it was the same type of audience, the mid-market. So, I guess they tried it again under a new name. So, we just got back from there a few days ago. So, Heidi Arndt was the emcee for the event. She was the facilitator. She did a great job as always. And actually, she’ll be having an event in May, which we can talk about either later in the podcast or at a later date. So, what did you think about the mid-market conference Next Level?

Bill Neumann:

So, the event was December 4th through the 6th, and it was at the JW Marriott in Austin. Anybody that’s actually been to an ADSO event, they typically will have it at a really nice resort. JW Marriott was certainly a nice place. I think they had their summit there a couple of years back, their regular summit. So, I thought it was a good event. There were a couple of things that maybe that I would have liked to have seen done differently, but there were some groups that I had never met before. Kim and I, well, I won’t speak for you, but I had the opportunity to speak to a lot of vendors that I had not spoken to before. I also really liked the networking event that they had on the first night. We got the chance to talk to quite a few DSOs at that event.

Kim Larson:

Well, that was an interesting event. Are you speaking about the DSO only event, the cocktail event?

Bill Neumann:

Yes. It didn’t seem like it was DSOs only.

Kim Larson:

It was about 70% vendors. I did get to meet a few new DSOs, which was nice, and see some old favorites. I wish that the executive, some of the ADSO executive committee members were able to stay around for the rest of the conference, was able to speak to a few of them there at the DSO only event, some before the event before they left. But I think that would have been great to see some of the leadership, especially in the economic climate that we’re living in right now. I would appreciate, and I know a lot of other people in the audience would’ve appreciated to hear their wisdom and their vision at this time. Obviously, they have experienced all sorts of ups and downs.

So, let’s talk about the panels. One of my favorites was the first panel, it was the Founders Forum. It had on [inaudible 00:03:39], Jeff Moose, Larry Moray, and Michael Riccobene. I thought it was great. What did you think?

Bill Neumann:

Yeah, I really liked it. Actually, I don’t know if you… I’m sure you remember this, but both Oakpoint and Riccobene are-

Kim Larson:

Emerging groups to watch.

Bill Neumann:

… Emerging groups to watch, so that was kind of cool. That was not planned.

Kim Larson:

Actually the same year, I believe. They won in 2022.

Bill Neumann:

Yeah, you’re exactly right. So yeah, I got a lot out of that. I think talking to some of the other DSOs and the vendors, they really enjoyed that as well. Let’s talk about some of the other panels. So some of the other panels they had on both days on December 4th and December 5th and December 6th, they had Thought Leader Theater and they had Care Credit, they had Align Tech, they had Lucid, which is a new company that we had an opportunity to talk to the CEO and a couple of the C-suites there. It seems like pretty cool technology. On the second day, December 6th, they had Med Teams there, Straumann Group, Holland and Knight Henry Schein one were there and there were a couple others. So I thought that was neat, the thought leader where it was relatively quick, I think they were maybe 5 to 10 minute long segments.

Kim Larson:

It was interesting, most of the vendors were in the main room where the presentations and panels were held. Mixed feedback about that.

Bill Neumann:

Yeah, that was the one thing I think when we started this off, there were some things that I thought would’ve worked well, but probably didn’t. I would’ve done differently. I was always a big advocate for having the vendors in the room during the sessions. And the more I’m going to these meetings, one of the challenges is if somebody wants to actually have a conversation with a vendor while there might be a session going on, it’s super challenging. And I think I’ve seen it work actually better when the vendors are in the hallway. A lot of people tend to go out in the hallway because maybe a panel doesn’t appeal to them or something or one of the segments, but yet they may want to talk to the vendors. So there were a couple of vendors in the hallway, but most of them I would say were actually, like 95% were in the main room. So I don’t know if I like that format.

Kim Larson:

So ADSO is already planning on having the Next Level event, I guess roughly the same time, December-ish 2024 and at the same place. So I know that the vendors we’re hoping next year more DSOs would be coming out, and they’re looking at 2 to 75 location. That’s what they’re defining as mid-market. Is there anything else you wanted to talk about with regards to that meeting?

Bill Neumann:

No. I mean, I think there were some other sessions that we didn’t necessarily mention. There was also some really good… I thought they had more than adequate time for networking. I thought the networking was actually really good, and I think that’s something that they should continue to have, whether it’s the cocktail events, but just really long networking breaks. And I think that is what a lot of people both DSOs and also the vendors want.

Yeah. And then I know that there were some other speakers. I know Dr. Ahmed from DECA Dental spoke towards the end of the second day. Heidi was there as well. Of course, she was the emcee, did a great job as you mentioned earlier, Kim. And yeah, I think it’s great. I think there’s a place for it. I think next year it’ll be even better. I do remember back to the partnering for growth and I think Next Level was definitely a better format and… Yeah, 2 to 75. So if you’re a 2 to 75 group, that’s a broad range there. This is definitely a meeting for you and hopefully you’ll get a chance to meet with some of the executives from the ADSO. All right, lets-

Kim Larson:

Yeah, we have Yankee coming up. That’s the next one. That’s at the end of January. Last year was their first year to have the DSO session which-

Bill Neumann:

This year.

Kim Larson:

Yeah, right. This year, 2023. So right, the next one will be January of 2024. And what was interesting is we were speaking to some vendors here at the ADSO Next Level who didn’t even realize who are at the Yankee show, who didn’t even realize that they were having ADSO event, but it’s on the second floor. So when you come in, go up the escalators, it’s up there. But I thought for a first time event, it was really, really good. I think they had some really great panels, and I really enjoyed that meeting overall. It was small, very small, but I think they had a great turnout for most of… Sometimes people start to flow out as the days go on. I felt like they really retained people. What did you think?

Bill Neumann:

Yeah, I think Shannon McCarthy, shout out to her. She really did a great job on the event show. To Kim’s point, there are a lot of vendors that did not know, and there might’ve been some DSOs or groups as well that didn’t know there was a separate multi-site summit going on at the same time that the traditional Yankee dental meeting was going on. So what are the dates of that, Kim, in case people… Everybody can find, if you go to groupdentistrynow.com and go to our events tab, you can find all the information on all the major DSO and multi-site meetings.

Kim Larson:

It’s coming up January 25th through 26th in Boston.

Bill Neumann:

You do have to register separately for that. So if you’re registered for the Yankee, you do have to register separately. But I thought it was great. I was surprised at the first year doing something that it could have been gone as well as that. And they really do have some great content, for sure.

Kim Larson:

Yeah. And the next one after that, it comes up pretty quickly right after that. It’s February 1st through 2nd, the AADGP in Las Vegas.

Bill Neumann:

And we didn’t have a discount code for Yankee, I don’t believe, but we do have one for the AADGP. It’s their 50th anniversary, which a lot of people don’t know they have been around for 50 years, but they’re really trying out to themselves with this event. We can mention the entertainers that they’re going to have. Jay Leno, Wayne Newton, Dr. Christensen will be there. There’s going to be plenty of others, but if you use code GDNOW, so groupdentistrynow 2024 GDNOW2024, you get 10% off. And I’ll just mention a couple of things because even though the dates are first through the second on the 31st, they do it. They’ve always done this where they have pre-conferences, and our friends over at Mortenson Dental Partners are going to be doing a pre-conference session where they talked about an employee owned dental group model. And then also there is another session going on, which is a workshop which is put on by Aligned Dental Partners, they’ve done that several years. Yeah, it should be I think a really good event. And-

Kim Larson:

And to those who went last year, please note it’s a different hotel this year.

Bill Neumann:

Yes, they are doing it at a different hotel. I believe it’s Caesars is where they’re doing it this year. So that’ll be a lot better than, I think they had it at Bally’s for quite a while. And Caesars, there’s definitely an upgrade.

Kim Larson:

So going to talk about, let’s take a shift and move into some other topics?

Bill Neumann:

Sure. Let’s go ahead.

Kim Larson:

DSO deals, shall we?

Bill Neumann:

Yeah, let’s talk about DSO deals. So Kim pretty much does the work every single month to gather all the DSO deals that are publicly available and also are not publicly available. She gets a lot of deals that are sent to her from various DSOs. So tell us what you’ve seen, because you’ve been really tracking this more than anybody else in the industry. So what are your thoughts on maybe how things from the beginning of the year until now have changed if they’ve changed?

Kim Larson:

We hear a lot of talk. I mean, the industry is actually feeling the pressures of the economy. We see less bidders, but I’m still seeing a large amount of consolidation happening, perhaps just less bidding happening with that. But the M&As are still strong. We still have de novo’s happening. The monthly list is no shorter now than it was a year or two ago, slowing down that we hear about, but I’m just not seeing it per se.

Bill Neumann:

Yeah, I would agree. I mean, I think that some of the bigger platforms out there maybe aren’t acquiring. Although we say that, and I look at… Kim’s looking at the list right now, look at Affordable Care and they’re adding new practices, some acquisitions.

Kim Larson:

Some that I see that used to be acquiring a lot, maybe per month. It has slowed down, but we’re seeing so many others coming in and maybe making their mark. So that’s been interesting.

Bill Neumann:

Yeah, newly invested platforms seem to still be going strong. It looks like MB2 is still adding quite a few practices, partners to their lists. So there are some out there that are… And of course, specialty endo and oral surgery still seems to be pretty hot. So I think you’re right, Kim. Anything else on the DSO deals?

Kim Larson:

Just check back at the beginning of every month. And I know sometimes people use this list to find out who they lost a deal to. So, it’s a great resource also to find out new DSOs. There’s always new ones popping up or just to find out the health of a DSO, what’s going on, and if they’re opening locations in new markets, expanding their footprints into new areas of the country, which is very important to know. So we also, I guess have a big 10th anniversary coming up for Group Dentistry Now in January. It’s our 10 year, that’s when we started it all.

Bill Neumann:

So, yeah. I mean, let’s talk a little bit about that. I mean, if you go back to 2014 before I was even with the organization. I mean, Kim, you started everything thing. I’d love to get your feeling on what was it like in 2014?

Kim Larson:

So 2014 was a totally different environment, totally different climate. There was a lot of resistance mostly from solar practitioners. But it seems like we’ve made a lot of inroads there and we’ve come a long way as an industry, and we have organizations and people on board now that weren’t on board in the beginning perhaps. But now there is still a lot of pushback I’m finding, or I found recently. I went to a non DSO event and it is interesting to see that some industry partners are still talking about how difficult it is to deal. They don’t like to necessarily deal with DSOs, they don’t like… Especially margin compression as well as they have to have a heightened level of customer service.

So, I guess they have to figure out the best way to deal with that because consolidation is going to continue to happen. We estimate the market is probably, what would you say, 30% consolidated? In the next five plus years, we’re going to be at… Some people are predicting 80% consolidation. So, it’s important for the vendors to figure out ways to deal with the DSOs and how to work with them.

Bill Neumann:

Yeah, it is surprising that there are still vendors out there that are fighting this fight. Like say, “Ignore this market long enough, it’ll go away,” right?

Kim Larson:

That’s exactly right.

Bill Neumann:

It’s actually pretty comical at this stage. But back to that 10th anniversary celebration, that was something that came up quite a bit back in 2014 when you started things and before there was a DSO, right? They were group practices back then. DSOs are not… They’ve been around but not called DSOs, I guess, is what I’m trying to say.

Kim Larson:

Yeah, I remember being at the CDA meeting in 2011 or ’12 and hearing people talk about dental group practices. But when I went back to look it up on the computer, all I found was negative things. Now of course, the industry has evolved a lot since early days and there were struggles and things happened that people have worked through thankfully, but the industry has come a long way. But we see a lot of people trying to get into the DSO market now and lots of vendor choices, which is great for DSOs.

Bill Neumann:

I do think that the industry has come a long way, some stakeholders in the industry further than others, and it is kind of comical. Especially some key opinion leaders out there that were anti-DSO and [inaudible 00:16:39] forward now and they now sold their practices to DSOs.

Kim Larson:

And have become “DSO experts.”

Bill Neumann:

Yes, there are quite a few DSO experts out there. If you’re looking for one, you definitely have to watch who you’re choosing now because some experts are not necessarily experts. But that being said, I think the industry’s in a good place, have to struggle through the challenging economic times, focus on same store growth versus acquisitional growth. There are some groups that are struggling. I mean that’s absolutely, it’s very apparent now which groups were built on solid basic fundamentals while others grew rather too quickly, and now they’re in situations where they’re not growing at all and in some situations where their lenders have taken over. So it’s really fascinating where we are, but I still think it’s a great industry to be in.

Kim Larson:

Absolutely.

Bill Neumann:

So I think that’s going to be it for this DSO Declassified. We appreciate everybody listening in and we’re going to try very hard to do this on a more consistent basis. And thanks for joining, Kim. Are we going to have you back on the show, we hope?

Kim Larson:

Sure.

Bill Neumann:

Okay, that’s great.

Kim Larson:

Well, thanks for joining us today.

Bill Neumann:

Thank you. Until next time, this is the Group Dentistry Now show. This is DSO Declassified. See, we don’t do it enough to even get it right. And Kim, where can they find you? Every time you go to a meeting, it’s like-

Kim Larson:

Right. So you can follow me on LinkedIn. You probably can’t connect because unfortunately LinkedIn has limited how many connections you can have. So I’ve reached my 30,000 limits. So if you’re interested, please follow me, I would love that. And also my email is kim.larson@groupdentistrynow.com and we’ll see everybody at the Yankee show coming up soon in January. Looking forward to it.

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